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Docket: 2005-287(IT)G
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BETWEEN:
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RULAND REALTY LIMITED,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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____________________________________________________________________
Motion heard on September 1, 2005 at Toronto, Ontario
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Before: The Honourable
Justice L.M. Little
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Appearances:
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Counsel for the Appellant:
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Adrienne K.
Woodyard
and Jane
Southren
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Counsel for the
Respondent:
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Elizabeth
Chasson
and Perry
Derksen
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____________________________________________________________________
ORDER
Upon Motion made by the
Appellant for Judgment pursuant to Rule 170.1(a) of the Tax
Court of Canada Rules (General Procedure;
And upon Motion made by
the Respondent for an Order granting leave to amend the Reply to the Notice of
Appeal;
And upon hearing what was
alleged by the parties;
It is Ordered that the
Respondent be granted leave to amend the Reply to the Notice of Appeal;
It is Ordered that lump
sum costs in the amount of $15,000.00 plus disbursements totalling $207.00,
payable forthwith, be awarded to the Appellant, in accordance with the attached
Reasons for Order.
Signed at Vancouver, British
Columbia, this 27th day of October
2005.
Little
J.
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Citation: 2005TCC690
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Date: 20051027
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Docket:2005-287(IT)G
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BETWEEN:
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RULAND REALTY LIMITED,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR ORDER
Little J.
A. FACTS:
[1] A
Notice of Appeal was filed by the Appellant on January 28, 2005 against Notices
of Reassessment made on June 14, 2002 and August 16, 2002 for the 1989 taxation
year.
[2] Counsel
for the Appellant states in the Notice of Appeal as follows:
29. The issue to be decided
in this appeal is whether the third 1989 Reassessment and the Fourth 1989
Reassessment are valid.
[3] The
Minister of National Revenue (the "Minister") filed a Reply to Notice
of Appeal on April 8, 2005.
[4] On
May 5, 2005, counsel for the Appellant filed an Answer with the Court in which
he commented in detail on many of the points contained in the Minister's Reply.
[5] On
July 22, 2005, counsel for the Appellant filed a Notice of Motion. The Motion
was for Judgment pursuant to Rule 170.1(a) of the Tax Court of Canada
Rules (General Procedure) (the "Rules"), re admission
in the pleadings that the Minister is not permitted to reassess an amount
pursuant to subsection 165(3) of the Income Tax Act (the "Act").
[6] Counsel
for the Appellant requested the costs of this Motion on a solicitor-client
basis payable forthwith.
[7] By
letter dated August 19, 2005, counsel for the Minister filed a Notice of
Motion with the Court. The Notice of Motion is for an order granting leave to amend
the Respondent's Reply.
[8] Counsel
for the Appellant wrote a letter dated August 22, 2005 to
Elizabeth Chasson, counsel for the Minister. The letter stated as follows:
1. The Appellant consents to the
Respondent's Motion to amend the Reply.
2. The Appellant expects to be fully
compensated in costs.
3. The Appellant will
have to withdraw its own Motion.
4. The Appellant requests
costs on a solicitor-client basis to compensate it fully for the time spent and
the disbursements incurred in preparing and serving its Answer and serving the
Notice of Motion.
[9] By
letter dated August 25, 2005, counsel for the Appellant advised counsel for the
Minister that a breakdown of the legal fees incurred by the Appellant in
connection with this appeal were as follows:
Total Time and Disbursements $47,107.00
B. ISSUE:
[10] Should the Appellant be awarded solicitor-client costs in the amount
of $47,107.00?
C. ANALYSIS:
[11] Section 147 of the Rules sets out the general principles
applicable to the award of costs. The relevant portions of this section are:
147. (1) Subject to the provisions
of the Act, the Court shall have full discretionary power over 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.
. . .
(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 proceeding 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.
(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.
(5) Notwithstanding any
other provision in these rules, the Court has the discretionary power
(a) to
award or refuse costs in respect of a particular issue or part of a proceeding,
(b) to
award a percentage of taxed costs or award taxed costs up to and for a
particular stage of a proceeding, or
(c) to
award all or part of the costs on a solicitor and client basis.
[12] In Young v. Young, [1993] 4 S.C.R. 3, the Supreme Court of
Canada said that solicitor-client costs are generally awarded only where there
has been reprehensible, scandalous or outrageous conduct on the part of one of
the parties. The Supreme Court held that neither the fact that an application
has little merit nor that part of the costs of the litigation have been paid by
others are basis for the award of solicitor-client costs.
[13] In Wewayakum Indian Band v. Canada (1999), 247 N.R. 350, 171
F.T.R. 320 the Federal Court of Appeal held that the fact that a claim has
little merit or was very weak is not a basis for awarding solicitor-client
costs.
[14] In Vacyshyn v. The Queen, [1999] 1 C.T.C. 139, 99 DTC 5133, the
Federal Court of Appeal said that an award of costs on a solicitor and client
basis is exceptional and is generally made on the grounds of misconduct
connected with the litigation.
[15] After considering the above Court decisions and a number of other
decisions I have concluded that the rule with regard to an award of costs on a
solicitor and client basis is that such an award is exceptional and generally
ought to be made only on the ground of misconduct connected with the litigation.
[16] I have concluded that this is not a situation where it is appropriate
to award solicitor and client costs.
[17] It will be noted that section 147 of the Rules gives the Court
full discretionary power over payment of the costs of all parties. I have
concluded that it is appropriate to award lump sum costs of $15,000.00 plus the
following disbursements to the Appellant, payable forthwith:
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Court fees
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Filing and service of Answer
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$61.00
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Filing and service of Amended
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Answer
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23.00
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Photocopying
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123.00
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$207.00
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Signed at Vancouver,
British Columbia, this 27th day of October 2005.
Little
J.
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