Courts of Justice Act

The plaintiff (the “Estate”) suing its former law firm for alleged negligence in proposing a particular method for transferring shares from the Estate to a charitable foundation. CRA, in disallowing a donation credit, assessed the Estate for over $9 million, and the estate appealed that assessment to the Tax Court. However, there had “been undue and avoidable delay in the tax appeal” (para. 27) on the part of the Estate.

In granting the motion of the defendant law firm for a stay of the negligence action pending the disposition of the tax appeal, Josefo, M. stated (at paras. 15, 25):

[R]esorting to a stay will avoid potentially duplicative matters proceeding and potentially different results possibly emerging from two different courts. …

[T]he ultimate decision of the Tax Court on the propriety of the method or structure for transferring shares recommended by the law firm and lawyer to the Estate will, in my view, very much influence if not be determinative of much if not all of this within negligence action.