International Journal of Coercion, Abuse, and Manipulation Volume 6 2023 116
However unlikely as it may seem, the data in the Decision
Dataset very strongly indicates Fiscal Arbitrators
operated in the opposite manner. One possible
explanation is that Fiscal Arbitrators is something
of a throwback to earlier pseudolaw communities
where pseudolaw was privileged knowledge, held by
gurus, and then spread in-person via seminars and
other direct contacts (Netolitzky, 2021, pp. 183-184).
However, that recruitment and proselytization scheme
was already falling out of favour in the early 2000s, and,
even then, Canadian “privileged knowledge” Detaxer
gurus usually operated websites (e.g., Netolitzky,
2016a, pp. 617-624), if not online forums, where their
concepts were described and discussed (Netolitzky,
2021, pp. 183-186). The then ascendant Freeman-on-
the-Land community was chiefly built around online
videos (Netolitzky, 2021, p. 184). Fiscal Arbitrators
was therefore much “quieter” than its predecessors and
contemporaries.
A second possibility is that almost all instances
of pseudolaw that are described in academic and
professional writing have an online component
because investigators chiefly look for pseudolaw and
its emanations and expressions online. You only find
targets in locations where you search. If so, then Fiscal
Arbitrators might be an example of an entirely parallel
pseudolaw ecosystem that operates almost entirely
offline. Perhaps Fiscal Arbitrators only came to the
public’s attention because this Detaxing scheme: 1) was
highly successful in recruiting customers 2) involved a
constellation of factors that led to Tax Court of Canada
litigation and 3) this combination of characteristics
resulted in a significant volume of reported Canadian
court judgments. Searches of court decision databases
are what led this investigator and other pseudolaw
trackers to discover Fiscal Arbitrators and its scheme.
This hypothesis is supported by a number of instances
where known pseudolaw schemes promoters have
been the subject of criminal prosecution (e.g., DeMara
Consulting: R v Stancer, 2016 BCSC 192 Dave’s Tax
Reorganization: R c Cardin, 2021 QCCS 930 R c
Paquin, 2021 QCCS 931), but, again, these schemes
seem to have little to no known online presence. Certain
expressions of pseudolaw thus may be “invisible” to
Internet-based research, but will become potentially
detectable via court proceedings where counter-law
concepts come into conflict with “real law,” or perhaps
by other means.
Most commonly described emanations of pseudolaw
have an ideological component: government and
institutions are bad, so authority should be shifted
to individuals (Netolitzky, 2021). These perspectives
lead to “attack” and “get out of jail free” pseudolaw
litigation. However, such resistance and counter-
authority beliefs are comparatively rare among the
general public. Ideologically-driven pseudolaw beliefs
and communities represent “a fringe of a fringe.” How
do persons in “the fringe of a fringe” locate and contact
one another? By the Internet, and, in particular, social
media.
Ideological pseudolaw may be a chiefly online
phenomenon because the Internet is so well suited
to connecting up marginal and extremist persons
with shared interests and perspectives. Viewed in
this context, some kinds of pseudolaw may be chiefly
propagated online because the medium matches the
characteristics of potential customers/participants.
Put another way, an ideological pseudolaw guru will
probably contact more customers with Facebook,
YouTube, and Telegram accounts, than by proselytizing
to coworkers during a coffee break.
However, when a person is selling a “get rich quick”
scheme, almost anyone could be a potential customer.
“Mercenary” customers are everywhere. Without the
requirement to locate potential clients in specialized
ideologically-linked circles, no need exists to expand
advertising and recruitment into Internet-based
mechanisms. All a “get rich quick” or “no taxes for
you” pseudolaw promoter needs is to find gullible and
greedy persons, and they are legion. Fiscal Arbitrators’
dramatic expansion illustrates that point.
This study clearly demonstrates that Fiscal Arbitrators’
customers had a low skepticism threshold before
signing up to questionable processes. Those customers
report they: 1) did not understand the basis for their
tax claims, and 2) simply ignored the content and
implications of the tax returns they signed. Within
only several years, many hundreds of Canadian
taxpayers were willing to participate in the Fiscal
Arbitrators scheme, without any recourse to Internet-
based advertising, recruitment, and communications.
