A federal tax court judge has recused himself from a high-profile case involving accounting giant KPMG following revelations by the CBC that he attended an exclusive party in Europe sponsored by the law firm alleged to have signed off on what authorities later decried as an offshore tax "sham."

The fifth estate and Radio-Canada's Enquête program revealed that Justice Randall Bocock, while at an international tax conference last fall in Madrid, took part in a "cocktail reception" hosted by Dentons, a law firm with offices in Canada and around the world.

Bocock was, until this week, managing the case of a wealthy Victoria family that used a KPMG-devised scheme the Canada Revenue Agency says "intended to deceive" the taxman, although he was not expected to be the judge presiding over the actual trial.

"I am recusing myself as case management judge in respect of these appeals," the justice wrote in a "recusal order" posted on the tax court's website.

"My wife and I briefly attended that reception, open to conference attendees and their guests," Justice Bocock wrote. "I was aware of all these facts, but not the fact that law firm … was referenced anywhere in these appeals."

Bocock insisted he was unaware of Dentons' role in the case until the fifth estate broadcast.

However, documents filed in the Tax Court of Canada state that Dentons — at the time known as Fraser Milner Casgrain — provided "written opinions" as part of the approval process before the KPMG scheme was implemented in 1999.

Eugene Rossiter, chief justice of the Tax Court of Canada, will name Randall Bocock’s replacement in the trial into a KPMG tax plan used by wealthy Canadians. Rossiter had previously defended Bocock’s activities in Madrid where he attended social events during a KPMG-linked tax conference. (Tax Court of Canada)

And as far back as last June, the CBC made public Dentons' key role in blessing the KPMG tax plan in an investigative news story .

In court filings, the Canada Revenue Agency has alleged that the Isle of Man scheme was a "sham" that "intended to deceive" the federal treasury.

Last week, the Canadian Judicial Council, which oversees federally appointed judges in Canada, announced it was launching an investigation into Bocock and two other judges cited in the investigative programs.

For tips on this story email investigations@cbc.ca or phone Harvey Cashore at 416-526-4704

"I think now we delve into the area of potential conflict of interest," Norman Sabourin, executive director of the council, told the fifth estate after watching the fifth estate and Enquête.

In his recusal order, Justice Bocock cited the pending investigation — which he described as "fair and appropriate" — as another reason for stepping aside.

"Justice must be done and seen to be done," he wrote.

André Lareau, a Laval University professor and tax law expert who testified at the House of Commons inquiry into the KPMG affair, said judges have to be extremely careful.

"Even if we were to think the judge had no conversations at that cocktail, he should not put himself in a situation where he risks being under the influence or even the appearance of influence," he said.

Bocock's replacement in the trial will be selected by Eugene Rossiter, the chief justice of the Tax Court of Canada, who had previously defended Bocock's activities in Madrid.

"I am satisfied that Justice Bocock did not place himself in a conflict of interest by briefly attending a reception that was open to all participants of an international tax conference," Justice Rossiter wrote in an email to the fifth estate.

In an earlier email, Rossiter's office told the fifth estate that Bocock attended two receptions in Madrid, but declined to say which ones. The chief justice also said two other tax court justices attended the KPMG-sponsored conference, but would not indicate who they were.

Tax court chief justice under review

Rossiter himself is now one of the three judges under review by the Canadian Judicial Council — in his case, for comments he made about the practice of judges on his tax court drinking alcohol at social events with tax industry officials.

"We will have pizza and we will have wine and lots of it," Rossiter said at a recent tax conference in Calgary to what conference organizers in a tweet described as "massive applause."

After CBC/Radio-Canada reported those remarks, Norman Sabourin of the Canadian Judicial Council declined to comment on Rossiter's remarks, except to say that chief justices in particular must "set ethical aspirations."

He said there can be occasions when judges and lawyers get together for drinks without there being anything inappropriate.

The Canadian Judicial Council's review could take up to two months.