University Hill – Federal Court of Appeal finds that a settlement agreement agreeing as to round percentages of expenses that were unreasonable accorded with Galway

Boivin JA found that a settlement agreement with CRA, that stipulated the disallowance of various categories of expenses incurred by film-production tax-shelter LPs or round percentages thereof or formula amounts, did not violate the Galway principle given that this was not inconsistent with s. 67, which could be applied to disallow only a portion of such expenses. Essentially, the point is that Galway precludes a compromise that is irreconcilable with the ITA, but does not preclude a compromise on the facts.

Neal Armstrong. Summaries of University Hill Holdings Inc. (formerly 589918 B.C. Ltd.) v. Canada, 2017 FCA 232 under s. 169(3) and s. 152(1).