The order relate to the admissibility of two expert reports that Blackberry Limited wanted to submit in an appeal filed with the tax court concerning an assessment of approximately $17.1 million of FAPI (for research and development services received from US affiliates) and a reduction of the US corporate tax paid by US affiliate corporations when determining the FAT deduction. The first report contained an opinion on the development of international tax principles in Canada and the second report contained an opinion firstly, on alternative hypothetical transfer pricing structures and secondly, on the policy ramifications of a “hypothetical” model receiving similar treatment as that which the Appellant received from the Minister. The tax authorities held, that the reports were irrelevant, unnecessary and prejudicial and therefore inadmissable. Order of the Tax Court The Court ruled in favor of the tax authorities. “The two-step test for determining expert evidence admissibility was initially articulated by the Supreme Court of Canada (“Supreme Court”) in Mohan and subsequently clarified in White Burgess. The Supreme Court’s direction may be summarized below: 1. Threshold admissibility: This step consists of four questions: is the evidence logically relevant; is it necessary to assist the trier of fact; are there other exclusionary rules; and is the expert properly qualified. 2. Gatekeeper function / Residual discretion to exclude: This step is a cost-benefit analysis of the help and harm of the evidence. Does the probative value outweigh potential prejudice, confusion, and prolonged court time? This can be thought of as an application of the general exclusionary rule.”.  According to the Court the expert reports did not pass the test, but in the order the Court states that “Both Dr. Mintz and Mr. Rolph will have their inadmissible opinions otherwise placed before the Court, just not in the form of expert evidence. Dr. Mintz will be heard through the authentic, unvarnished Technical Report he helped author 24 years ago. Mr. Rolph will be heard through the introduction in argument and submissions by Appellant’s counsel of the analogous “hypotheses” and conclusions he has provided in Section 3 of his report.” ...