McLarty v. The Queen, 2012 TCC 192

Docket: 98-1659(IT)G

BETWEEN:

ALLAN McLARTY,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Order for Costs determined by Written Submissions concerning the Motion heard on February 1, 2012, at Calgary, Alberta.

By: The Honourable Justice T.E. Margeson

 Participants:

____________________________________________________________________

ORDER

UPON reading the written submissions concerning costs of the Appellant, the Respondent and the third party, Grant Thornton LLP;

THIS COURT ORDERS THAT:

1.       The Respondent shall pay costs in the amount of $13,000 to the Appellant, to be paid within 30 days of the date of this Order.

2.       The Respondent shall pay costs in the amount of $18,000 to the third party, Grant Thornton LLP, to be paid within 30 days of the date of this Order.

         Signed at Ottawa, Canada, this 5th day of June 2012.

“T.E. Margeson”

Citation: 2012 TCC 192

Date: 20120605

Docket: 98-1659(IT)G

BETWEEN:

ALLAN McLARTY,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR ORDER FOR COSTS

Margeson J.

[1]              By Order dated March 8, 2012, this Court dismissed the motion of the Respondent seeking an Order for leave to examine a representative of Grant Thornton LLP or Mr. Norman Knecht, a former partner pursuant to section 99 of the Tax Court of Canada Rules (General Procedure) (the “Rules”).

[2]              The Court further ordered that costs be awarded to the other parties and indicated that it would hear the parties on the matter of costs.

[3]              Subsequently, the Court conducted a conference call with the parties on this issue but they were unable to come to any agreement as to costs. The Court then directed the parties to file brief written submissions with respect to costs and the parties complied.

[4]              As can be seen from the Reasons for Order concerning the motion, the Court was satisfied that Grant Thornton LLP had no relevant information that the Respondent had not been able to obtain at discoveries already conducted or from the parties that it was entitled to examine. Further, the Court found that it would not be unfair to the Respondent to proceed to trial without further discoveries as sought.

[5]              The Court further found that the Respondent was attempting to obtain information to confirm its theory of the case which it was not entitled to do.

[6]              After considering all of the circumstances of this case as presented and considering the provisions of Rule 147, the Court is satisfied that this is a proper case for the award of costs on a lump-sum basis and above the tariff but falls short of being a case where the Court should award costs on a solicitor-client basis. The Court has been advised by counsel for the Appellant, an officer of this Court, that the Appellant was billed $32,851.23, inclusive of legal fees, disbursements and GST. The Court has no reason to doubt that information.

[7]              However, the parties must realize that this was a motion and not a trial, in spite of the time spent on preparing for this motion. The Appellant cannot expect to be fully reimbursed for all of his costs, and counsel for the Appellant seeks the lump-sum of $15,000 as being reasonable.

[8]              The Court is satisfied that a reasonable figure would be the sum of $13,000 to be paid to the Appellant. The Respondent shall therefore pay to the Appellant the costs of this motion which I fix at $13,000, in any event of the cause. The costs are to be paid within 30 days of the date of this Order.

[9]              The argument of counsel for the Respondent on this issue is rejected.

[10]         With respect to the costs of the third party, Grant Thornton LLP, its counsel proposes that it obtain full recovery of costs of $34,171, as this award reflects the intent of the Rules and is the fair result in the circumstances of this case. This position is rejected by the Court. This Court finds that an award of costs of $18,000 is more appropriate under the circumstances of this case.

[11]         The Respondent shall therefore pay to the third party, Grant Thornton LLP, the sum of $18,000, in any event of the cause. The costs are to be paid within 30 days of the date of this Order.

[12]         The argument of counsel for the Respondent on this issue is rejected and the amount suggested is not realistic.

         Signed at Ottawa, Canada, this 5th day of June 2012.

“T.E. Margeson”

CITATION:                                       2012 TCC 192

COURT FILE NO.:                            98-1659(IT)G

STYLE OF CAUSE:                          ALLAN McLARTY and

                                                          HER MAJESTY THE QUEEN

ORDER FOR COSTS:                      By Written Submissions

REASONS FOR ORDER BY:           The Honourable Justice T.E. Margeson

DATE OF ORDER:                           June 5, 2012

PARTICIPANTS:

COUNSEL OF RECORD:

       For the Appellant:                        Jehad Haymour

                                                         Fraser Milner Casgrain LLP

                                                          Calgary, Alberta

       For the Respondent:                    Myles J. Kirvan

                                                          Deputy Attorney General of Canada

                                                          Ottawa, Canada

       For Grant Thornton LLP:            Alexandra Brown

                                                          Laishley Reed LLP

                                                          Toronto, Ontario