BETWEEN:
HUGH STANFIELD, GRETA ANDERSON, ROBERT ANDERSON,
DONALD APOLCZER, CAROL L. APOLCZER, JAMES C. AYEARST,
ELIZABETH JOAN AYEARST, CHRISTINE BANVILLE, BRENT BEYAK,
DAVID G. BLISSETT, JAMES L. BRADY, KEITH BROOKE,
GEORGE BURDEN, DONALD CAREY, PATRICIA CARPENTER,
ALAN CARPENTER, MARIA CLARKE, KENNETH CLARKE,
JULIA S. CUNDLIFFE, KATE A. DAVIS, LARRY DAVIS,
ALLAN DE HAAN, HERB DEMARS, TERRANCE DUNFORD,
IRVINE J. DYCK, NORMA FARENICK, STEPHAN FRALICK,
RENEE GALLANT, ROY GALLANT, MARY GELPKE, PAUL GELPKE,
DIANNE GERMAIN, BEN GOERTZEN, MARTHA GOERTZEN,
PETER GRABOSKI, FRANK GRAF, GARY H. GRUETER,
DAVID R. HACKETT, ERIC. R. HARRISON, KENNETH ALLAN HAY,
JOHN A. HIGGINS, GEOFFREY HILLIARD, WILLIAM JOHNSON,
PETER LEGER, EDNA L. LINDAL, ROBERT LINDAL,
WAYNE GARRY MARTIN, ED MACINTOSH, ROBERT MCGINN,
TERENCE MEADOWS, ROBERT NABER, EDITH NELSON,
GARTH L. NELSON, GLENN PARKER, JOAN L. PARSONS,
HELEN PARSONS, DANNY PAWLACHUK, JOSEPH PENNIMPEDE,
IRENE PENNIMPEDE, BRENDA QUATTRIN, GARRY REIMER,
NEIL REINHART, GLEN ROBBINS, LUC ROBERGE, JOAN ELLEN SABOURIN,
PAUL WYATT SABOURIN, MARK SAMPSON, SUSAN SCOTT, PHILIP SCOTT,
MICHAEL SLADE, KAZIK SMILOWSKI, FRANCES SMILOWSKI,
CANDICE STANFIELD, SEONA STEPHEN, JOHN G. STEPHEN,
GREGORY STEVENS, JENNIFER STEVENS, ROGER S. STOGRE,
BRIAN E. STOUTENBURG, LESLEY SUGGITT, JAMES H. SUGGITT,
SCOTT THOMSON, ALLAN TOLSMA, TOM TOLSMA, AGNES DOROTHY TOLSMA,
ANDREW TROJNER, MARY TROJNER, JIM R. TROJNER,
GEORGE H. WADSWORTH, SHARON WADSWORTH, GLENYS WHELAN,
EARL WILKES, DAVID J. WILLIAMS, MILDRED WILLIAMSON,
KERRY WILSON, HARVEY YARN, DAVID ZEVICK, PREBEN ANDERSEN,
DANIEL M. ARRIGO, ROBERT P. BLAIR, STEPHEN P. BURKE,
BRENT CARLSON, FIONA DOUGLAS-CRAMPTON, HELEN FADDEN,
REID FREDERICK, EDGAR GIESBRECHT, JOHN GORDON,
GARY HAMMER, JOHN F. HEATHE, JUDITH A. KOSTUK,
RON A. KROWCHUK, LARRY LEDOUX, PENNY LEDOUX,
ERNEST REIMER, LAURIE REIMER, MAXWELL THOMPSON
and
THE MINISTER OF NATIONAL REVENUE
ASSESSMENT OF COSTS - REASONS
Assessment Officer
[1] This application for judicial review, addressing a request by the Respondent for audit information asserted by the Applicants to actually be for criminal investigation purposes, was granted with costs against the Respondent. I issued a timetable for written disposition of the assessment of the Applicants' bill of costs.
