Docket: A-216-16
Citation:
2017 FCA 19
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CORAM:
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STRATAS J.A.
WEBB J.A.
SCOTT J.A.
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BETWEEN:
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RALPH MATHIAS
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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 JUDGMENT OF THE COURT
(Delivered from the Bench at Calgary, Alberta, on
January 31, 2017).
STRATAS J.A.
[1]
Under Rule 160 of the Tax Court of Canada
Rules (General Procedure), SOR/90-688a, where “it
appears that the appellant is resident outside of Canada” the Tax Court of Canada may “give such direction regarding security for costs as is just.”
The appellant is resident outside of Canada. The respondent moved for an order
requiring the appellant to pay security for costs. By order dated June 6, 2016,
the Tax Court of Canada (per Rossiter C.J.) granted the motion and
required the appellant to pay $9,000 into court as security for costs. The
appellant appeals to this Court.
[2]
The Tax Court issued only an order. It did not
provide separate reasons for it. The reasons for the order can be discerned
only by examining the wording of the order viewed in light of the record before
the Court. The order is succinct. In its entirety, it reads:
UPON the
Respondent's motion for an Order directing the Appellant to pay $13,850.00 into
Court as security for costs and for an Order awarding costs in this motion;
AND UPON consideration of the submissions of
counsel for both parties;
IT IS ORDERED that:
1. The Appellant shall deposit with the Tax
Court of Canada, on or before August 4, 2016, the sum of Cdn. $9,000.00, as
security for the Court’s expenses.
2. Costs of this motion are fixed at
$750.00, payable in favour of the Respondent, at the same time as the security
sum be deposited.
[3]
In this Court, the appellant submits that the
order must be quashed because the reasons for its making are insufficient. The
appellant says he cannot tell why the Tax Court ordered security for costs over
his opposition, why $9,000 was set as the amount, and why he was ordered to pay
the security as a lump sum, not in instalments as he requested.
[4]
We agree with the appellant. The reasons fall
well short of the standards set out in cases such as R. v. Sheppard,
2002 SCC 26, [2002] 1 S.C.R. 869, R. v. Gagnon,
2006 SCC 17, [2006] 1 S.C.R. 621, Hill v. Hamilton-Wentworth Police
Services Board, 2007 SCC 41, [2007] 3 S.C.R. 129, R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3, R. v. Walker, 2008 SCC 34, [2008] 2
S.C.R. 245 and R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788. A good summary
of these cases appears in Canada v. Long Plain First Nation, 2015 FCA
177, 388 D.L.R. (4th) 209 at para. 143. Examining the order in light of the
record before the Tax Court, we cannot discern the bases for it.
[5]
Where, as here, the reasons
are legally insufficient, this Court normally decides the matter de novo:
Canada (Attorney General) v. Larkman, 2012 FCA 204, 433 N.R. 184 at para. 60; Plante v.
Canada (Correctional Service), 2005 FCA 120 at para. 2; Infonet Services
Corp. v. Matrox Electronic Services Ltd., 2004 FCA 162 at para. 6; Jukutavicius
v. Canada (Attorney General), 2004 FCA 289, 327 N.R. 239 at para. 24. This we shall do.
[6]
Since the appellant does not reside in Canada,
it will be difficult for the respondent to enforce any costs award it might receive.
There is nothing in the record that suggests otherwise. The evidence offered by
the appellant concerning his financial condition is too narrow and general to
be given much weight. Therefore, the respondent is entitled to an order
requiring the appellant to provide security for costs.
[7]
In its motion for security for costs, the
respondent provided a bill of estimated costs. The amount in issue is $105,000
and so, for the purposes of calculating the appellant’s possible liability in
costs, this is a Class B appeal: Tariff A, paragraph 1(b) of the Rules. The
figures for Class B appeals are set out in section 1 of Tariff B. Following
this methodology, the respondent claims a total of $13,850, all inclusive,
based on its bill of costs. Central to the respondent’s position is its estimate
that the discoveries and the hearing will each take three days. The respondent
also submits that the just disposition of this matter under Rule 160 would
allow the appellant to pay this amount by way of three instalments, one in the
amount of $4,725 paid into court 45 days after the date of this Court’s
judgment, another in the amount of $4,000 paid into court 90 days after the
date of this Court’s judgment, and the last in the amount of $5,125 upon the filing
of an application for hearing in the Tax Court.
[8]
The appellant suggests that a lower amount,
$7,000, would be just in the circumstances. He points to his financial
situation, as disclosed by the affidavit filed before the Tax Court. He adds
that a more reasonable estimate is two days for discoveries and one day for
hearing. He also submits that justice requires that the amount be paid by way
of two instalments of $3,000 and $4,000.
[9]
From a review of the notice of appeal and the
reply and after hearing counsel’s submissions, we agree with the respondent.
We consider the estimate of three days for discoveries and three days for the
hearing to be reasonable given the nature, number and complexity of the issues
in this case. We also consider that dividing the amount into three instalments
rather than two and the timing of the instalments proposed by the respondent suitably
recognizes the financial situation of the appellant. We add that the affidavit
filed by the appellant in the Tax Court offers evidence only of a very general,
unparticularized nature concerning his ability to pay. On the evidence, we are
not persuaded that the amount of $13,850, all inclusive, is unjust in the
circumstances.
[10]
We note that this amount is higher than that
ordered by the Tax Court. Unusually, the appellant in this case will end up in
a worse position as a result of his appeal. However, this is a consequence of
the fact that, based on our jurisprudence, this appeal has had to proceed as an
appeal de novo—i.e., a complete reconsideration of the merits of
the original motion for security for costs brought in the Tax Court.
[11]
Therefore, we shall allow
the appeal, set aside the order of the Tax Court, grant the motion for security
for costs, and order that the appellant pay into court $13,850
as security for costs in three instalments: the first
in the amount of $4,725 within 45 days of the judgment of this Court, the
second in the amount of $4,000 within 90 days of the judgment of this Court,
and the third in the amount of $5,125 within seven days of the application for
hearing under Rule 123.
[12]
Overall, the respondent has
been successful on its motion and so we shall award costs here and below in the
total amount of $1,000, all inclusive.
"David Stratas"
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