Executive Summary: Key Legal and Evidentiary Issues

• Whether the Tax Court erred in refusing to compel the Canada Revenue Agency to answer two questions posed on discovery framed the sole issue on appeal.
• Appellate intervention was confined to instances of palpable and overriding error or an extricable error of law, given the fact-based nature of the inquiry.
• Central to the dispute was the relevance test from Canada v. Lehigh Cement Limited and Rule 95 of the Tax Court of Canada Rules (General Procedure).
• Relevance of the two discovery questions to the issues raised in Brant's underlying tax appeal was the substantive question the Tax Court had decided.
• Brant carried the burden of demonstrating a reviewable error, including any misapplication of the Lehigh Cement test.
• Dismissal of the appeal carried a costs consequence in favour of the Crown.

Facts of the case

Brant Investments Ltd. appealed to the Federal Court of Appeal from an interlocutory order of the Tax Court of Canada, cited as 2025 TCC 95. In that order, the Tax Court dismissed Brant's motion to compel the Canada Revenue Agency to answer two questions on discovery. The appeal was heard at Vancouver, British Columbia, on May 27, 2026, before LeBlanc, Goyette and Pamel JJ.A. Judgment was delivered from the Bench the same day, with the Reasons for Judgment of the Court written by Goyette J.A.

Governing rules and standard of review

This appeal did not involve policy terms or contractual clauses; the provisions at issue were procedural and jurisprudential. The Tax Court applied Rule 95 of the Tax Court of Canada Rules (General Procedure), S.O.R./90-688a, together with the relevance test set out in Canada v. Lehigh Cement Limited, 2011 FCA 120 (at para. 34). On appeal, the Federal Court of Appeal identified the applicable standard of review: because determining whether questions and related undertakings are permissible is a fact-based inquiry, the Court could intervene only where the Tax Court committed a palpable and overriding error or an extricable error of law. For that standard the Court relied on Madison Pacific Properties Inc. v. Canada, 2019 FCA 19 (at paras. 24–25) and 684761 B.C. Ltd. v. Canada, 2015 FCA 123 (at para. 3), citing Lehigh Cement (at paras. 24–25).

The court's reasoning and analysis

Applying the Lehigh Cement test and Rule 95, the Tax Court had found the two questions irrelevant to the issues Brant raised in its appeal, and it provided detailed reasons for that conclusion. On review, the Federal Court of Appeal was not persuaded that the Tax Court made a reviewable error in dismissing the motion. In particular, Brant did not persuade the Court that the Tax Court had misapplied the Lehigh Cement test. Given the deferential standard applicable to this fact-based determination, the Court found no basis to interfere.

Ruling and outcome

The Federal Court of Appeal dismissed the appeal with costs, with reasons signed by Goyette J.A. on behalf of the Court. The successful party was the respondent, His Majesty the King, in whose favour costs were awarded; the reasons order costs but do not specify a monetary amount, so the exact figure is Not Specified.