Citation: 2016 TCC 161
Date: 201608XX
Docket: 2009-3506(IT)G
BETWEEN:
JUANITA
MARIANO,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent;
Docket:
2009-3516(IT)G
AND BETWEEN:
DOUGLAS
MOSHURCHAK,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent;
Docket: 2009-3498(IT)G
AND BETWEEN:
SERGIY BILOBROV,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
Docket: 2009-3503(IT)G
AND BETWEEN:
MELBA LAPUS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
Docket: 2009-3510(IT)G
AND BETWEEN:
MYLYNE SANTOS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
Docket: 2009-3514(IT)G
AND BETWEEN:
THE ESTATE OF PENNY SHARP,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent;
Docket: 2009-3515(IT)G
AND BETWEEN:
JANICE MOSHURCHAK,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED AMENDED REASONS RESPECTING
SUBMISSIONS ON COSTS
Pizzitelli J.
[1]
The Respondent was totally successful in the
trials of the above matters involving a charitable donation scheme which spanned
over 25 days of hearings including one week of oral argument supplemented by
detailed written argument given by both sides. The Respondent was awarded costs
in the decision with a proviso that if any party disagreed with such order as
to costs they were invited to make submissions within 30 days, a period that
was extended by the Court upon request.
[2]
Based on the order of costs, the Respondent submitted
a Bill of Costs seeking Tariff B fees of $41,075 and disbursements in the total
amount of $491,136.95, which included expert witness fees of its expert, FTI, in
the amount of $422,286.20. It should be noted that both sides gave testimony of
one expert witness, after each side was disqualified in attempting to bring the
testimony of a second expert witness. In the Bill of Costs above referenced,
the Respondent did not include the expenses incurred in connection with JS, the
person tendered as its second expert witness whose qualifications were not
accepted by the Court.
[3]
Notwithstanding that the Respondent has only
claimed Tariff costs, the Appellants, in its initial submissions and subsequently
in reply submissions, argues that such fees should not be allowed or
dramatically reduced on essentially the following basis:
1.
That these were “test cases” and hence each
party should bear its own costs;
2.
That the Promoter should be solely liable for
costs, which position was taken only in reply submissions;
3. In
the alternative, that the costs be allocated amongst thousands of taxpayers who
were similarly assessed under this tax donation scheme or affected by the
decisions; including alternatively taxpayers at the objection stage or those at
the appeals stage or those who agreed to be bound by this decision under the
Court Rules or by agreement with the Respondent at the objection stage; either
on a several or joint and several basis.
4. That
in any case, the total of fees and disbursements claimed do not reflect the
reasonable expectation of the Appellants as to the cost liability in the event
of their dismissal; and
5. That
the quantum of expert fees should be reduced, notwithstanding the reasonable
expectation of the Appellants in 4 above.
[4]
The Respondent advised the Court it was
satisfied with the costs order in the decision but reserved the right to make
submissions if the Appellants disagreed with such costs. Accordingly, the
Respondent’s submissions essentially contest those of the Appellants and
request that the 5 Appellants who agreed to be bound by the decision in this
matter, namely in the matters of Sergiy Bilobrov, 2009‑3498(IT)G, Melba Lapus, 2009-3503(IT)G, Janice Moshurchak,
2009‑3515(IT)G, Mylyne Santos, 2009-3510(IT)G and Penny Sharp,
2009‑3514(IT)G (the “Bound Appellants”) be jointly and severally
responsible for those costs and in the alternative, that GLGI Inc. (the “Promoter”)
also be jointly and severally responsible, all of which will be addressed later
when discussing who shall be responsible for costs.
[5]
It should also be noted that the Bound
Appellants were invited by both the Court and the Respondent to make
submissions on costs and some of them did so, some more than once, most essentially
adopting similar arguments of the Appellants herein, that these involved test
cases and so there should be no costs, such costs were not reasonably expected
and that it was their understanding the Promoter would be and should be
responsible for all costs. Submissions were also made regarding the allocation
of costs amongst those potentially liable which I will address in the final
provisions of this Order. On these issues my comments pertaining to the
Appellants obviously apply to the Bound Appellants as well.
[6]
One of the Bound Appellants also argues that as
a matter of statutory interpretation the Agreement to be Bound Form 146.1 does
not make reference to costs and so a Bound Appellant should not be liable for
any or in any event such agreement is ambiguous and/or the result of unequal
bargaining power and so the doctrine of contra proferentem should apply to
construe the form agreement in favour of such Bound Appellant. The same Bound
Appellant also challenges the amount of the legal fees portion of the
Respondent’s claimed costs on the basis that it should be reduced by the amount
of Cost Orders for costs awarded in any event of the cause by the case
management judge and myself as the trial management judge to avoid duplication
of fees. These arguments will be addressed in my Reasons as well.
[7]
Since the Respondent’s submissions, together
with those of some of the Bound Appellants make reference to the Promoter’s
responsibility for costs, the Court ordered that the Promoter be notified and
given opportunity to make submissions on costs; which Order was served on the Promoter
together with the submissions. The Respondent also served copies of its costs
submissions on the Promoter as well as its lawyers and some of its officers to
maximize chance of receipt thereof. The Promoter did not reply with any costs
submissions although in the further reply submissions of the Appellants,
prepared by their counsel who was initially retained by the Promoter, the
Appellants ask that if costs are to be awarded that they be awarded against
only the Promoter as the first alternative.
[8]
In essence, all interested or affected persons
were given the opportunity to address the issue of costs.
[9]
It should be noted that neither of the Appellants
nor the Bound Appellants have attacked the reasonableness of the Respondent’s
legal fees portion of the costs claimed amounting to $41,075 of the total of
fees and disbursements claimed in its Bill of Costs above; other than to argue
no fees should be payable in test cases or, in the case of one of the Bound
Appellants, that such legal fees should be reduced by the amount of pre-trial
cost orders totalling $13,000, the latter to be discussed when dealing with
quantum issues later on. In fact, none of them have
made any representations on the factors to consider in Rules 147(3)(a) to (i.1)
of the Tax Court of Canada Rules (General Procedure) (the “Rules”) applicable
to these appeals and focus only on the “other factors” in Rule 147(3)(j)
thereof dealing with other matters relevant to the question of costs to support
its arguments. The Respondent on the other hand has made reference to all the
factors in its submissions which I will address shortly.
I. The
Law-Rule 147
[10]
There is no dispute that Rule 147 grants the
Court complete discretion in determining the amount of costs, their allocation
and the persons required to pay them and that Rule 147(3) sets out the factors
that the Court may consider in exercising such discretion which must be
considered on a principled basis. Having regard to the costs submissions made,
the relevant provisions of Rule 147 read as follows:
147 (1) The Court may determine the amount
of the costs of all parties involved in any proceeding, the allocation of those
costs and the persons required to pay them.
…
(3) In exercising its discretionary power
pursuant to subsection (1) the Court may consider,
(a) the result of
the proceeding,
(b) the amounts
in issue,
(c) the
importance of the issues,
(d) any offer of
settlement made in writing,
(e) the volume of
work,
(f) the
complexity of the issues,
(g) the conduct
of any party that tended to shorten or to lengthen unnecessarily the duration
of the proceeding,
(h) the denial or
the neglect or refusal of any party to admit anything that should have been
admitted,
(i) whether any
stage in the proceedings was,
(i) improper,
vexatious, or unnecessary, or
(ii) taken
through negligence, mistake or excessive caution,
(i.1) whether the
expense required to have an expert witness give evidence was justified given
(i) the nature
of the proceeding, its public significance and any need to clarify the law,
(ii) the number,
complexity or technical nature of the issues in dispute, or
(iii) the amount
in dispute; and
(j) any other
matter relevant to the question of costs.
…
(4) The Court may fix all or part of the
costs with or without reference to Schedule II, Tariff B and, further, it may
award a lump sum in lieu of or in addition to any taxed costs.
[11]
This matter did not involve any settlement
offers to which the provisions of Rules 147(3.1) to (3.8) would be applicable.
[12]
I am in agreement with the arguments made by
the Respondent with respect to those factors in paragraphs 147(3)(a) to (i.1) which
in my opinion would have justified an award of costs higher than the Tariff
costs claimed.
[13]
Under paragraph (a) of the factors the Respondent
was entirely successful on all the various issues in play at trial: on the
issue of donative intent, on the validity of the trust for several reasons and on
the lack of trust property, on the issue of the Program sham and on the valuation
issue of the software donations in kind. These various issues created in my
opinion a level of complexity and volume of work within the factors of paragraphs
(e) and (f), clearly evidenced by the mass of Exhibits that included 17 plus
volumes of Joint Documents, four proposed Expert Witness Reports, a Partial
Agreed Statement of Facts respecting some evidence and about 30 separately entered
Respondent’s Exhibits and a few of the Appellants. The hearing required over 25
sitting days, including one week of oral argument. Written argument was also
tendered by both parties in support of their positions. The hearing took place
in 3 cities; Vancouver, Toronto and Halifax, (the latter to accommodate the Appellants’
witness which included a hearing on a Saturday), during which about a dozen
witnesses were called to testify including 6 witnesses called by the Appellants,
themselves included.
[14]
The Appellants refused to admit various facts
under factor (h), including that the Program was promoted on the basis the
participants would receive tax credits in excess of cash paid to participate
even though the promotional materials in evidence clearly established this.
These resulted in an unnecessarily lengthened trial and put the Respondent to substantially
increased effort.
