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GST — purchase of real estate

My client was a non-profit housing corporation that purchased land and built a housing complex. When it bought the land, it mistakenly paid the GST to the vendor instead of self-assessing and reporting the tax to Revenue Canada. Years later, it was assessed by Revenue Canada for some $250,000 including interest and penalties.

The corporation objected to the assessment, but the objection was turned down. It then hired a lawyer and filed an appeal to the Tax Court of Canada. Revenue Canada, in its Reply to the appeal, defended its position vigorously.

Months later, while the appeal was pending before the Court, I became involved. I immediately saw ways in which the case could be resolved in the corporation's favour. I wrote to the Department of Justice counsel, setting out a detailed technical analysis that showed why the corporation would win the case in Court. Counsel agreed and recommended to Revenue Canada to cancel the assessment. Revenue Canada agreed.

Problem vanished, and without needing to go to Court!

(1997)