Guenette Reg.:
1 This taxation came on for hearing by means of a telephone conference call on November 28, 1997. It follows a judgment of the Honourable Judge O'Connor, dated June 13, 1997, who allowed the appeal with costs. The Appellant represented himself, and the Respondent was represented by Mrs. Sanjana Bhatia.
2 The only item on the Appellant's Bill of Costs is a claim for:3 The invoice is addressed to the Appellant from Rennie & Company, Chartered Accountants, concerning research and discussions relating to the Appellant's appeal before this Court.
4 Mr. Burstow explained that the substance of the appeal and the issues involved were very complex and detailed, too complex for him to understand and argue on his own. He therefore obtained professional advice from the accounting firm to assist him, advice that he argued was “essential to the conduct of his appeal” and that this item should be allowed as a disbursement pursuant to subsection 12(3) of the Tax Court of Canada Rules (Informal Procedure).
5 Mrs. Bhatia argued that the Appellant represented himself at the hearing, and is not entitled to counsel fees under section 11 of the Rules, as he is not a barrister, solicitor or advocate. She referred me to the decisions in Edgar v. R., [1994] 1 C.T.C. 2562 (T.C.C.), Hays v. H.M.Q. (unreported T.C.C. 93-210(IT)I), Landriault v. H.M.Q. (unreported T.C.C. 94 2940(IT)I), Borck v. Minister of National Revenue (IT)(T.C.C.) to support her position that accountant's fees should not be allowed as fees, nor as disbursements. She contended that the Borck decision (supra) confirmed that the accountant's fee should not be considered a disbursement. Regardless, she argued that even if claimed as a disbursement, the fees were not “essential to the conduct of the appeal” as per subsection 12(3) and therefore should be disallowed.
6 Mr. Burstow repeated that the accountant's charge was being claimed as a disbursement, not as a fee, and that the disbursement was indeed “essential” to him for the successful litigation of his appeal.
7 This question comes before me on a regular basis, with slightly different circumstances in each case. Clearly, when claimed as a fee under section 11 of the Informal Procedure Rules or Tariff B, item 1(1) of the General Procedure Rules, accountant's fees should be disallowed. This was clearly confirmed by the Associate Chief Judge of this Court in Edgar (supra).
8 As a disbursement under subsection 12(3) of the Informal Procedure Rules or Tariff B, item 1(2) of General Procedure Rules, the question is less clear. Can the accountant's fees be considered an “essential” disbursement, or are they fees for the type of services normally provided by counsel simply recharacterized as a disbursement?
9 In the case at bar, I am inclined to agree with the Appellant that the services provided by Rennie & Company were indeed essential to the successful litigation of his appeal, due to the complexity of the issues involved.
10 However, to my thinking, if the Rules Committee of this Court intended large sums to be allowed for representation by, or advice from accountants and other agents, it would have made specific provisions to that effect in the Rules. I believe that the authority vested in the Taxing Officer to allow “other disbursements” is not open-ended. To allow thousands of dollars, or tens of thousands for that matter, for such services would be more than that allowed for the services of counsel or an expert witness. I question whether the Rules Committee intended for such a situation to occur.
11 The Honourable Judge Bowman expressed these concerns in the review of Munro v. R. (IT)I (T.C.C.) where he made the following observations (he was referring specifically to an accountant acting as an agent for the Appellant, but I believe the same observations are pertinent to the matter at hand):
To allow as disbursements under subsection 12(3) fees paid to accountants or others who are non-lawyers but who represent a taxpayer at trial would lead to the anomalous results that, whereas a lawyer's fees when taxed on a party and party basis would be limited to the amounts set out in section 11, an accountant's fees for doing essentially the same thing could be substantially higher than those amounts if allowed as disbursements.
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I am troubled by the possibility that an accountant's fee for representing a taxpayer if allowed as a disbursement under subsection 12(3) may exceed the fee allowed in respect a (sic) lawyer under section 11 or the amount of an expert witness fee if that same accountant gave evidence as an expert.
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I think the lesser degree of absurdity and unacceptability is achieved by concluding that in general nothing should be allowed for the fees of an agent and leaving it to the Rules Committee to deal with the matter by way of an amendment to the rules, if it sees fit. This result seems to be more in accordance with the overall scheme of the rules, which limits the amounts recoverable in respect of counsel and of expert witnesses. I doubt that the Rules Committee would have intended that the recovery of non-legal representatives fees should, in contrast with these of lawyers, be totally open-ended.
12 Although I believe Mr. Burstow should be entitled to some restitution for his disbursement, for the aforementioned reasons, I will not allow any.
13 The only item in the Bill of Costs is taxed off for a total of $6,955.00, and no amount is allowed. A certificate will be issued.
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