[15]
There is no doubt in my mind as well that under
factor (i.1) the expense required to have an expert witness give evidence was
justified by the Respondent. Firstly, its expert witness was necessary to
address the expert testimony of the Appellants’ expert witness and secondly,
the issue of the value of software is a complex, technical and business matter
beyond the ability of the Court to address without such assistance.
[16]
Under factor (d), “any offer of settlement made
in writing”, I also take note of the fact that the Appellants and all Bound
Appellants in these proceedings were given written settlement offers they
ultimately declined to accept notwithstanding several deadline extensions granted
to them. Such extensions totalled almost 8 months. The Appellant, Mrs. Juanita
Mariano (“Mariano”), in fact initially accepted such offer then changed her
mind by which time the offer was no longer in play - too late to change her
mind.
[17]
Having regard to the above, it is clear the
issues in dispute were factually complex pursuant to factor (f), made more
complex by the complex structure of the donation program (the “Program”) involving
cash and in-kind donations, trusts, the involvement of various administrative,
management and supplier parties, including U.S. and offshore entities, allegations
of sham, as well as the technical valuations of the Appellants’ expert witness and
the 2 valuations by the Promoter’s valuators that formed part of the
Program materials. The Respondent was forced to review and consider all these
materials and facts.
[18]
Counsel for the parties conducted themselves
professionally and admirably throughout this trial such that it can be easily
said there were no improper, vexatious or unnecessary stages in the actual
trial proceedings under factor (i). However, the able, professional and
efficient conduct of the Appellants’ counsel in their carriage of these actions
does not derogate from the lengthy, complex, and unnecessarily lengthened trial
that resulted partially due to the conduct of their clients; both the
Appellants, by their refusal to make admissions, and the Promoter of the
Program which will be discussed later.
[19]
Although the “amount in issue” under factor (b)
was not directly addressed by the Appellants’ submissions, it was indirectly
addressed in their submissions relating to “other factors” in paragraph (j) in
respect to the reasonable expectations of the Appellants, which I will discuss
in more detail shortly. For the purposes of this factor (h) however, it is
clear the Appellants feel the amount of taxes in issue is not significant – relative
to the amount of costs claimed as they state in paragraph 10 of its costs
submissions:
10. …The cost exposure would have completely
outweighed the potential benefit of pursuing the appeals….
[20]
The Respondent admits that the amount of tax in
dispute, even including the amounts of the Bound Appellants, are not
significant however, also points out that the amount of charitable tax credits
claimed by the Appellants is significant.
[21]
The evidence was also that Mariano made a cash
payment of $7,500 and claimed a donation receipt of $45,044 for which she
expected to receive a total federal and provincial tax credit of $16,362.99 for
2005. Douglas Moshurchak (“Moshurchak”) made a cash payment of $14,250 in 2004
and claimed a donation receipt of $57,044 for which he expected a combined tax
credit of $18,777.76. For 2005, Moshurchak made a net cash payment of $100,000
($116,000 if you include his $16,000 negotiated kickback from his commissioned
adviser who donated same on his behalf) for which he claimed a donation receipt
of $928,052 and expected a combined tax credit of $357,208.44.
[22]
Taken together, the total combined federal and
provincial tax credits in dispute do not equal the costs claimed, although they
came close at about $392,409. However, if one adds the charitable tax credits claimed
by the Bound Appellants according to the relevant pleadings, then the total
amount of charitable tax credits claimed is very significant relative to costs.
If one looks at the amount of the proposed donations claimed giving rise to the
tax credits; such amounts are very significant relative to costs; more
than double. Having regard to the above, this factor is not determinative
either way and so I give little weight to this particular factor in the
circumstances.
[23]
Moreover, I agree with Hogan, J. in Otteson v
The Queen, 2014 TCC 362, 2015 DTC 1025, at paragraph 17:
In my opinion, it is inappropriate to draw a
simple straight line between the amount in issue and the actual amount of a
costs award. In determining a proper award, it is more appropriate to examine
what percentage of the costs incurred by successful parties has been covered by
the Court's costs awards. The point of costs awards is to provide compensation
for the legal expenses incurred by the successful party.
[24]
In my opinion, a review of the above factors
alone, before consideration of other factors to consider under paragraph
147(3)(j), would clearly have justified a claim by the Respondent of legal fees
well in excess of the Tariff costs claimed and for expenses for an expert
witness necessarily incurred, all as suggested by the Respondent herself in
argument. However I will now address the other factors to consider under paragraph
(j) that form the main basis of the Appellants’ arguments to complete the
factors analysis including the effect on costs of being a lead case, the
parties reasonable expectation of costs and the interpretation issues raised
regarding the form and effect of the Agreement to be Bound pursuant to Rule
146.1.
II.
Other Factors-Rule 147(3)(j)
A. Lead Cases
[25]
Rule 147(3)(j) allows the Court to consider “any
other matter relevant to the question of costs”.
[26]
In Velcro Canada Inc. v The Queen, 2012
TCC 273, 2012 DTC 1222, Rossiter A.C.J. (as he was then) clearly stated that
such provision allows the Court to consider whatever other factors it deems
relevant to the matter of costs on a case by case basis as explained in
paragraphs 12 and 13 thereof:
[12] Rule 147(3) provides factors to be
considered in exercising the Court’s discretionary power. After enumerating a list
of factors, it specifies that the Court may consider “any other matter relevant
to the question of costs”, thereby providing the Court with even broader
discretion to consider other factors it thinks relevant on a case by case
basis. Such other factors that may be relevant could include, but are not
limited to:
1. the actual costs incurred by a litigant and their breakdown
including the experience of counsel, rates charged, and time spent on the
appeal;
2. the amount of costs an unsuccessful party could reasonably
expect to pay in relation to the proceeding for which costs are being fixed;
and
3. whether the expense incurred for an expert witness to give
evidence was justified.
[13] The factors to be considered by
the Court in exercising its discretionary power to award costs are extremely
broad, they are specific to every appeal before the Court and as noted, the
Court may consider any other matter relevant to the question of costs.
[27]
It should be noted that Velcro dealt with
the issue of whether costs should be awarded in excess of the Tariff
costs. I take note of the fact that the vast majority of submissions in respect
of the Rule 147(3) factors deal with cases where costs in excess of Tariff are
claimed and more so with the amount of legal fees as opposed to disbursements.
While the broad wording of Rule 147(3)(j) and the Velcro decision do not
preclude a claim for legal fees for less than Tariff, nor an analyses of the
justification for the quantum of expert witness fees which it specifically
mentions as a possible factor to consider, it should be noted that there is a
long history of precedent across all Courts in this country that assumes a
successful party is generally entitled to costs on a Tariff basis, subject to
special circumstances dictating otherwise, and that the approach to fixing
costs on a principled basis is that costs “should be compensatory and
contributory, not punitive nor extravagant” as stated by Boyle J. in Martin
v The Queen, 2014 TCC 50, 2014 DTC 1072, paragraph 14, who clearly sets out
the goal of the cost decision exercise as follows:
…The proper question is: What should be the
losing party’s appropriate contribution to the successful party’s costs of
pursuing the appeal in which his or her position prevailed?
[28]
These basic principles were reflected in
decisions of the Federal Court of Appeal like Consorzio del Prosciutto di
Parma v Maple Leaf Meats Inc. 2002 FCA 417 where Rothstein J.A. (as he was
then) stated at paragraph 8:
An award of party-party costs in not an
exercise in exact science. It is only an estimate of the amount the Court
considers appropriate as a contribution towards a successful party’s
solicitor-client costs…
[29]
The Ontario Court of Appeal in R v Ciarniello,
81 OR (3d) 561 (Ont.C.A.) in deciding different considerations applied for
awarding costs in criminal cases than in civil cases stated at paragraph 32
that:
Routine costs awards in favour of the
winning party are a feature of civil, not criminal proceedings. Costs awards in
civil litigation serve several purposes. Costs in civil cases are awarded on
the compensatory principle that it is just to allow the successful civil
litigant at least partial indemnity for the costs of the action….
[30]
Farrar J.A. of the Nova Scotia Court of Appeal
confirmed the deeply established principles of awarding costs to a successful
litigant in Cherubini Metal Works Ltd. v Nova Scotia (A.G.), 2011 NSCA
43 at paragraph 113:
The general rule is that costs should follow
the event. While a trial judge has the discretion to depart from the general
rule, it is an error in principle not to award a successful party costs unless
there are sound reasons for doing so.
[31]
The Appellants argue that these cases are “test
cases”, the other factor to consider, that constitutes sound reason for
departing from the general rule of costs following the event. The Appellants
argue that the Appellants were chosen as lead cases on an involuntary basis and
that there were 16,000 taxpayers who participated in the GLGI program in the
2004 and 2005 years whose objections were not confirmed and that only about 25
taxpayers had launched actual appeals by mid‑2015, including the
Appellants and 5 other Appellants represented by the same counsel as the
Appellants herein who agreed to be bound by this decision, while there were 27,000
additional donors by such later date whose appeals were still at the objection
stage. The Appellants’ lead case argument is clearly set out in paragraph 21 of
its initial written submissions which reads as follows:
21. It is submitted that, in the context of a Lead Appeal, it would
be reasonable for a Lead Appellant (whose case would be used to dispose of
potentially thousands of cases) to expect that he/she would not be forced to
pay costs any greater than his/her pro-rata share of the costs. Also, it is further
submitted that, if Lead Appellants were burdened with the full liability of the
costs of a Lead Appeal, then no one would agree to be a Lead Appellant. To
impose such a liability, in the context of a Lead Appeal would be punitive and
would run contrary to the object and spirit of the Lead Cases provisions in
Rule 146.1.
