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Date: 20030121
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Docket: 2000-1594(GST)G
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BETWEEN:
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AGATHA KIT CHUN LAU,
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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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_______________________________________________________________
Appeal heard with the appeal of Patrick Wing Chu Lau
(2000-1596(GST)G)
on September 4 and 5, 2002 and motion with respect to
costs heard
on January 20, 2003 at Toronto, Ontario.
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Before: The
Honourable D.G.H. Bowman, Associate Chief Judge
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Appearances:
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Counsel for the
Appellant:
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Robert J.
Morris, Esq.
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Counsel for the
Respondent:
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J. Michelle
Farrell
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_______________________________________________________________
JUDGMENT
Whereas reasons for judgment were issued on November 25,
2002
And whereas counsel for the appellant requested an opportunity
to address the matter of costs before the issuance of the formal judgment
And upon hearing the representation of counsel for both parties
on the matter of costs on January 20th, 2003
…/2
It is ordered that the appeal from the assessment made under
subsection 323(1) the Excise Tax Act be allowed with costs and the
assessment be vacated.
It is further ordered that one set of fees,
disbursements and the costs of the motion for costs be awarded to the appellant
and Patrick Wing Chu Lau in the total lump sum amount of $52,000.
Signed at Toronto,
Ontario, this 21st day of January 2003.
A.C.J.
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Date: 20030121
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Docket: 2000-1596(GST)G
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BETWEEN:
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PATRICK WING CHU LAU,
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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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_______________________________________________________________
Appeal heard with the appeal of Agatha Kit Chun Lau
(2000-1594(GST)G)
on September 4 and 5, 2002 and motion with respect to
costs heard
on January 20, 2003 at Toronto, Ontario.
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Before: The
Honourable D.G.H. Bowman, Associate Chief Judge
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Appearances:
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Counsel for the
Appellant:
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Robert J.
Morris, Esq.
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Counsel for the
Respondent:
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J. Michelle
Farrell
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_______________________________________________________________
JUDGMENT
Whereas reasons for judgment were issued on November 25,
2002
And whereas counsel for the appellant requested an opportunity
to address the matter of costs before the issuance of the formal judgment
And upon hearing the representation of counsel for both parties
on the matter of costs on January 20th, 2003
…/2
It is ordered that the appeal from the assessment made under
subsection 323(1) the Excise Tax Act be allowed with costs and the
assessment be vacated.
It is further ordered that one set of fees,
disbursements and the costs of the motion for costs be awarded to the appellant
and Agatha Kit Chun Lau in the total lump sum amount of $52,000.
Signed at Toronto,
Ontario, this 21st day of January 2003.
A.C.J.
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Dockets: 2000-1594(GST)G
2000-1596(GST)G
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BETWEEN:
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AGATHA KIT CHUN LAU
PATRICK WING CHU LAU,
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Appellants,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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CERTIFICATION OF TRANSCRIPT OF
RULING ON COSTS
Let the attached certified transcript of my Ruling on
Costs delivered orally from the Bench at the Tax Court of Canada, Courtroom No.
1, 9th Floor, Merrill Lynch Canada Tower, 200 King Street West, Toronto,
Ontario, on January 20, 2003, be filed.
Signed at Ottawa,
Canada, this 24th day of February 2003.
A.J.C.
Court
File No. 2000‑1594(GST)G
2000-1596(GST)G
TAX
COURT OF CANADA
IN
RE: The Income Tax Act
B E T W E E N:
AGATHA
KIT CHUN LAU, PATRICK WING CHU LAU
Appellants
‑
and ‑
MINISTER
OF NATIONAL REVENUE
Respondent
‑‑‑
Held before The Honourable Associate Chief Judge Bowman of The Tax Court of
Canada, in Courtroom Number 1, 9th Floor, 200 King Street West, Toronto,
Ontario, on the 20th day of January, 2003.
RULING
ON COSTS
Delivered
Orally from the Bench
at
Toronto, on January 20, 2003.)
‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑‑
APPEARANCES:
Robert J.
