Docket: 2003-2432(IT)G
BETWEEN:
TERRY DACOSTA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Show cause and motion heard on January 21,
2008, at London, Ontario
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
Agent for the Appellant:
|
Andrea
Cooley
|
|
Counsel for the Respondent:
|
Pascal Tétrault
|
____________________________________________________________________
ORDER
UPON motion made by counsel
for the Appellant requesting an order extending the time to file and serve the
Appellant’s List of Documents, to complete the examinations for discovery and
undertakings, and to communicate with the Court’s Hearings Coordinator;
AND UPON hearing the submissions
of the parties;
The Appellant’s motion is
allowed in part.
IT IS ORDERED that:
1.
The
Appellant shall file and serve a List of Documents (Partial Disclosure) on the
Respondent by January 22, 2008.
2.
The
Appellant is to notify the Respondent by January 31, 2008 which dates in
February, March and April 2008 the Appellant will not be available for
discovery, failing which the Crown will have the right to set the date.
3.
The
examination for discovery of the Appellant shall be completed by April 30,
2008.
4.
Any
undertakings given by the Appellant at his examination for discovery shall be
satisfied by May 30, 2008.
5.
The
parties shall communicate with the Hearings Coordinator, in writing, on or
before June 30, 2008 to advise the Court of dates in August and September 2008 for a hearing
date to be set in London peremptorily. The parties may file a joint
application to fix a time and place for the hearing in accordance with section
123 of the Tax Court of Canada Rules (General Procedure).
6.
Costs in the amount of $475
plus disbursements, with respect to the show cause and the motion, shall be
payable to the Respondent by the Appellant and shall be reimbursed to the
Appellant by counsel for the Appellant.
7.
Pursuant
to Rule 152(3), Appellant’s counsel is directed to send a copy of this Order
and the Reasons to the Appellant promptly and to indicate by letter to this
Court when this has been done.
Signed at Ottawa, Canada, this 7th
day of March 2008.
"Patrick Boyle"
Citation: 2008TCC136
Date: 20080307
Docket: 2003-2432(IT)G
BETWEEN:
TERRY DACOSTA,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Boyle, J.
[1] At the conclusion
of hearing both the show cause hearing ordered by the Court in London Ontario on January 21, 2008,
and the Appellant’s motion heard at the same time, I allowed the Appellant’s motion
in part and ordered new dates by which to complete the pre-trial process. I extended
the time for filing and serving the Appellant’s List of Documents, discovery of
the Appellant, completion of the Appellant’s undertakings, and required the
parties to advise the Court by June 30, 2008 if the matter is ready to be set
down for trial. The Crown had opposed the Appellant’s motion and urged me to
dismiss the appeal for delay in accordance with Rule 125(5). At that time I expressly
reserved on the issue of costs for the show cause and for the motion and
invited submissions on whether any or all costs should be payable personally by
the Appellant’s counsel.
History of the
Appeal
[2] This appeal of the
1998 and 1999 taxation years was instituted by the Appellant on his own behalf
in 2003 by filing a skeletal Notice of Appeal. At the first show cause hearing
in November 2004, which the Appellant did not attend, this Court ordered
production of Respondent’s documents by December 31, 2004, production of the
Appellant’s documents by January 31, 2005 and communication with the Hearings
Coordinator by February 28, 2005. The Respondent’s List of Documents was filed
and served as ordered. The Appellant’s was not. By the time of the most recent show
cause hearing, it was three years late.
[3] Prior to February
28, 2005, the Appellant retained counsel. On February 28, 2005, the
lawyer’s office sent a letter indicating counsel had been consulted, was out of
the office for the next week and had left no instructions with his assistant.
On March 31, 2005, the Appellant’s counsel requested an extension of the
time to file the List of Documents to May 31, 2005. This request was opposed by
the Crown.
