Executive Summary: Key Legal and Evidentiary Issues

• Judicial review was sought after the CRA determined the applicant ineligible for CRB based on insufficient net income.

• The applicant voluntarily discontinued his application, later claiming he had been misled during settlement discussions.

• The court applied the Philipos test to determine whether a discontinued proceeding could be revived.

• Evidence showed the applicant was informed by CRA counsel that no legal advice could be provided and encouraged to consider his options.

• The CRA’s eligibility rationale distinguished between gross and net income, confirming denial of CRB was reasonable.

• The court found no procedural unfairness or trickery, dismissing the motion and awarding no costs.

Facts and outcome of the case

The case involved an application for judicial review brought by Vassos Theodosiou, a self-represented litigant, who had earlier applied for and received both the Canada Recovery Benefit (CRB) and the Canada Emergency Response Benefit (CERB). After two levels of review, the Canada Revenue Agency (CRA) determined that while Mr. Theodosiou’s gross business income exceeded $5,000, his net business income did not meet the required threshold in 2019, 2020, or 2021. As a result, the CRA concluded that he was not eligible for the CRB, though he was not required to repay the CERB.

On April 4, 2025, the applicant filed a judicial review application challenging this CRA decision. On April 22, he spoke with counsel for the Attorney General of Canada. During the conversation, which was later summarized in an email from the government counsel, it was explained that Mr. Theodosiou was unlikely to succeed in court due to his financial ineligibility for the CRB and that government counsel could not offer legal advice or financial concessions. The applicant later claimed he felt pressured and misunderstood the role of the opposing counsel. Nevertheless, two days later, he filed a Notice of Discontinuance.

Subsequently, the applicant brought a motion to set aside the discontinuance and revive the case, arguing he had been “tricked” and lacked legal representation at the time. The Federal Court, presided over by Justice Allyson Whyte Nowak, assessed the motion under the framework established in Philipos v. Canada (Attorney General), 2016 FCA 79. That test requires the applicant to prove: (1) circumstances that undermine the decision to discontinue; (2) a reasonable chance of success in the original application; and (3) no prejudice to the opposing party.

The court found that the applicant did not meet the first or second parts of the test. The email documenting the conversation between the parties was contemporaneous and accurate, showing the applicant was advised to take time to decide and was clearly told legal advice could not be given. The court also found that the CRA’s decision was based on clear legal distinctions between gross and net income, and the applicant’s assertions lacked substantive legal grounding. As such, the court determined the applicant had simply changed his mind and that there was no procedural unfairness or deception.

In conclusion, the Federal Court denied the motion to re-open the discontinued application. No costs were awarded to either side. The outcome reinforces the legal and procedural standards for reopening discontinued proceedings and illustrates how courts handle claims of misunderstanding in the context of self-represented litigants.