A KPMG partner argued confidentiality. The court had other ideas.
A British Columbia court has ordered a KPMG partner to answer questions under oath about a tax transaction he designed, rejecting confidentiality objections.
The ruling came from Associate Judge Robinson of the Supreme Court of British Columbia in Vancouver, delivered orally on July 14, 2026.
The case grows out of a commercial dispute over a multi-tower residential development in North Vancouver. In 2015, a company director agreed to buy three strata lots in one of the towers, planning to merge them into a single penthouse, with the purchase set to close in January 2019. As that date neared, the director arranged the transfer of $2.5 million from the developer to himself and to a corporate defendant. Whether that money was a loan, an advance on future income, or something else is one of the central questions headed to trial.
Because the director and the developer were not at arm's length, the transfer carried potential income tax consequences, since the advance might be treated as deemed income. To manage that exposure, the director retained KPMG, and one of the firm's partners designed what the court described as a complicated tax transaction.
The judge was careful to note there was no suggestion the partner acted improperly or unlawfully, and made no findings against him.
At issue was the developer's request to examine the partner under oath before trial. KPMG, acting for itself and the partner, joined the defendants in opposing the application. They argued the accountant had not refused to cooperate, since he was willing to answer written questions, so a court order was premature.
The court saw it differently. The partner's willingness, it found, was conditional on not breaching his obligations under the CPABC Code of Professional Conduct, which restricts disclosure of confidential client information without consent or a court order. In practice, that meant the defendants controlled what he could say. The judge described the defendants' assurance as "at best highly equivocal and at worst, illusory," and treated their position as a refusal under the rules governing pre-trial examination of witnesses.
The court also rejected written questions as a substitute for oral examination, finding that approach unworkable given the technical nature of the transaction and the follow-up questions it would inevitably prompt.
The application was allowed. The partner must submit to an oral examination, with the developer ordered to cover his reasonable costs, an amount it may later claim back as a taxable disbursement. On the costs of the application itself, the judge found the developer had succeeded and ordered that those costs be decided with the outcome of the case.
For accountants, tax advisors, and other professionals bound by confidentiality codes, the decision is a reminder that those obligations give way to a court's authority. A client's refusal to waive confidentiality does not shield a professional from being compelled to testify, and presenting limited cooperation as goodwill may not satisfy a court weighing access to relevant evidence.
