Munro v. R., [1998] 1 CTC 2001

Bowman T.C.J.:

This is an appeal from a taxation of costs made by Mr. R.P. Guenette, Registrar of this court.

The principal question is whether the informal procedure rules of this court authorize the allowance, as part of a successful party’s taxed costs, of a fee paid to a certified management accountant who represented the party before the court. A subsidiary question is, assuming they do not, whether, I, or the taxing officer, can in effect, amend the disposition of costs made by the trial judge.

The background facts can be fairly briefly stated. Ms. Munro suffers from a severe and prolonged physical disability within the meaning of sections 118.3 and 118.4 of the Income Tax Act. She claimed the disability tax credit, which was denied her. She appealed to this court in respect of an earlier year and she represented herself. I understand that she was successful. In a subsequent year she was again denied the credit. She appealed again for the years 1991, 1993 and 1994 and retained the services of Ms. Gaelen Fisher, B. Comm., M.B.A., CMA, a certified management accountant, who evidently presented a persuasive case before His Honour Judge Garon, because at the conclusion of the evidence and argument, the Crown consented to judgment allowing the appeal.

Judge Garon rendered judgment as follows:

Judgment

Counsel for the Respondent having consented in open Court to a judgment allowing the appeals in respect of the 1991, 1993 and 1994 taxation years:

The appeals from the assessments made under the Income Tax Act for the 1991, 1993 and 1994 taxation years are allowed and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the Appellant is entitled to the disability tax credit in each of these years.

The Appellant is entitled to be reimbursed any expenses she may have incurred in connection with her appeals.

The costs were taxed by the Registrar. Among the expenses for which the appellant sought reimbursement were Ms. Fisher’s fees in the amount of $778.27. Mr. Guenette allowed $300.00 as a fee to the medical doctor who appeared as a witness, $120.00 for medical forms and $61.75 for other disbursements. The amount of $61.75 formed part of Ms. Fisher’s fee of $778.27. He did not allow any amount for Ms. Fisher’s fees, apart from the disbursement of $61.75. Moreover, Ms. Fisher informed me that $150.00 of her fee was in respect of negotiations with the Department of National Revenue prior to the filing of the appeal. Therefore the amount in issue in this appeal from the taxation is $566.52.

Before Mr. Guenette, Ms. Fisher argued only that she was entitled to a counsel fee under section 11 of the informal procedure rules, which reads: 11. On the taxation of party and party costs the following fees may be allowed for the services of counsel

(a) for the preparation of a notice of appeal, $150

(b) for preparing for a hearing, $200

(c) for the conduct of a hearing, $300 per half day or part thereof, and

(d) for the taxation of costs, $50.

The bill of costs followed the wording of sections 11 and 12 as follows:

A. For services of counsel I claim the following:

(a) preparation of notice of appeal, $244.67

(b) preparation of hearing, $246.10

(c) conducting the hearing ('/2), $287.50 (one half day)

(d) for taxation of costs, $ nil

B. For witnesses’ fees I claim the following: $ nil

C. For expert witness I claim the following: $400.00

D. Other disbursements: $120.00

On the appeal before me, Ms. Fisher took the position that her fees for representing Ms. Munro before the court fell within subsection 12(3) of the rules, which reads:

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

I agree with Mr. Guenette that Ms. Fisher’s fees do not fall within section 11 of the rules. However highly qualified she may be in other areas she is not a lawyer and is therefore not a counsel as that term is defined in section 2 of the rules. This conclusion is in accordance with the decision of Christie A.C.J.T.C.C. in Edgar v. R., [1994] 1 C.T.C. 2562 (T.C.C.).

That does not however end the matter. Ms. Fisher’s fees are unquestionably a “disbursement” within the plain meaning of that word. Were they essential for the conduct of the appeal? Obviously Ms. Munro thought so. If she felt that the services of Ms. Fisher were needed for the prosecution of her appeal I do not propose to second-guess her judgement. I think that the services of Ms. Fisher were essential for the conduct of the proceeding [1] . I do not read “essential” as meaning “absolutely necessary” but rather as reasonably necessary. I am not prepared to speculate whether she might have been able to win the case on her own.

