Citation: 2012TCC19
Date: 20120113
Docket: 2007-3170(IT)G
BETWEEN:
GORDON LERICHE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
D'Arcy J.
[1]
In my judgment, I
allowed the appeal with costs. Subsequent to the issuance of the judgment,
counsel for the Appellant filed a submission requesting the Court award costs
in excess of the Tariff rate.
[2]
The Appellant has
requested the following costs:
-
Fees from the
commencement of the appeal to the decision at trial - $39,397.50
-
GST of fees - $1,969.88
-
Disbursements - $3,842.77
-
Disbursements
accounting fees - $9,577.50
-
Fees for the cost
submission - $750
[3]
In her written
submissions, the Respondent requested that the Court award costs (under the
tariff) to the Respondent, or, in the alternative, that each party bear its own
costs, or, in the further alternative, my judgment awarding costs to the
Appellant in accordance with the tariff remain.
[4]
As noted by this Court
on numerous occasions, a trial judge has absolute and unfettered discretion to
award or withhold costs subject only to the applicable rules on costs.
[5]
Sections 147 to 152.1
of the Tax Court of Canada Rules (General Procedure) (the “Rules”)
contain the rules for awarding costs in general procedure appeals.
[6]
When exercising its
discretion, the Court may consider one or more of the elements listed in
subsection 147(3) of the Rules, which reads as follows:
In exercising its discretionary power pursuant to subsection (1) the
Court may consider,
(a) the result of the proceeding,
(b) the
amounts in issue,
(c) the
importance of the issues,
(d) any
offer of settlement made in writing,
(e) the
volume of work,
(f) the
complexity of the issues,
(g) the
conduct of any party that tended to shorten or to lengthen unnecessarily the
duration of the proceeding,
(h) the
denial or the neglect or refusal or any party to admit anything that should
have been admitted,
(i)
whether any stage in the proceedings was,
(i)
improper, vexatious, or unnecessary, or
(ii) taken
through negligence, mistake or excessive caution,
(j) any
other matter relevant to the question of costs.
[7]
In addition, pursuant to
subsection 147(4) of the Rules, the Court may fix costs without
reference to the Tariff contained in Schedule II of the Rules (the “Tariff”),
and may award a lump sum in lieu of, or in addition to, any taxed costs.
[8]
Paragraph 147(5)(c) of the Rules
provides that the Court has the discretion to award costs on a solicitor and
client basis. As noted by my colleague Justice Hogan in General Electric
Capital Canada Inc. v. the Queen, 2010 TCC 490, 2010 D.T.C. 1353 (“General
Electric”) at paragraphs 20 to 24, solicitor and client costs are
only awarded in exceptional circumstances where there is evidence of
reprehensible, scandalous or outrageous conduct.
[9]
Counsel for the Appellant states
in his submission that the Appellant is asking for costs “in excess of the
tariff rate.” However, it appears to me that the requested costs are on a
solicitor and client basis. The table at page 11 of the submission appears to
be claiming costs that represent 100% of the solicitor-client fees incurred.
[10]
There is no evidence in this
appeal of reprehensible, scandalous or outrageous conduct that would allow for
awarding of costs on a solicitor and client basis.
[11]
I have also considered whether the
Court should award party and party costs above the Tariff.
[12]
This Court and the Federal Court
of Appeal has considered, on numerous occasions, the issue of when the Court
should award party and party costs above the Tariff. I agree with the approach
taken by Justice Hogan in General Electric: the factors listed in subsection
147(3) of the Rules should be considered when determining whether to
award party and party costs above the Tariff. Justice Hogan stated the
following at paragraph 28 of his decision:
. . . It is
reasonable to conclude that the purpose of section 147 of the Rules was
to give a judge the discretion to move away from the Tariff in order to provide
fair and reasonable relief in the circumstances — with or without reference to
Schedule II, Tariff B.
[13]
After considering the following
factors in subsection 147(3), I have concluded that costs should be awarded to
the Appellant in accordance with the Tariff, not above it:
1.
In total, the Appellant obtained
60% of the amount sought. The amount at issue was $73,667. During the hearing,
the Respondent consented to $15,892. In my judgment, I allowed an additional
$27,212. While the fact that the Appellant obtained 60% of the amount sought
justifies the awarding of costs, it does not support an award of costs above
the Tariff rate.
2.
The law in most of the relevant
areas is fairly well settled. Further, the issues were not complex.
3.
The Respondent made the only settlement
offers. The last offer was for $25,775. This offer was for an amount that is
substantially less than the amount obtained by the Appellant. It appears that
the only “offer” made by the Appellant was for the amount at issue, $73,667.
4.
In my view, the hearing should not
have taken four days. The conduct of both counsel lengthened the hearing.
[14]
For the foregoing reasons, the
Court will not amend its Amended Judgment dated August 23, 2010 that awarded
the Appellant costs in accordance with the Tariff.
Signed at Ottawa, Canada,
this 13th day of January 2012.
“S. D’Arcy”
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