Gaudreau : Tax Planning Documents Are Discoverable (Subject To Privilege)

In the recent decision of Gaudreau v.R.¹ decision, the Tax Court of Canada ordered a taxpayer to disclose a tax memorandum prepared by an accounting firm. This decision serves as an important reminder that tax advice received from accountants is not protected by privilege.² This case is also a reminder of the importance of attorney-client privilege in a transactional context.

Gaudreau concerns a tax memorandum prepared by the taxpayer's accountants structuring a transaction as a "hybrid sale". The CRA assessed the taxpayer on the basis that this transaction was subject to the specific anti-avoidance rule found in subsection 84(2) of the Income Tax Act.³

The appellant opposed the disclosure of the memorandum as part of the discovery process, arguing the lack of relevance to the issue under appeal because the memorandum contained no mention of subsection 84(2) of the ITA.