Costigane v. The Queen, docket 94-1909-IT-I (Informal Procedure)

Date: 20010316

Docket: 94-1909-IT-I

BETWEEN:

THOMAS K. COSTIGANE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Bell, J.T.C.C.

[1]            This is an appeal by the Appellant from an award of costs in an Informal Procedure case, the Reasons for Taxation and Certificate of Costs being dated July 1, 2001.

[2]            The Appellant's appeal before this Court was allowed with costs. He submitted a Bill of Costs in the amount of $6,275.55. This represents the total of two bills given to the Appellant by Robinson & Company, Chartered Accountants, for research and allied services in respect of the Appellant's appeal. The Appellant made much of his position that he was not represented by the accountants and that the bill did not constitute representation costs. That is patently inaccurate. The Registrar of this Court, at the commencement of the hearing of the appeal on June 16, 1995 said, without interruption or objection from the Appellant:

The Appellant is represented by agent Grant Robinson ...

Mr. Robinson then advised the Court that he was a chartered accountant and proceeded with the introduction of documentary evidence and the examination of the Appellant and conduct of the case.

[3]            The taxing officer stated that the expenses claimed were described as "disbursements" and that the activities were consistent with those services performed by and allowable to counsel, but not to an agent. He said:

Each invoice shows hourly charges and does not address specific information, for example the number of copies or the charge per copy. An allocation of hours to perform general functions does not make it possible to determine the reasonableness and necessity of the activity and associated expense essential for the conduct of the appeal.

[4]            Finally, the taxing officer said that having considered the evidence and submissions of both parties:

The amount claimed of $6,275.55 is taxed off.

[5]            At the hearing the Appellant submitted that he was claiming "only the actual disbursements incurred". He said:

Section 12(3) of the Informal Procedure Rules provides for amounts that are allowed in an award of costs. This section is separate from section 11 by number and intent. It allows costs in addition to any party and party costs allowable under section 11. Section 12 is not concerned with party and party costs which are described separately in section 11. ... The disbursement costs that are detailed in the Bill of Costs are an itemized listing of out-of-pocket expenses that were necessary in order to conduct this appeal. The fact that a number of individuals at an accounting management firm undertook these required tasks of research, photocopying, collating, organizing, requesting files, typing, mailing, telephoning, purchasing, etc., rather than my buying each of these tasks one at time or actually doing these tasks myself does not alter the fact that these were out-of-pocket expenses incurred in order to conduct the appeal.

[6]                 Subsection 18.26(1) of the Tax Court of Canada Act provides, in certain circumstances, that the Court may award costs to the Appellant in accordance with the Rules of Court. I simply awarded costs without fixing any sum.

[7]            Section 11. of the Informal Procedure Rules ("Rules") provides the fees which "may be allowed for services of counsel".

[8]                 Subsection 12.(1) provides for amounts paid to an ordinary witness. Subsection (2) provides the amounts payable in respect of an expert witness. Subsection (3) reads:

Such other disbursements may be allowed as were essential for the conduct of this appeal, if it is established that the disbursements were made or that the party is liable for them.

[9]            It is useful to set forth the text of the two invoices submitted by Robinson & Company to the Appellant. They are as follows:

5C625

January 31, 1995

Dr. Thomas Costigane

Campus Estates Plaza

35 Harvard Road

Guelph, Ontario

N1G 3A2

INVOICE 4589

To-           All time charges to December 31, 1994 including:

Tax research on procedure for appeals to tax court.

Review source documents and correspondence between Tom Costigane and Revenue Canada.

Locate tax cases cited by Revenue Canada and cross reference similar cases to develop support for Tom Costigane's position using CD Rom tax library.

Copy and highlight cases and provide to client for feedback.

Call to Privacy Co-ordinator at Revenue Canada to determine what files are available on Tom Costigane.

Letter to Jeanette Berkin at Revenue Canada, requesting tax audit and tax appeal officer files.

11.5 Total Hours

Our Fee                                                                   $1,100.00

GST                                                                                         $    77.00

Total Fee                                                                                $1,177.00

Vendor G.S.T. #R124276734

5C625

June 29, 1995

Dr. Thomas Costigane

Campus Estates Plaza

35 Harvard Road

Guelph, Ontario

N1G 3A2

INVOICE 4882

To-           All time charges related to tax court appearance.

Feb. 10 -                 call to privacy coordinator.

                                request for auditor files

                                (.50 Hours)

Feb. 18 -                 telephone conversation with Jeanette Berkin at

Revenue Canada - update status of files (audit/appeals).

(.25 Hours)

Mar. 11 -                 - meeting with Tom Costigane

                                (2.25 Hours)

Mar. 18 -                 follow up on correction of file and change court

                                date (1.75 Hours)

Mar. 26 -                 receive auditors files and material review.

                                (.50 Hours)

May 20 -                 meeting with Tom and review of position.

                                (3.00 Hours)

                -                 typing tax brief (2.5 Hours)

May 31 -                 review Tom's report on issues to be decided, review

of recent tax cases (McGovern), search for others. Discussions with Francois Beland at Tax Court of Canada regarding administration practises, costs and representations. (3.00 Hours)

Jun 10     - preparation of material and case arguments for tax

court and conversation with Francois Beland at tax court.

- trip to library to search and copy advertisements for rental of condominium, preparation of schedule of expenses from 1988-1994, preparation of binders for court, photocopy and spike, etc.

- final preparation for trial. Review case and organize binders etc.

- meeting Monday and Wednesday to review case.

- changes to appeal package and binder index.

(28.00 Hours)

47.65 Total Hours

Our Fee                                                                                   $4,765.00

GST                                                                                                         $ 333.55

Total Fee                                                                                                $5,098.55

Vendor G.S.T. #R124276734

[10]          The Federal Court of Appeal in Her Majesty the Queen v. Linda Munro, 98 DTC 6443 concluded that the words "such other disbursements" in Rule 12(3) cannot be interpreted to include fees for services of agents. At 6447 the Court said:

The informal procedure set out in the Act specifically contemplates in section 18.14 representation by an agent; yet the Rules Committee has expressly restricted the taxable fees to those relating to "services of counsel". It does violence to the very clear intent in Rule 11 of restricting fees to services of counsel to suggest that the words "such other disbursements" in Rule 12(3) can be interpreted in such a way as to include fees for services of agents and furthermore to allow such agents the right to claim whatever they want beyond and above what counsel are allowed to claim. Agents should not be allowed to claim indirectly under Rule 12(3) what has been directly denied to them in Rule 11.

[11]          Each and every item in the two bills reproduced above relates to preparation for an appeal to this Court. I conclude that the Appellant's circumstances fall clearly within the above Federal Court of Appeal description. Accordingly, the appeal is dismissed.

Signed at Ottawa, Canada this 16^th day of March, 2001.

"R.D. Bell"

J.T.C.C.