Morris For the Appellants
J. Michelle
Farrell For the Respondent
William
O'Brien ‑ Registrar
Per: Penny
Stewart, CSR (Reporter)
-‑‑
Upon commencing at 3:45 p.m.
HIS
HONOUR: This is a motion for increased costs.
The
appeals of Agatha Kit Chun Lau and her husband Patrick Wing Chu Lau came on
before the court. I allowed both appeals and I accepted counsel for the
appellant's suggestion that I should reserve the matter of costs until
submissions were made, and I was prepared to do so.
In
the case of Agatha Kit Chun Lau I agree with Mr. Morris, I do not think
this case should have gone to court. And without being critical at all of
counsel, she had to take instructions, at least she thought she had to take
instructions from the Department of National Revenue. Nonetheless essentially
the Department of National Revenue, or CCRA as it is now called, did not accept
Agatha's position that she was never an officer of Nikiko Restaurant
Incorporated. They did not accept the evidence of Mr. Hui, the
solicitor. I think they should have accepted it at a very early stage in the
proceedings.
Basically,
the only people that seemed to look at these appeals in CCRA was a collections
officer who is not in my view an appropriate person to be looking at appeals.
There
was, I think, somewhat more merit in the Crown's assessment against Patrick
Wing Chu Lau. There were substantial amounts of money involved. The
accountants treated a very large part of the amount, against which GST was
imposed, as consulting fees. I had to accept that evidence, although, as I
indicated to counsel, I had some suspicions on whether these really were
consulting fees.
I
have decided to award a lump sum in the amount of $52,000.00 in both cases. I
am basing my discretion on several considerations:
First,
the Crown bumped this up into the General Procedure. This put a considerable
burden on both appellants. I think the Crown should be obliged to pay for
that.
Secondly,
I do not think there was merit in the Crown's assessment against Agatha Lau.
Thirdly, an offer
of settlement was made based on a recommendation of the judge that heard the
pretrial. That was rejected. I think the Crown should have been a little more
ready to accept the offer. It was not merely an unprincipled saw‑off or
compromise. It could have been justified on the basis of the consulting fees
which were very doubtful at the best of times.
Now
the tariff would have permitted about $16,000.00 on a party and party basis.
The solicitor and client costs prepared by the Lerner firm would have come to
$103,157.01. I think this is rather high. I do not question that the hours
were spent but I do question whether they really needed to be spent. I think
that is rather high.
I am
not awarding solicitor and client costs. I am awarding a lump sum which is, I
think, commensurate with the difficulty of the case, the time spent, and the
other factors that I have just mentioned.
Bear
in mind that section 147 of the General Procedure Rules provides a large number
of criteria on which the court may exercise its discretion and I will read
them: the result of the proceeding; the amounts in issue; the importance of
the issues; any offer of settlement made in writing.
Now,
pausing there, I think that I must in exercising my discretion at least
consider the offer of settlement. I do not think that an offer of settlement
which is less than the amount actually achieved at trial justifies an award of
solicitor and client costs. That was settled I believe in the decision of
Miller by Judge Lamarre. But, nonetheless, it is not a factor that can be
ignored completely.
The
volume of work. There was a lot of work involved in this case.
The complexity
of the issues. Well, I am not so sure the issues are all that complex. There
has been quite an evolution in these directors liability cases in which I think
the Federal Court of Appeal, in my respectful view, correctly has alleviated
somewhat the stringent criteria applied by our court.
There
is certainly no suggestion that any party shortened or lengthened the
proceedings. There was no impropriety at all in my view here. There were some
statements that solicitor and client costs can only be awarded where there is
impropriety on the part of one or other of the parties. But I am not awarding
solicitor and client costs.
I
think a fair disposition of this matter and one that partially compensates the
appellants for their ordeal of having to come to court and justify their
position is $52,000.00. That will include disbursements and the costs of this
motion.
‑‑‑
Whereupon concluding at 3:55 p.m.
I
HEREBY CERTIFY THE FOREGOING
to
be a true and accurate
transcription
of my shorthand notes
to
the best of my skill and ability.
Penny
Stewart, CSR
Chartered Shorthand Reporter
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