Brulé
T.CJ.:
Facts
Pursuant
to
the
status
hearing
of
October
1,
1996,
the
hearing
of
this
appeal
was
set
down
for
27
and
28
February,
1997.
On
February
17,
1997,
counsel
for
the
Appellant,
William
Vanveen
of
the
law
firm
Gowling,
Strathy
&
Henderson,
requested
an
adjournment
of
the
hearing
on
the
grounds
that
he
represented
a
party
with
standing
at
the
Somalia
Inquiry
and
was
required
to
attend
the
Inquiry
until
the
end
of
March,
1997.
Mr.
Vanveen
stated
that
because
the
Minister
of
Defence
had
curtailed
the
term
of
the
Inquiry,
its
hearing
schedule
had
been
altered
and
Mr.
Vanveen
was
now
required
to
attend
the
Inquiry
throughout
the
remainder
of
February
and
the
entire
month
of
March.
Therefore,
he
could
not
appear
before
this
Court
on
the
dates
for
which
the
hearing
was
scheduled.
The
Request
for
Adjournment
was
not
opposed
by
the
Respondent.
The
Request
for
Adjournment
was
denied
on
February
18,
1997.
On
February
26,
1997,
the
day
before
the
hearing
was
scheduled
to
begin,
counsel
for
the
Appellant
filed
a
Notice
of
Change
of
Counsel
with
the
Court
in
which
Rolland
E.
Hedges,
of
the
law
firm
Hedges
and
Sutherland,
was
named
as
the
new
counsel
of
record.
On
February
27,
1997
the
counsel
for
the
Respondent
objected
to
Mr.
Hedges
becoming
the
new
counsel
of
record.
Respondent’s
counsel
stated
that
since
Mr.
Hedges
had
acted
for
a
corporation
of
which
the
Appellant
was
a
Shareholder,
and
for
the
Appellant’s
former
business
partners,
during
the
period
at
issue
in
the
appeal,
that
a
conflict
of
interest
existed.
It
was
possible
that
Mr.
Hedges
would
be
called
as
a
witness
by
the
Respondent
during
the
course
of
the
hearing.
Mr.
Hedges
acknowledged
that
there
was
at
least
the
appearance
of
a
conflict
of
interest,
and
withdrew
before
becoming
counsel
of
record.
Notice
of
Change
of
Counsel
Counsel
for
the
Appellant
filed
a
Notice
of
Change
of
Counsel
with
the
Court
on
the
afternoon
of
February
26,
1997.
This
Notice
was
served
by
facsimile
copy
upon
Mr.
Hedges
and
Respondent’s
counsel
on
the
same
date.
The
serving
of
this
Notice,
however,
did
not
comply
with
the
General
Procedure
Rules
of
the
Tax
Court
of
Canada
(General
Procedure
Rules).
There
is
no
Rule
in
the
General
Procedure
Rules
which
provides
for
the
filing
by
counsel
of
a
Notice
of
Change
of
Counsel.
Section
31
of
the
General
Procedure
Rules
reads
as
follows:
31.
(1)
Subject
to
the
other
provisions
of
this
section
where
a
party
has
taken
any
step
in
a
proceeding
by
a
document
signed
by
counsel,
that
person
shall
be
the
counsel
of
record
for
that
party
until
a
change
is
effected
in
a
manner
provided
by
this
section.
(2)
A
counsel
or
record
shall
act
as
and
remain
the
counsel
of
record
until,
(a)
the
client
delivers
a
notice
under
section
32,
(b)
such
counsel
has
served
a
notice
of
intention
to
cease
to
act
as
counsel
and
the
provisions
of
subsection
33(1)
have
been
complied
with,
or
(c)
a
direction
removing
the
counsel
from
the
record
has
been
entered,
served
on
the
client
and
every
other
party
and
filed
with
a
proof
of
service.
In
the
proceeding
at
bar,
the
Notice
of
Change
of
Counsel
has
been
improperly
served.
Counsel
himself,
and
not
the
client,
has
delivered
the
notice.
Section
32
requires
that
the
client
must
serve
the
notice
not
only
upon
all
parties,
but
also
upon
the
counsel
being
changed.
32.
(1)
A
party
who
has
counsel
of
record
may
change
the
counsel
of
record
by
serving
on
the
counsel
and
every
other
party
and
filing,
with
proof
of
service,
a
notice
giving
the
name,
address
for
service
and
telephone
number
of
the
new
counsel.
(2)
A
party
acting
in
person
may
appoint
a
counsel
of
record
by
serving
every
other
party
and
filing,
with
proof
of
service,
a
notice
giving
the
name,
address
for
service
and
telephone
number
of
the
counsel
of
record.