[4] A status hearing
was ordered by the Court on June 9, 2005. At that time the Court ordered that the
Appellant had ten days to decide if he wished to elect to have the appeal
governed by the Court’s informal procedure or, if not, to file an Amended
Notice of Appeal within 30 days. An Amended Notice of Appeal was filed within
that time and an Amended Reply was filed thereafter.
[5] On March 26, 2007,
this Court ordered a second show cause hearing for June 6, 2007 pursuant to
Rule 125 to show cause why the appeal should not be dismissed for delay. On May
28, 2007, Appellant’s counsel brought a motion for an order extending the time
to file the Appellant’s List of Documents, to complete discoveries and
undertakings, and communicate with the Hearings Coordinator. The Respondent
consented to the Appellant’s 2007 motion. On May 31, 2007, the Court
ordered that the Appellant’s List of Documents was to be filed and served by
July 16, 2007, discoveries were to be completed by October 1, 2007,
undertakings by October 31, 2007 and the parties were to communicate
with the Court by November 30, 2007.
[6] On
November 30, 2007, the Crown wrote to advise the Court that the
Appellant’s List of Documents was not served in the time ordered and discovery
of the Appellant had not been completed, and to suggest a case management
conference may be helpful.
[7] Appellant’s counsel
attempted to file the Appellant’s List of Documents with the Court on November
14, 2007, almost four months late. It was not accepted for filing and the Court
so advised the Appellant’s counsel by letter dated December 3, 2007. This
Court’s Practice Note 14 provides that following an order setting a date for
completion of any step in an appeal, an application for further time shall
proceed by way of motion supported by an affidavit except in special
circumstances.
[8] No further
communication having been received, on December 12, 2007 the Court
ordered a third show cause hearing for Monday January 21, 2008 to
show cause why this appeal should not be dismissed for delay.
[9] On Wednesday
January 16, Appellant’s counsel filed a motion requesting further extensions of
time. The reasons given for the delay in the supporting affidavit for the
January 2008 motion are identical to those in the May 2007 affidavit
supporting the May 2007 Order extending the time.
The Hearing
[10] At the show cause
hearing neither the Appellant’s counsel nor the Appellant were in attendance.
Appellant’s counsel had arranged for an agent to attend in his place as he had
another Court proceeding underway elsewhere.
[11] The Crown opposed
the Appellant’s motion and encouraged me to dismiss the appeal for delay in
accordance with Rule 125. Needless to say, the Appellant’s counsel’s agent
could not provide any insight or answers to any questions or concerns regarding
the delays and the non-compliance with this Court’s May 2007 Order.
[12] The most recent show
cause hearing was the third show cause hearing ordered in this file. In
addition, the Court had also ordered a status hearing. Three years after the
initial Court ordered date for filing and serving his List of Documents, the
Appellant had still not done so. Mr. Dacosta is very fortunate I did
not decide to dismiss his appeal for delay. The only reason I did not do so was
that I was less than certain that he and not his counsel was the cause of the
delay. Having neither of them present did not help me in this regard.
[13] At the hearing I
ordered new dates. The Appellant’s List of Documents was to be filed and served
by the following day. There would be no discovery of the Crown. Discovery of
the Appellant would be completed by April 30 and undertakings satisfied by
May 30. The Appellant was to notify the Respondent by the end of January which
dates in February, March and April the Appellant would not be available for
discovery, failing which the Crown would have the right to set the date. The
parties are to advise the Court by June 30, 2008 of dates in August and
September 2008 for the trial to be scheduled and heard. The trial date is to be
set peremptorily. I advised the parties that there was no need for and would be
no tolerance of further delays. The Appellant should assume that if any of the
steps are not completed by the dates ordered, this Court will dismiss his
appeal.
Costs
[14] This brings me to
the question of costs. As stated, I asked for submissions on costs from both
parties and asked the Appellant’s counsel’s agent to advise the Appellant’s counsel
that he should address whether costs should be payable by him personally in the
circumstances.
