This case was about the deductibility of legal fees. The taxpayers argued "that they could not disclose more particulars of their legal expenses without waiving solicitor and client privilege, which they were not willing to do." They said that they should not have "to waive their privilege to succeed in their appeals." (Para. 12.)
The FCA did not agree. It said, "neither the Minister nor the Court is obliged to determine a factual dispute in the taxpayer’s favour merely because the taxpayer asserts and refuses to waive a claim of solicitor and client privilege with respect to evidence that could resolve the dispute." (Para. 13.)
See also Richard A. Kanan Corporation v. The Queen, 2014 TCC D. Campbell) 25 April 2014, where the taxpayers, relying on similar expenses paid to the same firms, were allowed to deduct some of their legal fees.
See Dr. Mike Orth Inc. v. Canada, (2014 FCA Sharlow)