(3)
A
party
who
has
a
counsel
of
record
may
elect
to
act
in
person
by
serving
on
the
counsel
and
every
other
party
and
filing
with
proof
of
service,
a
notice
of
intention
to
act
in
person
giving
the
party’s
address
for
service
and
telephone
number.
Section
33
allows
the
counsel
of
record
to
remove
himself
by
notice
before
a
proceeding
has
been
listed
for
hearing.
Section
34
provides
for
the
removal
of
the
counsel
of
record
after
the
proceeding
has
been
set
for
hearing.
The
counsel
of
record
must
move,
on
notice
to
his
client,
for
a
direction
to
remove
him
as
counsel
of
record.
Since
no
such
motion
was
brought
by
Mr.
Vanveen,
it
is
clear
that
he
did
not
seek
to
be
removed
from
the
record
under
section
34.
34.
(1)
At
any
time
after,
(a)
a
joint
application
has
been
made
to
fix
the
time
and
place
of
hearing,
or
(b)
a
proceeding
has
been
listed
for
hearing,
whichever
is
earlier,
a
counsel
may
move,
on
notice
to
his
or
her
client,
for
a
direction
to
remove
him
or
her
as
counsel
of
record.
(2)
A
notice
of
motion
for
the
removal
of
a
counsel
from
the
record
and
direction
under
subsection
(1)
shall
be
served
on
the
client
personally
or
by
sending
a
copy
by
mail
to
the
last
known
address
of
the
client.
(3)
The
direction
to
remove
a
counsel
from
the
record
shall
set
out
the
last
known
address
of
the
client.
(4)
The
address
for
service
of
the
client
shall
thereafter
be
the
address
contained
in
the
direction,
until
the
client
has
filed
a
document
which
sets
out
another
address
for
service.
It
is
clear
that
the
Notice
of
Change
of
Counsel
is
of
dubious
legal
status.
If,
however,
Respondent’s
counsel
had
not
had
any
objection
to
the
change
of
counsel,
and
Mr.
Hedges
had
been
willing
to
proceed
with
the
hearing
on
the
morning
of
February
27,
as
it
was
scheduled,
the
Court
would
have
accepted
the
irregular
Notice
of
Change
in
Counsel
(under
sections
7
and
9
of
the
General
Procedure
Rules).
As
it
happens,
these
events
did
not
occur,
and
the
Court
did
not
accept
Mr.
Hedges
as
new
counsel
of
record.
New
counsel
of
record
The
Appellant
now
must
seek
a
new
counsel
of
record
to
represent
him.
Mr.
Hedges
suggested
that
Mr.
Vanveen
might
be
available
to
represent
the
Appellant,
now
that
the
hearing
had
been
adjourned
but
the
Court
refused
to
accept
this
suggestion.
Since
Mr.
Vanveen
has
withdrawn
from
the
record,
although
improperly,
has
not
acted
in
the
proper
interests
of
the
Court,
and
has
misconducted
himself,
he
will
not
be
permitted
to
return
as
counsel
of
record.
There
is
something
unseemly
about
this
entire
fiasco.
Mr.
Vanveen,
the
original
counsel
of
record
for
the
Appellant,
made
a
request
to
adjourn
the
hearing
because
it
conflicted
with
another
matter
which
he
had
scheduled.
This
request
was
denied
the
next
day
—
six
calendar
days
before
the
scheduled
commencement
of
the
hearing.
On
the
day
before
the
hearing,
Mr.
Vanveen
filed
the
irregular
Notice
of
Change
of
Counsel
which
purported
to
make
Mr.
Hedges
the
new
counsel
of
record.
Mr.
Hedges
stated
that
he
was
aware
of
the
potential
conflict
of
interest
and
was
not
surprised
by
the
Respondent’s
objection
to
him
becoming
the
new
counsel
of
record.
The
adjournment
was
granted
because
to
proceed
with
the
case
would
require
the
Appellant
to
represent
himself.
At
this
juncture,
that
course
of
action
would
have
been
highly
prejudicial
to
the
Appellant
who
was
advised
by
the
Court
to
seek
new
counsel,
to
which
suggestion
the
Appellant
agreed.
Costs
Section
152
of
the
General
Procedure
Rules
provides
that
the
Court
may
direct
that
a
counsel
for
a
party
be
personally
liable
for
costs
but
no
such
direction
shall
be
made
unless
the
counsel
is
given
a
reasonable
opportunity
to
make
representations
to
the
Court.
152.