[32]
The Appellants analogize lead cases chosen under
this Court’s lead case Rule 146.1 as “akin” to the test cases referenced in Law
Society of British Columbia v Mangat, [1997] BCJ No. 2694 and Vennell v
Barnado’s, 73 OR (3d) 13, where the courts did not order costs against the
unsuccessful parties therein. Each party bore their own costs.
[33]
With respect to the Appellants, the Mangat’s
cost decision was not decided on the basis that the defendants were singled out
as a test case from among several potential defendants, although it was a
factor, but rather specifically because the defendants were forced to seek
injunctive relief to be able to continue their immigration consulting and other
activities from which they earned their living during the previous 15 years
before the province considered them to fall under the Legal Professions Act.
Injunctive relief was granted because “of a far less than clear legislative
scheme set out in the Immigration Act”, an issue of statutory interpretation,
in the context of the federal government having failed to implement the
licensing scheme for such consultants contemplated by that Act. The case
at hand involved no serious statutory interpretation issues nor large public
policy elements; but dealt with factual issues in the context of what I would
consider well established law on both donative intent and trust law.
[34]
Likewise, Vennell was not decided on the
basis it was a test case either. It involved a motion to turn a class action
proceeding into an individual proceeding against the defendant therein for
damages for its alleged negligence as an agency that facilitated child immigration
from the UK during the last world war to Canada after which such immigrant
children were alleged to have been mistreated and abused. The court granted the
motion and refused to award costs in favour of the successful party against
whom the class action was discontinued. No costs were awarded on the basis that
the individual case, although not found to be a test case that would bind
others, was still of public interest and concern for two reasons. At paragraphs
44 and 45 thereof Cullity J. described how it would have been in the
public interest, as well as in the interests of the surviving children, their
descendants and descendants of deceased children:
[44] … for such
matters to receive judicial and public attention. Public recognition of past
wrongs is, in itself, a form of redress and it can be the first step to a
consideration of whether further measures are appropriate.
[45] The other
respect in which the public interest would have been engaged by a class
proceeding arises from the fact that the issues raised concerned the
exploitation and abuse of children by those to whom they were entrusted. There
is ample evidence on the public record that this is a subject that is a
continuing cause of public concern. The public has an interest in the welfare
of its children -- including those under the supervision of agencies that receive
government support -- and the formulation of public policy with respect to
their welfare in the future. The enquiry should not be undertaken in ignorance
of the history of child migration to this country if there are lessons that
might be learned from it….
[35]
Moreover, the decision of Cullity J. in Vennell
clearly defines a test case in paragraph 25 thereof as one where a party to a
test case is involved with the other cases and there is agreement to be bound:
…A test case, as I understand it, ordinarily
refers to a proceeding that will determine the issues that will arise in other
cases that are pending or, at least, contemplated. Most commonly, I think, a
party to a test case will also be involved in the other cases and will have
agreed to accept the decision in the test case for the purposes of them. That
has, for example, happened where, instead of proceeding to a trial of common
issues under the CPA, an individual action has been commenced as a test case
that will bind the defendant for the purposes of the claims of other members of
a class in which the individual plaintiff is included.
[36]
Rule 146.1 does not bind either the Minister of
National Revenue (the “Minister”) or any taxpayer if the taxpayer does not
agree to be bound to such lead case decision under said Rule. The Appellants
are simply incorrect in stating in paragraph 15 of its written submissions that:
…This definition of a “test case’ is akin to
the Appellant’s situation as Lead Appellants and the thousands of other appellants
who will be bound by the Honourable Court’s judgment.
[37]
There is no doubt that a lead case may also be a
test case in circumstances where all Appellants that could be affected by the
decision agree to be bound, but in the case at hand, as with any lead case
designated under Rule 146.1, only taxpayers, who are at the appeal stage and who
agree to be bound are so bound. The thousands of taxpayers at the objection
stage are not bound by the decision in this case and have the right to appeal
which will not be extinguished by the decision herein, unless of course they
have entered into an agreement to be bound with the Minister outside any Rules.
[38]
A decision in a lead case can of course have
weighty precedential value that may practically determine the results in
subsequent cases, however as Rip J. stated in Brown v The Queen, [2002]
TCJ No. 204, 2002 DTC 1925, at paragraph 20:
…That the decision of a Court in a tax
appeal may help settle other assessments and reduce the Crown’s expenses are
not reasons for the Crown to absorb costs of the appeal.
[39]
In fact, this Court has stated that where an
appeal has precedential value, the successful party, is entitled to an award
“beyond, but not greatly beyond, the Tariff….”. See Otteson at paragraph
21. Notwithstanding this, the Appellants are only asking for essentially a Tariff
award. In like vein, this Court found in Teelucksingh v The Queen, 2011
TCC 253 that in a lead case where thousands of other taxpayers may be affected,
the quantum of tax payable was exponentially greater than the tax in question
in that particular appeal and same is a factor that would justify greater than
Tariff cost awards, not lower as one of the Bound Appellants seems to suggest
in its submissions.
[40]
Notwithstanding the above, the fact that the Appellants’
appeals may be lead cases or have precedential value is a factor that can be
considered by a Court under the Rule 147(3)(j) “other factors” category, however,
the Courts have made clear that in order to constitute special or sound reasons
not to follow the practice of costs following the result, the issues before the
Court must transcend the interest of the litigants and be of public interest or
there must be misconduct by the successful party. See David Polowin Real
Estate Ltd. v Dominion of Canada General Insurance Co., 93 OR (3d) 257. In Brown,
Rip J. addressed this issue in the context of a similar argument by the appellant
therein that due to the large number of appeals held in abeyance and cases at
the objections stage that could all exceed 3,000, that their case, as the first
case to be heard, should be considered a test case and the Crown should absorb
its own costs, at paragraph 20:
…I cannot agree. This was not a test case.
Simply because a provision of the Act is considered by a Court for the first
time and may affect other taxpayers does not colour that appeal with the
character of a test case. The normal income tax appeal-which this appeal was-is
not a matter of public policy (as in Lachine General Hospital Corp. v. A.G. of
Quebec) or touch on constitutional principles and in the public interest (as in
Singh v. the Queen). It is simply a dispute between a taxpayer and the Crown as
to whether the taxpayer was properly assessed tax. The principle purpose of
these appeals was to settle a dispute between the parties, not necessarily to
settle a point of law….
[41]
In the case at hand there was no important issue
of statutory interpretation, constitutional issue or serious matter of public
interest in play. The law of trusts, sham, and donative intent applicable herein
were well established. While the public always has a general interest in
ensuring all laws are complied with and taxpayers pay their required taxes,
this general interest existent in all tax cases does not elevate each case to
that level of importance contemplated above. The Appellants have not
established that these matters fall within the category of cases of Polowin,
Vennell and Mangat above or those referred to by Rip J. in Brown
above.
[42]
I must also agree with the Respondent that the
fact the Minister had thousands of cases at the objection stage that were not
confirmed does not constitute special circumstances that justify departure from
the usual costs rule. It would be administratively impossible for the Minister
to confirm all cases in line on similar matters before any case should proceed,
especially in cases like this one where donors participated in this Program
over a span of several years, resulting in long delays in anyone getting to
trial if the Minister were to be put to this task and the long list of
complaints that would arise from taxpayers who want their day in Court,
something I take judicial notice of the fact occurs frequently. Simply put,
someone has to go first and a taxpayer who files an appeal must obviously do so
with a view to getting his or her case heard in a reasonable period of time. I
agree with the Respondent’s reasoning that if the Minister were required to
confirm all objections at the same time or all before proceeding to trial,
aside from administrative feasibility, the Minister would be put in the absurd
position of practically never being entitled to costs.
B. Expectations
of Costs
[43]
As a further “other factor” to consider, the
Appellants argue that the costs of the Respondent should be significantly
reduced to reflect the reasonable expectation of the Appellants as to their
cost liability in the event their lead cases were dismissed. In paragraphs 5
and 10 of their written submissions the Appellants state:
5. …At no time did the Appellants have a
reasonable expectation that they would face a cost exposure in excess of
$500,000 should this Honourable Court dismiss the Lead Appeals.
…
10. Had the Appellants reasonably expected
that such a cost award as is sought could be made against them, they would have
never pursued their appeals. They would have discontinued them. The cost
exposure would have completely outweighed the potential benefit of pursuing the
appeals. In effect, their access to the court would have been prevented by such
potential liability. While the appeals of the Appellants ultimately failed,
such exposure would, it is submitted, deter any appellant from pursuing an
appeal which might otherwise be destined for success.
[44]
It should be noted that part of the Appellants’
arguments, and those of the Bound Appellants who made submissions, regarding
reasonable expectation are couched in their fairness position that it would be
reasonable for a lead Appellant to only expect to pay a pro-rata portion
of costs having regard to the thousands of taxpayers affected, and that to be
burdened with full liability in the context of a lead Appellant would be
punitive, a hardship, and dissuade taxpayers from being lead Appellants and run
contrary to the object and spirit of the lead case rules in Rule 146.1. I will
discuss these arguments later as well.
