The taxpayers' return was prepared by an individual whose last name they could not recall at the hearing. The return claimed meaningless deductions (e.g. deducting money one owes to oneself as "agent"), and Jorré J found the Minister's assessment of penalties to be well founded.
Jorré J noted that CRA owes no duty of care to a taxpayer to prevent them from receiving refunds based on obviously vacuous claims (para. 29) - although such duty would not be relevant to s. 163(2) in any event, because it is the grossly negligent underreporting that triggers liability, not the receipt of a refund (para. 30).