|
Docket: 2000-5089(GST)G |
|
BETWEEN: |
|
VINCENZO POLSINELLI, |
|
Applicant, |
|
and |
|
|
|
HER MAJESTY THE QUEEN, |
|
Respondent. |
____________________________________________________________________
|
Before: The Honourable Justice G. Sheridan |
|
|
|
|
|
Counsel for the Applicant: |
Domenic Marciano |
|
|
|
|
Counsel for the Respondent: |
Jason J. Wakely |
____________________________________________________________________
ORDER AS TO COSTS
Upon motion by the Applicant for an Order pursuant to section 147 of the Tax Court of Canada Rules (General Procedure) ("Rules") for costs in excess of those to which he is are entitled under Schedule II, Tariff B ("Tariff") of the Rules;
And upon the Applicant's request that this motion be disposed of by the Court upon consideration of written submissions of counsel;
And upon the Respondent opposing that motion;
And upon reading the written submissions of both parties;
It is ordered that the Applicant's motion be dismissed in accordance with the attached Reasons for Order, and costs be awarded by the Taxing Officer in accordance with Schedule II, Tariff B.
Each party shall bear its costs in respect of this motion.
Signed at Ottawa, Canada, this 25th day of October, 2004.
|
"G. Sheridan" |
Sheridan, J.
|
Docket: 2000-5087(GST)G |
|
BETWEEN: |
|
ENZO POLSINELLI, |
|
Applicant, |
|
and |
|
|
|
HER MAJESTY THE QUEEN, |
|
Respondent. |
____________________________________________________________________
|
Before: The Honourable Justice G. Sheridan |
|
|
|
|
|
Counsel for the Applicant: |
Domenic Marciano |
|
|
|
|
Counsel for the Respondent: |
Jason J. Wakely |
____________________________________________________________________
ORDER AS TO COSTS
Upon motion by the Applicant for an order pursuant to section 147 of the Tax Court of Canada Rules (General Procedure) ("Rules") for costs in excess of those to which he is are entitled under Schedule II, Tariff B ("Tariff") of the Rules;
And upon the Applicant's request that this motion be disposed of by the Court upon consideration of written submissions of counsel;
And upon the Respondent opposing that motion;
And upon reading the written submissions of both parties;
It is ordered that the Applicant's motion be dismissed in accordance with the attached Reasons for Order, and costs be awarded by the Taxing Officer in accordance with Schedule II, Tariff B.
Each party shall bear its costs in respect of this motion.
Signed at Ottawa, Canada, this 25th day of October, 2004.
|
"G. Sheridan" |
Sheridan, J.
|
Citation: 2004TCC720 |
|
Date: 20041025 |
|
Docket: 2000-5089(GST)G |
|
BETWEEN: |
|
VINCENZO POLSINELLI, |
|
Applicant, |
|
and |
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent, |
|
|
|
Docket: 2000-5087(GST)G |
|
AND BETWEEN: |
|
ENZO POLSINELLI |
|
Applicant, |
|
and |
|
|
|
HER MAJESTY THE QUEEN, |
|
|
|
Respondent. |
REASONS FOR ORDER AS TO COSTS
Sheridan, J.
[1] The Applicants, Vincenzo Polsinelli (2000-5089(GST)G) and Enzo Polsinelli (2000-5087(GST)G), are each seeking an Order pursuant to subsection 147(7) of the Tax Court of Canada Rules (General Procedure) for costs in excess of Schedule II, Tariff B of the Tax Court of Canada Rules. In Judgments dated April 8, 2004, I allowed, with costs, the appeals filed by the Applicants on the basis that they had exercised due diligence within the meaning of subsection 323(3) of the Excise Tax Act and were, therefore, not liable for the unremitted GST of the corporation for which they had served as directors.
[2] The Applicants are requesting:
(a) An Order (i) allowing counsel to make oral and/or written submissions to this Honourable Court with respect to costs, and (ii) to have this Honourable Court fix costs in consequence thereto.
(b) In the alternative, an Order directing that costs be assessed by a taxing officer and directing said taxing officer to award costs in accordance with Schedule II, Tariff B to the date of the Applicants' first written settlement offer, and thereafter to award costs on a solicitor-client scale and without regard to Schedule II, Tariff B, or otherwise providing said taxing officer with such other direction as this Honourable Court deems just.
[3] Counsel for the Respondent takes the position that the Applicants' applications ought to be dismissed with a direction to the Taxing Officer:
(a) that [Enzo Polsinelli's] costs be calculated in accordance with Class C of Schedule II, Tariff B of the Tax Court of Canada Rules (General Procedure); and
(b) that [Vincenzo Polsinelli's] costs be calculated in accordance with Class A of the tariff , with the elimination of fees for pre-hearing conference, status hearing, preparation for hearing, and conduct of the hearing.
[4] With regard to the Applicants' claim for costs on a solicitor-client basis, the case law is clear that the awarding of such costs is "exceptional and generally to be awarded only on the ground of misconduct connected with the litigation"[1]. There is simply nothing in the Respondent's conduct that could properly be characterized as "reprehensible, scandalous or outrageous" so as to justify such an award.
