The Tax Court of Canada has protected ten disputed documents connected to tax advice for an Alaris transaction, while ordering disclosure of four others that dealt with routine document delivery or an unexplained public record. The ruling draws a distinction between accountants helping lawyers provide legal advice and accounting work that attracts no such protection.
In Alaris Equity Partners Inc. v. The King, 2026 TCC 185, Justice Randall S. Bocock ordered complete, unredacted copies of the four documents to be produced within 30 days of his October 28, 2026 order. The decision resolves a document-production motion, not the merits of the company’s tax appeals.
Accountants retained directly by tax counsel
The underlying appeals concern the general anti-avoidance rule and whether tax attributes could be carried forward and used following equity-financing transactions in 2006 and 2008. The fourteen documents at issue on the motion all related to the 2008 transaction and were created over roughly six weeks.
Alaris retained Felesky Flynn for tax advice after commercial negotiations were substantially complete. Facing a tight timetable, the law firm directly engaged Ernst & Young to gather, organize, review and summarize corporate and tax information needed for its opinion. The written engagement was disclosed in full; the dispute concerned the resulting report and related communications.
That arrangement mattered. Bocock found that EY acted solely and directly for the tax lawyers in performing the due-diligence work. It was not simply an accounting firm independently retained by the company and exchanging information with counsel.
The court nevertheless rejected any automatic extension of privilege to everything an accountant produces. Ordinary accounting work does not become protected merely because lawyers are involved. The relevant task must already be privileged in character: work supporting legal advice that lawyers could have performed themselves does not lose that protection solely because they delegate it to an agent.
The purpose of each communication controlled
Bocock reviewed the disputed documents individually. The EY report was privileged because it assembled information and evidentiary foundations needed for the legal opinion, within the usual scope of work a law firm might provide to its client. There was no evidence of disclosure to an outside party that would waive the protection.
Four exchanges between EY and Alaris representatives were also protected. They contained targeted requests for information needed by the lawyers and responsive material. Although no lawyer was listed as sender or addressee in those exchanges, the court found that EY was acting as counsel’s agent within the flow of communications needed for the legal opinion.
Two detailed exchanges between EY and Felesky Flynn likewise contained information central to that relationship and the advice being prepared. The judge protected another three internal Alaris emails that refined factual questions arising from counsel’s advice before returning to the lawyers for a legal conclusion. Their circulation within the client group did not, on these facts, remove them from the protected process of seeking advice.
The opposite result applied to three emails concerning the process, availability and timing of document delivery. Bocock compared their function to delivery or packing slips: they did not identify substantive details or contents essential to a legal opinion. Their connection to a broader legal-advice exercise was insufficient to protect them.
The fourth unprotected document involved an isolated public document from 2006, sent without a specific request or context. The judge found that the accompanying exchange did not establish a privileged communication. The resulting order required disclosure of documents numbered five through eight, while preserving privilege for the other ten.
A confined ruling on access to evidence
The court received unredacted copies under seal for its own review. Its public reasons explain the documents’ functions without making the protected contents publicly available. The ruling therefore does not establish a general right to inspect the company’s tax advice, nor does it create blanket privilege for work performed by accountants.
The mixed result also left costs open. Bocock assessed no costs at that stage, but allowed either side to raise the issue later if settlement offers exchanged over the motion could affect the outcome. The order makes no finding that the four documents have since been produced and determines neither the validity of the underlying tax assessments nor the ultimate result of the appeals.
Source: Alaris Equity Partners Inc. v. The King, 2026 TCC 185.
