Executive summary: key legal and evidentiary issues

• The Respondent (the Crown) brought a motion to compel self-represented Appellants Neelu and Subodh Malik to answer written follow-up questions arising from examination for discovery undertakings in a GST/HST dispute.

• Central to the underlying appeals is whether the Appellants were "builders" under the Excise Tax Act, whether the subject property was not an exempt supply as a primary place of residence, and whether it constituted a self-supply.

• Both Appellants refused every follow-up question using an identical omnibus statement offering five vague, alternative grounds, which the Court found meaningless and obstructive.

• Additional objections raised at the hearing — "privacy" regarding contractor contact details and "duplication" claiming information was already produced — were rejected as unsupported by evidence.

• Relevancy of discovery questions was assessed under the broad, liberal standard from Canada v Lehigh Cement Limited, 2011 FCA 120, requiring only a reasonable likelihood the answer could advance or damage a party's case.

• Costs of $500 per Appellant were awarded to the Respondent as compensatory — not punitive — despite the Crown's request for enhanced costs of $3,000 to $4,000.

The property dispute and its tax implications

Neelu Malik and Subodh Malik, spouses, purchased a house at 1359 Applewood Road, Mississauga, Ontario, in 2012. They rented the property out for several years before severing the lot and creating a second address at 1355 Applewood Road, Mississauga, Ontario. New homes were built on each lot. The underlying tax appeals before the Tax Court of Canada concerned the Minister of National Revenue's calculation of GST/HST on the second lot, 1355 Applewood Road, which is the subject of these appeals. The appeals raised three issues: whether the Appellants were "builders" for the purposes of the Excise Tax Act, whether the subject property was not an exempt supply as a primary place of residence, and whether the subject property was a self-supply. The Appellants' Notices of Appeal asserted that they had purchased 1359 Applewood Road with the primary intention of building a house for their family, and detailed the history of the houses and properties as well as the Appellants' family and financial circumstances. The Replies to the Notices of Appeal contained 50 statements of assumed facts, making the appeals fact-driven.

The discovery process and the Respondent's motion

The Appellants were examined for discovery at oral examinations held in June 2025. Neelu Malik provided answers to 29 undertakings and Subodh Malik provided answers to 2 undertakings, with most of the undertakings being to produce documentation. Following those answers, the Respondent served each Appellant with a list of follow-up questions in writing, each dated September 25, 2025. Most of the follow-up questions asked for information relating to produced documents — including architectural drawings, mortgage statements, contractor invoices, insurance documents, and telecommunications service agreements — all connected to the factual circumstances surrounding the two properties. Both Appellants refused to answer every single follow-up question.

The omnibus refusal and its shortcomings

Each Appellant refused every question with the same written statement asserting that the Appellant had already pleaded all material facts relied on, or that the question invited legal argument and either asked what evidence the Appellant intended to rely on, or sought the Appellant's legal position, or was irrelevant to the correctness of the assessment. Justice Clark found this omnibus statement "so broad as to be meaningless," characterizing it as "nothing more than a slammed door in the face of the questioner." The Court emphasized that section 107 of the Tax Court of Canada Rules (General Procedure) requires an objector to briefly state the reason for the objection and requires that reason to be recorded together with the question. The blanket refusal made it impossible for the questioner to know the actual basis for the refusal, and difficult for the Court to determine the precise basis for the refusal.

The Court's analysis of relevance and proportionality

Applying the test for relevance established in Canada v Lehigh Cement Limited, 2011 FCA 120, Justice Clark confirmed that on a motion, the threshold for relevance is low, and when in doubt, the judge hearing the motion should err on the side of allowing the question. A question is relevant where there is a reasonable likelihood that it might elicit information which may directly or indirectly enable the party seeking the answer to advance its case or to damage the case of its adversary. The Court reviewed each of the questions in issue in the motion and determined that none sought disclosure of legal argument; rather, the questions sought clarification or additional information arising from information provided in answer to an undertaking. The Court also found that the questions did not ask the Appellants what evidence they would rely on, but sought information that could potentially be used as evidence. The Appellants' additional objections of "privacy" (regarding the telephone numbers of contractors) and "duplication" (claiming the information could be found in the books of documents used at discovery) were also rejected. When asked to direct the Court to where the requested information had already been produced, the Appellants were not able to identify a document. Privacy was not accepted as a basis for refusing to answer, as subsection 95(4) of the Rules provides that a party may obtain names and addresses of persons who might reasonably be expected to have knowledge of the transactions or occurrences in issue. The Court also considered proportionality, noting these were Class B appeals involving self-represented appellants and fact-driven matters involving a large number of disputed facts, and found nothing to suggest the questions would create an undue burden on either Appellant.

The ruling and costs award

Justice Clark allowed the Respondent's motion in its entirety for both appeals. Neelu Malik was ordered to answer the Further Questions on Undertakings dated September 25, 2025, with the exceptions of withdrawn questions 11b(i), 13(a), 13(b), 13(c), 13(3)(i)(2), 13(e)(i)(1), and 13(d)(i)(2), on or before January 30, 2026. Subodh Malik was similarly ordered to answer each of the Further Questions on Undertakings dated September 25, 2025, with the exception of withdrawn question 1(b), on or before January 30, 2026. The parties were directed to communicate with the Hearings Coordinator to advise if the matter would settle or proceed to hearing, on or before March 2, 2026. Although the Respondent had sought enhanced costs of between $3,000 to $4,000 pursuant to subsection 147(3) of the Rules, the Court awarded costs fixed at $500 from each Appellant to be paid to the Respondent on or before January 30, 2026, characterizing the award as compensatory and not punitive. The Court noted that while the Appellants' conduct had unnecessarily lengthened the duration of the proceedings, they were self-represented individuals who had not missed any court-ordered deadlines or caused any other delay.