[45]
There is no doubt however that if a Court does
not consider costs reasonable or within the reasonable expectations of the
unsuccessful parties that the costs claimed would have been spent that the
Court may reduce costs, including disbursements as set out in Balasundaram v
Alex Irvine Motors Ltd. [2012] OJ No. 6323. In the case at hand, however, I
have some difficulty in accepting the Appellants’ general arguments without
some indication as to what they consider reasonable and why. The Appellants’
argument does attack the quantum of the Respondent’s expert witness fees as
being unreasonable via the Respondent’s own expectations, but does not address
why it considers the Respondent’s claimed costs totaling about $491,000, and
specifically the expert witness fees claimed of $422,000 to which it primarily
objects, to be beyond what expectations they had as to what costs might be
expended by the Respondent.
[46]
The Appellants have not directly attacked the
quantum of legal fees claimed by the Respondent on the Tariff basis as being
unreasonable. The Appellants attack, in reality, the Respondent’s claim for
expert witnesses as not being reasonably expected. Frankly, I see no merit to
the Appellants’ argument that such level of expert fees were unexpected for
several reasons:
1. The
Appellants submitted 2 expert reports and witnesses for trial. The issues are
well set out in both pleadings and it is clear the Appellants expected to and
did utilize expert witnesses to substantiate their own claim for values of the
licences in issue, being the in-kind portion of the purported gift. Their
positions and actions, including using expert witnesses, was what necessitated
the Respondent’s need for expert witnesses, to effectively rebut their own, which
was done with great success.
2. The
Appellants have not provided information as to the amounts either they expended
or had expended on their behalf for expert witnesses, making a comparison of
expert fees impossible and their submissions as to the Respondent’s quantum somewhat
meaningless. In Hague v Liberty Mutual Insurance Co. [2005] OJ No. 1660,
cited in The Law of Costs, Second Edition, Volume 1, Mark M. Orkin, at
pages 2-37 and 2-38, the Court stated:
One might fairly
ask how the expectation of the parties is to be found out as part of the costs
process. In my view, it is not to be obtained directly from the parties through,
say, affidavits being filed. Any such affidavit evidence would inevitably be
completely self-serving and of no assistance to the court. Rather, it would
appear that the expectation of the parties will fall to be determined in one of
two ways. It may be determined by the unsuccessful party revealing what
his/her/its costs were on the same matter as some measure of what was to be
expected. The unsuccessful party is, of course, not required to reveal that
information but, if they choose not to do so, they may impair their ability to
make any meaningful submissions on this aspect of the process….
3. The
Appellants were represented at different times by three sets of experienced tax
litigation counsel and the pleadings, particularly the Respondent’s Reply, were
long and detailed such that the Appellants and their counsel knew the case they
had to meet and the several issues to be addressed, including the valuation of
software licence issues necessitating expert witness. I find it incredulous the
Appellants were not aware or were not told this would be expensive and time
consuming litigation that was initially set down for 8 weeks over two cities,
Vancouver and Toronto, notwithstanding the Court travelled to Halifax to hear
the Appellants’ own witness, at their request. As so clearly expressed in 155569
Canada Ltd. v 248524 Alberta Ltd., [1999] AJ No. 623 (ACQB) at paragraph 48:
…The common
law’s approach to costs is structured and cohesive. It is understood that a party
to litigation knows or should know that, other than in exceptional cases, if it
loses the lawsuit, it will have to pay not only its own costs, but a hefty
proportion of those of the party opposite as well….
I agree with the
Respondent that if it is the Appellants’ contention that it was not fully
appraised of such risks, then that is a matter between the Appellants and their
counsel.
4. The
Appellants executed a Direction as part of the Program documentation that
specifically referred to the contribution of 3 percent of the cash
donations made to the Program foundation up to a maximum of $750,000 to a legal
defense fund to pay legal fees in the event of a reassessment by the Canada
Revenue Agency (“CRA”). The existence of a $750,000 legal defense fund is
certainly evidence that the costs of litigating would be very large.
I do not accept that
the Appellants did not reasonably expect such a level of costs in the
circumstances. Rather, it is clear that the Appellants expected the costs of
litigation to be very high in these matters and should have known that that the
risk of success was unclear, if not even low, due to the many recent decisions
of the Federal Court of Appeal on the issue of donative intent.
I also do not agree
with the Appellants’ contention that even the Respondent did not reasonably
expect its costs of litigation to be so high. The Appellants of course take
this position only with respect to the Respondent’s claimed expert witness
fees, arguing that the proposal given by FTI to the Respondent, dated June 20,
2011, for a range of between $235,000 and $325,000, was exceeded as obviously
the final invoices totalled $422,000. The Appellants’ submissions note that
actual proposal rates were lower than actual rates charged. For instance, the
expert witness, Mr. Neil Mizrahi’s rate was quoted at $400 per hour in the 2011
proposal but actual rates charged on the invoices ranged between $400-500 per
hour. Frankly, as the Respondent has argued, the proposal was dated in June of
2011 at which time the trial was, according to such proposal, scheduled for between
November 21 to December 2, 2011. We know that the trial was later scheduled for
June, 2012 but the Appellants requested two adjournments which pushed the
ultimate trial date to March of 2015 and so it is not unexpected that fees
rates would rise over a four year period. Moreover, the proposal is clear that
fees would be charged on the basis of actual time spent in conducting the engagement
based on its hourly rates, for which 2011 rates were listed and that the
proposal only gave an estimate of total fees to be charged. In any event, there
is no basis in law argued to suggest the Respondent’s actual disbursements
should not be used as the basis for its claim, subject to the Appellants rights
to challenge its reasonableness and quantum.
[47]
The Appellants have not provided any evidence as
to what its own expert witness, particularly Mr. Dobner, quoted and charged so
it is not possible to weigh the reasonableness of the Respondent’s witness fees
relative to their own or whether their final bills exceeded proposal estimates
as a comparison.
[48]
I am not prepared to find that the expert
witness fees of the Respondent were not reasonably expected by the Appellants nor
the Respondent herself based on the Appellants’ arguments. I will address the Appellants’
arguments regarding the quantum of the Respondent’s claimed expert fees shortly.
[49]
What is clear to me however is not that the Appellants
did not reasonably expect legal fees and disbursements to be at the level of
those claimed by the Respondent, but rather that the Appellants, like the Bound
Appellants, expected the Promoter of the Program to pay them. This is clear
from the evidence at trial of the Directions signed by the Appellants
referencing the defense fund and the evidence the Appellants’ expert witness
fees were paid for by the Promoter who engaged its services. It is also clear
from the Appellant Mariano’s letter to this Court dated February 22, 2016 on
costs where she stated “I had been under the premise that GLGI would finance
the cost of litigation”. It is further evidenced by the admissions in argument
that the Promoter paid the Appellants’ counsel fees whom it engaged, as well as
the submissions of some of the Bound Appellants. I will discuss this matter in
more detail when addressing the issue of what persons should pay the costs as
contemplated by Rule 147(1) above.
C. Spirit,
Intent and Interpretation of Rule 146.1
[50]
I should also like to address the Appellants’
argument that to charge a lead Appellant full costs for an unsuccessful action
runs contrary to the spirit and intention of the lead case rule in Rule 146.1
and would discourage appellants from volunteering to be lead appellants. Rule
146.1 reads as follows:
146.1 (1) This section applies if
(a) two or more
appeals have been filed before the Court;
(b) the Court has
not made a decision disposing of any of the appeals; and
(c) the appeals
give rise to one or more common or related issues of fact or law.
(2) The Court may give a direction
(a) specifying
one or more of the appeals referred to in subsection (1) as a lead case or lead
cases; and
(b) staying the
related appeals.
(3) If the Court gives a direction, each
party in a related appeal who agrees to be bound, in whole or in part, by the
decision in the lead case shall, within 10 days, file Form 146.1 with the
Court.
(4) If a party does not agree to be bound by
the decision in the lead case, in whole or in part, or does not file Form 146.1
with the Court, the Court shall give a direction that the appeal is no longer
stayed.
(5) The Court may, on its own initiative or
at the request of a party, give directions with respect to the related appeals,
provide for their disposal or take further steps with respect to those appeals.
(6) If a lead case or lead cases are
withdrawn or disposed of before the Court makes a decision in relation to the
common or related issues, the Court shall give directions as to
(a) whether
another appeal or other appeals are to be heard as the lead case or lead cases;
and
(b) whether any
direction affecting the related appeals should be set aside or amended.
[51]
As is evident from the above Rule, no reference
is made therein to any special rule on costs pertaining to them. Clearly, the
issue on costs is intended to be dealt with under the very next rule, Rule 147,
which gives the Court the broad and discretionary powers earlier discussed,
including considering other factors, such as to whether the matter is a lead
case, in awarding costs, its quantum and who pays same.
[52]
As stated above, the mere fact that specific appeals
before the Court may be lead cases does not excuse the Appellants from paying
costs. I agree however with the Appellants’ position that being a lead case is
a factor that can be considered under factor (j) as earlier alluded to, in
determining and allocating costs and is a factor that must be considered on a
principled basis like all other factors.
[53]
Clearly, the wording in Rule 146.1 allows the
Court to give directions that certain appeals will be designated as lead cases
while others are stayed. The spirit and intention of the lead case rule is
self-evident. The Court, in controlling its process, is able to utilize this
rule to prevent being swamped by potentially thousands of like cases, and the
costs and resources applicable thereto, by hearing select cases chosen
presumably with a view to having strong precedential value that may hopefully
resolve at least the majority of all potential appeals, if not all.
