Hogan J. confirmed s. 163(2) penalties against the taxpayers in respect of business expenses, given that the taxpayers' only proof that the expenses were genuine was an invoice that the taxpayers themselves had fabricated.
The Minister had also sought penalties in respect of an alleged shareholder benefit, which Hogan J. denied in accordance with his having already found that the taxpayers' conduct had not transgressed the lesser threshold in s. 152(4)(a)(i).