Qualifying Expert Witnesses In The Tax Court Of Canada | Yao v. The Queen

• Published date: 13 May 2022
• Subject Matter: Litigation, Mediation & Arbitration, Tax, Immigration, Trials & Appeals & Compensation, Income Tax, Tax Authorities, General Immigration
• Law Firm: Gowling WLG
• Author: Mr Stevan Novoselac

Yao v. The Queen¹ affords a practical overview of how the Tax Court of Canada ("TCC") determines admissibility of proposed expert evidence. This article discusses the TCC's approach in that case and highlights some practical considerations for expert evidence in TCC appeals.

Framework for admissibility

The TCC in Yao held a voir dire, which is a motion or mini-hearing, where the proposed expert witnesses can be questioned on issues relevant to admissibility. As a framework for determining admissibility, the TCC applied the two-part test:

1. threshold admissibility; and
2. the gatekeeper function or the residual discretion to exclude.

In determining threshold admissibility, the TCC applied a four-part test.

The first part of this test is to consider whether the proposed expert evidence is logically relevant. Relevancy in this context is a low hurdle determined by reference to the issues, as framed in the pleadings (notice of appeal, reply and answer, if any). Essentially, the question to be addressed is whether the proposed expert evidence makes the existence or non-existence of a fact in issue more or less likely than it would be without that evidence.

The second part of the test is to consider whether the proposed expert evidence is necessary to assist the trier of fact. The focus here is on enabling the TCC to appreciate technical matters in issue. Many cases have illustrated this factor as providing the Judge with "prescription glasses," through which technical information may be viewed before being analyzed and weighed by the Judge.

The third and fourth parts of the test are to consider whether there are any applicable exclusionary rules and whether the proposed expert is properly qualified or has the requisite credentials.

In applying the second part of the test, or the gatekeeper function, the TCC engages in a cost-benefit analysis, comparing the help versus the harm of the evidence. Put another way, the TCC considers whether the probative value of the proposed expert evidence outweighs the potential prejudice, confusion and prolonged Court time that would result if it were to be admitted.

If the proposed expert evidence passes both parts of the test and gets admitted, the TCC ultimately decides how much weight to give it, considering its probative value.

Application in Yao

The issue for the TCC in Yao was whether the appellants, as refugee claimants, were "temporary residents" (under Income Tax Act section 122.6) and thereby qualified for the Canada...