Canada v. Fio Corporation (October 30, 2015 – 2015 FCA 236, Gauthier, Webb (author), Near JJ. A.).
Précis: This is a decision in an appeal from a decision of the Tax Court blogged earlier on this site. The Tax Court held that the Crown had violated the implied undertaking rule during the discovery process:
 The issue in this appeal is the application of the implied undertaking rule to the specific facts of this case. D’Arcy J, of the Tax Court of Canada, issued an Order dated February 20, 2014 (2014 TCC 58). This Order prohibited the Crown from using certain documents that had been submitted by Fio Corporation (when it commenced its appeal to the Tax Court of Canada) in any other proceeding. Costs in the amount of $25,000 were also awarded to Fio Corporation and the Crown was given 30 days to file an application for leave to use the prohibited documents in another proceeding.
The Federal Court of Appeal disagreed with the Tax Court decision, holding that the documents at issue had been produced prior to the institution of the appeal and were therefore not subject to the implied undertaking rule. The appeal was allowed with costs both on appeal and in the Tax Court.
Decision: The Court of Appeal adopted a narrower formulation of the implied undertaking rule:
 As a result, in my view, in relation to appeals before the Tax Court of Canada, the implied undertaking rule does not apply to:
(a) any evidence that was disclosed prior to the commencement of the proceedings in the Tax Court of Canada; or
(b) any evidence that a party produced in the course of such proceedings but which such party was not compelled to produce as part of such proceedings.
The Court then applied this narrower formulation to the facts and issue and held that the Tax Court Judge had erred as to the date when the documents in question were first produced by the taxpayer:
 The error of the Tax Court Judge in finding that the documents were first disclosed in April 2012 was a palpable and overriding error. The evidence does not support this finding and this finding would have a direct impact on the result. Since, based on the evidence submitted, the documents were previously disclosed to the CRA auditors in 2009, the implied undertaking rule does not apply to the Discovery Documents.
As a result the appeal was allowed with costs both on appeal and in the Tax Court.