Although the taxpayer lost, this decision has an extensive discussion of when a waiver might be set aside (1) for reason of having be coerced, (2) due to the taxpayer’s mental incapacity at the time he gave it, or (3) on the basis that the taxpayer did not intend to waive the normal limitation period.
[14] It is established law that a waiver such as the one Mr. Radelet asks be set aside cannot be set aside on the basis of coercion or undue influence unless it is established that the CRA tried to mislead, threaten or unduly pressure the taxpayer in connection with the waiver: Nguyen v. HMQ, 2005 TCC 697 [Dussault J.] at paragraph 32. Further, such waiver is unenforceable on the basis of coercion where, more likely than not, the evidence shows the taxpayer did not freely consent or was unduly pressured: Nguyen at paragraph 33. Therefore, the issue is whether Mr. Radelet has established on the balance of probabilities that he did not freely consent.
[32] Mr. Radelet must introduce evidence that convinces the Court that on balance, he more likely than not lacked the requisite capacity to enter into the waiver on the very date it was executed: Wiens v The Queen, 2011 TCC 152 [Webb J.] at paragraph 23.
[37] As referenced in submissions, the approach in interpreting a waiver is to ascertain the intention of the parties as expressed in the documents and relevant circumstances revealed by the evidence: Ruzmmin Remtilla v. HMQ, 2015 TCC 200 at paragraph 35, itself referencing Golberg v. Canada, [1992] 2 CTC 208 FCTD confirmed in Mitchell v. Canada, 2002 FCA 407 at paragraph 37. In turn, the intention must be filtered through the perspective of an objective reasonable bystander: Noran West Developments Ltd. v. R., 2012 TCC 434 at paragraph 74.