Taiga v. Deloitte – BC Supreme Court finds that a contingent tax-savings-based fee agreement with a company’s external auditors did not engage a conflict of interest

The entering into by a company (Taiga) of a contingent fee arrangement with its external auditors (Deloitte) whereby Deloitte would be paid 20% of the tax savings from implementing an Inter-Leasing-style plan to minimize provincial income tax did not give rise to a conflict of interest.

Affleck J also found that an obligation of Deloitte to repay the fees in the event of a "successful challenge" was not triggered on the initial CRA GAAR reassessments, but instead would only be triggered if they were "either unsuccessfully resisted in the courts or...the plaintiffs were professionally advised there was no reasonable prospect of successful resistance in the courts."   As the tax dispute instead was settled in "a prudent settlement agreement preserving at least some of the benefits of the … Plan," Deloitte got to keep its fees.

Summary of Taiga Building Products Ltd. v. Deloitte & Touche, LLP, 2014 DTC 5082 [at 7068], 2014 BCSC 1083 under General Concepts – Negligence and Fiduciary Duty.