The taxpayer's voting shares were held mainly by a pair of business associates ("Ouimet and O'Neill"). O'Neill was responsible for preparing the taxpayer's 2007 return, but failed to provide his tax preparers with the documentation in a timely fashion. In fact, O'Neill had perpetrated a fraud on the taxpayer which eventually lead to a brokerage O'Neill worked for paying the taxpayer $7 million in compensation. The Minister denied the taxpayer's application for relief of interest and late-filing penalties for its 2007 return.
Scott J. granted the taxpayer's appeal and remitted the matter for reconsideration. The Minister's reasons had stated that the taxpayer was aware in 2007 that its return would be late, which ignored that the taxpayer had no reason in 2007 to believe that it was unreasonable to entrust O'Neill with its return. Moreover, there was no discussion of O'Neill's fraud.