[54]
Taxpayers at the appeals stage who agree to be
bound may likewise avoid the risk of increased costs of joining in the appeal
as a group as well as the time and effort of so joining. Taxpayers not at the
appeals stage can evaluate the ultimate decision and decide for themselves
whether they can distinguish themselves from such precedent and proceed to trial
with the inherent risk of success and costs or not. The taxpayers chosen as
lead appellants can proceed to the determination of their appeals faster and
without the complications and time requirements of being heard as part of a
larger group.
[55]
Her Majesty as well, can, relying on the
precedent from the lead case decision, decide whether to continue the action
via other taxpayers or discontinue or reassess, thus not only benefiting from
such precedential value but availing herself of potentially large savings in
costs and resources from having to continue all potential appeals.
[56]
In essence, the lead case rules are designed to
potentially benefit and may benefit all interested players – the Court, the Crown,
the appellants and the taxpayers at large. Then again, they may not as no
non-appellant can be forced to be bound by the resulting decision and may
proceed to a hearing as a matter of right, just as the Appellants in these lead
cases did. It is then in my opinion fundamentally incorrect to suggest, as one
of the Bound Appellants did in its submissions, that as a matter of contract
law an agreement to be bound under such rule is not enforceable on the basis a
party so agreeing receives no consideration for doing so. Ironically, such
Bound Appellant seems to agree the consideration received by the Respondent
would be the savings in time, effort and costs of litigating multiple cases yet
ignores the like benefit received by those appellants who agree to be bound. In
any event, such Bound Appellant also mischaracterizes the nature of the
Agreement to be Bound as a bilateral agreement requiring consideration in which
the parties negotiate an outcome. This is simply incorrect in my view which will
be discussed shortly.
[57]
In designating the lead cases, the Court
considers the representations of counsel for both sides. The decision of the
Court is not taken in a vacuum. Generally, as was the case in these matters,
the Court is provided with one or more groups of appeals and attempts to obtain
consensus on who the lead cases will be if possible, after input by the
parties, and directs lead cases that hopefully represent the widest band of
similar issues. In some cases the ultimate appellants volunteer to be the lead
cases and in others do not and make the case for exclusion therefrom. Without
the lead case rule however, it is clear that each taxpayer who files an appeal
would be proceeding to trial in any event unless he or she discontinues the action
or manages to reach a settlement with the Respondent.
[58]
It seems appropriate at this juncture to address
the submissions of one of the Bound Appellants who argued that the failure of
the Form 146.1 - Agreement to be Bound - to mention any costs and its nature as
a take it or leave it contract with the Respondent that creates a situation of
unbalanced bargaining power, both justify the application of the doctrine of
contra proferentem. There is no dispute that such doctrine works in the case of
ambiguity of a contract term to interpret a contract term against the party who
drafted it, particularly in the case of unequal bargaining positions between
the two as set out in cases relied upon by the said Bound Appellant in Ironside
v Smith, 1998 ABCA 366, a decision of the Alberta Court of Appeal dealing
with a dispute over a securities trading fees agreement and in Non-Marine
Underwriters, Lloyd’s London v Scalera, [1997] B.C.J. No. 2481 which dealt
with an insurance contract dispute. Frankly, I find this submission to be
without any merit.
[59]
The agreement to be bound which an appellant may
execute in Form 146.1 of the Rules is however not a bilateral agreement
negotiated between an appellant and the CRA or Minister of Justice on its behalf.
There is no negotiation or any input whatsoever by the Respondent in the
content or filing of this Form by an appellant. Only an appellant, presumably
with the advice of his counsel, can decide to file the Form under the Rule
above discussed, created by the Rules Committee of the Tax Court of Canada to
assist the Court in managing and governing its processes under its statutory
power to create and amend rules subject only to Governor in Council approval.
Accordingly, there can be no imbalance of bargaining power where no bargaining
can exist and where no bargain is sought in the conventional sense. It may well
be a take it or leave it agreement, but one that no appellant can be forced to
sign and one that is only in the nature of an agreement pertaining to a court
process with the Court. Any appellant can choose to have its day in Court if it
chooses not to sign. To suggest otherwise would be to suggest any Court rules
could be unenforceable simply because the litigant did not negotiate the rule;
an absurd result totally ignoring the purpose and benefit of having procedural
rules for the benefit of all potential litigants and not just for the Minister.
Procedural Rules of a Court simply cannot be seen as bilateral contractual
terms between parties in the commercial sense.
[60]
I also do not agree that the Rule is ambiguous
as to costs. The Rule speaks to an agreement to be bound by a decision in the
lead case. Simply put, a decision includes an order as to Costs as an integral
part thereof. The language of the very first sentence of Rule 147 evidences
this by allowing the Court to “determine the amount of the costs of all parties
involved in any proceeding….”
[61]
I would also like to comment on the submission
of the Bound Appellant, Penny Sharp (“Sharp”), that she did not volunteer to
execute the Agreement to be Bound but rather was ordered to do so by this
Court; in particular by myself pursuant to my Order of September 11, 2014 wherein
she was given 10 days to file such Agreement to be Bound or have her appeal
dismissed. The said Order was drafted by counsel for the Bound Appellants and
was pursuant to a pre-trial motion to, inter alia, dismiss Sharp’s
appeal for failure to obey this Court’s Order to answer written discovery
questions by a certain date. Sharp and her other Bound Appellants were
represented by able and reputable counsel and it was her counsel who suggested
that there was no need to consider the motion to dismiss her appeal as her
client was willing to execute an Agreement to be Bound. Since counsel did not
have such Agreement yet signed he asked that his client be given the
aforementioned period to sign and file such Agreement failing which her appeal
would be dismissed and the Court granted such request. Consequently, her counsel
filed the said Agreement Form on her behalf. To suggest she was ordered by the
Court to involuntarily execute the Form to be bound and therefore she should
not be liable for costs is both factually dishonest and unprincipled, in my
view, in the circumstances.
[62]
In conclusion, after analysing all of the Rule
147(3) factors above, I find that the Appellants are not entitled to an order
of no costs and are subject to an order for costs which shall include
legal fees and disbursements based on the quantum that I will next determine.
III.
Quantum and Reasonableness of Fees and Disbursements
A. Quantum of Legal Fees
[63]
Only one of the Bound Appellants has questioned
the quantum of the legal fees claimed by the Respondent in the amount of
$41,075 based on Class A action in Tariff B on the basis that the Respondent
has not provided evidence of its legal fees and that in any event, same should
be reduced by the quantum of pre-trial cost orders totalling $13,000 to avoid
duplication of fees.
[64]
I would agree that the Respondent, in claiming a
quantum of costs based on Tariff has not provided a breakdown of its actual
fees incurred including counsel rates and time spent on the appeal. In Velcro,
Rossiter ACJ, as he then was, considered these actual costs and their breakdown
as a relevant other factor the Court could consider, if it chose to. The Velcro
decision together with Spruce Credit Union v The Queen, 2014 TCC 42,
2014 DTC 1063, decisions speak to the total discretion of this Court to
consider costs with or without making reference to the Tariff as the judge, on
a case by case basis, so determines. I am therefore neither required, nor do I
deem it necessary in the circumstances of this case, to evaluate the amount of
actual legal fees incurred by the Respondent nor their breakdown in terms of
hours spent, hourly rates and counsel experience for a few very convincing
reasons. I am strongly convinced the Respondent’s legal fees were far in excess
of the Tariff fees claimed.
[65]
Firstly, from my analyses of the Rule 147(3) factors,
the Respondent had a very strong case to seek costs much in excess of Tariff
claimed if it had so chosen as I have alluded to earlier and frankly I consider
the Appellants and Bound Appellants lucky the Respondent chose not to do so.
[66]
Secondly, it is overwhelmingly clear by simple
mathematics that in a 25 day trial, conservatively assuming counsel worked only
8 hour days, that for 5 counsel a total of 1,640 hours would have been spent
thus resulting in an average hourly rate of $41.00. Even if only fees for one
counsel were to have been allowed, and I can say unequivocally that I would not
have been so restrictive, the total hours would have amounted to 200 hours for
a resulting average hourly rate of about $200. I must agree with counsel for
the Respondent that “common sense” dictates that its legal fees exceeded the
amount of fees claimed in its Bill of Costs.
[67]
In the circumstances, I do not feel it necessary
for the Respondent to have made submissions on the number of hours spent on the
matter and their hourly rates and submissions on experience when, unlike in Velcro,
the winner is not seeking costs in excess of Tariff which the Court clearly
acknowledged “was not intended to compensate a litigant fully for legal
expenses incurred in an appeal”(paragraph 9).
[68]
I also do not agree that the Respondent’s
claimed costs should be reduced by the cost awards totalling $13,000 in any
event of the cause against the Appellants. Boyle J. awarded costs of $5,000
during a case management against the Appellants on the basis of a further delay
in the trial caused by the Appellants’ late in the day production of documents.
These costs go to the conduct of the Appellants. I awarded costs of $8,000
against the Appellants pursuant to a motion of the Respondent to dismiss the
appeals of certain Appellants and Bound Appellants for failure to comply with
previous Court Orders regarding written discovery answers without explanation
and in the context of a new counsel requesting yet another adjournment which
was granted, as well as changes to the lead Appellants. The motion materials
were voluminous and included several affidavits, book of authorities and the
requirement to deal with multiple issues. These costs went to the conduct of
the Appellants rather than rewarding the Respondent for their extra time spent
and to be spent in repreparing for the trial and for which the Respondent
sought costs of $10,000 - $20,000. I have no doubt that if my award of costs
was to reimburse the Respondent for its extra time and expenses incurred or to
be incurred due to the Appellants’ abuses of process resulting in delays to the
trial I would have likely awarded the Respondent costs on a substantial
indemnity basis as claimed. Instead, I refused to do so and determined they
should be addressed in the cause for such extra time.
