Hansen - Tax Court of Canada awards enhanced substantial indemnity costs against the Crown for its delay in making a concession
The judgment in Hansen (dealing with whether serial dealings in “homes” were statute-barred from reassessment or eligible for the principal residence exemption) was numerically somewhat more favourable to the taxpayer than an offer he had made to the Crown about nine months before the trial. D’Auray J. applied s. 147(3.1) of the Rules to award the taxpayer party and party costs to the date of service of the offer, but awarded him 85% of solicitor and client costs thereafter, rather than the normal "substantial indemnity" rate of 80% set out in the Rules.
In explaining the increase to 85%, she noted that the Crown had not admitted that the homes were owned in equal co-ownership by the taxpayer and his wife, rather than by the taxpayer alone, until one week before trial, even though this fact had been admitted in the discoveries by a CRA representative more than a year earlier. Furthermore, the Crown had never responded to the taxpayer’s offer.
Neal Armstrong. Summary of Hansen v. The Queen, 2021 TCC 39 under Tax Court Rules, s. 147(3.1).