That mode of recruitment may have provided tactical

ISSN: 2710-4028 DOI: doi.org/10.54208/1000/0006 117
advantages. For instance, this low-key direct social
network communications methodology meant Fiscal
Arbitrators would not be as readily detected by
Canadian law enforcement and income tax authorities.
Fiscal Arbitrators could and did operate submerged
and below the radar. Perhaps the same is true for many
other money-based pseudolaw schemes.
The range of, and variety in, participants within
pseudolaw “get rich quick” schemes is poorly
understood. This type of pseudolaw movement is
apparently short-lived. Many operate for only about
one to two years, with new instances appearing on an
apparently annual basis (Netolitzky, 2019a, pp. 1175-
1182). What this study reminds investigators is that
those money-based pseudolaw schemes that operate in
a more public manner, via Internet channels, may only
be a subset of a broader collection of scams of this type.
Other gurus in addition to Fiscal Arbitrators may have
taken a stealthy approach, and, like Fiscal Arbitrators,
operate quietly and in the shadows.
E. Distillation Effect
While this study was not intended to investigate
litigation behaviour, the Decision Dataset, and the
frequency and pattern of Federal Court of Appeal
challenges to unsuccessful Decision Dataset appeals,
appears to confirm a process named the “Distillation
Effect.” The Distillation Effect was proposed in 2019
by Justice Yves-Marie Morissette of the Quebec Court
of Appeal (Morissette, 2019, pp. 285, 306 Netolitzky,
2019b, p. 251), and argues that persons who abuse
court processes and engage in hopeless litigation are
more likely to seek appeals than other litigants. The
result is that as litigation moves through successive
tiers of appeals and reviews, the frequency of valid
litigation decreases as “good faith, fair dealing” actors
drop out. Problematic litigants and abusive litigation
are, instead, more likely to continue. “Bad litigation”
becomes “distilled out” and thus concentrated. The
Distillation Effect has been confirmed to operate in
Canada in Supreme Court of Canada proceedings
(Netolitzky, 2022, pp. 137-139) and in the Federal
Court of Appeal (Netolitzky &Warman, 2021, p. 248).
The Decision Dataset provides the first example of a
“first instance” Distillation Effect in Canadian court
proceedings, i.e., that the Distillation Effect operates
during appeals and/or challenges to the “lowest tier”
of court decisions. Those would usually be called “trial
decisions,” though, technically, Tax Court of Canada
proceedings are a kind of appeal or review of CRA
reassessments and rulings.
As is discussed above in Part III(C) (appeal outcomes),
some self-represented taxpayers relied on pseudolaw
and/or unorthodox litigation arguments that are
hopeless and therefore abuses of the court (Unrau v
National Dental Examining Board, 2019 ABQB 283).
Those Tax Court of Canada appellants were twice as
likely to appeal their Tax Court of Canada failures than
other self-represented appellants. This difference is
statistically significant (p=0.012). When one includes
all Decision Dataset Tax Court of Canada proceedings,
and groups represented and self-represented litigants
together, then the Distillation Effect is even more
pronounced: 55.6% (N=9) of abusive litigants
continued to conduct an appeal, versus 12.7% (N=55)
of non-abusive litigants, a statistically significant result:
x2(1, N=64)=9.312, p=0.00228.
This example of the Distillation Effect in operation
has limited broader implications. The key relevance
of the appearance of the Distillation Effect in a first
instance court scenario is that this study demonstrates
the Distillation Effect is now known to occur in at
least some first instance court processes. The Decision
Dataset self-represented and represented litigant
populations are a specialized and plausibly unusual
group, all responding to a highly specific law and fact
scenario. The identification of the Distillation Effect
in this study therefore provides little basis to conclude
the Distillation Effect is a commonplace trial court
phenomenon. Instead, the current study provides
meaningful evidence that the Distillation Effect not
only operates in higher appeal courts, but also can
appear in trial court processes. That observation
emphasizes the need for a broader-based quantitative
investigation of first instance litigation, to properly
appreciate the scope and operation of the Distillation
Effect in the Canadian legal system as a whole.
V. Conclusion
This study is the first instance where a Canadian
pseudolaw population has been investigated via
reported court judgments in a manner that provides