Citation: 2010 TCC 16
Date: 20100112
Dockets: 2007-2495(IT)G
2008-1085(IT)G
BETWEEN:
ANDREW A. DONATO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Woods J.
[1] Reasons for judgment in the above appeal, issued on
November 13, 2009 (2009 TCC 590), directed the parties to make written
submissions on costs following the appellant’s request. After reviewing submissions
and responses from both parties, my conclusions are set out below.
[2] First, the
appellant should be entitled to costs as the party who was primarily successful
at trial.
[3] The
respondent submits that each party should bear their own costs because success
was divided, based on the number of taxation years involved and the number of
issues. Although the appellant was primarily successful measured by the amounts
at issue, this was largely happenstance, it is suggested.
[4] In my
view, the quantum should be the predominant factor here. The appellant was
successful on a statute bar issue for the 1999 taxation year where the amount
at issue was more than double the amount at issue for the 2001 taxation year in
which the respondent was successful. This was not divided success. It was a substantial
win for the appellant.
[5] The
respondent submits that, if costs are awarded to the appellant, they should be
on a party and party basis under Class B of the Tariffs.
[6] The
correct principle to be applied, the respondent suggests, was described by
Justice Bowman in Continental Bank of Canada v. The Queen, 94 DTC 1858, at 1876:
[…] It must have been obvious to the members of the
Rules Committee who prepared the tariff that the party and party costs
recoverable are small in relation to a litigant’s actual costs. Many cases
that come before this court are large and complex. Tax litigation is a complex and
specialized area of the law and the drafters of our Rules must be taken to have
known that.
In the normal course the tariff is to be respected
unless exceptional circumstances dictate a departure from it. Such
circumstances could be misconduct by one of the parties, undue delay,
inappropriate prolongation of the proceedings, unnecessary procedural
wrangling, to mention only a few. None of these elements exists here.
[7] According
to the appellant, costs in accordance with the tariffs would be $10,775.91. It
is submitted that a larger award should be granted because an offer to settle
was made by the appellant that was identical to the outcome at trial. Counsel
cites a recent decision of Boyle J. in support: Langille v. The Queen,
2009 TCC 540.
[8] The appellant
suggests that an award of $67,890.66 is appropriate. This represents 75 percent
of counsel fees (plus GST) and 100 percent of disbursements. It is also noted
that senior counsel, Mr. Innes, waived his fee in this matter.
[9] Recently,
the Rules Committee of this Court has endorsed an increase in costs when a written
settlement offer has been made that is no less favourable than the actual
outcome.
[10] Although
no specific rule has been promulgated yet, the current thinking of the Rules
Committee does provide useful guidance.
[11] In the circumstances, I would award costs to the
appellant in a lump sum amount of $40,000, inclusive of disbursements.
Signed at Toronto,
Ontario this 12th
day of January 2010.
“J. M. Woods”
CITATION: 2010 TCC 16
COURT FILE NOs.: 2007-2495(IT)G and 2008-1085(IT)G
STYLE OF CAUSE: ANDREW A. DONATO and
HER
MAJESTY THE QUEEN
PLACE OF HEARING: n/a
DATES OF HEARING: n/a
REASONS FOR ORDER BY: The
Honourable Justice J. M. Woods
DATE OF ORDER: January 12, 2010
APPEARANCES: n/a
COUNSEL OF RECORD:
For the Appellant:
Name: William I. Innes
Firm: Fraser
Milner Casgrain LLP
Toronto, Ontario
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa, Canada
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