[69]
Costs awarded in any event of the cause are
generally those awarded having regard to the conduct of the parties in order to
assist the Court in controlling its processes and should not be automatically
deducted from costs in the cause unless the party objecting to same can
demonstrate a clear duplication of costs for the actual time and expense
incurred by the other party in the context where abuse of process is not the
main underlying reason for such costs. In any event, in the case at hand, the
Respondent, in its Bill of Costs, only claimed Tariff fees of $350 for the
September 11, 2014 motion before me that can be said to be a possible duplication
of fees for the same matter. As I said, the Respondent was put to the task of
bringing a motion to enforce a Court Order that certain Appellants involved,
including the Bound Appellant, Sharp, failed to comply with without
explanation. The motion also involved other matters such as confirming the lead
Appellants yet again and adjourning yet again the scheduled trial and setting
new trial dates in multiple cities. In the circumstances, I am not prepared to
reduce the Respondent’s fees by the $350 claimed for the motion as the other
matters dealt with would have clearly exceeded that amount.
[70]
There will be no deduction from the Costs of
$41,075 claimed by the Respondent for legal fees in this matter.
B. Quantum
of Expert Witness fees
[71]
I have already determined that the Respondent’s costs
were not unreasonably expected and that the Respondent has the right to claim
costs based on actual disbursements. Moreover, I have found that actual rates
charged that exceeded initial quotes are not necessarily unreasonable having
regard to the passage of time when rates can be expected to increase. The Appellants
however are entitled to and do object to the quantum and reasonableness of the
Respondent’s expert witness fees totalling $422,000 on several basis. There is
no dispute as to other disbursements.
[72]
Firstly, the Appellants purport to argue the
hourly rate charged by the experts are excessive as they state in paragraph 23
of their submissions that “…they must not be excessive and extravagant, and
rates charged must not get “out of hand”:” and rely on Eli Lilly Canada Inc.
v Novopharm Ltd., 2007 FC 708, at paragraph 10, where the Federal Court
stated:
As to fees changed by such experts they
should be reasonable and be the lesser of actual fees charged or the rate that
was charged by Novopharm’s senior counsel for services for the same period of
time as spent by the experts. Expert rates should not get out of hand.
Disbursements must be reasonable and not extravagant.
[73]
Unfortunately, the Appellants made no
submissions as to what reasonable actual rates should have been charged, if
applicable, so the Court is left to the decision by other means.
[74]
Unlike in Eli Lilly above where two
private litigants can avail themselves of and compare competitive senior
counsel rates, the case at hand involves the Respondent using Department of
Justice lawyers whose rates to another department of government are not
comparable to market rates. A more reasonable approach would be to compare
expert witness rates on the open market or use the Appellants’ senior counsel’s
rate to gauge the reasonableness of expert witness rates in the open market. As
earlier discussed, the Appellants have chosen not to provide evidence of the
expert witness rates charged by its expert witness, a competitor to the
Respondent’s expert witness, FTI Consulting Canada, nor of the fees charged by
counsel for the Appellants in these matters so no comparison is possible to
determine the reasonableness on those basis either.
[75]
The hourly rates charge by FTI was based on a
scale of rates for its staff ranging from $700-$740 for Mr. Howard Rosen, the
Senior Managing Director of FTI and from $400-$500 for Mr. Mizrahi and $240 for
Mr. Eddie Tobias, a junior assistant to Mr. Mizrahi, amongst others whose fees
are not opposed. Aside from the Appellants’ earlier argument that hourly rates
charged exceeded rates quoted and thus were not reasonably expected, which I
found unconvincing, the Appellants do not directly attack the hourly rate of
these persons whose time was reflected on the various invoices per se, but
rather whether their time was necessary or reimbursable, so I cannot find such
hourly rates to be unreasonable in the circumstances. Moreover, case law seems
to suggest that all of such rates are within the limits of rates accepted by
the courts in other matters. In Canada Trustco Mortgage Co. v The Queen,
2007 TCC 500, the Court allowed $1,000 and $874 hourly rates for two
highly qualified expert witness in the area of asset securitization. This case
involved valuing software licensing which to me was a highly complex asset to
value as well. Moreover, I take judicial notice of the fact that rates charged
by senior counsel in tax litigation matters are comparable or even higher than
the expert rates charged by FTI staff above.
[76]
Secondly, the Appellants object to the fees
charged by Mr. Mizrahi and Mr. Tobias in attending at trial to listen to the testimony
of the Appellants’ expert witness, Mr. Dobner, as well as the general witnesses
called by the Appellants during the opening 7 days of trial and relies on GlaxoSmithKline
Inc. v Pharmascience Inc., 2008 FC 849, where the Court gave specific
instructions to the taxing officer at paragraph 6 that:
…Any time spent by Pharmascience’s witnesses
in preparing Pharmascience’s counsel to examine GSK’s expert witnesses or in
attending the examination of any other witness shall not be recoverable.
[77]
The Respondent argues that the serious
deficiencies in the Appellants’ expert witness report made it necessary for its
own expert witness to attend such portion of the hearings in order to assist it
to more effectively cross-examine the expert witness. Frankly, the expert
witness report and any deficiencies were available to the Respondent before the
trial and the testimony of the Appellants’ expert witness generally consisted
of presenting its expert report to the Court. I am not only convinced such
attendance was not necessary for the Respondent’s able counsel to properly
cross-examine the Appellants’ expert witness, I am also convinced the Appellants’
counsel would not have consented to the Respondent’s uncommon request to allow
its expert witness to sit in on other testimony if the Respondent had indicated
at the time it would be seeking to claim costs for such accommodation.
[78]
Accordingly, any fees and disbursements charged
by Mr. Mizrahi and Mr. Tobias in attending to hear the evidence of any
witnesses at trial or in preparing the Respondent’s counsel to cross-examine
the Appellants’ witnesses shall not be permitted. While a copy of the April 15,
2015 invoice covering the time during these events was attached to the
Appellants’ cost submissions such invoice does not set out the details to
assist the Court to determine such reduction in expert witness fee. Therefore
the taxing officer will be directed to determine such reduction based on the
actual fees charged by such above persons in the said invoice if the parties
are not able to agree amongst themselves within 30 days of the date of this
Order.
[79]
Thirdly, the Appellants dispute the claim of
expert fees for Mr. Rosen amounting to $51,916 excluding HST based on an hourly
rate ranging from $700 ‑$740 for a total of $71.2 hours on the basis he
did not provide any report and there was no indication he contributed to the reports
filed with the Court by Mr. Mizrahi. I note however that reference to Mr.
Rosen’s participation was contemplated by the June 2011 proposal submitted by
FTI to the Respondent and that various invoices detail the number of hours
claimed throughout the engagement. I have no difficulty with senior as well as
junior staff claiming fees for their services and contribution to assisting in
the preparation and supervision of the report and advising their client prior
to trial. As senior consultant to the file, Mr. Rosen’s total hours are a small
part of the overall services provided by FTI mainly through the services of Mr.
Mizrahi and I see no basis for exempting or doubting his efforts.
[80]
Likewise, the Appellants object to paying for
the cost of Mr. Tobias’ 88.5 hours of preparatory time in assisting Mr.
Mizrahi in the July 31, 2015 invoice of FTI. However, the use of junior staff
to assist in preparation is common to all professions and acceptable. As the
Respondent has pointed out, Mr. Dobner also referred to assistance received
from his staff in providing his services and it is equally reasonable to assume
the Respondent’s expert witness would do the same and expect to be compensated.
His hours are openly listed on the invoices provided by the Respondent in its
cost submissions and there shall be no reduction in his claimed fees as a
result.
[81]
The Respondent has generally been quite
reasonable in its approach to costs in this matter, particularly in its request
for only legal fees based on Tariff. It has quite properly not sought any fees
for the proposed expert witness, Mr. J.C., who was not accepted by the
Court as an expert witness. Having regard to all the circumstances of this case
and the consideration of all the factors to weigh in determining costs pursuant
to Rule 147(3) I award total costs as claimed by the Respondent less a
reduction for any expert fees and disbursements charged by FTI for the services
of Mr. Mizrahi and Mr. Tobias in attending to hear the evidence of any
witnesses at trial or in preparing the Respondent’s counsel to cross-examine
the Appellants’ witnesses claimed in the April 15, 2015 invoices of FTI to the
Respondent.
[82]
I will next determine what persons should be
liable for costs as addressed by both parties in their argument; and the
allocation of costs amongst parties found to be liable for costs.
IV. Persons
to Pay Costs
[83]
I will now turn my attention to the issue of who
pays the costs, including whether any other person is responsible therefore and
on what basis.
[84]
As stated earlier, Rule 147(1) gives the Court
broad discretion to determine what persons will pay the costs of the parties
involved in any proceeding and the allocation of same. The plain wording of
such Rule makes it clear that the Court can assess non-parties to a proceeding
with costs as both the Appellants and Respondent have argued. As I earlier
referred to as well, the exercise of such discretion by the Court must be made
on a principled basis.
