On the basis of a "no-names" disclosure on behalf of the taxpayers that they had unreported income and that the individual taxpayer had been charged by an unnamed police force with a minor fraud and that an investigating officer had mentioned to the individual that the police might notify CCRA that he had failed to report income tax, CCRA indicated that it would consider a disclosure on behalf of the taxpayers to be valid based on the facts described to CCRA. When the taxpayers then disclosed particulars including their identity, CCRA indicated that it would not consider the disclosure to be voluntary. This was based on an understanding that there was an "informal relationship" with the police force in question amounting to an unwritten agreement, so that at the time of the disclosure by the taxpayers, there was an investigation by an authority with which CCRA had an information exchange agreement, as described in paragraph 6(a) of Information Circular 00-1R.
Strayer D.J. found that the requirements of promissory estoppel existed (on the basis of a "promise" provided in the Information Circular that a disclosure will be treated as voluntary if the client initiates it, subject to it being considered involuntary if the client initiates the disclosure with the knowledge of an audit, investigation etc. by the CCRA or an authority with which CCRA had an information exchange agreement) and on the basis that the taxpayers had no knowledge that the police force was such an authority with which CCRA had an information exchange agreement (even if the informal arrangement between that police force and CCRA could be described as a qualifying agreement). The matter was referred back to the Minister with the direction that the disclosure of the taxpayers be treated as voluntary and assessed under the voluntary disclosure program on that basis.