[2] The Respondent objected to the 6 units ($120.00 per unit) claimed under counsel fee item 4 for two motions to consolidate as the resultant orders were silent on costs. The Applicants did not address this in rebuttal. In any event, I disallow the 6 units further to my conclusions in Balisky v. Canada (Minister of Natural Resources), [2004] F.C.J. No. 536 (A.O.) at para. [6] and Aird v. Country Park Village Properties (Mainland) Ltd., [2005] F.C.J. No. 1426 (A.O.) at para. [10]. The Respondent's only other objection addressed the claim for 223 units under item 1 (preparation and filing of originating documents and application records / available range 4-7 units). The remaining fee items not in issue are only claimed once for the Applicants as a whole.
[3] Court file T-1554-02 was instituted in the name of Hugh Stanfield (the Stanfield Applicant) only. However, many other individuals had brought similar applications for judicial review. The Stanfield Applicant moved the Court, counsel for the Respondent consenting, for an order consolidating certain of said applications (96) with court file T-1554-02 on the grounds that they all sought similar relief, all involved substantially similar evidence, the outcome in court file T-1554-02 would likely resolve said applications and such consolidation would promote expeditious and inexpensive resolutions by avoiding a multiplicity of proceedings. On November 14, 2002, the Prothonotary, John A. Hargrave (the Prothonotary) ordered (the 1st Order) that:
The matters in Schedule "A", which Schedule is attached, are now consolidated, to be heard together, or one following the other as the hearing judge may determine.
All filing shall now to be in this file, T-1554-02. Filings to date in the Schedule "A" proceedings are now deemed to have been made in this file, T-1554-02.
A copy of this Order shall go into each Schedule "A" file.
The style of cause shall now be that set out above.
Subsequently, the Applicants moved the Court, counsel for the Respondent consenting, for similar relief relative to an additional nineteen of said applications. On January 28, 2003, the Prothonotary ordered (the 2nd Order) that:
The matters in Schedule "A" above are now consolidated into this proceeding, T-1554-02, to be heard together, or one following the other as the hearing judge may decide.
All filings shall be in this file, T-1554-02, which is to have the style of cause set out above.
For the sake of good order a copy of this order to go into each Schedule "A" file.
Subsequently, a number of Applicants discontinued their respective proceedings. The remaining Applicants claim the maximum 7 units under item 1 for the Stanfield Applicant and 50 percent (to reflect the volume of work particular to each Applicant before consolidation, but recognizing that, after consolidation, only a single set of work occurred for the Applicants as a whole) of the minimum 4 units under item 1 for each of 108 other Applicants all for a total of 223 units ($26,760.00 + tax).
I. The Applicants' Position
[4] The Applicants asserted that the Respondent, further to concerns about alleged tax loss arrangements associated with currency and commodity transactions, sent to each Applicant a demand for information in the form of a questionnaire under cover of a letter stating that, although "a criminal investigation regarding the promotion of transactions of the type claimed on your income tax return" was underway, you "are not under investigation at the present time but we wish to advise you that any information submitted may be provided to our Investigations Division for review." As they were concerned that this information would be used to further criminal investigation of each of them, each Applicant brought an application for judicial review. The resultant judgment quashed the letters and prohibited the Respondent from bringing process against the Applicants for failing to respond to the letters.
[5] The Applicants argued further to Rules 409 and 400(3)(a) (result), (c) (importance and complexity of the issues), (g) (amount of work) and (h) (the public interest) that their costs as claimed should be allowed. The decision here, the first to consider the scope and application of Supreme Court of Canada case law on the line between a tax audit and a criminal investigation relative to information sought from a taxpayer, was of public interest. The Tariff permits recovery of less than 20 percent of the actual cost for the considerable work, confirmed in the record, required of counsel. The individual proceedings above consolidated in court file T-1554-02 were not stayed and each initially required work within the meaning of item 1 and particular to the respective circumstances of each Applicant instituting legal proceedings to preserve the right against self-incrimination.
[6] The Applicants argued that the Respondent's position, i.e. that only 7 units are allowable for item 1, is prejudicial to those Applicants additional to the Stanfield Applicant because it precludes their costs associated with real and considerable work. This acts as a disincentive and is inconsistent with the purpose of consolidation of proceedings, i.e. more expeditious and efficient dispositions. Successful litigants, who already have an award of costs, should not have to incur additional costs for applications under Rule 400(4) (lump sum) or 400(3)(l) (directions for multiple sets of costs). As well, Rule 400(3)(l) does not apply here because the Applicants had a common solicitor and did not separate their positions unnecessarily. The record refutes the Respondent's assertion that most of the work under item 1 was concentrated on the Applicants' Record, which included a Memorandum of Fact and Law, only one of which was filed.
II. The Respondent's Position
[7] The Respondent asserted that the issue in this litigation, i.e. whether the predominant purpose of the letters was audit or criminal investigation, was not complex, was based on settled law and, although important to the Applicants, had no wider application. Party and party costs under the Tariff permit only partial indemnity. The Applicants did not, as they could have, apply for directions for full indemnity via a lump sum under Rule 400(4) or multiple sets of costs under Rule 400(3)(l), and cannot purport to do so now in the guise of an assessment of costs: see Astrazeneca A.B. v. Novopharm Ltd., [2004] F.C.J. No. 1196 (A.O.). The Respondent agreed to the maximum 7 units permitted for item 1, but argued that, in the absence of directions from the Court, there is no discretion to exceed that amount.
[8] The Respondent argued that the Applicants' submissions concede, by agreeing that item 1 addresses the drafting, service and filing of the supporting materials additional to the instituting document, that item 1 can only be allowed once in a proceeding regardless of the number of originating documents therein. As there was only one judgment in one proceeding, the Applicants cannot claim anything beyond the 7 units conceded above. Further, the additional 216 units are excessive in that most of the work addressed the Application Record, only one of which, containing the Memorandum of Fact and Law, was prepared and filed for the Applicants as a whole.
III. Assessment
[9] I accept the Applicants' evidence that, for each person, a discrete institution and preparation of a supporting affidavit particular to each necessarily occurred. I agree with the Respondent that, absent directions otherwise, I cannot exceed the maximum 7 units. However, I concluded at para. [7] in Starlight v. Canada, [2001] F.C.J. No. 1376 (A.O.) that the same point in the ranges throughout the Tariff need not be used, as each item for the services of counsel is discrete and must be considered in its own circumstances. As well, broad distinctions may be required between an upper versus lower allowance from available ranges. These propositions could be relevant if the judgment for costs here could be said to apply to those Applicants' files, i.e. a discrete finding for each in turn additional to that for the Stanfield Applicant.
[10] A noticeable difference between the 1st Order and the 2nd Order is the provision in the former that filings to date in the other court files are now deemed to have been made in court file T-1554-02. That provision on its face did not suggest that costs of the Applicants, other than the Stanfield Applicant, associated with work under item 1, i.e. to meet individually with counsel to convey instructions to institute an application for judicial review and for counsel to carry out said instructions, were somehow subsumed in and confined to the limits of a single potential award of costs specific to the Stanfield Applicant. It did not suggest that said Applicants, other than the Stanfield Applicant, would be entitled to multiple sets of costs, i.e. an item 1 fee for each Applicant.
