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The claim arises out of the purchase by investors of units in mining cells of a potential gold property in British Columbia offered for sale by the defendant, Royal Crown Gold Reserve Inc. (hereinafter "Royal"). The defendant, Douglas Stewart Scott, is the sole shareholder and director of Royal. The defendant, Claude Taillefer, is alleged to be a promotor of the Royal investment. The defendant, Michael Friedman, is a lawyer who practices with the defendant, McMillan LLP, who provided a legal opinion letter to Mr. Scott prior to the sale of units to the investors which addressed the requirements under the Income Tax Act, R.S.C. 1985, c.1 (ITA) to qualify a mining investment as a "Canadian development expense" (CDE). This letter subsequently found its way into the hands of a number of investors.  A major feature advertised by Royal with respect to the investment was its tax deductibility against earned income. The Canada Revenue Agency (CRA) subsequently disallowed the deductions.