Date: 20000530
Docket: 98-1562-IT-I
BETWEEN:
HUSSEIN EL-HENNAWY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Sarchuk J.T.C.C.
[1]
The Appellant's appeals from assessments of tax made under
the Income Tax Act for the 1993, 1994 and 1995 years were
allowed, with costs. Included in the expenses for which the
Appellant sought reimbursement were professional services, i.e.
counsel fees, in the amount of $11,950 and disbursements in the
amount of $3,880.61. Pursuant to the provisions of subsections
11(b) and (c) of the Tax Court of Canada Rules
(Informal Procedure), the Taxing Officer,
R.D. Reeve, allowed the amount of $500 for the services of
counsel and all remaining amounts were taxed off. This appeal
followed.
[2]
The appeal itself proceeded on the basis of written submissions
by each of the parties. The Appellant for his part appears to
have reiterated the submissions he made before the Taxing Officer
while the Respondent's position is that the Taxing Officer
properly exercised his discretion in accordance with the law.
Neither submission provides much assistance to this Court.
[3]
It is trite law that this Court in reviewing the taxation of
costs ought not to interfere with the discretion of the Taxing
Officer unless the amounts allowed are so inappropriate or his
decision is so unreasonable as to suggest that an error in
principle must have been the cause.[1] Thus, in the absence of such an
error, this Court is not entitled to substitute an amount it
might have awarded if the claim had been before it in the first
instance.
[4]
With respect to fees for the services of counsel, the Taxing
Officer allowed the maximum amounts permitted by section 11 of
the Tax Court of Canada Rules (Informal Procedure).
Since counsel neither prepared the Notice of Appeal nor appeared
for the taxation of costs, the Taxing Officer's denial of
those allowances was correct. With respect to the telephone
charges, these were disallowed by the Taxing Officer on the basis
that a number of them reflected telephone calls made prior to the
commencement of proceedings which expenses in the normal course
are not allowable unless it can be shown that such disbursement
was essential for the conduct of the appeals. He concluded that
there was no evidence to that effect. With respect to the
disbursements for telephone calls following the filing of the
appeals, the Taxing Officer found inconsistencies and
inadequacies in the Appellant's explanation as to their
necessity and concluded that the evidence failed to support these
expenses as relevant, reasonable and necessary for the conduct of
the appeals. The submissions made by the Appellant for the
purpose of this review failed to demonstrate that the Taxing
Officer erred in principle in denying those disbursements.
[5]
Two further items are in issue. The first is the amount of $2,464
being the cost of the Appellant's travel to Egypt in or about
June 1998 and the further amount of $115 allegedly being the cost
to ship documents from Cairo to Canada on September 5, 1998. In
each case, the Appellant's explanation was that it was
necessary to travel to obtain the documents and to provide them
to counsel for the preparation of the appeals. In his reasons,
the Taxing Officer considered and accepted the Respondent's
submission that no new evidence was presented nor were any new
documents presented that had not been previously available to
both parties. He considered the Appellant's explanation that
this material aided counsel in preparing the appeal but found
that there was no evidence provided to assist in determining the
relevance, reasonableness and necessity of the material as being
essential for the conduct of the appeal and accordingly taxed
them off. Again on the evidence before me, I am unable to reach
any other conclusion but to confirm the Taxing Officer's
decision.
[6]
The final two items reflect claims for disbursements with
reference to photocopying and preparation of documents and books.
In this particular instance, the Taxing Officer concluded that
"it is reasonable to expect some copies to be made for an
appeal" but found that "there is no evidence as to the
relevance, reasonableness or necessity of the amount claimed in
this instance". Reference to the Tax Court of Canada Minutes
clearly indicate that the Appellant's counsel filed a book of
documents and a book of authorities. The preparation of such
material is a legitimate disbursement and accordingly, it was not
reasonable to have taxed off the photocopying charges in the
amounts of $125 and $106.
[7]
Accordingly, the appeal from the taxation of costs is allowed and
it is ordered that the Certificate of Costs dated November 6,
2000 be amended by deleting the figure $500 and substituting
therefor the figure $731.
Signed at Ottawa, Canada, this 30th day of May, 2001.
"A.A. Sarchuk"
J.T.C.C.
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