[15] The Crown’s
submissions were filed almost a month late and only after a follow-up call from
the Court. That leaves me with little interest in awarding costs beyond the
tariff provided for in the Rules. Accordingly, I am awarding costs in favour of
the Respondent based on the tariff for the show cause hearing and for the
motion in the aggregate amount of $475 plus disbursements. The show cause
hearing had to be ordered as a result of the Appellant’s delay. While the
Appellant’s motion was allowed in part, in so far as the dates were extended
again, this was necessitated solely by the Appellant not complying with the
dates previously ordered by this Court.
[16] Appellant’s counsel
filed a costs submission. It was his view costs should be awarded in favour of
the Appellant. His first reason was his success on the motion. He gave no
reason in his costs submission as to why he never communicated with the Court,
nor had this been addressed in the supporting affidavit for his motion or at
the hearing.
[17] In the final
paragraph of his submission asking for costs, Appellant’s counsel submits that
costs should not, in any event, be payable personally by him. His reasons were
twofold. Firstly he had tried unsuccessfully to get the Respondent’s consent to
the motion. Secondly, the Appellant had had difficulty paying his accounts.
[18] I find the
Appellant’s submissions and his behaviour in this matter very disappointing. He
does not address why he never contacted the Court to try to get dates
rescheduled without the need for the Court and Respondent’s counsel to spend
Court time in London dealing with this (in his absence and the absence of the
Appellant). His implicit suggestion seems to be that he may not have done
things on a timely basis because he was not getting fully paid by his client.
An even worse interpretation is that the Court and Crown had to hear the motion
and have the show cause hearing to assist the Appellant’s counsel get paid.
Regardless of whether his client had fully paid him, as Appellant’s counsel of
record, a brief telephone call to the Hearings Coordinator may well have
avoided the need for scheduling a third show cause hearing and for the
contested motion. The people of Canada cannot be expected to assist Appellant’s
counsel collect his accounts in such a manner or at such a cost.
[19] I find the
performance of Appellant’s counsel exceedingly disappointing, unprofessional
and inexcusable, as well as in breach of Justice Rossiter’s 2007 Order. I must
then turn to whether it is of the character that warrants his personal
responsibility for the costs award.
[20] An award of costs
payable by counsel personally is permitted both as part of the Court’s inherent
jurisdiction as well as under the statutory jurisdiction of Rule 152. Such
awards are, in either event, extraordinary.
[21] Chief Justice
McLachlin writing for the majority of the Supreme Court of Canada on this point
wrote in Young v. Young (1993), 108 D.L.R. (4th) 46:
It is as clear that the courts possess
that jurisdiction to make such an award, often under statute and, in any event,
as part of their inherent jurisdiction to control abuse of process and contempt
of court…
[22] An order that
counsel pay costs personally can be made as part of the inherent jurisdiction
of a superior court to control abuse of process, contempt of court and the
conduct of its own officers. In contrast, Rule 152 clearly increases the
circumstances permitting of such orders if counsel has caused costs to be
incurred without reasonable cause or to be wasted by undue delay, misconduct or
other default.
152(1) Where a counsel for a party has
caused costs to be incurred improperly or without reasonable cause or to be
wasted by undue delay, misconduct or other default, the Court may make a
direction,
(a) disallowing some or all of
the costs as between the counsel and the client,
(b) directing the counsel to
reimburse the client for any costs that the client has been ordered to pay to
any other party, and
(c) requiring the counsel to
indemnify any other party against costs payable by that party.
(2) A direction under
subsection (1) may be made by the Court on its own initiative or on the motion
of any party to the proceeding, but no such direction shall be made unless the
counsel is given a reasonable opportunity to make representations to the Court.
(3) The Court may direct
that notice of a direction against a counsel under subsection (1) be given to
the client in the manner specified in the direction.