[85]
The Appellants argue in paragraph 6.b. of its
submissions that if costs are to be awarded they should be assessed on a
proportionate basis amongst the 16,000 or so taxpayers who participated in the
Program:
6.b. In the alternative to a. above, that the costs of the Appeals
be fixed on the basis that the Appellants be liable for only their
proportionate share of the reasonable costs of the Appeals in relation to the
16,000 taxpayers affected by the decision in these Lead Appeals, or in such
other proportion as this Court deems just;
[86]
At paragraph 18 of their submissions, the
Appellants also make reference to correspondence from the Department of Justice
making reference to “…27,000 additional donors whose cases are still at the
objection stage.”
[87]
Regardless of the actual number of affected
taxpayers, it is clear the Appellants are suggesting the Minister could have
easily brought such objectors into the appeals stage by issuing Notices of
Confirmation for them.
[88]
At paragraph 19 of the Appellants’ submissions,
the Appellants argue “…that there are at least 25 GLGI appeals currently
within the jurisdiction of the Tax Court, …” and that “[I]f the costs claimed
by the Respondent of $532,211.95 (ignoring all other submissions contained
herein) were apportioned equally amongst only the 25 appeals of which the
Appellants are aware (the 23 referred to in paragraph 18 above [which includes
the Bound Appellants] plus the Appeals of Mr. Moshurchak and Ms. Mariano), the
pro-rata liability of each appellant would be $21,288,48, an amount more
closely reflecting the reasonable expectation of the Appellants.”
[89]
The Appellants are obviously casting a wide net
of persons to be responsible for costs, including the Bound Appellants, any
other taxpayer at the appeals stage and even any taxpayer still at the objection
stage, although I note the Appellants initial submissions made no specific
reference to the Promoter being liable for costs but did so in Reply
submissions; all in the context of their arguments that such allocation would
be more in line with the Appellants’ reasonable expectation of costs and the unfairness
of the Appellants funding the litigation for the benefit of all those affected,
the latter essentially being the argument used earlier in support of its position
that there should be no costs in lead cases.
[90]
I have already addressed the issue of the
parties expectation of costs and the no-cost submissions for lead cases of the
Appellants earlier and need not revisit this here other than to reiterate that
I do not agree with the Appellants’ submissions in those regards.
[91]
As to the issue of the scope of persons the
Court may assess costs of the Appellants against, I must agree with the
Respondent that there is simply no basis in law for allocating costs to taxpayers
simply because they are at the objection stage nor to taxpayers at the appeals
stage who did not agree to be bound by the decision herein. It is trite law
that this Court has no jurisdiction over taxpayers who have not filed a Notice
of Appeal, as confirmed by Little J. in Caputo v The Queen, 2011 TCC
364, 2011 DTC 1268, nor is there any power bestowed on the Court to force the
Minister to issue notice of confirmations to any taxpayer, which power falls
within the administrative power of the Minister, the reasonableness of which is
not reviewable by this Court. Moreover, as the Respondent has pointed out,
section 241 of the Income Tax Act provides that the names of such
taxpayers and other information pertaining to them is confidential and so the
Court would not even be in a position to know who they are.
[92]
Section 241 reads as follows:
241. (1) Provision
of information - Except as authorized by this section, no official or other
representative of a government entity shall
(a) knowingly
provide, or knowingly allow to be provided, to any person any taxpayer
information;
(b) knowingly
allow any person to have access to any taxpayer information; or
(c) knowingly use
any taxpayer information otherwise than in the course of the administration or
enforcement of this Act, the Canada Pension Plan, the Unemployment
Insurance Act or the Employment Insurance Act or for the purpose for
which it was provided under this section.
(2) Evidence
relating to taxpayer information - Notwithstanding any other Act of
Parliament or other law, no official or other representative of a government
entity shall be required, in connection with any legal proceedings, to give or
produce evidence relating to any taxpayer information.
(3) Communication
where proceedings have been commenced - Subsections (1) and (2) do not
apply in respect of
(a) criminal
proceedings, either by indictment or on summary conviction, that have been
commenced by the laying of an information or the preferring of an indictment,
under an Act of Parliament; or
(b) any legal
proceedings relating to the administration or enforcement of this Act, the Canada
Pension Plan, the Unemployment Insurance Act or the Employment
Insurance Act or any other Act of Parliament or law of a province that
provides for the imposition or collection of a tax or duty.
[93]
It is obvious there is no exception for
accessing such confidential information for the purposes of allocating costs
above.
[94]
More fundamental however, is the principle that
persons who have no ability to influence the conduct of an appeal cannot be
liable for costs. This I submit is the common sense corollary to the common law
rules that a Court has the inherent jurisdiction, if not the statutory one, to
hold non-parties liable for costs in certain circumstances, such as funding or
maintaining a lawsuit or conducting the action from the sidelines which I will
discuss in more detail. See 155569 Canada Ltd. and Richards v
Minister of National Revenue [2005] FCJ No. 21, 2005 DTC 5155. There is
simply no evidence to suggest any taxpayer at the objection stage or those even
at the appeals stage who did not agree to be bound, had any participation,
influence, control or other role in the appeals in question.
[95]
In contrast, the Bound Appellants should also be
responsible for any costs herein, both on the basis they agreed pursuant to
Rule 146.1 to be bound in whole by the decision in these appeals, which
decision obviously includes any costs awarded, and on the basis such Bound
Appellants were part of the same group of appeals, were represented at all
times by the same counsel, three sets in all throughout the proceedings, and
filed pleadings almost identical in nature to those of the Appellants in this
case; save for identification and amounts in issue differences. These Bound
Appellants were fully engaged in the group of appeals and obviously had the
ability to influence their counsel or these proceedings if they chose to do so.
They stood to benefit from any successes and likewise must be bound by the
costs of an unsuccessful action they agreed to be bound by. Accordingly, I do
not agree that the Bound Appellants should be taxed on a separate basis from
the Appellants as suggested in the submissions of one of the Bound Appellants.
[96]
At this point it is important to make an
important distinction between the Bound Appellants and any taxpayers at the
objection stage who may have entered into an agreement with the CRA to be bound
by the lead cases. The Appellants’ in their follow up Reply submissions suggest
these objectors should also be treated as Bound Appellants and be severally or
jointly and severally responsible for costs. I cannot agree to this. As
mentioned earlier, the Court has no jurisdiction to deal with such objectors
whose affairs are confidential and who clearly had no ability to influence the
lead appeals nor to involve themselves in the administrative dealings of the
Minister in making such offers or agreements. Furthermore, in the sample offer
to settle or agreement to be bound that the Appellants submitted as an exhibit
to their Reply submissions, the agreement to be bound with the lead cases makes
reference to only taxes, interest and penalties and not costs so there is no
basis for arguing there is an agreement to pay costs. The Bound Appellants
however executed a Form 146.1 agreeing to be wholly bound by the decision in
the lead cases without limit, which decision includes any decision as to costs.
[97]
I will now address whether the Promoter should
be liable for costs.
[98]
The 155569 Canada Ltd. and Richards cases
referred to above, decisions of the Alberta and Federal Courts respectively,
confirm a superior court of record’s inherent jurisdiction to assess costs
against non-parties to an action. In 155569 Canada Ltd., Veit J., in
addressing whether limited partners of a limited partnership who invested funds
in order to fund and maintain the partnership’s lawsuit in return for an
additional return on its investment, summarized the law on when non-parties may
be liable for costs at paragraphs 35 - 37:
35 The
law establishes that non-parties may, in exceptional circumstances, be liable
for costs. Canadian law takes the view that the authority to make such orders
comes within the court’s inherent jurisdiction. British law is currently of the
view that the equivalent of our Judicature Act gives this right to the courts
as a statutory power. In the result, by whatever reasoning is employed, it is
clear that Canadian courts can impose the obligation to pay costs on non-parties.
The issue in this case is, therefore, whether the court should exercise its
jurisdiction and discretion to order certain non-parties, in particular certain
limited partners who have funded the law suit, to pay costs.
36 While
acknowledging that they have funded the lawsuit, some limited partners have
said that they have done none of the other things mentioned in cases such as
Symphony Group plc. For example, they argue, they have not
- initiated the
proceedings: McColeman;
- counselled commencement
of the action: Alexanian;
- solicited parties
to carry on the litigation: Canadian Tire;
- created the partnership to carry on the litigation and thereby
avoid liability for costs: Tradewinds;
- promoted themselves as the “real litigants”: Canadian Tire;
- conducted the action from the sidelines; Alexanian.
37 The
simple answer to that argument is that, in order to be made liable to pay the
costs of a lawsuit, it is not necessary to have done more than to have maintained,
or financed, that lawsuit: Singh. There are other ways in which non-parties can
be liable for costs - as for example by conducting the lawsuit from the
sidelines - but these are independent from the issue of financing the lawsuit.
[99]
In the above decision, Veit J. found that the
limited partners essentially were offered and did buy an interest in a lawsuit
that constituted maintenance or something akin to it and hence were potentially
liable for costs but found in the circumstances of that case such limited
partners had no notice of the claim for costs against them. At paragraph 62, Viet
J. stated:
62 In
summary then, although limited partners who fund lawsuits in circumstances
similar to these are potentially liable to pay costs of the proceedings, no
award of costs is made here because the plaintiff did not give the targeted
limited partners adequate notice of its claim against them. When the claim is
raised for the first time only after the lawsuit is finished, as in this case,
the limited partners are powerless to change anything in the conduct of the
proceedings. It is unfair to impose costs on them at this stage. The situation
might be otherwise if, from the outset of the proceedings, it were clear that,
as a matter of law some limited partners were liable to costs even though no
explicit claim for costs were made: Rule 120. But the legal and factual
framework for the claim, perhaps in all limited partnership cases, but
certainly in this case, was not obvious.