(1)
Where
a
counsel
for
a
party
has
caused
costs
to
be
incurred
improperly
or
without
reasonable
cause
or
to
be
wasted
by
undue
delay,
misconduct
or
other
default,
the
Court
may
make
a
direction,
(a)
disallowing
some
or
all
of
the
costs
as
between
the
counsel
and
the
client,
(b)
directing
the
counsel
to
reimburse
the
client
any
costs
that
the
client
has
been
ordered
to
pay
to
any
other
party,
and
(c)
requiring
the
counsel
to
indemnify
any
other
party
against
costs
payable
by
that
party.
(2)
A
direction
under
subsection
(1)
may
be
made
by
the
Court
on
its
own
initiative
or
on
the
motion
of
any
party
to
the
proceeding,
but
no
such
direction
shall
be
made
unless
the
counsel
is
given
a
reasonable
opportunity
to
make
representations
to
the
Court.
(3)
The
Court
may
direct
that
notice
of
a
direction
against
a
counsel
under
subsection
(1)
be
given
to
the
client
in
the
manner
specified
in
the
direction.
The
rule
provides
the
Court
with
considerable
scope
with
which
to
order
costs
against
Mr.
Vanveen.
The
rule
has
been
considered
in
two
decisions
of
the
Tax
Court.
In
Austin
v.
R,
(1993),
93
D.T.C.
982
(T.C.C.),
Judge
Sarchuk
was
faced
with
the
situation
where
the
Appellant’s
counsel
had
brought
a
motion
that
was
fundamentally
without
merit.
It
was
also
poorly
researched,
ill-considered
and
virtually
impossible
to
support
in
law.
The
taxpayer’s
counsel,
moreover,
ought
to
have
known
this.
The
result
was
a
motion
without
a
bona
fide
expectation
of
success
which
unnecessarily
lengthened
the
proceeding
and
caused
costs
to
be
improperly
incurred.
Therefore,
Judge
Sarchuk
ordered
that
the
Appellant’s
counsel
be
personally
liable
for
75%
of
the
cost
of
the
motion.
The
case
at
bar
is
somewhat
different
because
there
is
no
suggestion
that
the
taxpayer’s
appeal
is
groundless.
Rather,
a
solicitor
has,
by
his
conduct,
incurred
costs
for
the
Court,
the
Respondent,
and
in
all
probability
his
client.
Judge
Rip’s
recent
decision
in
Rivers
v.
R.
(as
yet
unreported
(February
4,
1997),
Doc.
91-2157(IT)G
(T.C.C.))
is
more
analogous
to
the
situation
at
bar.
In
Rivers,
the
solicitor
entered
into
an
agreement
that
his
clients
would
be
bound
by
the
decision
of
a
test
case
which
was
to
be
heard
in
the
Tax
Court
of
Canada.
After
the
decision
of
the
Tax
Court
was
delivered
and
all
appeals
had
been
exhausted,
the
solicitor
refused
to
execute
the
agreement
that
provided
for
the
Consents
to
Judgment.
Judge
Rip
held
that
the
solicitor
would
be
personally
liable
for
a
portion
of
the
costs.
In
his
analysis
of
the
judgment
Judge
Rip
noted
the
following
characteristics
of
the
procedure
governed
by
section
152.
Orders
requiring
solicitors
to
pay
costs
personally
are
sparingly
made
and
only
in
clear
cases:
Young
v.
Young,
(1990),
75
D.L.R.
(4th)
46
(B.C.
C.A.)
(B.C.C.A.)
per
Cummings
J.A.
The
jurisdiction
is
not
merely
punitive,
but
compensatory
—
the
Order
is
for
payment
of
costs
thrown
away
or
lost
because
of
the
conduct
complained
of;
see
Sonntag
v.
Sonntag,
(1979),
24
O.R.
(2d)
473
(Ont.
H.C.).
Conclusion
In
order
to
award
any
costs
against
Mr.
Vanveen
personally,
the
Court
must
provide
him
with
a
reasonable
opportunity
to
make
representations
to
the
Court.
The
hearing
of
February
27,
was
not
such
an
opportunity
because
Mr.
Vanveen
was
unaware
that
the
order
would
be
made
against
him.
If
costs
are
to
be
awarded,
then
they
will
be
the
following:
(i)
The
costs
of
all
parties
to
the
proceeding
of
February
27,
which
was
a
wasteful
and
unnecessary
exercise;
and
(ii)
The
costs
which
the
Appellant
incurs
up
to
the
commencement
of
the
hearing
of
the
appeal
on
May
20,
1997.
In
other
words,
the
Appellant
should
be
compensated
for
any
costs
which
would
not
have
been
incurred
but
for
the
failure
of
Mr.
Vanveen
to
attend
the
hearing
of
the
appeal
on
February
27,
1997
and
to
act
as
counsel
for
the
Appellant.
Opportunity
granted
to
make
representations
later
regarding
costs.
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