Date: 20021022

Docket: 2001-3471-IT-I

BETWEEN:

EVE SAMYCIA,

Appellant,

- and -

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Taxation

Reeve, R. D., T.O., T.C.C.

[1]            This taxation of costs commenced via conference call at 11:00 a.m. (PST) on Tuesday October 8, 2002. The Appellant had filed an appeal in the Tax Court of Canada for the 1999 taxation year. The Honourable Judge Bowman, in his judgment dated February 8, 2002, allowed the appeal with costs, if any. For the taxation, Mr. Victor Caux represented the Respondent and Agent, Marc Soprovich, represented the Appellant.

[2]            The Appellant submitted an unsigned Bill of Costs in the amount of $2,282.36, a portion of which is produced below.

Transportation     Ferry     $ 30.50

      Vehicle     21.00

      Parking     13.00

Meals          17.00

Wage loss during appearance          166.77

Legal     Percy Smith     102.60

Accounting and Tax research     Soprovich & Co.     254.80

          ""                      1,676.69

          $               2,282.36

The Respondent did not take issue with the claim for the ferry, vehicle kilometre charge or the parking and meal expense.

SUBMISSION - Mr. Soprovich for the Appellant

[3]            Costs were sought in the Notice of Appeal and a subsequent submission was sent to the Tax Court requesting that the Court order the Canada Customs and Revenue Agency to pay all legal and other costs including travel, loss of wages, and professional costs associated with accounting fees. When the judge gave his decision he indicated that the Appellant was entitled to costs, if any, and it is submitted that the decision relates to the costs that were asked for.

[4]            The Judge has two ways to award costs; one is costs, the other is fixed costs. Since a request was made for costs prior to the judgment being rendered and the amounts at the time were not known, the specific costs that were requested would be fixed on the date of the judgment.

[5]            The intent of the Tax Court judge would be to ensure that there were no over burdening costs to the taxpayer in obtaining justice.

SUBMISSION - Mr. Caux for the Respondent

[6]            Two amounts totalling $1,931.49 have been claimed for the accounting firm of Soprovich & Co. These claims are for services provided by an accounting firm, which are not proper in this instance. In The Queen v. Munro, 98 D.T.C. 6443 (F.C.A.)., at paragraph 20, an Appellant had applied for costs for the services of an agent. It was held that an agent could not claim services as disbursements under Rule 12(3) that would otherwise be denied under Rule 11. That is the case here.

[7]            With respect to $166.77 claimed for a loss of wages by the Appellant. There are no provisions in the Informal Procedure Rules that cover this situation. In Tippett v.Canada [1996] T.C.J. No. 1217, it was held that costs do not include a loss of income due to absence from employment during litigation, therefore, this is not an appropriate amount to claim.

[8]            With respect to an amount of $102.60 from Percy Smith's office, legal fees must fall under one of the heading under section 11 of the Informal Procedure Rules as stated in Kew v. Canada [2001] T.C.J. No. 116. The facts here are similar and therefore this is not an appropriate amount to claim.

DECISION

[9]            The appeal was instituted under the Tax Court of Canada Rules (Informal Procedure) on September 24, 2001 and was heard on January 29, 2002. The provision for costs commences at section 10 of these rules. With respect to the Appellant's position that the costs awarded may be regarded as costs that were fixed, based on previous written submissions, I do not see that to be the case. When fixing costs on items, Judges are quite specific in setting a dollar amount. In this instance the award is for costs, if any. Realizing that counsel did not represent the Appellant, the Judge allowed costs wherever any expenses would be eligible under the rules.

[10]          The firm of Soprovich & Co., Certified General Accountant of Gibsons, British Columbia, submitted the Bill of Costs on behalf of the Appellant. There was a claim for the Appellant's loss of wages. The case of Tippett, supra, is on point on this issue. In that decision, it was held that costs do not include a loss of income due to absence from employment during litigation. Following that reasoning, the amount of $166.77 is taxed off.

[11]          Services of Percy Smith in the amount of $102.60, was supported by a receipt which shows the individual to be a lawyer. The receipt is dated August 14, 2001, prior to the Appeal being instituted. The Bill of Costs refers to this amount as "legal" service, but the receipt makes no reference to any subject. There is no evidence to suggest that this amount was relevant to the conduct of the appeal or was a reasonable and proper expense. The amount of $102.60 is taxed off.

