Wood v. The Queen, docket 96-2445-GST-G

Date: 19990602

Dockets:96-2445-GST-G; 96-3870-GST-G;

1999-2332-GST-G; 98-1666-GST-G

BETWEEN:

ROBERT WOOD,

JAMES R. McMURTER c.o.b. McMURTER HOME CENTRE,

JAMES R. McMURTER c.o.b. McMURTER HOME CENTRE,

ROBIN GILES BRANT o/a FREE FLOW GAS BAR,

Appellants,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasonsfor Order

Bowie J.T.C.C.

[1]            These are three appeals from assessments for goods and services tax (GST) made under Part IX of the Excise Tax Act. The Appellants, who are status Indians, all elected, when filing their appeals, to invoke the informal procedure of the Court, which makes no provision for production of documents or examinations for discovery. In each case the Attorney General of Canada has exercised the right under section 18.3002 of the Tax Court of Canada Act (the Act) to have the appeal proceed under the general procedure of the Court, presumably because all the appeals raise complex questions of constitutional, treaty, and statute law relating to the taxation of status Indians. Many of these issues are common to all three appeals.

[2]            There have been a number of interlocutory motions in these appeals since their inception. My colleague Judge Rip made an Order on March 26, 1998 in the Wood appeal which fixed a schedule for production of documents, discovery, and the filing of expert witness affidavits. Subsequently, following a status hearing held by telephone conference, he amended his Order in the Wood appeal, and made Orders in the McMurter and Brant appeals, and in another related appeal which has since been discontinued, which fixed new dates for production, discovery and the filing of expert witness affidavits, and fixed a trial date for the four appeals to be heard on common evidence. His Order contemplated a trial of six weeks duration, beginning on November 15, 1999. By that Order, documents were to be produced by all parties by January 29, 1999, with discoveries to be completed by April 30, 1999 and any undertakings fulfilled by June 30, 1999.

[3]            In early January 1999, counsel for the Appellants undertook to deliver a Further Amended Notice of Appeal in the Brant appeal, which would particularize the basis for the claims that the Appellants are exempt by statute, by treaty and by constitutional right from the requirement to collect GST from their customers. Demands for these same particulars in the other appeals had, by then, been outstanding for many months.

[4]            The Respondent moved before me to compel the delivery of lists of documents, the Amended Notice of Appeal and the particulars, and to extend the time for completion of discovery. The affidavit in support of that motion recites numerous unanswered letters sent from counsel for the Respondent to counsel for the Appellants, as well as many unanswered telephone calls. The Notice of Motion was filed on April 28, 1999. It came on for hearing first on May 12, 1999, at which time I adjourned it until May 26, 1999 on the undertaking of counsel for the Appellants that the lists of documents and Further Amended Notices of Appeal would be delivered by May 25, 1999. They were so delivered, and on May 26, 1999, I made an Order which once again amended the dates fixed for completion of discovery and for filing the expert witness affidavits. These dates were agreed to by both counsel at the hearing on May 26, 1999. The only matter that remains is the disposition of the costs of the motion.

[5]            Counsel for the Respondent asks for costs of the motion to be fixed at $3,000.00, payable jointly and severally by the Appellants, on or before May 31, 1999. The authority to make such an Order is found in Rule 147.

[6]            Counsel for the Appellants took the position that I should not make any Order as to the costs of these motions. He submitted that section 18.3007 of the Act governs the costs of these motions, and that it should be left to be dealt with by the trial judge. In support of this, he referred to my decision in an earlier motion: Wood v. The Queen.[1] On that occasion, I made an Order under section 18.3007 that the appeal proceed by way of the general procedure, and Mr. Sherry invited me at that time to make an Order requiring the Respondent to pay the costs of the Appellant for the whole proceeding in any event of the cause, and in advance. I declined to make any Order as to the costs of the appeal. One of several reasons which I expressed for that decision was that the exercise of the Court's discretion as to costs would be best left to the trial judge.

[7]            I shall deal first with the question whether the Court's normal jurisdiction in respect of the costs of these motions has been displaced by section 18.3007 of the Act.

18.3007 (1) Where the following conditions are met, namely, (a) an order has been made under subsection 18.3002(1) in respect of an appeal, (b) the appeal is not an appeal referred to in subsection 18.3002(3), (c) the amount in dispute in the appeal is equal to or less than $50,000, and

(d) the aggregate of supplies for the prior fiscal year of the person who brought the appeal is equal to or less than $6,000,000, the Court may, where the circumstances so warrant, (e) make no order as to costs or order that the person who brought the appeal be awarded costs, notwithstanding that under the rules of Court costs would be adjudged to Her Majesty in right of Canada, or (f) make an order that that person be awarded costs, notwithstanding that under the rules of Court no order as to costs would be made.

