Tax Court of Canada


Tax

Income tax

Administration and enforcement

Minister’s conduct unnecessarily lengthened proceedings, which supported enhanced award of costs

Minister of National Revenue assessed taxpayer, treating garage roof repairs as capital expenditures, not current expense. Minister refused taxpayer’s offer to settle. Taxpayer’s appeal was allowed. Taxpayer brought motion for costs of $200,000. Motion granted. Taxpayer was awarded lump sum of costs of $150,000. Taxpayer was entirely successful and obtained judgment more favourable than its offer to settle. Minister did not respond to taxpayer’s offer to settle and raised concern about potential for double deductions for first time in costs submissions. Taxpayer’s offer could be considered as factor in costs award, but it could not be considered within s. 147(3.1) of Tax Court of Canada Rules (General Procedure). Minister’s conduct unnecessarily lengthened proceedings, which supported enhanced award of costs. Portion of claimed costs and disbursements was incurred prior to filing of notice of appeal so they were denied. Five per cent administrative fee and professional fees for research and preparation of memo were denied. Taking into account taxpayer’s settlement offer and Minister’s conduct, and disallowed disbursements, lump sum award of $150,000 was justified.

Aon Inc. v. The Queen (2018), 2018 CarswellNat 3163, Diane Campbell J. (T.C.C. [General Procedure]); additional reasons (2017), 2017 CarswellNat 4242, 2017 TCC 166, Gaston Jorré J. (T.C.C. [General Procedure]).

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