Date: 20000530
Docket: 98-1562-IT-I
BETWEEN:
HUSSEIN EL-HENNAWY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Order
Sarchuk J.T.C.C.
[1] The Appellant's appeals from assessments of tax made under the Income Tax Act for the 1993, 1994 and 1995 years were allowed, with costs. Included in the expenses for which the Appellant sought reimbursement were professional services, i.e. counsel fees, in the amount of $11,950 and disbursements in the amount of $3,880.61. Pursuant to the provisions of subsections 11(b) and (c) of the Tax Court of Canada Rules (Informal Procedure), the Taxing Officer, R.D. Reeve, allowed the amount of $500 for the services of counsel and all remaining amounts were taxed off. This appeal followed.
[2] The appeal itself proceeded on the basis of written submissions by each of the parties. The Appellant for his part appears to have reiterated the submissions he made before the Taxing Officer while the Respondent's position is that the Taxing Officer properly exercised his discretion in accordance with the law. Neither submission provides much assistance to this Court.
[3] It is trite law that this Court in reviewing the taxation of costs ought not to interfere with the discretion of the Taxing Officer unless the amounts allowed are so inappropriate or his decision is so unreasonable as to suggest that an error in principle must have been the cause.[1] Thus, in the absence of such an error, this Court is not entitled to substitute an amount it might have awarded if the claim had been before it in the first instance.
[4] With respect to fees for the services of counsel, the Taxing Officer allowed the maximum amounts permitted by section 11 of the Tax Court of Canada Rules (Informal Procedure). Since counsel neither prepared the Notice of Appeal nor appeared for the taxation of costs, the Taxing Officer's denial of those allowances was correct. With respect to the telephone charges, these were disallowed by the Taxing Officer on the basis that a number of them reflected telephone calls made prior to the commencement of proceedings which expenses in the normal course are not allowable unless it can be shown that such disbursement was essential for the conduct of the appeals. He concluded that there was no evidence to that effect. With respect to the disbursements for telephone calls following the filing of the appeals, the Taxing Officer found inconsistencies and inadequacies in the Appellant's explanation as to their necessity and concluded that the evidence failed to support these expenses as relevant, reasonable and necessary for the conduct of the appeals. The submissions made by the Appellant for the purpose of this review failed to demonstrate that the Taxing Officer erred in principle in denying those disbursements.
[5] Two further items are in issue. The first is the amount of $2,464 being the cost of the Appellant's travel to Egypt in or about June 1998 and the further amount of $115 allegedly being the cost to ship documents from Cairo to Canada on September 5, 1998. In each case, the Appellant's explanation was that it was necessary to travel to obtain the documents and to provide them to counsel for the preparation of the appeals. In his reasons, the Taxing Officer considered and accepted the Respondent's submission that no new evidence was presented nor were any new documents presented that had not been previously available to both parties. He considered the Appellant's explanation that this material aided counsel in preparing the appeal but found that there was no evidence provided to assist in determining the relevance, reasonableness and necessity of the material as being essential for the conduct of the appeal and accordingly taxed them off. Again on the evidence before me, I am unable to reach any other conclusion but to confirm the Taxing Officer's decision.
[6] The final two items reflect claims for disbursements with reference to photocopying and preparation of documents and books. In this particular instance, the Taxing Officer concluded that "it is reasonable to expect some copies to be made for an appeal" but found that "there is no evidence as to the relevance, reasonableness or necessity of the amount claimed in this instance". Reference to the Tax Court of Canada Minutes clearly indicate that the Appellant's counsel filed a book of documents and a book of authorities. The preparation of such material is a legitimate disbursement and accordingly, it was not reasonable to have taxed off the photocopying charges in the amounts of $125 and $106.
[7] Accordingly, the appeal from the taxation of costs is allowed and it is ordered that the Certificate of Costs dated November 6, 2000 be amended by deleting the figure $500 and substituting therefor the figure $731.
Signed at Ottawa, Canada, this 30th day of May, 2001.
"A.A. Sarchuk"
J.T.C.C.