[100] What is clearly evident from the above decision is that the limited
partners who funded the lawsuit did so only qua “investors” and had no
influence or control over the conduct of the proceedings and thus could not be
held liable for costs without adequate advance notice. The case at hand is far
from similar.
[101] I share the Respondent’s opinion expressed in paragraph 134 of its
costs submissions:
It is difficult to conceive of a fact
pattern more supportive of an order of costs against the non-party Promoter
than the one in these appeals….
[102] The Promoter not only funded the action herein but conducted the
action from the sidelines if not directly from on-field. I take note of the
following:
1. The
Promoter prepared and arranged for the Appellants and in fact all participants
in the Program to execute a Direction as part of the transactional documents
wherein the Appellant, Mariano, as an example, agreed:
Global Learning
Group Inc.(“Promoter”) will establish a legal fund equal to 3% of the amount of
cash raised for the Foundation (to a maximum of $750,000) to pay legal fees in
the event of a reassessment by the Canada Revenue Agency. To avail itself of
the defense fund, the undersigned must consent to carriage of its appeal by the
Promoter on behalf of the undersigned, with legal counsel of the Promoter’s
choice, by way of binding test case, at Promoter’s option.
The Direction signed by
the Appellant, Moshurchak, made no reference “by way of binding test case, at
Promoter’s option” but I note in the Promoter’s promotional material entered
into evidence that the Promoter advised participants that if they are
reassessed by the CRA “a lead case would be chosen and the entire program would
be tested on that one case.”
2. It
is absolutely clear from the above and from other evidence during the trial
that the Promoter created a defense fund in anticipation of a challenge by the
CRA, promoted the fact there might be a challenge as well as a test case, had
full carriage of the action, had the right and did appoint and pay for the
solicitors who conducted the action on behalf of the Appellants as test cases
and was directly involved in instructing not only its solicitors but actually,
through its representative, attended pre-trial conferences.
3. The
Promoter hired the expert witnesses tendered by the Appellants at trial and
paid for the Dobner report. The Promoter, through its principal, Mr. Robert
Lewis, signed the engagement letter retaining PricewaterhouseCoopers to prepare
the expert report and agreed to be solely responsible for payment of their
services. At trial, it was clear that the expert, Dobner, who prepared the
report received instructions from the Promoter or its representatives and not
from the Appellants who seem to have had absolutely no role in the process.
4. The
Promoter not only paid all the legal fees of the solicitors engaged to conduct
the lead case but paid the costs assessed against the various Appellants by
Boyle J. during case management conferences and well as those assessed by
myself during the trial management conference which were agreed to in principle
but not amount by its counsel at the time.
5. Although
the Appellants’ costs submissions suggest there was no agreement on the part of
the Promoter to pay any costs award, this is contrary to the positions taken by
the Appellant, Mariano, in her letter to the Court advising that her
expectation was that the Promoter was to pay same, as well as the position
taken by various Bound Appellants, who in their submissions confirmed their
understanding that the Promoter was to pay same and direct the action. Frankly,
I find it rather incongruent to suggest that there was no legal obligation for
the Promoter to pay costs in this matter when one considers the wide wording of
the Direction creating the defence fund above to pay legal fees that did not
restrict same to only legal fees of its own counsel nor in light of the promotional
materials which talked of dealing with the matters by lead cases. Not only does
this suggest strong prima facie evidence that the Promoter represented
and agreed it would cover all costs associated with the “defense” but as
indicated it actually did pay the cost awards earlier referred to in satisfaction
of that obligation.
6. The
Promoter clearly controlled all aspects of the Program, from negotiating master
licences, arranging and paying for the valuations and legal opinions it
utilized as part of its Program materials, hiring parties to administer the
Program and collect funds, issue tax receipts and administer the Trust it was
instrumental in instructing its solicitors to create, paying for all experts
and lawyers involved and even preparing and making available templates for
participants to use to file notices of objection with the CRA, which were utilized
by both of the Appellants in this case as well as funded the lead case
litigation. It controlled all aspects of the Program and it controlled the
litigation that resulted therefrom. Frankly, the Appellants’ testimony was
essentially relevant and substantially limited to the issue of donative intent
and their understanding of the Program. The Appellants had realistically no
role to play in dealing with the other issues in this trial; including in
preparing and defending any of the valuations, expert reports, validity of the
Trust and of the Program itself which I found to be a sham nor were they the
source of the evidence tendered in support thereof including some fraudulent
customs invoices tendered to substantiate the conversions of licences into
CD’s. In short, the Promoter had far more participation and influence in the
action than did the Appellants themselves.
[103] Having regard to the above, I am of the view that the Promoter
should also be responsible for costs in this matter. Even without reference to
such aforesaid third-party cost precedents I would have arrived at the same
conclusion pursuant to the broad discretion Rule 147 gives me. Finally, I will
address the allocation of costs amongst those parties responsible therefore.
V. Allocation
of Costs
[104] I find that the Appellants, the Bound Appellants and the Promoter
shall be responsible for the costs of the Respondent as earlier calculated.
While I appreciate the Promoter may bear the direct responsibility for the sham
it has perpetrated on the Appellants and the Canadian public at large and
benefited to the extent of millions of dollars in cash contributions, the
Appellants and Bound Appellants did blindly or willingly jump on the Program train
in expectation of receiving a net cash advantage from their donation. As I
indicated in paragraph 88 of my Reasons in this matter:
..When otherwise good people turn a blind
eye to the obvious reality surrounding them, they cannot lay blame on others for
the consequences that follow from the fraud or sham of others. They certainly
should not expect the Canadian public to fund their losses.
Accordingly, I am not prepared to limit liability
for costs solely to the Promoter as requested by the Appellants and Bound
Appellants.
[105] The usual rule of allocating costs is that of joint and several
liability for those found to be responsible for costs. See Makuz v The Queen,
[2007] 1 CTC 2370, 2006 DTC 3464, at paragraph 3.
[106] In the circumstances however, an award of simple joint and several
liability amongst all of the above parties would in my opinion offend the
principle enunciated by Boyle J. in Martin above that the approach to
fixing costs on a principled basis is that costs “should be compensatory and
contributory, not punitive nor extravagant”. The Appellants and Bound
Appellants had significantly different contributions to the Program and
significantly different tax risks associated with it. As indicated above, Mariano
contributed in one year only a sum of $7,500 in cash while Moshurchak
contributed over two years for a total cash contribution of at least over
$114,000. The Bound Appellants made contributions of sums in between the range
of the Appellants. Moreover, even though the Appellants and Bound Appellants
participated in the same Program, they received different allocations of
software licences, ranging from 3 times to 8 times the cash contribution made;
with at least the Appellant Moshurchak having negotiated a larger allocation
for his second time larger cash donation. Thus charitable receipts were
calculated on different basis. To hold all such persons to the same degree of
cost liability would in my opinion be punitive to some and inadequately
contributory from others.
[107] Accordingly, aware of the reality Rothstein J.A (as he was them)
alluded to in Consorzio above, that an award of costs is not a
scientific exercise, I find that each of the Appellants, Bound Appellants and
the Promoter shall be jointly and severally liable for costs as earlier
determined but that the maximum amount of costs for which each of the
Appellants and Bound Appellants are liable for shall be capped; such that each
of their liability for costs shall be limited to the proportion that their
total Charitable Tax Credits claimed in respect of the Program for all years under
appeal herein is to total of all Charitable Tax Credits claimed by all of them
combined with respect to the Program for such years under appeal. For greater clarity, the total
Charitable Tax Credits claimed by any of the Appellants or Bound Appellants
shall include any Charitable Tax Credits claimed or claimable in respect of
their charitable donations claimed for such years under appeal that relate to
the Program, including any Charitable Tax Credits transferred to any other
person during the years under appeal or claimable or so transferable in future
years. To avoid double counting, any Appellant or Bound Appellant, such as
Janice Moshurchak, who received a transfer of any Charitable Tax Credit from
another party (such as from her husband Douglas Moshurchak) shall not count
such transferred Charitable Tax Credits in his or her total Charitable Tax
Credit claimed. There shall be no limit to the
Promoter’s liability for costs. This has the effect of treating the Appellants
and Bound Appellants differently amongst themselves to avoid punishing any of
them and permitting a fair contribution to costs but also treating them as a group
who together with the Promoter will be responsible for the full amount of costs
on a joint and several basis.
VI. Conclusion
[108] As earlier determined the amount of costs shall be $491,136.95 as
claimed by the Respondent less a reduction for any expert fees and
disbursements charged by FTI for the services of Mr. Mizrahi and Mr. Tobias
in attending to hear the evidence of any witnesses at trial or in preparing the
Respondent’s counsel to cross-examine the Appellants’ witnesses claimed in the
April 15, 2015 invoice of FTI to the Respondent. The taxing officer will be
directed to determine such reduction based on the actual fees charged by such
above persons in the said invoice if the parties are not able to agree amongst
themselves within 30 days of the date of this Order. These Costs shall be allocated
in accordance with paragraph [107] above.
This Amended
Amended Order and Amended Amended Reasons for Order are issued in substitution
of the Amended Order and Amended Reasons for Order dated August 4, 2016.
Signed
at Ottawa, Canada, this 13th day of August 2016.
“F.J. Pizzitelli”
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