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Docket: 2002-4035(IT)G |
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BETWEEN: |
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R. DAREN BAXTER, |
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Appellant, |
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And |
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HER MAJESTY THE QUEEN, |
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Respondent. |
____________________________________________________________________
Continuation of telephone conference regarding costs
heard on November 30, 2006 at Ottawa, Canada
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By: The Honourable Justice R.D. Bell |
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Participants: |
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Counsel for the Appellant: |
Al Meghji Edwin C. Harris, Q.C. Ted Citrome |
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Counsel for the Respondent: |
John W. Smithers V. Lynn W. Gillis |
____________________________________________________________________
ORDER
Having read the written submissions of counsel respecting costs and having conducted two telephone conferences with counsel in discussion thereof, the Appellant is awarded costs in this appeal in the total amount of $526,181.47 made up as follows:
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Costs under Schedule II
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(a) |
Court fees - Service of Notice of Appeal |
$ 250.00
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(b) |
Legal fees computed under Schedule II, Tariff B |
$ 17,150.00
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(c) |
Court reporter charges and transcript costs |
$ 658.92 |
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(d) |
Transcripts of proceeding held at Tax Court of Canada |
$ 1,408.15
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(e) |
Expert costs |
$ 25,000.00 |
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(f) |
Expert witness costs and expenses |
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(i) Charles LeBeau |
$ 31,000.00 |
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(ii) Cole Valuation Partners Limited |
$366,000.00
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(g) |
Online database searches, courier services, telecopy charges, stationery charges, and printing/photocopying charges
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$ 4,930.55 |
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Total Costs under Schedule II |
$446,397.62 |
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Plus an additional amount, pursuant to section 147 of the Tax Court of Canada Rules (General Procedure) |
$ 50,000.00 |
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Total |
$ 496,397.62 |
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GST on Fees |
$ 4,044.00 |
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GST on Disbursements |
$ 25,739.85 |
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Total Costs |
$ 526,181.47 |
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Signed at Ottawa, Canada, this 30th day of November, 2006.
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"R.D. Bell" |
Bell, J.
BETWEEN:
and
REASONS FOR ORDER AS TO COSTS
[1] The Appellant appealed a reassessment raising six issues before the Court. On examination for discovery the Appellant learned that the Respondent had not made five assumptions of fact which were contained in the Respondent's Reply to the Notice of Appeal. The Respondent amended its Reply to include certain assumptions as allegations of fact. This resulted in the Respondent having the onus of proving that the Appellant was not at arm's length with the company from whom he purchased software licenses. He had not heard of that company, being Bermuda based until 10 days before his licenses purchase.
[2] The allegation of not being at arm's length required the Appellant not only to prepare his case in that regard but also to challenge the Respondent's claim that the fair market value of the license was virtually nil at the time of purchase.
[3] The Respondent also took the position that the Appellant was not carrying on the business of using the license but that his agent, not at arm's length with the license vendor, was carrying on business with that license on its own account.
[4] I found the not carrying on business argument to have absolutely no merit. I also found the non-arm's length argument absolutely without foundation. The Respondent's position in this regard required the Appellant to seek and present expert valuation evidence. This extended the hearing by about five days.
[5] The Appellant has appealed only two of the six issues, all of which were resolved by this Court in favour of the Appellant. The Respondent did not appeal the decisions respecting arm's length, fair market value and carrying on business.
[6] On the basis of the foregoing, under the provisions of section 147 of the General Procedure Rules, I have fixed an amount of costs, in addition to tariff costs, in the sum of $50,000.
Signed at Ottawa, Canada, this 30th day of November, 2006.
COURT FILE NO.: 2002-4035(IT)G
STYLE OF CAUSE: R. Daren Baxter v. The Queen
PLACE OF HEARING: Ottawa, Canada
DATE OF HEARING: November 30, 2006
REASONS FOR JUDGEMENT BY: The Honourable Justice R.D. Bell
DATE OF JUDGMENT: November 30, 2006
APPEARANCES:
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Al Meghji Edwin C. Harris, Q.C. Ted Citrome
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John W. Smithers V. Lynn W. Gillis |
COUNSEL OF RECORD:
Edwin C. Harris, Q.C.
Ted Citrome
Firm: Osler, Hoskin & Harcourt
For the Respondent: John H. Sims, Q.C.
Deputy Attorney General of Canada
Ottawa, Canada