(2) Where costs are awarded under subsection (1), the award shall be made at the time of the order disposing of the appeal.

[8]            The clear meaning of this provision is that the trial judge, when disposing of an appeal to which that section applies, may, in the circumstances described, make an Order of the kind there described, notwithstanding that if the Appellant had elected the general procedure, a less favourable Order would have been appropriate in all the circumstances. This section has no language designed to displace the normal provisions as to costs which are found in Rule 147.

[9]            I turn to the question of the appropriate Order to be made under Rule 147. The present situation is much different from that which I dealt with on the earlier occasion in the Wood appeal. What was sought there was an Order at the outset of the proceedings which would govern the disposition of costs throughout. What is at issue here is the costs of the interlocutory motions which I have heard and disposed of. I am fully informed by the affidavits filed as to the history giving rise to the motions, and as to the merits of the positions taken by the parties. No factor was brought to my attention by counsel for the Appellants which would place the trial judge in a better position than I am to deal with the question. Moreover, the trial judge, when dealing with costs of the appeals, will be aware of the Order that I make now as to costs on these motions, and will be able to take it into account if it is appropriate to do so.

[10]          The following factors are relevant to the exercise of my discretion.

                1.              These motions would have been unnecessary, but for the failure of counsel for the Appellants to comply with the requirements of the status hearing Order of Judge Rip as to production of documents, his failure to furnish the particulars demanded in the McMurter and Wood appeals, and to deliver the Further Amended Notice of Appeal as he undertook to do in the Brant appeal.

                2.              Counsel for the Appellants filed a written statement of his position on the motion. It did not deal with all of the relief requested, but, so far as it went, it agreed that the Respondent was entitled to the relief requested. When the motion came on for hearing, counsel for the Appellants quite freely admitted that the remainder of the relief sought by the Respondent was appropriate, save only for the question of costs.

                3.              Although an affidavit was filed by the Appellants on the motion, it offered no reasonable explanation for the failure to either comply with the Order of Judge Rip, or seek a further amendment of it. The affidavit in support of the motion recites a litany of failures by counsel for the Appellants to respond to telephone calls and correspondence, as well as the failure to abide by the requirements of the Rules and the status hearing Order. The affidavit filed on behalf of the Appellants does not deny these failures. Much of it is devoted to matters that are not relevant to the issues before me on these motions.

                4.              The delays in these proceedings resulting from the failures to comply with the Rules and the status hearing Order, as amended, have jeopardized the trial date fixed by Judge Rip. I will monitor the progress of these appeals from this date to the date of trial, as both counsel have requested, but it is quite possible that commencement of the trial will have to be delayed until next year.

[11]          Of these factors, the single most important one is the failure of the Appellants to comply with Judge Rip's Order, and, in doing so, to take no step to seek an amendment of it. Presumably no amendment was sought because there was no reasonable ground that could be put forward to support such an application. The time is long past when litigants may amble through the process at their leisure. Judicial resources are scarce, and they are expensive. In this Court status hearings, and the resultant Orders, are designed to promote the efficient use of judicial resources and the Court's facilities, and the orderly conduct of appeals. It is not only an affront to the Court, but also wasteful of a valuable public resource for motions of this kind to have to be brought.

[12]          The Respondent will have the costs of these motions, in any event of the cause, and payable by June 30, 1999. I fix the costs in each of the three appeals at $850.00. That amount reflects the fact that the motions were heard together, but on two separate days, and also that the Appellants had remedied some of their delinquency between the first and the second appearances. Counsel for the Appellants shall deliver a copy of my Order and a copy of these Reasons to each of the Appellants, personally or by registered mail, by June 11, 1999. He shall file proof of having done so by June 18, 1999. If the costs are not paid by June 30, 1999 the Respondent may move for dismissal on a date to be fixed by the Registry of the Court on application.

Signed at Ottawa, Canada, this 2nd day of June, 1999.

"E.A. Bowie"

J.T.C.C.

