Canadian Constitution Foundation
Taxpayer wins first round in court against CRACanadian Constitution Foundation, July 7, 2010
«Irvin Leroux v. CRA»
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«Court Documents» PRINCE GEORGE, B.C. — Irvin Leroux, the taxpayer who suffered financial ruin following a nightmare audit by Canada Revenue Agency (CRA), has won the right to continue his lawsuit against the CRA in the Supreme Court of British Columbia.
In 1996, Mr. Leroux owned and operated an RV park, campground and small residential subdivision. Then CRA came to audit his books. The agency lost or accidentally shredded most of his business records, then assessed him for almost $1 million in taxes, penalties and interest which the missing records would have shown he didn’t owe.
After a decade of fighting in tax court, Mr. Leroux was vindicated: the government owed him a refund, not the other way around. But by that time, the CRA’s attempts to collect the non-existent tax debt had created financial havoc for Mr. Leroux, leaving him virtually destitute and in hock to creditors.
In 2007, Mr. Leroux launched a lawsuit for damages against the CRA.
During a 3-day motion in March, 2010 the CRA asked the court to dismiss Mr. Leroux’s lawsuit as “frivolous and vexatious”, without even letting the case proceed to trial. The decision of Justice B.M. Preston, released July 7, 2010, held that the facts alleged in the pleadings, if proven true at trial, would be “sufficient to support those claims” for “negligence and breach of statutory duty”. Accordingly, the bulk of the motion relief requested by the CRA was denied, and the CRA was ordered to pay Mr. Leroux’s costs of the motion.
Mr. Leroux has been assisted in the litigation by the Canadian Constitution Foundation (CCF). Karen Selick, the CCF’s Litigation Director, said: “This decision clears the way for Mr. Leroux to proceed to trial and demonstrate to the CRA that it cannot run roughshod over taxpayers with impunity.”
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