Gaudreau – Tax Court of Canada requires the production by a vendor of the tax-planning memo of the purchaser’s accountant

The taxpayer was assessed under s. 84(2) regarding his sale of his interest in an insurance company that was structured as a hybrid sale transaction. The taxpayer took the position that he was not required to produce on discovery a six-page memo that had been prepared by the accounting firm for the purchaser and which had been shared with him (as vendor) and his advisors, on the grounds that it contained nothing but a description of transactions of which the Minister was already aware and matters of “subjective opinion” and that it contained no mention of or discussion of s. 84(2).

After noting the absence of accountant-client privilege, St-Hillaire J found that the memo was potentially relevant and should be produced, indicating in this regard that it had been used as the planning memo and that “the preferred approach to the interpretation of subsection 84(2) involves an examination of the circumstances surrounding the transactions in question.”

Neal Armstrong. Summary of Gaudreau v. The King, 2023 CCI 115 under Rule 82(1) and General Concepts – Solicitor-client privilege.