Naraine v. Canada (January 13, 2016 – 2016 FCA 6, Pelletier, Stratas, Gleason (author) JJ. A.).
Précis: The Tax Court decision in this case was blogged earlier on this site. Mr. Naraine spent 21 years pursuing a remedy against Ford after his employment was terminated. The Tax Court held that the payment he received was taxable either as a retiring allowance or as interest. It also rejected his claim for the deduction of legal fee above the amount of $16,700 allowed by CRA. The Tax Court held that he had not adequately proven such additional legal expenses. Mr. Naraine appealed that finding with respect to legal fees. The Federal Court of Appeal agreed with the Tax Court and dismissed the appeal with costs.
Decision: The Federal Court of Appeal agreed with the Tax Court that Mr. Naraine had simply not proven the additional legal fees he sought to deduct:
 The Tax Court refused the bulk of Mr. Naraine’s claimed legal expenses because it found that Mr. Naraine had failed to establish that he had incurred these expenses during the relevant time period. This determination is a factual one and can be set aside by this Court on appeal only if the Tax Court made a palpable and overriding error in reaching its conclusion: Housen v. Nikolaisen, 2002 SCC 33,  2 S.C.R. 235 at paragraph 10.
 I do not believe that the Tax Court made any such error because Mr. Naraine produced no documentary evidence to support his assertion that he incurred the expenses during the time frames contemplated in subsection 60(o.1) of the ITA and provided no explanation as to why he was unable to produce copies of the bills that his lawyers would have delivered to him. While, as this Court held in House v. The Queen, 2011 FCA 234 at paragraph 80, documentary evidence need not necessarily be produced in every tax case to support a claimed deduction, I believe that it was reasonable to expect that it be produced here or that a cogent explanation be furnished as to why the evidence was not available as Mr. Naraine would have received bills confirming the amount and timing of his legal expenses. The Tax Court thus did not commit a reviewable error in refusing to recognize the claimed legal expenses.
As a result the appeal was dismissed with costs.