[23] The common law inherent
jurisdiction requirement that there be a finding of bad faith clearly does not
constitute a prerequisite under Rule 152. The words of Rule 152
should be given their ordinary meaning. There is no requirement that the
lawyer’s conduct be abusive, negligent or in bad faith. See, for example, the
recent Ontario decisions in Walsh v. 1124660 Ontario Ltd. et al., [2007]
O.J. No. 639 and Standard Life Assurance Co. v. Elliott et al., [2007]
O.J. No. 2031.
[24] In Standard Life,
Justice Molloy writes at paragraph 25:
However, just because the actions of a
solicitor may fall within the defined circumstances in which costs may be
awarded against him personally, does not mean that the court’s discretion ought
to be exercised in that manner. On the contrary, the discretion ought to be
exercised sparingly and only in exceptional circumstances.
Justice Molloy then quotes
approvingly from paragraph 115 of Justice Granger’s decision in Marchand
(Litigation Guardian of) v. Public General Hospital Society of Chatham,
[1998] O.J. No. 527 (O.C.J.Gen.Div.) as follows:
Applying the ordinary meaning to the
words found in Rule 57.07, costs incurred without reasonable cause, or by
reason of undue delay, negligence or other default can be charged back to the
solicitor who is responsible for such costs being incurred.
And later:
Although “bad faith” is not
a requirement to invoking the costs sanctions of Rule 57.07 against a
solicitor, such an order should only be made in rare circumstances and such
orders should not discourage lawyers from pursuing unpopular or difficult
cases. It is only when a lawyer pursues a goal which is clearly unattainable or
is clearly derelict in his or her duties as an officer of the court that resort
should be had to R. 57.07.
[25] Although this Court’s
Rule 152 differs in some respect from Ontario’s Rule 57.07, notably our
rule does not refer to negligence but to misconduct, the words of Molloy J. and
Granger J. are equally applicable to a consideration of our Rule 152.
[26] Most of the cases
dealing with awarding costs personally against a solicitor are concerned that
lawyers not be deterred from pursuing unpopular causes or taking positions that
are novel and untested. Those considerations do not apply here. We simply have
a counsel whose behaviour towards this Court and whose failure to comply with a
court order is inexcusable. Justice Lane’s Reasons in Walsh quoted at paragraph 17 from the
Reasons of Justice Quinn in Belanger v. McGrade Estate, [2003] O.J.
No. 2853 (S.C.J.):
[Counsel] caused costs to be incurred
without reasonable cause and to be wasted, by his failure to provide the
necessary material to the applicant’s counsel in the time frame set out in the
order of Marshall J. This has nothing to do with the fearless representation of
a client.
The discretion available under subrule 57.07(1) should be
exercised with the utmost care and only in the clearest of cases. Any doubt
should be resolved in favour of the solicitor. Nevertheless, even with those
cautions, I think that what occurred in this case is precisely the kind of
scenario intended to be caught by the rule.
[27] I could not word it
better than that in this case.
[28] This is not a case
such as Jurchison, 2000 DTC 1660 where, to paraphrase Justice Bowie,
counsel’s behaviour merely did not rise to the level of civility which at one
time did, and still should, characterize the way in which members of the bar
conduct their dealings with one another. In this case Appellant’s counsel
disregarded a Court order and did not communicate with the Court regarding the
failure. This case is more similar to this Court’s decision in Whiteway v.
Canada, (1998 TCC 91158, [1998] T.C.J.
No. 84, [1998] 2 C.T.C. 3254) as well as the decision of
this Court in Anctil v. Canada, 97 DTC 1462.
[29] The costs awarded in
favour of the Respondent payable by the Appellant for the most recent show
cause hearing and the Appellant’s motion are directed to be fully reimbursed by
Appellant’s counsel to the Appellant pursuant to Rule 152(1)(b).
Pursuant to Rule 152(3), Appellant’s counsel is directed to send a copy of
these Reasons and today’s Order to the Appellant promptly and to indicate by
letter to this Court when this has been done.
Signed at Ottawa, Canada, this 7th day of March 2008.
"Patrick Boyle"
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