Scarlett v. R., [1999] 1 CTC 2295

Tanasychuk B., T.O., T.C.C.:

This taxation came on for hearing on July 9, 1998, by means of a telephone conference call. It follows a Judgment of the Honourable Judge McArthur dated May 1, 1996, in which he allowed the appeals made under the Income Tax Act with respect to the 1990 and 1991 taxation years, with costs. The Appellant represented herself at the hearing and at the taxation. Mr. Sean O’Donnell represented the Respondent.

The Bill of Costs as submitted by the Appellant is as follows:

BILL OF COSTS (L2464/R1974/T9/BT9) test_marked_paragraph_end (1310) 0.839 0471_2087_2195

A. For services of counsel, I claim the following:

(a)	preparation of notice of appeal -	$ 150.00
(b)	preparation of hearing -	$ 200.00
(c)	conducting the hearing (4) - (indicate the number of	$1,200.00
	half days)
(d)	for taxation of costs -	$	50.00
D.	Other disbursements:	$8,164.00

The claim for preparation of the notice of appeal in the amount of $150.00 is not in dispute. Accordingly, I will allow the sum of $150.00 on account of preparation of the notice of appeal.

The second item claimed is for preparation for hearing in the amount of $200.00. Ms. Scarlett asserts that she is entitled to this item as counsel did assist her in preparing for the hearing. Mr. O’Donnell’s position is that Ms. Scarlett is not entitled to this amount, as she was not represented by counsel at the hearing.

The third item is a claim for $1,200.00 on account of conducting the hearing. Ms. Scarlett submitted that this claim is for four half days she spent in Court at $300.00 per half day. Again, Mr. O’Donnell’s position is that Ms. Scarlett is not entitled to any amount for conducting the hearing, as she was not represented by counsel.

The fourth item is a claim for $50.00 on account of this taxation of costs. Mr. O’Donnell’s reiterated his position that this is not an allowable claim, as the Appellant was not represented by counsel.

The claims put forward by Ms. Scarlett for preparation for hearing, conducting the hearing and taxation of costs fall under section 11 of the Tax Court of Canada Rules (Informal Procedure). That section reads as follows:

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 preparation 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.

Ms. Scarlett was represented by counsel at the time her appeals were filed on March 4, 1994. As of January 30, 1995, Ms. Scarlett represented herself. In the decision of Edgar v. R., [1994] I C.T.C. 2562 (T.C.C.), the Associate Chief Judge of this Court held that only counsel is entitled to the fees described in section 11 of the Rules. Ms. Scarlett is not a person who may practice as a barrister, advocate, attorney or solicitor in any of the provinces, which is the description of counsel, as set out in section 2 of the Tax Court of Canada Rules (General Procedure). The words "for services of counsel” as set out in section 11 are clear and not subject to interpretation. Accordingly, I will disallow the following items:

The last item on the bill of costs is a claim for disbursements of $8,164.00. This figure includes claims for lost revenue in the amount of $7,500.00, photocopy charges of $224.00 and transportation charges of $440.00.

Included with the bill of costs was a summary of the items claimed as disbursements. The summary briefly outlines the time Ms. Scarlett spent meeting with officials of Revenue Canada, her own legal counsel and counsel at the Department of Justice. These meetings were held prior to and after the filing of the appeal in the Tax Court of Canada. Ms. Scarlett indicated that she operates her own business as a training consultant and lost the opportunity to earn revenue in the amount $7,500.00.

Mr. O’Donnell referred to a decision of the Registrar of the Tax Court of Canada in Tippett v. R., Court file No. 95-380(GST)I, [reported (1996), 4 G.T.C. 3187 (T.C.C.)]. In the Tippett decision, the Appellant was a sea captain and claimed that he had to take one month off work in order to be present at the hearing. As a result, he was claiming one month’s salary on his bill of costs, which amount was disallowed.

Ms. Scarlett’s claim for lost revenue is distinguishable from Mr. Tippett’s, in that her claim does not relate to lost revenue as a result of her attendance in Court. Her claim relates to revenue lost as a result of time spent meeting with officials of Revenue Canada, counsel for the Respondent, as well as her own counsel.

In a review of the Registrar’s decision in Tippett, Judge Rip stated:

Costs do not include loss of income due to business opportunity missed or absence from employment during litigation.

I agree with the Honourable Judge Rip. Costs are meant to reimburse a party for actual out of pocket expenses. A claim for lost revenue is not an out of pocket expense. Accordingly, I will tax off the claim for lost revenue in the amount of $7,500.00.

The next item is the claim for $224.00 on account of photocopy expenses. The Appellant submitted an affidavit to the Court, in which she stated a total of 1,948 photocopies were made at a commercial establishment known as “MY OFFICE/YOUR OFFICE”. There were no receipts produced in support of this claim. There was a letter produced, under the signature of the owner of “MY OFFICE/YOUR OFFICE”, which contained a statement that the estimated cost of photocopies made by the Appellant was in the range of $175.00 to $200.00.

Mr. O’Donnell admitted that the Appellant produced copies of documents at the hearing, which were marked as Exhibits, but found a claim for 1,948 copies to be excessive. He suggested that a figure of 100 copies at 25¢ per page was reasonable and was prepared to consent to the amount of $25.00 for photocopies. I accept that Ms. Scarlett expended monies on account of photocopies. However, in the absence of a detailed explanation as to what was copied and receipts on account of the expenditures, I will only allow $25.00 of the $224.00 claimed, which amount was agreed to by Mr. O’Donnell. The balance of $199.00 is taxed off.

The last item of $440.00 is for transportation charges. This figure represents eight trips made by Ms. Scarlett to the offices of the Department of Justice in Toronto and attendance in Court on three occasions, as well as parking charges of $113.00. The estimate of the round trip distance from Ms. Scarlett’s home to the offices of the Department of Justice and the Tax Court of Canada was 85 kilometres. Transportation costs were calculated at the rate of $.35 per kilometre. No receipts were produced for the parking charges claimed.

Mr. O’Donnell suggested that Ms. Scarlett is not entitled to be reimbursed for the costs involved in driving to and from the offices of the Department of Justice. He further suggested that transportation costs are not covered by the Tariff and that Ms. Scarlett could have reduced the expenses incurred, by travelling via public transit.

1 will not allow the claim for the costs associated with travelling to the offices of the Department of Justice of $238.00 and parking of $59.00. In my view, the costs associated in meeting with opposing counsel are not costs which are properly recoverable on a taxation of party and party costs. I will accordingly tax off the amount of $297.00.

As Ms. Scarlett did attend in Court on three separate occasions, I will allow her claim for mileage of $89.25, representing three 85 kilometer trips to the Tax Court of Canada, at the rate of $.35 per kilometer. 1 will not allow the claim for parking on these three occasions, as there were no receipts produced to substantiate the claim for $54.00 and will tax that amount off.

The Bill of Costs of the Appellant in the amount of $8,164.00 is taxed and the amount of $264.25 is allowed. A certificate in that amount will be issued.

Order accordingly.