Minister of National Revenue issued notices of determination indicating that two partnerships had nil business losses because they were not valid partnerships. Taxpayers, as designated partners of purported partnerships, appealed. Tax Court judge granted taxpayers’ applications pursuant to R. 58 of Tax Court of Canada Rules (General Procedure) to determine question regarding issuance of notice of determination. Parties made submissions on costs. Costs awarded to taxpayers. Taxpayers awarded 50 per cent of actual costs, totalling $66,592.75 plus disbursements of $735.95, with GST. Costs were awarded only in respect of applications under R. 58 of Rules, and not for entire appeal or for costs submissions. Taxpayers were entirely successful on applications, which was reason for costs, but not for higher award of costs. Factors in favour of higher award of costs included significant amount in issue, importance of issue to development of tax law, and complexity of issue. By bringing and successfully arguing application under R. 58 of Rules, taxpayers avoided lengthy trial and saved parties time and cost, which was factor in favour of higher costs. While taxpayers’ actual costs of $133,185.50 seemed high for 1.5 day motion, it did not seem out of line considering amount in issue and complexity of issue. Costs equal to 50 per cent of taxpayers’ actual costs were appropriate.
2078970 Ontario Inc., in its capacity as designated partner of Lux Operating Limited Partnership v. The Queen (2018), 2018 CarswellNat 6522, 2018 TCC 214, David E. Graham J. (T.C.C. [General Procedure]); additional reasons (2018), 2018 CarswellNat 3781, 2018 TCC 141, David E. Graham J. (T.C.C. [General Procedure]).
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