Citation:
2017 TCC 34
Date: 20170302
Docket: 2005-4409(IT)G
BETWEEN:
GEORGE
WOLSEY,
Appellant,
and
HER
MAJESTY THE QUEEN,
Respondent.
REASONS
FOR ORDER
Graham J.
[1]
In my Judgment dated October 24, 2016, I denied
George Wolsey’s application to set aside the dismissal of his appeal of his
2000, 2001 and 2002 tax years.
Mr. Wolsey’s appeal had been dismissed following his failure to appear at a
status hearing. I awarded costs to the Respondent in respect of the
application. I provided the parties with time to reach an agreement on costs,
failing which the parties were to make written submissions regarding costs. The
parties did not reach an agreement. The Respondent provided written submissions
on costs. Mr. Wolsey did not provide any written submissions.
[2]
The Respondent is seeking costs calculated by
doubling the amount of costs determined in accordance with Schedule II, Tariff
B of the Tax Court of Canada Rules (General Procedure) for a Class C
proceeding. The Respondent calculates tariff costs as being $6,525 and thus
double costs as being $13,050.
To this the Respondent adds disbursements of $6,639 to reach a total of
$19,689.
[3]
Subsection 147(3) of the Rules sets out factors
that the Court may consider in awarding costs. I will review each of those
factors. The costs that I have awarded are in respect of the application, not
the appeal. Thus I will review the factors from that perspective.
Result of the Proceeding
[4]
The Respondent was entirely successful in the
application.
Amount in Issue
[5]
The underlying appeal involved a dispute over
approximately $1.165M in alleged unreported income, shareholder benefits and
capital gains. Since the purpose of the application was to set aside a dismissal
of the appeal, this same amount was effectively in issue on the application. This
is a significant amount of money.
Importance of the Issues
[6]
None of the issues in the application was of
importance to the development of tax law, to the public interest or to a broad
number of people.
Settlement Offers
[7]
I am not aware of any settlement offers being
made in the application.
Volume of Work
[8]
The amount of work involved in the application was
not significant.
Complexity of the Issues
[9]
The issues in the application were not complex.
Conduct Affecting the
Duration of the Proceeding
[10]
Mr. Wolsey was responsible both for delaying the
hearing of the application and for unnecessarily extending the hearing itself.
[11]
As I stated in my Reasons for Judgment, “my strong impression is that [Mr. Wolsey’s]
conduct throughout this Application has unnecessarily lengthened the
proceedings. Viewed collectively, the series of unfortunate events that
necessitated four adjournments of this matter (each shortly before, on the eve
of or during the hearing) begin to take on the appearance of intentional delay
and an abuse of the Court's goodwill. Mr. Wolsey's surprise attempt to adjourn
the hearing a fifth time before me on the morning of the hearing only
reinforces that impression. Unless Mr. Wolsey is able to convince me that my
impression is wrong, any decision that I am required to issue in respect of
costs will reflect that view.” As Mr. Wolsey has not made any
written submissions on costs, nothing has changed my impression of his conduct.
[12]
While I am not awarding costs in respect of Mr.
Wolsey’s conduct during the underlying appeal, that conduct does shape my view
of his conduct during the application. It strongly reinforces my impression
that Mr. Wolsey was intentionally delaying the application. As I observed in my
Reasons for Judgment, everything about Mr. Wolsey's conduct both during the
appeal and the application “screams
not of someone who desperately wants to resolve his tax problem, but rather of
someone who desperately wants to delay resolving it. Mr. Wolsey has
regularly ignored Court-ordered deadlines, has failed to apply to extend those
deadlines until forced to do so by either the Court or the Respondent and, both
before and after the October 9 status hearing, has failed to provide the Court
and his counsel with his correct contact information.”
[13]
The hearing of the application lasted four days.
This is an extraordinary amount of time for the hearing of an application to
set aside a dismissal for failure to appear. In my experience, such
applications are generally dealt with in a half day or, at most, a day.
[14]
Mr. Wolsey’s counsel was appointed in May 2016.
Counsel advised the Court that Mr. Wolsey gave him no instructions between May
and the first day of the hearing of the application in late August. While Mr.
Wolsey’s counsel represented Mr. Wolsey very professionally in the four days of
hearing that followed, counsel could not help but be unprepared due to his
client’s lack of communication. In turn, that lack of preparation could not help
but extend the duration of the proceedings.
The responsibility for that lack of preparation falls squarely on Mr. Wolsey.
[15]
Based on all of the foregoing, I find that Mr.
Wolsey’s conduct significantly affected the duration of the proceedings.
[16]
I acknowledge that a significant portion of the
hearing involved a witness called by the Respondent who was completely
unprepared and frequently confused and who caused excessive delays. That said,
it was Mr. Wolsey’s refusal to admit receipt of certain communications that
caused the Respondent to need to call the witness in the first place. The
witness was Mr. Wolsey’s accountant and was subpoenaed by the Respondent. I do
not blame the Respondent for the resulting delays.
Denial or Refusal to Admit
[17]
I found Mr. Wolsey not to be credible. A great
deal of hearing time was wasted proving that Mr. Wolsey had received
communications that he denied receiving. Had Mr. Wolsey admitted receiving
those communications and instead focused on providing a credible explanation
for his failure to attend the status hearing, I am confident that the hearing
would have been concluded much more quickly.
[18]
I note that, in her written submissions, the
Respondent submitted that Mr. Wolsey’s refusal to waive solicitor-client
or litigation privilege over certain communications unnecessarily lengthened
the proceedings. I do not accept this position. While questions of privilege
certainly lengthened the proceedings, Mr. Wolsey cannot be blamed for
asserting his fundamental rights.
Improper, Vexatious or
Unnecessary Stages
[19]
There was no evidence that would suggest that
any stage in the proceeding was improper, vexatious, or, except as already
discussed above, unnecessary.
Stages Taken Through
Negligence, Mistake or Excessive Caution
[20]
There was no evidence that would suggest that
any stage in the proceeding was taken through negligence, mistake or excessive
caution.
Justification of Expert
Witnesses
[21]
There were no expert witnesses called in the
application.
Other Relevant Matters
[22]
I am not aware of any other matters relevant to
the determination of costs.
Summary
[23]
Considering all of the above factors and, in
particular, Mr. Wolsey’s conduct affecting the length of the proceedings and
his denial of certain key facts, I find that an award of costs in excess of the
tariff is appropriate. I also find that the figure proposed by the Respondent
is entirely reasonable.
[24]
Fixed costs of $19,689 are accordingly awarded
to the Respondent in respect of the application. Those costs are payable
immediately.
Signed at Ottawa, Canada, this 2nd day of March
2017.
“David E. Graham”
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