Executive Summary: Key Legal and Evidentiary Issues

• Judicial review was sought regarding the Minister of National Revenue’s prolonged audit and failure to issue tax assessments for 2010–2015.

• The Minister argued there was no reviewable decision or grounds for judicial review, and that alternative remedies existed.

• The court determined that the applicants’ legal rights were not affected by the Minister’s actions or correspondence.

• Courtesy Letters from the Minister did not constitute decisions subject to judicial review.

• Section 231.1 of the Income Tax Act was interpreted as an audit tool, not a time limit on audit completion.

• The applications were struck without leave to amend, and costs were awarded to the Minister.

Facts and outcome of the case

Background and parties involved

This case involved three related applicants—Sui Ping Luo, Jia Hong Liang, and Shao Dong Liang—who are family members. The Canada Revenue Agency (CRA) began auditing their 2010 to 2015 tax years in 2016. The Minister of National Revenue issued Demands for Information under the Income Tax Act, requesting documents and information regarding their tax returns. The applicants did not fully comply with these demands, and the CRA sent Courtesy Letters warning that legal proceedings would be initiated if the required information was not provided.

Procedural history and applications for judicial review

On July 3, 2025, the Minister filed a compliance application to compel the applicants to provide the outstanding information. The next day, the applicants filed Notices of Application for Judicial Review, claiming the Minister failed to complete the audits and issue assessments with due dispatch and challenging the Minister’s decision that their submissions were incomplete. The applicants sought orders compelling the Minister to end the audits for the 2010 to 2015 tax years.

Arguments and legal framework

The Minister moved to strike the applications, contending that there was no reviewable decision, no grounds for judicial review under the Federal Courts Act, and that the applicants had other remedies. The applicants argued that the court had jurisdiction to review the Minister’s conduct, including the length of the audit and the alleged agreement to complete the audit within a reasonable time. They asserted that the Minister’s actions were unreasonable and abusive.

Court’s analysis and findings

The court found that the Courtesy Letters did not change the applicants’ legal position or impose obligations, and therefore were not decisions subject to judicial review. The court clarified that section 231.1 of the Income Tax Act is an audit tool and does not impose a time limit on the completion of audits or issuance of assessments. The applications did not identify any legal rights affected or obligations imposed by the Minister’s actions. The court concluded that the real objective was to avoid complying with the CRA’s Demands for Information, which would interfere with the Minister’s statutory powers.

Outcome and costs

The court granted the Minister’s motions to strike the applications for judicial review in their entirety, without leave to amend. The applicants were ordered to pay costs to the Minister, fixed at $6,000 collectively for all three applications, payable within 30 days. The Minister of National Revenue was the successful party in this matter.