Executive Summary: Key Legal and Evidentiary Issues

• GST/HST input tax credits totaling $1,618,846 were denied for advisory fees paid during Vail's acquisition of Whistler Blackcomb.

• The Respondent contested the appointment of the Appellant’s nominee for discovery, challenging her status under Rule 93(2).

• Concerns were raised over the nominee’s credibility due to inconsistent testimony about her title and timing of her appointment.

• The Respondent sought a court order to compel a more qualified individual, Michele Romanow, to be examined on behalf of the Appellant.

• Whistler Blackcomb requested additional CRA audit documents and questioned the adequacy of previous document production.

• Both motions were dismissed; the Court found insufficient grounds to override nominee discretion or compel broader disclosure.

Facts and procedural history

Whistler Blackcomb Holdings Inc. appealed the Minister of National Revenue’s denial of $1,618,846 in input tax credits claimed in relation to GST/HST paid on advisory fees during a corporate acquisition. In 2015, Vail Resorts Inc. made an unsolicited offer to acquire Whistler Blackcomb. The company formed a Special Committee of independent directors to assess the proposal and retained Greenhill & Co Canada Ltd. and legal counsel Osler, Hoskin & Harcourt LLP. This offer was declined. A second offer was made and accepted in 2016, leading to the acquisition in October 2016.

The CRA denied the input tax credits on the basis that the advisory services were not acquired for the purpose of making taxable supplies or in the course of commercial activities. Whistler Blackcomb appealed this decision. During discovery proceedings, two motions arose and were the subject of the Court’s consideration.

Motions and discovery dispute

There were two motions:

1. The Respondent’s motion sought a court order requiring Whistler Blackcomb to appoint Michele Romanow as a second nominee for examination, arguing that the original nominee, Toni Marie Mitchell, did not meet the criteria under Rule 93(2) of the Tax Court of Canada Rules (General Procedure). Specifically, it was asserted that Ms. Mitchell was not a current or former officer, director, or employee of Whistler Blackcomb and lacked sufficient knowledge of the matters in issue.

2. The Appellant’s motion sought orders directing the Respondent’s nominee to answer a specific question and to produce certain documents requested during discovery, including working papers and internal CRA memoranda related to the audit and appeal.

Issues surrounding corporate representation

Toni Marie Mitchell was selected as Whistler Blackcomb’s nominee. At the time of her examination, she was Head of Tax at Vail and testified that she was not a current or former officer, director, or employee of Whistler Blackcomb. Later, a Director’s Resolution was produced stating that Ms. Mitchell had been appointed “Senior Director, Tax” of Whistler Blackcomb effective October 6, 2023, with consent given on January 26, 2024.

The Respondent argued that inconsistencies in Ms. Mitchell’s testimony—specifically her statement that she had been appointed “Assistant Treasurer” and her earlier denial of being an officer—called into question her qualification. However, the Court found no definitive reason to discredit the resolution or her status and accepted that she was an officer at the time of the continued examination.

The Court noted that Ms. Mitchell joined Vail on August 15, 2022, and had no personal knowledge of the 2016 transaction. Her preparation included reviewing document books and consulting with two Vail employees, Michael Bosco and Nathan Gronberg. While the Respondent listed numerous topics on which she lacked precise knowledge, the Court emphasized that Rule 93(2) allows a corporation to select its nominee and that personal knowledge is not required. A nominee must represent the corporation’s knowledge, not just their own.

Justice Bodie found that the Respondent did not follow up adequately during the examination to assess Ms. Mitchell’s preparation or seek adjournment to allow her to become better informed, as permitted under Rule 95(2). The motion to compel a new nominee was therefore dismissed.

Document production and evidentiary requests

The Appellant’s motion also challenged the Respondent’s refusal to produce all audit and appeals working papers, including those not reviewed by the CRA’s nominee, Susan Ferguson. During Ms. Ferguson’s examination on January 17, 2024, the Appellant requested:

• All working papers reviewed by Ms. Ferguson

• The memo she prepared for referral to the appeals officer

• The T401 report on objection

• The T2020 memos of the auditor, the appeals officer, and Ms. Ferguson

• The CRA audit report, if any

The Respondent initially provided only “relevant” documents reviewed by Ms. Ferguson. Shortly before the motion hearing on November 13, 2024, the Respondent submitted an affidavit from Enriko Trefa with additional documents, stating it now included all documents reviewed by Ms. Ferguson, except legal research. The Appellant acknowledged that it “appears that the Crown has now produced the relevant working papers as reviewed by Ms. Ferguson.”

The Appellant also sought broader production of all working papers in the audit and appeals file, regardless of whether they were reviewed. However, the Court found that no such broader undertaking was agreed to during the examination, and the Appellant was not entitled to those documents. The motion was dismissed.

Outcome

Both motions were dismissed. The Court concluded that:

• Ms. Mitchell qualified under Rule 93(2) as an officer and had made reasonable efforts to inform herself

• The Respondent had fulfilled its discovery obligations concerning document production

• The Respondent’s right to examine a second nominee was not triggered

• The Appellant’s request for additional documents went beyond what had been requested or agreed to during discovery

Justice Bodie ordered that costs of both motions would be “in the cause,” meaning to be determined with the final outcome of the case.

Neither party was successful on these interlocutory motions. No monetary award, damages, or specific cost amounts were granted or ordered in this decision.