Docket: 2008-2315(IT)G
BETWEEN:
4145356 CANADA LIMITED,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Costs
determined by written submissions
By: The Honourable
Justice Campbell J. Miller
Participants:
|
Counsel for the
Appellant:
|
Al Meghji and
Martha MacDonald
|
|
Counsel for the
Respondent:
|
Daniel Bourgeois
and
Andrew Miller
|
____________________________________________________________________
ORDER
Upon application by the parties for costs of
a motion heard on September 10, 2009, at Toronto,
Ontario,
And upon reviewing the written submissions
of the parties;
IT IS ORDERED THAT costs shall be in the
cause.
Signed at Ottawa, Canada,
this 26th day of October 2009.
"Campbell J. Miller"
Citation: 2009 TCC 546
Date: 20091026
Docket: 2008-2315(IT)G
BETWEEN:
4145356 CANADA LIMITED,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Campbell J. Miller
[1]
Subsequent to my order
of September 28, 2009, I received written submissions from the parties with
respect to costs. The Appellant seeks costs of the two motions against the
Crown payable forthwith:
a) on a solicitor-and-client
basis plus GST as of the date of an offer to settle the motions made by the
Appellant on August 17, 2009; or
b) in the alternative,
a lump sum amount over and above Schedule II, Tariff B of the Tax Court of
Canada Rules (General Procedure) (the “Rules”) plus $700.00 (ie. the
amount set out in Schedule II, Tariff B, for a one-day motion in a Class C
proceeding) and GST.
[2]
The Respondent argues
the award of costs of the motions should follow the outcome of the appeal.
[3]
Both parties were
substantially successful on their respective motions. This would normally
result in costs following the outcome. Are there circumstances in this matter
to depart from such normal course? The Appellant suggests there are, being an
offer it made on August 17, 2009. It is helpful to set out Mr. Meghji’s letter
of August 18, 2009, to Mr. Bourgeois:
This letter will confirm my offer of yesterday wherein we offered to
settle the motions scheduled to be heard on September 10th on the
basis that the Appellant would provide the Respondent with the materials that
it seeks and the Respondent would similarly produce the materials in the CRA
files referred to in the Discovery. The letter will also confirm that the
Attorney General has rejected this offer.
As you would expect, the preparation and attendance at the motions
will result in significant costs being incurred. The Appellant reserves the
right to refer to this settlement offer in any subsequent determination of the
costs of the motion.
[4]
On September 8, 2009,
two days before the hearing of the motion, the Respondent countered with the
following offer:
Further to our voice mail, we are hereby offering to settle the
motions to be held on Thursday, September 10, 2009, on the following basis:
1.
The Respondent will provide an answer to
questions 146, 185 and 235, found in the transcript of the examination for
discovery of Simmin Hirji.
2.
The Respondent will extend the undertaking given
to question 175 to question 168: “provide all of the materials relating to any
discussions that the CRA had with anyone about the U.S. tax treatment of this transaction”. As such, the Respondent will
provide any documents, subject to privilege, contained in the audit materials
of the Appellant’s sister companies as they relate to question 168.
3.
The Appellant will provide all documents
referred to in question 76 of the transcript of the examination for discovery
of Donavan Flynn and provide an answer to question 458 of the said transcript.
This offer of settlement will be valid until 10am on September 9,
2009.
[5]
The Appellant argues
that its offer was more favourable to the Respondent than my Order, but that
the Respondent’s offer was not more favourable than my Order. It appears from
the two brief offers that the Appellant was prepared to provide the Respondent
with answers, but the Respondent was not prepared to produce the contents of
its files. The thrusts and parries of litigation can be at times broad and
sweeping and, at other times, intricate and pointed. Early in this litigation,
the Respondent sought full disclosure pursuant to Rule 82, but as
indicated in my Reasons on the motions, such procedure was rejected by the
Appellant and the Respondent eventually withdrew its motion. Yet, here we are
many months later, with the Respondent digging in its heels and the Appellant
seemingly prepared to provide all. What can explain this apparent seismic shift
of position?
[6]
The answer lies in what
each party was seeking. The Appellant was effectively seeking full disclosure
from the Respondent in asking for the contents of its files. The Respondent’s
request of the Appellant was somewhat more focused. I conclude that the
Appellant, in offering to provide answers to the Respondent’s requests, was not
giving up as much as it was seeking in return. The Appellant wants me to attach
considerable significance to the Respondent’s rejection of its offer. In the
circumstances, I am not prepared to attach any more significance to the
rejected offer than I am to the Appellant’s rejection of the Rule 82
full disclosure sought earlier by the Respondent. If either the Respondent’s
initial approach (full disclosure) or the Appellant’s offer had been accepted,
there would have been no need for these motions.
[7]
There is considerable
discretion given to the Court in awarding costs. Rule 147
identifies a non-exclusive list of factors that might be considered. I have
considered the following:
a) both offers of settlement;
b) the
parties conduct from the outset of the litigation, specifically the Rule 82
request.
[8]
I have concluded
counsel on both sides have strategized themselves into proceeding with motions that
the untrained eye of a less experienced litigator might view as unnecessary. I
conclude, in these circumstances, that costs shall be in the cause.
Signed at Ottawa, Canada,
this 26th day of October 2009.
"Campbell J. Miller"
CITATION: 2009 TCC 546
COURT FILE NO.: 2008-2315(IT)G
STYLE OF CAUSE: 4145356 CANADA LIMITED AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: September 10, 2009
REASONS FOR ORDER BY: Campbell J. Miller
DATE OF ORDER: October 26, 2009
APPEARANCES:
|
Counsel for the Appellant:
|
Al
Meghji and Martha MacDonald
|
|
Counsel for the Respondent:
|
Daniel Bourgeois and Andrew Miller
|
COUNSEL OF RECORD:
For the Appellant:
Name: Al Meghji
Firm: Osler, Hoskin & Harcourt LLP
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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