http://decisions.fca-caf.gc.ca/site/fca-caf/decisions/en/item/64779/index.do 
Palangio v. The Queen (November 18, 2013)[1] is a decision involving a municipal activist/politician who was sued in connection with letters and articles he wrote in local publications. The sole issue before the Federal Court of Appeal was whether he could deduct legal fees incurred in connection with such writing. While it is not clear from either the appeal decision or the Tax Court decision presumably the legal fees arose in connection with defamation proceedings. The Court of Appeal upheld the Tax Court decision denying the deduction of legal fees:
[4] As the appellant noted, in this appeal he has to show that the Tax Court Judge committed a palpable and overriding error in relation to any questions of fact or any questions of mixed fact and law (
Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235). We are all of the view that the appellant has failed to demonstrate that the Tax Court Judge made any palpable and overriding error with respect to:
a) his finding that the appellant did not have a source of business income in relation to his writing articles for the Heads Up newspaper; or
b) his finding, in any event, that the appellant failed to establish a connection between the legal fees and this writing activity that would support a finding that these legal fees were incurred for the purpose of earning income from this activity.
[1] 2013 FCA 268.