[5] In determining whether the Applicants ought to be granted party and party costs in excess of the Tariff, the Court must have regard to the criteria set out in subsection 147(3) of the Rules:
(a) the result of the proceeding;
(b) the amounts in issue;
(c) the importance of the issues;
(d) any offer of settlement made in writing;
(e) the volume of work;
(f) the complexity of the issues;
(g) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding;
(h) the denial or the neglect or refusal of any party to admit anything that should have been admitted;
(i) whether any stage in the proceedings was,
(i) improper, vexatious, or unnecessary, or
(ii) taken through negligence, mistake or excessive caution;
(j) any other matter relevant to the question of costs.
[6] Applying the criteria to the Applicants' case, the result of the proceeding is that they were successful in their appeals. Though the amounts in issue were significant to the Applicants personally, they were not, in the broader context, extraordinarily large. Likewise, the issues were important to the Applicants, but not in the sense of blazing a trail through unexplored legal terrain. On the same principle, neither the "volume of work" nor the "complexity of the issues" merits a larger award of costs. Regarding the Applicants' offers to settle, I am in agreement with the decision of my colleague, Lamarre, J. in Miller v.Canada[2] in which she held that the analysis in Lyons v. Canada[3] applied with equal vigour to an award of costs in excess of the Tariff:
...
para 10 The Applicants place special emphasis on paragraph 147(3)(d) of the Rules. It provides that in exercising its full discretionary powers over the payment of costs under subsection 147(1) the Court may consider any offer of settlement made in writing. The word "may" is to be construed "permissive": subsections 2(1), 3(1), section 11 of the Interpretation Act. I do not construe the paragraph referred to as legislating that if an offer in writing to settle has been refused the Court shall award solicitor and client costs to the offeror if the offeror obtains a judgment more favourable than the terms of the offer to settle, the award to be effective the date of refusal. This is the essence of the applicants' argument and the import of it is that rule 49.10 of the Ontario Rules of Civil Procedure is to be regarded as, in effect, incorporated in the Rules. In argument counsel for the applicants cited rule 49.10 and jurisprudence relating to it. That rule reads:
"49.10(1) Where an offer to settle,
(a) is made by a plaintiff at least seven days before the commencement of the hearing;
(b) is not withdrawn and does not expire before the commencement of the hearing; and
(c) is not accepted by the defendant,
and the plaintiff obtains a judgment as favourable as or more favourable than the terms of the offer to settle, the plaintiff is entitled to party and party costs to the date the offer to settle was served and solicitor and client costs from that date, unless the court orders otherwise."
para 11 There is no rule analogous to 49.10(1) in the Rules and its intendment cannot be regarded as incorporated therein by necessary implication.
[7] The criteria in paragraphs (h), (i) and (j) of subsection 147(3) have no application in this matter.
[8] In Continental Bank of Canada v. Canada[4], Bowman, A.C.J. recognized that costs awards were not designed to cover the full costs of litigation:
...
para 9 It is obvious that the amounts provided in the tariff were never intended to compensate a litigant fully for the legal expenses incurred in prosecuting an appeal. The fact that the amounts set out in the tariff appear to be inordinately low in relation to a party's actual costs is not a reason for increasing the costs awarded beyond those provided in the tariff. I do not think it is appropriate that every time a large and complex tax case comes before this court we should exercise our discretion to increase the costs awarded to an amount that is more commensurate with what the taxpayers' lawyers are likely to charge. It must have been obvious to the members of the Rules Committee who prepared the tariff that the party and party costs recoverable are small in relation to a litigant's actual costs. Many cases that come before this court are large and complex. Tax litigation is a complex and specialized area of the law and the drafters of our Rules must be taken to have known that.
Bowman, A.C.J. went on to say that " ... [i]n awarding costs in an income tax appeal it should be borne in mind that whether the taxpayer is successful or unsuccessful the expenses of prosecuting an appeal (net of any costs recovered), including costs awarded against the taxpayer, are deductible in computing income under paragraph 60(o) of the Income Tax Act."
[9] With these words in mind and having considered the arguments of counsel in light of the criteria in subsection 147(3) of the Rules, I am unable to conclude that the Applicants are entitled to costs in excess of these set out in the Tariff. Accordingly, the application is dismissed and costs shall be awarded by the Taxing Officer in accordance with Schedule II, Tariff B. Each party shall bear its own costs in respect of this motion.
Signed at Ottawa, Canada, this 25th day of October, 2004.
|
"G. Sheridan" |
Sheridan, J.
|
CITATION: |
2004TCC720 |
|
COURT FILE NOS.: |
2000-5089(GST)G and 2000-5087(GST)G |
|
STYLE OF CAUSE: |
Vincenzo Polsinelli and H.M.Q. and Enzo Polsinelli and H.M.Q. |
|
REASONS FOR ORDER AS TO COSTS BY: |
The Honourable Justice G. Sheridan |
|
DATE OF ORDER: |
October 25, 2004 |
|
Counsel for the Applicants: |
Domenic Marciano |
|
Counsel for the Respondent: |
Jason J. Wakely |
|
COUNSEL OF RECORD: |
|
For the Applicants: |
|
Name: |
Domenic Marciano |
|
Firm: |
Marciano Beckenstein Concord, Ontario |
|
For the Respondent: |
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada |