The taxpayer ran a sales and marketing business. His clients were principally livestock breeders and producers, and he worked from a home office. He deducted home renovation expenses from his business income, including a three-bay garage (to serve as an office and inventory storage), landscaping, and a fence. He argued the landscaping was for projecting a professional environment to clients and the fence was to improve security for his home office. C Miller J found that these two expenses were too tenuously connected with business to be deductible, but reversed the penalties for gross negligence. He stated (at para. 30):
I accept that with many of [the taxpayer's corporation's] disallowed expenses (fencing around the house for example), Mr. Lavoie was pushing the envelope, but conclude he was not grossly negligent in doing so. Simply because he has not proven to me that, on balance, this was a legitimate business expense, does not mean that there is no arguable basis whatsoever on which to attempt to deduct it.
For other claimed expenses, such as his wedding, jewelery for his wife and video games for his children, penalties were clearly justified.