[12]          With respect to two invoices submitted from the accounting firm of Soprovich & Co., one amount was for $254.80 and the second amount was for $1,676.69. The invoice for $254.80 is dated September 21, 2001, which is prior to the appeal being instituted, and refers to the services of "tax planning". The Bill of Costs describe the service as "Accounting and Tax research". There is often justification for research in proceedings, but the initial invoice in this instance refers to tax planning. If allowing costs for research is considered, there must be some account of the amount of time allocated to the specific research in order to determine whether it is reasonable and whether it is necessary. Under the circumstances, there is no evidence that the amount of this invoice was relevant to the proceeding or that it was a reasonable and necessary expense for the conduct of the appeal. The amount of $254.80 is taxed off.

[13]          The invoice for $1676.69, dated January 17, 2002, had been copied and filed at the Court with other documents on January 22, 2002. Attached to this invoice, is what is referred to, as a Client Billing Worksheet. The worksheet lists activities ranging from August 9, 2001, prior to the Appeal being instituted, to January 17, 2002 prior to the appeal being heard. The activities refer to reviewing CCRA decisions for $139.13, preparing the appeal for $49.00, discussions on CCRA key points and requiring information for $133.88, replying to the Minister's reply for $434.00, reviewing a request for $42.00 and finalizing letters, copying, faxing, and signing for $171.50. These amounts total $969.51. The activities are consistent with services that counsel provide when preparing an appeal. Section 11 of the Informal Procedure Rules, provide amounts allowable for the services of counsel. In the Rules, counsel is defined in section 2 as "...every person who may practice as a barrister, advocate, attorney or solicitor in any of the provinces". In this instance, the Appellant was not represented by counsel but had an agent assisting her. It is well established that an agent cannot claim the fees for the services of counsel or claim fees in the alternative as disbursements. To do so would entitle an agent to claim more than counsel would be entitled to claim under section 11 as set out in The Queen v. Munro, supra.

[14]          To arrive at the remaining amount of the total of $1676.69, a further examination of the earlier submitted copy provides a breakdown. Handwritten notations on the lower portion of the document, mentioned above, refer to a court appearance, ferry charges of $36.50, 6.5 hours at $87.50 and a meal for $36.00 for an additional amount of $597.50. This amount combined with the $969.51 referred to above, totals $1,567.01. On an attached page, an amount is shown for research, discussions, and meetings totalling $1,495.00 plus travel costs of $72.00 for a total shown as $1,567.00. An additional $109.69 was added for GST for a total of $1,676.69. This amount is consistent with the invoice from the accounting firm, submitted with the Bill of Costs. The above amount of $969.51 has been reviewed and considered in relation to the The Queen v. Munro, supra decision. The hours referred to appear to relate to the time allocated in performing the activities. Travel and meals are addressed below.

[15]          Reviewing this invoice leads to the conclusion that the activities are consistent with services normally performed by counsel in the preparation of an appeal. There is nothing mentioned specifically in the Judge's reasons, that would suggest certain research was necessary for the conduct of the appeal, thereby identifying some portions as eligible disbursements. Although the invoice refers to research, the worksheet does not identify any specific research that would be relevant, necessary and reasonable for the conduct of the appeal. Following The Queen v. Munro, supra, the amounts claimed in this invoice are not allowable to an agent as disbursements.

[16]          The amount of $1676.69 will be taxed on the following basis. Mr. Soprovich did attend court in Vancouver as a witness on January 29, 2002, therefore in accordance with section 12(1), he would be entitled to a witness fee of $50.00. The Respondent did not take issue with the ferry charge of $30.50, the vehicle charge of $21.00, parking charges of $13.00 and a meal in an amount of $17.00. Since the witness was from Gibsons, B.C., it would be reasonable and proper to allow the expense of a return ferry trip upon testifying. Consistent with the receipt provided, an additional $30.50 is allowed for that purpose. These are reasonable and proper expenses for the witness. A total amount of $162.00 is allowed. A certificate will be issued.

Dated at Vancouver, British Columbia this 22nd day of October 2002.

________________________

Taxing Officer

Date: 20021022

Docket: 2001-3471(IT)I

BETWEEN:

EVE SAMYCIA,

Appellant,

- and -

HER MAJESTY THE QUEEN                Respondent

CERTIFICATE OF COSTS

I CERTIFY that I have taxed the party and party costs of the Appellant in this proceeding under the authority of subsection 13(1) of the Tax Court of Canada Rules (Informal Procedure), and I allow the sum of $162.00.

Dated at Vancouver, in the Province of British Columbia, this 22nd day of October 2002.

____________________________________

Taxing Officer