PRINCE GEORGE, B.C. — Irvin Leroux, the beleaguered taxpayer who suffered financial ruin following a nightmare audit by Canada Revenue Agency (CRA), has won the right to continue his lawsuit against the CRA in the Supreme Court of British Columbia.
On November 1, 2011, the B.C. Court of Appeal rejected yet another attempt by the CRA to have Mr. Leroux’s case thrown out of court. The panel of 3 judges announced their intention orally to permit Mr. Leroux’s lawsuit to continue. Written reasons will be released by the court later.
Mr. Leroux’s lawyer Laurie Armstrong of Victoria, B.C. has been given leave to file an amended Statement of Claim narrowing the issues. Mr. Leroux’s original claim for damages for misfeasance in public office will be among the issues that go forward to trial.
In 1996, Mr. Leroux owned and operated an RV park, campground and small residential subdivision. Then CRA came to audit his books. The agency lost or accidentally shredded most of his business records, then assessed him for almost $1 million in taxes, penalties and interest which the missing records would have shown he didn’t owe.
After a decade of fighting in tax court, Mr. Leroux was vindicated: the government owed him a refund, not the other way around. But by that time, the CRA’s attempts to collect the non-existent tax debt had created financial havoc for Mr. Leroux, leaving him virtually destitute and in hock to creditors.
In 2007, Mr. Leroux launched a lawsuit for damages against the CRA.
During a 3-day motion in March, 2010 the CRA asked the court to dismiss Mr. Leroux’s lawsuit as “frivolous and vexatious”, without even letting the case proceed to trial. The decision of Justice B.M. Preston, released July 7, 2010, held that Mr. Leroux could proceed with his case.
The CRA appealed that decision, resulting in the November 1, 2011 hearing at the B.C. Court of Appeal.
Mr. Leroux has been assisted in the litigation by the Canadian Constitution Foundation (CCF). Karen Selick, the CCF’s Litigation Director, said: “This decision clears the way for Mr. Leroux to proceed to trial and demonstrate to the CRA that it cannot run roughshod over taxpayers with impunity.”
The written reasons of the Court of Appeal will be posted on the CCF’s website when they are released.