Citation: 2008TCC430
Date: 20080725
Docket: 2004-3308(GST)G,
2004-3309(GST)G,
2004-3310(GST)G,
2004-3721(GST)G,
2004-3722(GST)G,
2004-3724(GST)G,
2005-3168(GST)G,
BETWEEN:
CENTRE HOSPITALIER LE GARDEUR,
HÔTEL
DIEU DE ST-JÉROME,
CITÉ DE LA SANTÉ DE LAVAL,
COMPLEXE HOSPITALIER DE LA SAGAMIE,
CENTRE HOSPITALIER AFFILIÉ UNIVERSITAIRE DE QUÉBEC,
CENTRE HOSPITALIER RÉGIONAL DE RIMOUSKI,
CENTRE HOSPITALIER DE L’UNIVERSITÉ DE MONTRÉAL,
CAMPUS HÔTEL-DIEU DE MONTRÉAL,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR TAXATION
Alan Ritchie, T.O., T.C.C.
[1] This matter came on
for hearing by way of a telephone conference call on Thursday, March 27, 2008.
It follows a Judgment of the Honourable Justice Lamarre of this Court issued on
July 20, 2007, allowing the appeal, with one set of costs to the seven Appellants
whose appeals were heard on common evidence.
[2] The Appellants were
represented by Me Claude Nadeau, and the Respondent by Me
Benoît Denis.
[3] It was agreed that the
only question to be decided was the proper Class of Proceedings to be used in
applying Tariff B in the preparation of the Appellants Bill of Costs. Each of
the seven appeals were properly filed and heard as Class A appeals. Counsel
for the Appellant took the position that the amounts at issue in the seven
files should be considered cumulatively, and he prepared his Bill of Costs
under Class B as a result.
[4] The Bill of Costs as
submitted under class B is in the amount of $13,526.42; if prepared under class
A it would have totalled $11,201.42.
APPELLANT
[5] Counsel for the
Appellant conceded that only one set of costs was awarded by the Honourable
Justice Lamarre in her judgment. However, he took the position that she had
not indicated the class, and further that her intent was likely that the
amounts at issue for the seven files should be aggregated – resulting in costs
under class B.
[6] He referred to Schedule
II, Tariff A of the Tax Court of Canada Rules (General Procedure)
(hereinafter, the Rules) where the aggregates of all amounts at issue
are used to determine the class of an individual appeal – and drew an analogy
with the question at issue – to justify claiming costs under class B.
[7] Counsel also referred to
section 154 of the Rules which sets out the factors to be considered by
the Taxing Officer when taxing costs. He noted that the appeals dealt with
important issues, that were the first of their kind and therefore were test
cases, which were of a considerably complex nature, and that the workload
involved in preparing for the hearing was significant.
[8] There were over 800
products used by the hospitals for in vitro diagnostic procedures, each of
which had to be reviewed in order to determine whether or not they were
essential for the diagnosis. This information was presented by an expert
witness at trial. Counsel at the taxation pointed to the fact that Justice
Lamarre had referred to the analysis done by the expert witness – and the four
general categories of products that were presented – extensively in her reasons
for judgment.
[9] He also noted that the
amounts actually at issue in the seven appeals represented only 17% of the
total GST originally paid, as 83% had already been reimbursed to the Appellants
– and that this was a significant amount.
[10] There was no
jurisprudence put forward in support of the Appellants’ position.
RESPONDENT
[11] Counsel for the
Respondent took a different view than his counterpart with respect to the amount
of work involved in preparing for trial, and the notion that these were test
cases. Rather than being considered test cases, it was his view that since the
introduction of the GST this was simply the first time this question had been
considered by the Court, and that there was nothing exceptional involved. With
respect to the work done by the expert, he noted that the information was
summarized into four broad categories of products when it was presented at
trial, and that the total number of products reviewed was immaterial.
[12] He also dismissed the
notion that the amount of tax in question was somehow more than the 17% at
issue in the seven files – that the other 83% had been reimbursed and was not
relevant in any way to what the Taxing Officer should consider under section
154 of the Rules.
[13] Counsel for the
Respondent said it was clear that the Court had awarded one set of costs, and
that the matter of costs had been explicitly addressed at trial. In the
absence of any further direction from the Court, the costs should be under the same
class as the seven files – class A. He noted that the Appellants could have
sought direction from the Court regarding costs following the issuance of the
judgment as provided for in subsection 147(7) of the Rules – but that
they had not.
[14] Counsel for the Respondent cited the following cases in
support of his position:
Adam & Associés v. the Queen 2005 TCC 321 – without
direction from the Court, a taxing officer has no reason to change the class of
the appeal;
Bergen v. The Queen 94-1510(IT)G – unless
otherwise ordered by the Court, the class of the appeal is determined at the
outset and does not change because several appeals heard on common evidence
have an aggregate amount at issue that would fall under a different class;
Tsang v. the Queen 93-155(IT)G – the amount
at issue in a given appeal determines its class; and
Crompton v. The Queen 97 DTC 1507 – only the
Court can award costs beyond the Tariff, not the Taxing Officer.
[15] Counsel for the Respondent summarized his position by
saying it was very clear in his mind that the Court had awarded one set of
costs, and that those costs were under class A as all seven appeals were filed under
that class.
DECISION
[16] There are two
general principles upon which I base my view of the matter at hand.
[17] The first is that, in
absence of direction from the Court otherwise, when appeals are heard on common
evidence the Appellant(s) are entitled to one set of costs. In essence, it is
as if only one appeal had been heard for the purposes of determining costs. In
this case, Justice Lamarre explicitly stated in her decision that this was the
case.
[18] The second is that the
class of an appeal is properly determined at the point of filing the Notice of
Appeal, and does not change.
[19] Taken together, my view
is that for the purposes of determining costs, this is similar to a single
class A appeal for which costs have been awarded to the Appellant.
[20] Counsel for the Respondent referred to case law (above) in
support of his position, and the situation in Bergen is the same as in
this matter: two class B appeals were heard on common evidence, the Court
awarded one set of costs to the Appellants, and the Appellants aggregated the
amounts at issue in the two appeals and submitted a Bill of Costs under class
C.
[21] The Taxing Officer ruled at the taxation in favour of the
Respondent.
[22] Although there may be instances where the volume of work
related to preparing many appeals for trial on common evidence could justify
costs above the amounts set out in the Tariff, as Taxing Officer I have no
authority to make that determination as noted in Crompton.
[23] Parties faced with such a situation should raise the matter
at trial in hopes of obtaining clarity from the Court in the judgment, or apply
for special direction on costs under subsection 147(7) following the issuance
of the judgment.
[24] The Bill of Costs is taxed, and I allow the
sum of $11,201.42.
Signed at Ottawa, Canada, this 25th day of July 2008.
"Alan Ritchie"
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