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Citation: 2003TCC174
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Date: 20030326
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Docket: 98-687(IT)G
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BETWEEN:
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ATCON CONSTRUCTION INC.,
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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 DENIAL OF APPELLANT'S
APPLICATION FOR EXTENSION OF TIME TO
REQUEST DIRECTIONS BE GIVEN TO TAXING
OFFICER
Rip, J.
[1] Atcon Construction Inc.,
("Atcon" or "appellant") has applied to this
Court for an extension of time to request directions be given to
the Taxing Officer with respect to the appellant's successful
appeal, judgment of which is dated March 30, 2000. The
respondent's appeal of the judgment of this Court to the
Federal Court of Appeal was dismissed with costs awarded to
Atcon.
[2] Atcon made an offer to settle the
appeal to this Court on March 14, 2000. The offer was
rejected by the respondent on March 16, 2000. The appellant's
settlement offer was more favourable to the respondent than the
relief granted by the Court. Apparently, the settlement offer was
for an investment tax credit of 15 per cent of the
purchase price of two drills, and this Court was of the view the
appellant was entitled to an investment tax credit of 30 per
cent.
[3] The appellant filed its Bill of
Costs with this Court on May 24, 2002 and requested that its
costs be increased as a result of the respondent's failure to
accept its offer to settle.
[4] The appellant alleges that Atcon
agreed with the Canada Customs and Revenue Agency
("CCRA") to postpone any reassessment resulting from
this Court's decision pending the judgment of the Federal
Court of Appeal. Accordingly, Atcon says it did not pursue its
costs at that time; the appellant's solicitor did not realize
that it had only 30 days from the date of the judgment to request
directions be given to the Taxing Officer "as its solicitor
intended on arguing this point when Acton has its costs assessed
if agreement could not be reached between the parties":
subsection 147(7) of the Tax Court of Canada Rules (General
Procedure) ("Rules").[1] The respondent, argues the appellant,
has not, and will not, suffer any prejudice as a result of
Atcon's failure to apply on time for directions to the Taxing
Officer.
[5] However, the respondent's
position is that on May 10, 2000, an officer of the respondent
wrote to the appellant advising the appellant "to consider
providing a written direction to postpone any reassessment until
the Federal Court of Appeal had rendered a final
decision". The respondent asked for a reply within 30 days.
The respondent states it did not receive a response but on or
about August 2001, "a representative of the Applicant
contacted the CCRA requesting the CCRA to reassess in accordance
with" this Court's decision. The respondent claims it
did suffer prejudice from the failure of the appellant to apply
to this Court for an increase in costs within the time limit
imposed by subsection 147(7) of the Rules.
[6] Appellant's counsel raises two
issues:
1) Whether the Court should allow the appellant an extension
of time to request direction be given to the Taxing Officer.
2) Whether the appellant's costs should be increased as a
result of the respondent's failure to accept a settlement
offer which was more favourable to the respondent than the relief
granted by the Court.
Issue 1 - Extension of Time to Request Direction
be given to Taxing Officer
[7] The appellant applies for an
extension of time to request direction be given to Taxing Officer
from the due date of April 29, 2000 to October 25, 2002
under subsection 147(7) of the Rules.
[8] In support of its application, the
appellant cited the cases of Smerchanski v. M.N.R.,[2] Spur Oil
Limited v. The Queen,[3] Bayliner Marine Corp. v. Doral Boats Ltd.[4] and
Carruthers v. The Queen[5] as authority for the Court to exercise its
discretion in granting the extension.
[9] Smerchanski provides the
rationale behind the time limit to request the Court to give
directions to a Taxing Officer as essentially that the matter
should be "... sufficiently fresh in the mind of the Court
that the Court is in a position to appreciate whether there were
present in the particular case circumstances justifying a
departure from the normal tariff amounts...".[6]
[10] In Spur Oil, the Court granted
an extension because of "...the intervention of Long
Vacation and the application for leave to appeal to the Supreme
Court..."[7] In Bayliner, the Court granted an
extension because there was no prejudice to the other party, the
matters were complex and there were a number of matters to which
the defendant sought special costs. In Carruthers, the
Court granted the extension finding that the time requirement
should be liberally interpreted and it would be inequitable and
contrary to normal practice not to make such a direction.