COURT FILE NO.:                                                 96-2445(GST)G, 96-3870(GST)G,

                                                                                1999-2332(GST)G, 98-1666(GST)G

STYLE OF CAUSE:                                               Robert Wood, James R. McMurter c.o.b.                                                                                                                                        McMurter Home Centre, Robin Giles Brant                                                                                                                                   o/a Free Flow Gas Bar and Her Majesty the                                                                                                                                    Queen

PLACE OF HEARING:                                         Toronto, Ontario

DATE OF MOTION:                                            May 26, 1999

REASONS FOR JUDGMENT BY:                      The Honourable Judge E.A. Bowie

DATE OF REASONS FOR ORDER: June 2,1999

APPEARANCES:

Counsel for the Appellant:                  Micheal Sherry

Counsel for the Respondent:              Ernest Wheeler

COUNSEL OF RECORD:

For the Appellant:                

Name:                Micheal Sherry

Firm:                  N/A

For the Respondent:                             Morris Rosenberg

                                                                Deputy Attorney General of Canada

                                                                                Ottawa, Canada

BETWEEN:

96-2445(GST)G

ROBERT WOOD,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent,

AND BETWEEN:

96-3870(GST)G

JAMES R. McMURTER c.o.b. McMURTER HOME CENTRE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent,

AND BETWEEN:

1999-2332(GST)G

JAMES R. McMURTER c.o.b. McMURTER HOME CENTRE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent,

AND BETWEEN:

98-1666(GST)G

ROBIN GILES BRANT o/a FREE FLOW GAS BAR,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Motions heard on May 26, 1999, at Toronto, Ontario, by

the Honourable Judge E.A. Bowie

Appearances

Counsel for the Appellants:        Michael Sherry

Counsel for the Respondent:     Ernest Wheeler

ORDER

          Upon the Application of counsel for the Respondent in these appeals for Orders governing the pre-trial proceedings, including further amending the Orders made by the Honourable Judge G. J. Rip on October 23, 1998 in appeals number 98-1666(GDT)G, 96-3870(GST)G and 96-2445(GST)G, with respect to the time within which examinations for discovery are to be completed, and upon reading the affidavits of Gordon Bourgard and Camille Sherry, and upon hearing counsel for the parties, both of whom have consented to the terms of paragraphs 1 to 6 of this Order;

IT IS HEREBY ORDERED THAT

          1.        The Appellant Robert Wood shall file a Further Amended Notice of Appeal in appeal No. 96-2445(GST)G by May 31, 1999;

          2.        The appeal of James R. McMurter c.o.b. McMurter Home Centre, No. 1999-2332(GST)G shall be heard on common evidence with appeals No. 96-3870(GST)G, 96-2445(GST)G and 98-1666(GST)G;

          3.        Both parties will file and serve their lists of documents in appeal No. 99-2332(GST)G by June 15, 1999;

          4.        Should the Respondent be advised to deliver a Demand for Particulars in any of these appeals it is to be done by June 3, 1999, and if any such Demand for Particulars is delivered then the Appellant, or Appellants, shall respond to it by June 17, 1999;

          5.        (a)       Examinations for Discovery as to the business issues in each of these appeals shall be completed by June 30, 1999, and any undertakings arising out of those examinations shall be completed by July 15, 1999;

                   (b)      Examinations for Discovery as to the legal and constitutional issues in each of these appeals shall be completed by August 31, 1999, and any undertakings arising out of those examinations shall be completed by September 30, 1999;

                   (c)      The affidavits of expert witnesses shall be filed by October 14,                      1999;

                   and the Amended Orders of the Honourable Judge G. J. Rip in the appeals of Robert Wood ( 96-2445(GST)G), James R. McMurter c.o.b. McMurter Home Centre (96-3870(GST)G) and Robin Giles Brant o/a Free Flow Gas Bar (98-1666(GST)G) are hereby amended accordingly;

          6.        Status hearings will be held in each of these appeals at 9:30 a.m. on July 28, 1999 at the Tax Court of Canada, Suite 902, Merrill Lynch Canada Tower, 200 King Street West, Toronto, Ontario;

         

          7.        The Appellants in each of the appeals Robert Wood ( 96-2445(GST)G), James R. McMurter c.o.b. McMurter Home Centre (96-3870(GST)G) and Robin Giles Brant o/a Free Flow Gas Bar (98-1666(GST)G) shall pay to the Respondent the costs of this motion in any event of the cause. Such costs are hereby fixed in the amount of $850.00 for each appeal, and are to be paid not later than June 30, 1999.

          8.        Counsel for the Appellant shall deliver a copy of this Order and a copy of the Reasons for Order to each of the Appellants Robin Giles Brant, James R. McMurter, and Robert Wood, personally or by registered mail, by June 11, 1999, and shall file proof of having done so by June 18, 1999.

Signed at Ottawa, Canada, this 2nd day of June, 1999.

"E.A. Bowie"

J.T.C.C.

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