Background
LG Electronics Canada Inc., a distributor within a multinational group with a parent company in South Korea, applied in June 2009 to the Advance Pricing Arrangement (APA) program to govern inter-company transactions involving the purchase and sale of tangible goods. The application included a bilateral APA (BAPA) with Canadian and South Korean tax authorities. The BAPA was tentatively completed in December 2015 and the APA process finished in October 2017. In November 2018, the Minister of National Revenue reassessed LG based on the BAPA and APA.
LG subsequently requested interest and penalty relief related to the APA program (February 2017) and alleged CRA processing errors (March 2019). The Minister denied both requests on August 13, 2019. After LG requested a second review, the Minister issued a decision on June 23, 2025, cancelling arrears interest on 2012–2015 taxation years (December 16, 2016 to June 27, 2018) but refusing further relief, finding that undue CRA delays had not been identified.
LG commenced a judicial review application, and the parties agreed the decision was unreasonable and should be set aside. However, they disagreed on the appropriate remedies.
The Court’s Holding
Justice D’Agostino granted the application for judicial review. The Court set aside the Minister’s decision and remitted the matter for redetermination by a different delegated decision-maker. The Court allowed LG to provide further submissions within 30 days (by August 4, 2026).
However, the Court declined LG’s requests for: (1) directions containing specific findings of fact that the new decision-maker must adopt; (2) a mandatory 30-day deadline for the redetermination; or (3) costs. The Court held that even where both parties agree a decision is unreasonable, the court must carefully preserve the distinct roles of the judicial reviewer and the administrative decision-maker. The merits-decider is the administrative body, not the court. Allowing supplementary submissions adequately addresses the applicant’s concerns while maintaining proper institutional boundaries.
The Court noted that the passage of time justified permitting fresh submissions, but concluded this did not constitute an “exceptional circumstance” warranting directions on findings of fact or redetermination deadlines. The supplementary submissions would allow the new decision-maker to consider concerns that emerged following receipt of the certified tribunal record.
Key Takeaways
- On judicial review, even where the court sets aside a decision and remits for redetermination, it will not issue directions that pre-determine findings of fact, as this violates the administrative decision-maker’s role as merits-decider.
- The discretion to issue directions on judicial review must be “carefully exercised” and is reserved for truly exceptional circumstances, not routine cases of unreasonable decisions.
- Where a decision-maker has acted unreasonably, allowing supplementary submissions can be an appropriate remedy without imposing specific factual findings or redetermination deadlines on the new decision-maker.
- Judicial economy and the passage of time alone do not justify directions that constrain the decision-maker’s independent review of the merits.
Why It Matters
This decision provides important guidance on the limits of judicial review remedies in Canadian administrative law. While courts have discretion to issue directions when remitting decisions for reconsideration, they will not lightly exercise that discretion to make findings of fact for the decision-maker, even when both parties acknowledge the original decision was flawed. The judgment reinforces the principle that administrative bodies retain authority over the merits, and courts must respect that division of labor even when correcting errors.
For practitioners challenging administrative decisions, the case clarifies that fresh submissions to the reconsidering decision-maker, rather than court-imposed directions, is the standard remedy for deficient reasoning or newly discovered evidence. The decision also illustrates the court’s reluctance to impose strict timelines on redeterminations, preferring to allow administrative flexibility while preserving the reviewing function.