Docket: 2009-3904(GST)G
BETWEEN:
SURREY CITY CENTRE MALL LTD.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Motion
heard on April 8, 2013 at Vancouver, British Columbia
Before: The Honourable
Justice Valerie Miller
Appearances:
|
Counsel for the Appellant:
|
Joel
Nitikman
|
|
Counsel for the Respondent:
|
Bruce Senkpiel
|
____________________________________________________________________
ORDER
Applicant’s motion for an extension of time
to seek increased costs with respect to its appeal is dismissed and costs of
this motion is awarded to the Respondent.
The Applicant is entitled to
its costs in the appeal in accordance with the tariff.
Signed at Toronto, Ontario, this 7th day of May 2013.
“V.A. Miller”
Citation: 2013TCC148
Date: 201305XX
Docket: 2009-3904(GST)G
BETWEEN:
SURREY CITY CENTRE MALL LTD.,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
V.A. Miller J.
[1]
This is a motion by the
Applicant for an extension of time to seek increased costs in the amount of
$75,000 with respect to a judgment which allowed its appeal. The Applicant also
requests costs of this motion. The ground relied on is that counsel for the
Applicant did not learn that no appeal would be filed in this matter until
after the 30 day period allowed for an application for increased costs.
[2]
The appeal in this
matter involved an assessment against the Applicant for $2,688,785 of GST plus
interest and late-filing penalties. The issues in the appeal were (i) whether
the amount of $41.1 million paid by the Technical University of British
Columbia (“Tech BC”) to The Insurance Corporation of British Columbia (“ICBC”)
was constructively paid to the Applicant (Appellant), or whether the
Applicant’s debt was reduced within the meaning of subsection 182(1) of the Excise
Tax Act (“ETA”); and, (ii) whether Tech BC made the payment as agent for
the Province and therefore Crown immunity applied to it.
[3]
The trial was heard by
Justice Hershfield over a period of three days. He decided that the Applicant’s
debt was reduced within the meaning of subsection 182(1); but, that the
Applicant enjoyed the same immunity from taxation as the Province. He allowed
the appeal with costs to the Applicant and issued judgment on October 2, 2012.
The judgment was emailed to counsel for the Applicant on October 2, 2012.
[4]
The time within which a
taxpayer may apply to the Court to request increased cost is 30 days after he
has knowledge of the judgment: Subsection 147(7) of the Tax Court of Canada
Rules (General Procedure) (the “Rules”). Likewise, an appeal from a
judgment of the Tax Court must be made to the Federal Court of Appeal within 30
days of the judgment. In the circumstances of this motion, both appeal periods
expired on November 1, 2012. The Applicant filed this motion on November 28,
2012 – 27 days late.
[5]
The factors to consider
in granting an extension of time are: a continuing 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: Rosen v. R., [2000] 2 C.T.C. 422 (FCA); Tomas v.
R., 2007 FCA 86.
[6]
The Applicant’s reason
for its delay was that its counsel was waiting to see if the Respondent was
going to appeal this matter to the Federal Court of Appeal. In the affidavit
filed in support of this motion, the affiant states that counsel “did not want
to apply for costs before the matter was finally resolved. So far as he is
aware, there would be no prejudice to the Respondent if the Court granted an
extension of time to file this Motion”.
[7]
It is my view that the
reason given for the delay is an irrelevant consideration and an insufficient
reason to merit an extension of time: Maytag Corp. v. Whirlpool Corp.,
2001 FCA 250. The time limit given in subsection 147(7) of the Rules
applies without regard to whether an appeal has been made from the judgment.
The matter before the Tax Court was finalized by the judgment on October 2, 2012.
[8]
Because there was
nothing in the materials submitted to the Court which spoke to the Applicant’s
intention to make an application for increased costs within the 30 day time
limit, I asked counsel about this factor. His response was as follows:
JUSTICE: Don’t I
also have to look at whether or not during the 30-day period, the applicant can
show me evidence that it was intending to file a motion with respect to the
costs beyond the tariff?
