The taxpayer, a physician, sought retribution against an arbitrator who had ruled against her in a medical dispute. The arbitrator successfully sued the taxpayer for what amounted to a "vendetta" to sabotage his professional standing and have him criminally prosecuted, and he was awarded punitive damages.
Hogan J found that the taxpayer's legal fees incurred in the arbitrator's suit were not a business expense, as there was no connection between the relevant legal expenses and the business. He noted in particular that the expenses could not have been incurred to enable the taxpayer to continue her professional practice, given that her practice had continued even though the arbitrator's suit could not have turned out worse for her (para. 37).