There are basically two arguments against allowing Ms. Munro any portion of the fees charged by Ms. Fisher for representing her at trial:

(a) Section 11 of the rules provides for counsel fees, and, indeed limits them to a specific amount. Since the fees payable to lawyers are expressly dealt with in section 11 it may be inferred that fees paid to non-lawyers for representation at a hearing are intended to be excluded: expressio unius est exclusio alterius.

(b) 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 result 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.

These arguments are not without merit. Against them, however, are arguments supporting the view that the rules contemplate some relief to a successful taxpayer in respect of fees paid to a person who is not a lawyer who bona fide represents that taxpayer in court.

In the first place, we have the plain words of subsection 12(3) of the rules. An interpretation of those words to exclude a disbursement of a fee paid to a non-lawyer who represented a taxpayer in the informal procedure in this court would require the derivation of a fairly strong inference from the scheme and context of the rules as a whole. Unlike the rules of other jurisdictions, or, for that matter, the general procedure rules in this court, the informal procedure rules specifically contemplate representation by an agent. While the expressio unius rule is one of the many tools of statutory interpretation available to the court it is no more than an interpretative aid used to discern the apparent intention of the legislative draftsperson. Obviously no rule of interpretation can prevail against the plain words of an enactment [2] .

As Fauteux, C.J. said in Montreal (City) v. ILGWU Centre Inc. (1971), [1974] S.C.R. 59 (S.C.C.), at 66:

The legislator is presumed to mean what he says; and there is no need to resort to interpretation when the wording is clear...

The same view was expressed by Chief Justice Issac in Hawboldt Hydraulics (Canada) Inc. (Trustee of) v. Canada (1994), 94 D.T.C. 6541 (Fed. C.A.), at 6546:

But these principles are not invitations to Courts to ignore other well-accepted rules of construction, such as that which requires Courts to construe statutes so as “to ascribe some meaning to each word used by the legislature,” Atco et al. v. Calgary Power Ltd. et al., [1982] 1 S.C.R. 557 at 569.

Moreover, we have the unequivocal words of the judgment of Garon J., quoted above. I am not prepared to assume that he did not, in exercising the discretion vested in him under subsection 10(1) of the rules, have in mind the very fees that are in issue here.

lam 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 lawyer under section 11 or the amount of an expert witness fee if that same accountant gave evidence as an expert.

If nothing is allowed as a reimbursement of expenses of representation by non-lawyers it poses a serious problem for small litigants who contest assessments under the informal procedure. If they are entitled to nothing in respect of such fees it means that they must choose one of three unacceptable alternatives: hiring a lawyer (which can be expensive), trying to represent themselves (which many find at worst impossible or at best intimidating), or retaining an agent (usually an accountant) with no possibility of recovering any of the fees paid to that person if they are successful. To have the assistance of an experienced non-lawyer for whose fees they may have a modest amount of relief may well mean the difference between pursuing an appeal and not doing so [3] .

We are, therefore, faced with a choice between two absurd and unacceptable alternatives: allowing nothing in respect of a necessary cost of the litigation or allowing more in respect of an agent who is not a lawyer than would be allowed for a lawyer or an expert witness. The decision of the Privy Council in Victoria (City) v. Bishop of Vancouver Island, [1921] 2 A.C. 384 (British Columbia P.C.) is of no assistance. It merely directs us to choose a non-absurd result over an absurd one. Here we have two absurdities, and no middle ground.

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.

That disposes, then, of the general interpretation of rules 11 and 12 where a litigant is awarded his or her “costs” simplicter. It leaves unanswered the disposition of this case where Judge Garon stated that “The Appellant is entitled to be reimbursed any expenses she may have incurred in connection with her appeals” (emphasis added). That judgment has not been appealed. It is therefore unassailable and not subject to collateral at-

tack: see Dale v. R. (1997), 97 D.T.C. 5252 (Fed. C.A.), at 5255-5256, citing R. v. Wilson, [1983] 2 S.C.R. 594 (S.C.C.). I am not sitting in appeal on the manner in which Judge Garon awarded costs.

The appeal from the taxation of costs is therefore allowed and it is ordered that the certificate of taxation dated May 16, 1997 be amended by deleting the figure $481.75 and substituting therefor the figure $1,048.27.

Appeal dismissed.