Citation: 2006TCC258
Date: 20060427
Docket: 2004-3220(IT)I
BETWEEN:
GAÉTAN MATHIEU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Lamarre Proulx J.
[1] This is an application by the Respondent for the Court to reconsider its costs award.
[2] Here is the wording of the Respondent's application:
[TRANSLATION]
. . .
We have received a copy of the decision rendered by the Tax Court of Canada dated March 29, 2006.
However, we did observe, on page 11, in paragraph 32 of the decision, that the Court mentions the following :
[32] The Respondent shall pay one half of the Appellant's costs.
As the case was heard by informal procedure, there should be no costs awarded to the Appellant party unless the total amount in issue is reduced by more than half, which is not the case here.
Indeed, according to the evidence submitted during the hearing and the Minister's Reply to the Notice of Appeal, the tax in issue in relation with the credit for mental or physical impairment amounts to no more than $989.00, while the tax in dispute relating to the deduction for alimentary pension totals $27,721 (ref.: paragraphs 2, 3 and 5 of the Minister's Reply to the Notice of Appeal).
Therefore, in awarding the disability tax credit to the Appellant, only the sum of $989.00 was granted, i.e. much less than half the total amount of tax in dispute (the total amount being $989.00 + $27,721)
[3] I quote part of the Reply from counsel for the Appellant:
[TRANSLATION]
. . .
We would like to inform you that the Honourable Justice officiating at the Tax Court of Canada has all the discretion necessary to render the orders she finds appropriate, as this is a judgment and not a settlement evaluation.
. . .
Also, even if we consider the total amount in dispute, it first must be considered that this application brought before the Tax Court of Canada was based on two completely different elements, to wit, the deductibility of an alimentary pension in one case and obtaining a disability tax credit in the other case.
We therefore consider for all these reasons that there is no call for the Registrar of the Tax Court of Canada to amend the order rendered by the Tax Court of Canada.
Analysis and Conclusion
[4] Subsections 10(1) and 10(2) of the Tax Court of Canada Rules (Informal Procedure) read as follows:
10. (1) Costs on an appeal shall be at the discretion of the judge by whom the appeal is disposed of in the circumstances set out in subsection 18.26(1) of the Act which reads as follows:
18.26 (1) Where an appeal referred to in section 18 is allowed, the Court
(a) shall reimburse to the appellant the filing fee paid by the appellant under paragraph 18.15(3)(b); and
(b) where the judgment reduces the aggregate of all amounts in issue or the amount of interest in issue, or increases the amount of loss in issue, as the case may be, by more than one-half, may award costs to the appellant in accordance with the rules of Court."
10(2) A judge may direct the payment of costs in a fixed sum, in lieu of any taxed costs.
[5] I find it worthwhile to cite subsection 147(3) of the Tax Court of Canada Rules (General Procedure) (the "Rules"):
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.
[6] The amounts in dispute are not of the same nature. The amount of $27,000 is an amount relating to the calculation of income. The amount of $989 is an amount relating to the calculation of tax. It is the amount of the tax credit. Therefore, these are not two amounts that can be calculated together to determine whether the judgment reduces by more than half the total of the amounts in issue. That would lead, with respect, to an absurd result.
[7] In subsection 18(1) of the Tax Court of Canada Act, "amounts in issue" refers to the tax amounts assessed. It would seem surprising that subsection 18.26(1) of this Act, which uses the same language as subsection 18(1), would refer to amounts other than tax amounts.
[8] However, it may at times be useful, in awarding costs, to have a certain flexibility and that if all the amounts considered in a dispute are relating to the calculation of income, that it should be on half of the total of these amounts determined by the judge.
[9] In this matter, counsel for the Respondent kept with the amount of $27,000 and did not wish to establish or propose an amount on the corresponding tax. I do not contest her decision, as it would have been difficult to establish. However, we are, as mentioned previously, in a situation where the two amounts in issue are not of the same nature.
[10] This is therefore a situation where, in my view, the normal rules of procedure should be used to counter legislative insufficiency. One element that can be considered, as mentioned in subsection 147(3) of the Rules, is the importance of issues in dispute.
[11] In this appeal, there were two important issues: the deduction of an alimentary pension and the right to a tax credit for persons with disabilities. The first was decided in favour of the Respondent, the second in favour of the Appellant.
[12] Another element to consider in the costs award is the fact that the Appellant was represented by counsel.
[13] For all of these reasons, I am of the opinion that my decision to award half of the costs to the Appellant should not be modified.
Signed at Ottawa, Canada, this 27th day of April 2006.
"Louise Lamarre Proulx"
Translation certified true
on this 14th day of November 2006.
Gibson Boyd, Translator
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