Docket: 2000-3494(GST)G,
2000-3495(GST)G
2000-3496(GST)G, 2000-3497(GST)G
BETWEEN:
BONIK INC., BOKRIKA INC., SERBCAN INC.,
and THE NIKOLIC CHILDREN TRUST,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on November 22, 2006, at Toronto,
Ontario
By: The Honourable
Justice C.H. McArthur
Appearances:
|
Counsel
for the Appellants:
|
Ronald
B. Moldaver, Q.C.
|
|
Counsel for the Respondent:
|
Bobby Sood
|
____________________________________________________________________
ORDER
Upon motion by counsel for the Appellants for
an Order for costs of the proceedings and related proceedings; for an amendment
to the Reasons for Judgment in appeal no. 2000-3494(GST)G of Bonik Inc.; and
for direction as to further argument in the event the Reasons for Judgement are
amended;
And upon reading the affidavit of Marty
Johnson, filed, and the further materials filed, and upon hearing counsel for
the parties;
It is ordered that the Appellants’ motion is
denied, with costs to the Respondent.
Signed at Ottawa, Canada, this 3rd day of May, 2007.
“C.H. McArthur”
Citation: 2007TCC267
Date: 20070503
Docket: 2000-3494(GST)G, 2000-3495(GST)
2000-3496(GST)G, 2000-3497(GST)G
BETWEEN:
BONIK INC., BOKRIKA INC., SERBCAN INC.,
and THE NIKOLIC CHILDREN TRUST,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
McArthur J.
[1] This motion by the Appellants
is for an Order for costs in the hearing of the appeals, for an amendment to
the Reasons for Judgment in appeal no. 2000‑3494(GST)G of Bonik Inc.,
and for further argument in the event the Reasons for Judgment are amended, on
the following grounds:
1. The Appellants were
successful.
2. The results
achieved are better than the pre-hearing offer to compromise made by the Appellants.
3. The Respondent
at the outset and throughout the hearing of the appeals made several
unsuccessful challenges to the standing of the Appellants and to the ability of
the principal witnesses of the Appellants to have conduct of or otherwise have
influence in the prosecution of the appeals and that this, together with undue
cross-examination, improperly elongated the time taken to present evidence and
make argument.
4. With respect to
the Appellant Bonik in court file No. 2000-3494(GST)G, by inadvertence, the
Honourable Justice McArthur misapprehended said Reasons of Justice Loukidelis
and his orders and if the Appellant’s contention in this regard is correct, the
result in this case would be different and more beneficial for the Appellant.
[2] I will first deal
with the request for costs. No award for costs was granted to the Appellants
for many reasons, which I will attempt to set out. According to the Respondent’s
calculation, which I accept, the aggregate success of the Appellants was less
than 5%. There were four related Appellants and four appeals. Three were heard
on common evidence and the fourth, Bokrica, was heard separately and the appeal
was allowed. It dealt with an amount of $32,470, which was insignificant in
comparison to the overall amounts totalling approximately $873,000 in the four appeals.
I considered the four appeals together when making no order for costs to either
side.
[3] The four Appellants
had been treated as a single unit up to the date of hearing. I find as a fact
that they were the cause of most of the delays from the commencement of the
appeals in 2000 until the hearing in 2006. Hearings had been set down for trial
six times with five adjournments being granted. There were three status
hearings, and a hearing before Bowman J. in July 2005 requiring the Appellants to
establish why the appeals should not be dismissed on account of their delays.
The Appellants changed lawyers at least four times over the period of five or
six years.
[4] While Bokrika was
successful and the Respondent’s motions for summary judgment were unsuccessful,
the overall conduct of the Appellants cannot be ignored, notwithstanding the
written offer of settlement. Further no costs were awarded to the Respondent
who was overwhelmingly successful. The Appellants filed documents that were
often duplicitous and in disorder. The general rule is that the successful litigant
is entitled to party and party costs. Where success is divided, it is not unusual
for no order of costs to be made as is the present situation.
[6] Rule 147 of the Tax
Court of Canada Rules (General Procedure), gives the Court wide
discretionary powers. That Rule provides:
147(1) Subject
to the provisions of the Act, the Court shall have full discretionary power
over the payment of the costs of all parties involved in any proceeding, the
amount and allocation of those costs and determining the persons by whom they
are to be paid.
147(2) Costs
may be awarded to or against the Crown.
147(3) In exercising its
discretionary power pursuant to subsection (1) the Court may consider,
(a) the result of
the proceeding,
(b) the amounts
in issue,
(c) the
importance of the issues,
(d) any offer of
settlement made in writing,
(e) the volume of
work,
(f) the
complexity of the issues,
(g)
the conduct of any party that tended to shorten or to lengthen
unnecessarily the duration of the proceeding,
(h)
the denial or the neglect or refusal of any party to admit anything that
should have been admitted,
(i) whether any
stage in the proceedings was,
(i) improper,
vexatious, or unnecessary, or
(ii) taken
through negligence, mistake or excessive caution,
(j) any other matter relevant to the question of
costs.
147(4) The Court may fix all or part of the costs with or without
reference to Schedule II, Tariff B and, further, it may award a lump sum in
lieu of or in addition to any taxed costs.
(a) to
award or refuse costs in respect of a particular issue or
part of a proceeding,
(c) to award all or part of the costs on a solicitor and
client basis.
Counsel for the Respondent has
requested that $20,000 in costs be awarded to the Minister of National Revenue.
While I find the Respondent more deserving that the Appellants, in exercising
my discretion, I find the fairest conclusion is to award no costs.
[7] With respect to the
Appellant’s second request, I agree with counsel for the Respondent that the Rules
of the Court do not provide for an amendment of the Reasons for
Judgment. The Appellants are not requesting an amendment of the Order, and the amendment
requested would not alter the Order. My findings were consistent with the trial
evidence. Further, the Bonik appeal was not dismissed on whether the building
was used residential. It was dismissed on the ground that the Appellant failed
to establish the input tax credits claimed, and not because of a finding with respect
to the decision of Justice Loukidelis. For these reasons, the motion is denied,
with costs to the Respondent.
Signed at Ottawa, Canada, this 3rd
day of May, 2007.
“C.H. McArthur”
CITATION: 2007TCC267
COURT FILE NO.: 2000-3494(GST)G, 2000-3495(GST)G 2000‑3496(GST)G,
2000-3497(GST)G
STYLE OF CAUSE: BONIK INC., BOKRIKA INC., SERBCAN INC. and THE NIKOLIC CHILDREN
TRUST, and THE QUEEN
PLACE OF HEARING: Toronto,
Ontario
DATE OF HEARING: November 22, 2006
REASONS FOR ORDER
BY: The Honourable Justice C.H. McArthur
DATE OF ORDER: May 3, 2007
APPEARANCES:
|
Counsel for the Appellant:
|
Ronald B. Moldaver, Q.C.
|
|
Counsel for the
Respondent:
|
Bobby Sood
|
COUNSEL OF RECORD:
For the Appellant:
Name: Ronald B. Moldaver, Q.C.
Firm: Traub,
Moldaver
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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