INTRODUCTION
Expert witnesses play an important, and often decisive, role in litigation. Tax disputes are no different, as experts regularly testify on matters such as those involving asset valuations, transfer pricing or scientific research and experimental development (“SR&ED”). It is a truism that the first obligation of the expert is to the court to which the expert is called to assist and not to the party calling the expert.
This article discusses the role of a traditional expert witness in litigation called by either the taxpayer or the Crown on an appeal to the Tax Court of Canada. Other types of expert or quasi-expert witnesses are not addressed here, including the potential roles played by “participant” experts in tax disputes.[1]
The central requirements for expert witnesses in tax appeals are set out in section 145 of the Tax Court of Canada Rules (General Procedure).[2] As required under section 145, the proposed expert’s report shall set out the expert’s opinion in full, state the expert’s qualifications, and be accompanied by a certificate signed by the expert acknowledging that the expert has read the Code of Conduct for Expert Witnesses (the “Code of Conduct”) and agreed to be bound by it. The Code of Conduct states that:
1 An expert witness has an overriding duty to assist the Court impartially on matters relevant to his or her area of expertise.
2 This duty overrides any duty to a party to the proceeding, including the person retaining the expert witness. An expert witness must be independent and objective and must not be an advocate for a party.
This article focuses on what the obligations placed on an expert under the Code of Conduct mean for the proposed expert’s independence from the party calling the proposed expert as a witness and, in particular, on unique problems that can arise with some experts called by the Crown.
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