MR. NIKITMAN:
Well, the rules don’t specifically say that. I mean, that’s certainly a
factor.
JUSTICE: Hmm,
but the case law says that.
MR. NIKITMAN:
No, and I was going to say, that’s certainly a factor to take into account. I
can tell Your Honour the common practice among counsel is not to file for an
extended time until after you find out if there’s going to be an appeal filed.
And if there is an appeal filed, you don’t argue about costs until after that
appeal is over. And sometimes it goes to the Supreme Court of Canada and then
you don’t file your motion of costs until after the Supreme Court of Canada
decides it. So often there is a long, long delay until counsel -- until you
actually know the ultimate result of the case. I mean, that is the common
practice among counsel.
[9]
It may be a common
practice among some counsel; but, it is not a practice condoned by this Court.
Such a practice is totally disrespectful to the Court and its Rules.
[10]
In Maytag,
counsel also made the argument that the time for a motion for increased costs
is after all appeal routes have been exhausted. This is the time that the final
liability for costs has been determined. I adopt the comments made by Sharlow
J.A. in response to this argument:
I am unpersuaded by
this argument. The drafters of Rule 403 would have been well aware of the
exigencies of litigation, and particularly of the possibility that in any case
an appeal might result in a reversal of an order for costs. Yet that knowledge
did not deter them from imposing the 30 day limit in Rule 403(1)(a), and did
not lead them to substitute a rule that would permit a motion for directions as
to costs after the determination of any and all appeals. From this I infer that
more weight was placed on the value of timely and certain determination of
matters of costs than on the possibility of wasted effort due to appeals.
[11]
Later in his
submissions, counsel for the Applicant stated that the Applicant did not intend
to bring a motion for costs until after it learned whether there was going to
be an appeal of the judgment in this matter. According to the affidavit filed
on behalf of the Applicant, Mr. Nitikman did not telephone counsel for the
Respondent to inquire about an appeal until after the 30 day time limit had
expired. I conclude that the Applicant did not have a continuing intention to
make an application pursuant to subsection 147(7) of the Rules.
[12]
Counsel for the
Respondent stated that it would not be prejudiced if the extension were
granted. However, this is only one factor which I must consider.
[13]
In support of its
position for increased costs, counsel for the Applicant argued that the amount
at issue was large; the tax, interest and penalty were $4.7 million. The issue
was important and the decision is a “leading judgment” that has been noted in Australia and commented on by the GST scholar David Sherman.
[14]
It is my view that the
Applicant has not established that it has an arguable case. Its arguments in
support of increased costs were not convincing. That the amount in issue was
large is not enough to justify an award of costs in excess of the tariff. The
issue involved the interpretation of subsection 182(1) of the ETA. This
provision of the ETA had been dealt with in two prior decisions of this
Court. One of those decisions was from an appeal under the informal procedure. The
hearing of the appeal before Justice Hershfield lasted three days with only one
witness being examined. The exhibits consisted of 74 documents. That David
Sherman commented on the judgment does not make it a “test case”. Mr. Sherman
writes a review on all GST cases. The case analysis written by the Australian
barrister noted that there was “no ready comparison” to subsection 182 in the
Australian GST Act. I infer he found the decision interesting.
[15]
I have concluded that
in the circumstances of this matter, the Applicant would not have been entitled
to increased costs even if the application had been filed in time.
[16]
Although this motion
was filed only 27 days beyond the 30 day time limit, the Applicant has not
shown that there were extenuating circumstances that would justify an extension
of time for filing an application for increased costs in the appeal.
[17]
The motion is dismissed
with cost to the Respondent. The Applicant is entitled to its costs in the
appeal in accordance with the tariff.
Signed at Toronto, Ontario, this 7th day of May 2013.
“V.A. Miller”
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