Underlining the judgment in Carruthers was the Court's
apparent disapproval of the defendant's failure to consent to
the payment of the plaintiff's costs, which resulted in the
plaintiff having to make the application of costs.[8]
[11] The appellant also cited Riello
Canada, Inc. v. Lambert,[9] Kastner v. Painblanc[10] and Eli Lilly and Co.
v. Novopharm Ltd.[11] The respondent argued, and I agree, that these cases
do not apply to the facts at bar. In Riello the appellant
was a self-represented party, in Kastner the delay was
just over two months and the respondent conceded that it suffered
no prejudice and in Eli Lilly the Court allowed more
flexibility because new rules had come into effect shortly before
the motion was filed.
[12] The respondent relied on R. v.
Ontario Development Corp.[12] and Maytag Corp. v. Whirlpool Corp.[13] as authority
for the Court to refuse to grant the extension.
[13] In Ontario Development, the
plaintiff applied for an extension of time under
paragraph 344(7)(a) of the Rules, 25 months
after the trial and three months after the appeal. The plaintiff
cited unfamiliarity with the Rules as the reason for not
making the application for increased costs within the deadline.
Heald J.A., disallowed the plaintiff's request for an
extension, stating:
. . . In my view, the fact that counsel was not familiar with
the Rules of this Court regarding costs is not a satisfactory
basis for seeking an extension. Under Rule 344(7) prior to April
2, 1987, the time within which an application for increased costs
could be made was only ten days. That period was found, through
experience, to be unrealistically short. The 1987 amendments
extended that time to 30 days. It seems to me that a 30-day
time period is realistic and reasonable. Parties to litigation,
particularly at the appellate level, have a right to expect some
degree of finality to the proceedings in cases such as this where
there has been no indication that the matter is to proceed
further. There are no special extenuating circumstances in this
case that would warrant an extension of the time provided in the
Rules from 30 days to approximately 100 days. If this respondent
is entitled, in the circumstances outlined herein, to an
extension amounting to more than three times the period set out
in the Rules, it would be difficult to think of a case where such
an application could be refused. An extension in these
circumstances would be tantamount to amending Rule
344(7)(a).[14]
[14] In Maytag, the applicant did not
file a motion for an extension until two years after the Federal
Court of Appeal rendered its decision in favour of the applicant.
The applicant's reason for its delay was that it did not know
whether the Supreme Court of Canada would hear the other
party's appeal and if so, what the outcome would be. There
was also no indication that the applicant was entertaining an
application to increase its award of costs. The Federal Court of
Appeal found that there was no justification for the two year
delay in making the application and denied the applicant its
request for an extension of time to file the motion requesting
additional costs.
[15] In Rosen v. Canada,[15] the appellant filed
a notice of motion for an extension to bring a motion for
reconsideration. Although the subject matter of the motion in
Rosen is not the same as the subject matter of the motion
in the present case, the Federal Court of Appeal stated the
factors to consider in granting an extension of time as
follows:
The normal factors in support of such a motion namely the
intention to take proceedings within the prescribed time limits,
the existence of an arguable case, the cause and actual length of
the delay and whether there was prejudice caused by the
delay...[16]
[16] The appellant's reasons for not
filing its application within the prescribed period are
principally that its solicitor was not familiar with the
Rules and was waiting for the Federal Court of
Appeal's decision. The appellant also submits that it had an
agreement with the respondent not to be reassessed until the
Federal Court of Appeal's decision.
[17] The Federal Court of Appeal clearly
stated in Ontario Development and Maytag that
unfamiliarity with the Rules and an appeal to a higher
court are not sufficient reasons to warrant an extension of time.
There is no provision in the Rules which states that the
time limits to file an application do not apply in the event that
a party appeals to a higher court. It is also irrelevant whether
the respondent agreed not to reassess the appellant until after
the Court of Appeal's decision as this has no bearing on
costs.
[18] The appellant has not produced a just
reason for failing to comply with the Rules. This is not a
case where the request for costs is complicated, the appellant
had experienced counsel, the Rules were not new at the
time of the Court's judgment, there is no evidence that the
appellant intended to file its application on time and the
respondent has not conceded that she will not be prejudiced by
the granting of the extension.
[19] The appellant's application for
extension of time to request directions be given to the Taxing
Officer is dismissed with costs. There is no need, therefore, to
rule on the second issue.
Signed at Ottawa, Canada, this 26th day of March 2003.
J.T.C.C.
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