[11] I do think that, although the respective filings of each Applicant were consolidated in this single court file T-1554-02, their respective interests remained independent of one another (some common surnames indicate possible husband and wife scenarios, however). That is, although the single hearing and outcome could be determinative for all, the underlying transactions resulting in the respective court files for each in turn were discrete factual situations. Paragraph [6] of the decision (dated July 21, 2005), noting the Applicants' agreement to use the Stanfield Applicant's situation as an example of the transactions engaged in by each Applicant, reinforces my view of certain circumstances common for all of the Applicants, but certain other circumstances particular to each Applicant. As well, paragraphs [8] and [9] indicate the Respondent's interest relative to the Applicants extended to multiple tax avoidance schemes of various promoters from several areas of Canada. It is highly unlikely that Greta Anderson, as a random example, would ordinarily have agreed to sit in the same room with Donald Apolczer, another random example, to lay bare to their common counsel the full details of her particular transactions within the meaning of solicitor-client privilege. I therefore conclude that, regardless of the circumstances of common counsel, each Applicant reasonably and necessarily incurred item 1 costs particular to each, at least in terms of the preparation of the respective instituting document and affidavit for each. However, it seems clear that any work on the Application Record with particular regard here to the Memorandum of Fact and Law was a single endeavour common to all Applicants.
[12] I conclude that the 1st Order, which along with the 2nd Order formed part of the Application Record before the hearing judge, subsumed the respective court files within T-1554-02, but did not order them out of existence. Rather, each was deemed to have existed to date in court file T-1554-02. Presumably, common filings and events would subsequently dispose of each matter. That did not preclude filings particular to each and excluding the interest of all other Applicants, i.e. the respective notices of discontinuance filed subsequent to the 1st Order and the 2nd Order by seven Applicants. Each Applicant had already incurred costs within the meaning of item 1 independent of one another. The 1st Order brought them within the confines of court file T-1554-02 and by extension within the confines of its judgment which did not distinguish between the Stanfield Applicant and the other Applicants. That judgment was silent on restrictions to costs and silent on multiple sets of costs, i.e. whether to allow or prohibit them. It did not, and could not purport to do so, act as if in appeal of the 1st Order by varying or vacating the latter's terms. The 1st Order did not, as it could have, specify that the costs of all Applicants additional to those of the Stanfield Applicant were somehow precluded, superseded or restricted by the potential event particular to the Stanfield Applicant or that the only costs available for the proceeding as a whole would be those of the Stanfield Applicant. That left the hearing judge unfettered as to costs of the proceeding. By virtue of the 1st Order, the hearing judge was not to be seized of only one matter, i.e. that of the Stanfield Applicant, but many matters, i.e. those of the Stanfield Applicant plus the other Applicants. By virtue of the 1st Order, the hearing judge's decision applied to all. It follows, I think, that its provisions for costs apply to all Applicants given the absence of restrictive language.
[13] Accordingly, each is entitled to a discrete item 1 allowance. Given a common record and hearing, I do not think that the item 1 allowance for each Applicant can be set in a vacuum without regard to the overlying circumstances of certain common interests. However, in my view, that is resolved in the voluntary reductions in the bill of costs as presented. The record confirms that, after consolidation, no work occurred within the parameters of the judgment for costs that would entitle the Applicants to multiples of other fee items, in the manner here for item 1, such as item 14(a) (attendance by counsel at the hearing of the judicial review).
[14] The absence in the 2nd Order of deeming language comparable to that in the 1st Order is of concern. However, there is not any indication in the judgment or in the 2nd Order that the second set of consolidated Applicants were to receive considerations different from those for the first set of Applicants (the 1st Order). I allow the item 1 claim as presented at 223 units. The Applicants' bill of costs, presented at $62,728.92, is assessed and allowed at $61,904.52.
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET: T-1554-02
STYLE OF CAUSE: HUGH STANFIELD et al. v. MNR
ASSESSMENT OF COSTS IN WRITING WITHOUT PERSONAL APPEARANCE OF THE PARTIES
REASONS FOR ASSESSMENT OF COSTS: CHARLES E. STINSON
WRITTEN REPRESENTATIONS BY:
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Ms. Elizabeth A. Junkin
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Mr. Robert Carvalho
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SOLICITORS OF RECORD:
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McCarthy Tétrault LLP Vancouver, BC
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John H. Sims, Q.C. Deputy Attorney General of Canada
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