The taxpayers had the same financial representative, who failed to file foreign property ownership form T1135 for several taxation years, even though he had done so in other years. The Court found that the Minister's decision not to grant relief on the resulting interest and penalties was unreasonable. The decision relied entirely on Information Circular 07-01 ("Taxpayer Relief Provisions") without any demonstrable understanding that an information circular is not law. The decision should have referred to s. 220(3.1), being the actual authority for the Minister's discretion.
Nevertheless, the Court affirmed the decision because it was clear that the taxpayers' application had no merit. The financial representative's belief that the T1135 forms were unnecessary (supposedly on the assumption that the Minister got the necessary information from other filings) was patently unreasonable.
The six taxpayers also argued that it was unfair that six separate penalties be levied against them for only one mistake made by their common representative. The Court dismissed this plea for a "volume discount," noting that "each [taxpayer], accepting the risk, chose... to have a representative look after the filings. That risk materialized..." (para. 51).