If party could not legally accept offer then costs should not be imposed

COSTS

If party could not legally accept offer then costs should not be imposed

Taxpayer appealed assessment that denied deductions of share and cash bonuses. Appeal was allowed. Taxpayer made settlement offer, but Minister of National Revenue rejected offer. Taxpayer brought motion for substantial indemnity costs. Judge accepted submission that Minister was prevented from accepting settlement offer and that he did not need to provide reasons for refusal. Minister could not accept offer because of application of concept of legal disability. Taxpayer’s motion was dismissed. Taxpayer appealed. Appeal dismissed. Only offers that, as matter of law, could have been accepted could trigger costs consequences. If, due to legal disability, party could not accept offer then adverse costs consequences should not be imposed on that party. There was no principled basis on which Minister could have accepted that cash bonuses were non-deductible in exchange for treating share bonuses as deductible. Judge correctly ruled that Minister could not concede share bonus issue and that alone was sufficient to conclude that Crown could not accept settlement offer. Judge did not make reviewable error in concluding that Minister was justified in rejecting settlement offer. Judge did not err in law, fail to consider relevant factors, consider irrelevant factors or reach unreasonable conclusion. Judge exercised discretion appropriately.
Transalta Corp. v. R. (Dec. 6, 2013, F.C.A., Pierre Blais C.J., Eleanor R. Dawson J.A., and James W. O’Reilly J.A. (ex officio), File No. A-486-12) Decision at 221 A.C.W.S. (3d) 797 was affirmed.  234 A.C.W.S. (3d) 288.