The Estate claimed that the legal fees were spent to get back control of the corporation and that, if he won, Mr. Hollinger might have earned employment income in the future. On that prospect of future employment income, the Estate sought to deduct the legal fees.
As Chief Justice Rip said: "The appellant can't rely on paragraph 8(1)(b) if she claims that the court and out-of-court costs were paid with a view to getting the right to have future income from an office or employment or even the right to hold a position that [the deceased] had, but lost." (Para. 31; my translation from French and my emphasis.)
To deduct legal expenses, your legal action must have aimed at getting money owed to you and, if won, the money must be taxable as employment income.
See Estate of the Deceased Martin Hollinger c. La Reine, (2013 TCC, Rip CJ)