In this case, there was roughly $100,000 in dispute. Taxpayer’s counsel’s fees at $66,000 were roughly the same as the amount won. For that, he got $20,000 plus disbursements.
This is a dangerous precedent. Will the Court be one-sided, awarding hefty amounts to taxpayers but confining the Crown to tariff? (In this case, the taxpayer got relatively large costs despite divided success.)
A. Result of the Proceeding
[9] … the Appellant was successful on two of the four issues and unsuccessful on one, and the parties had divided success on the fourth issue. However, the issues on which the Appellant was successful dealt with a significantly higher portion of the overall amount in issue. Overall, the Appellant was more successful in the appeals.
B. Amount in Issue
…
[16] Thus, the total amount in issue is at most $112,961 (the total of the amounts indicated above).
C. Importance of Issues
[18] … However, the jurisprudence suggests that the question is not how important the issues are to the individual taxpayer (one might expect that any taxpayer bringing an appeal to the Tax Court of Canada would consider his case to be of significant personal importance), but rather whether the decision on the issues will have significant precedential and jurisprudential value. …
[19] The issues in those cases were not of significant precedential value.
D. Settlement Offers
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[21] The Respondent argues that because both parties made written settlement offers and actively attempted to resolve the issues prior to trial, this factor should not weigh in favour of granting increased costs.
…
[23] Given the closeness of the Appellant’s settlement offers to the ultimate result, it seems appropriate to grant some additional costs on the basis of the settlement offers, although not the substantial indemnity costs that the Appellant requests.
F. Complexity of Issues
[28] The issues in this case were not particularly complex. …
G. Conduct of Party That Tended to Shorten or Lengthen Unnecessarily the Duration of the Proceeding
…
[31] The Respondent has not specifically addressed this issue, but I am wary of creating a practice of awarding increased costs on the basis of hindsight. As Justice Campbell Miller noted in Henco, “[f]or this factor to be determinative, it must be clear . . . that a party has acted unreasonably in its conduct.”[9] The mere fact that the Respondent was unsuccessful on certain issues at trial does not mean that it was unreasonable to pursue those issues.
IV. Conclusion
[32] The remaining subsection 147(3) factors do not apply in this case. The applicable factors do not justify the percentage of solicitor-client costs requested by the Appellant, but they do justify awarding some amount above Tariff costs. The Appellant requested 75% of his solicitor-client costs plus disbursements. An award of approximately 30% of solicitor-client costs plus disbursements seems appropriate in this case.
See Klemen v. The Queen 2014 TCC 369 (Hogan)