Tax Court of Canada Judgments

Docket: 98-687(IT)G

BETWEEN:

ATCON CONSTRUCTION INC.,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

____________________________________________________________________

Dealt in writing without appearance of parties
By:               The Honourable Gerald J. Rip
Written Representations by:
Counsel for the Appellant:	D. Andrew Rouse
Counsel for the Respondent:	John P. Bodurtha

____________________________________________________________________

ORDER

          Upon application for extension of time to request directions be given to the Taxing Officer with respect to the appellant's successful appeal, judgment of which is dated March 30, 2000;

          The application is dismissed with costs.

Signed at Ottawa, Canada this 26th day of March 2003.

J.T.C.C.

Citation: 2003TCC174

Date: 20030326

Docket: 98-687(IT)G

BETWEEN:

ATCON CONSTRUCTION INC.,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR DENIAL OF APPELLANT'S

APPLICATION FOR EXTENSION OF TIME TO

REQUEST DIRECTIONS BE GIVEN TO TAXING OFFICER

Rip, J.

[1]      Atcon Construction Inc., ("Atcon" or "appellant") has applied to this Court for an extension of time to request directions be given to the Taxing Officer with respect to the appellant's successful appeal, judgment of which is dated March 30, 2000. The respondent's appeal of the judgment of this Court to the Federal Court of Appeal was dismissed with costs awarded to Atcon.

[2]      Atcon made an offer to settle the appeal to this Court on March 14, 2000. The offer was rejected by the respondent on March 16, 2000. The appellant's settlement offer was more favourable to the respondent than the relief granted by the Court. Apparently, the settlement offer was for an investment tax credit of 15 per cent of the purchase price of two drills, and this Court was of the view the appellant was entitled to an investment tax credit of 30 per cent.

[3]      The appellant filed its Bill of Costs with this Court on May 24, 2002 and requested that its costs be increased as a result of the respondent's failure to accept its offer to settle.

[4]      The appellant alleges that Atcon agreed with the Canada Customs and Revenue Agency ("CCRA") to postpone any reassessment resulting from this Court's decision pending the judgment of the Federal Court of Appeal. Accordingly, Atcon says it did not pursue its costs at that time; the appellant's solicitor did not realize that it had only 30 days from the date of the judgment to request directions be given to the Taxing Officer "as its solicitor intended on arguing this point when Acton has its costs assessed if agreement could not be reached between the parties": subsection 147(7) of the Tax Court of Canada Rules (General Procedure) ("Rules").[1] The respondent, argues the appellant, has not, and will not, suffer any prejudice as a result of Atcon's failure to apply on time for directions to the Taxing Officer.

[5]      However, the respondent's position is that on May 10, 2000, an officer of the respondent wrote to the appellant advising the appellant "to consider providing a written direction to postpone any reassessment until the Federal Court of Appeal had rendered a final decision". The respondent asked for a reply within 30 days. The respondent states it did not receive a response but on or about August 2001, "a representative of the Applicant contacted the CCRA requesting the CCRA to reassess in accordance with" this Court's decision. The respondent claims it did suffer prejudice from the failure of the appellant to apply to this Court for an increase in costs within the time limit imposed by subsection 147(7) of the Rules.

[6]      Appellant's counsel raises two issues:

1) Whether the Court should allow the appellant an extension of time to request direction be given to the Taxing Officer.

2) Whether the appellant's costs should be increased as a result of the respondent's failure to accept a settlement offer which was more favourable to the respondent than the relief granted by the Court.

Issue 1 - Extension of Time to Request Direction be given to Taxing Officer

[7]      The appellant applies for an extension of time to request direction be given to Taxing Officer from the due date of April 29, 2000 to October 25, 2002 under subsection 147(7) of the Rules.

[8]      In support of its application, the appellant cited the cases of Smerchanski v. M.N.R.,[2] Spur Oil Limited v. The Queen,[3] Bayliner Marine Corp. v. Doral Boats Ltd.[4] and Carruthers v. The Queen[5] as authority for the Court to exercise its discretion in granting the extension.

[9]      Smerchanski provides the rationale behind the time limit to request the Court to give directions to a Taxing Officer as essentially that the matter should be "... sufficiently fresh in the mind of the Court that the Court is in a position to appreciate whether there were present in the particular case circumstances justifying a departure from the normal tariff amounts...".[6]

[10]     In Spur Oil, the Court granted an extension because of "...the intervention of Long Vacation and the application for leave to appeal to the Supreme Court..."[7] In Bayliner, the Court granted an extension because there was no prejudice to the other party, the matters were complex and there were a number of matters to which the defendant sought special costs. In Carruthers, the Court granted the extension finding that the time requirement should be liberally interpreted and it would be inequitable and contrary to normal practice not to make such a direction. Underlining the judgment in Carruthers was the Court's apparent disapproval of the defendant's failure to consent to the payment of the plaintiff's costs, which resulted in the plaintiff having to make the application of costs.[8]

[11]     The appellant also cited Riello Canada, Inc. v. Lambert,[9] Kastner v. Painblanc[10] and Eli Lilly and Co. v. Novopharm Ltd.[11] The respondent argued, and I agree, that these cases do not apply to the facts at bar. In Riello the appellant was a self-represented party, in Kastner the delay was just over two months and the respondent conceded that it suffered no prejudice and in Eli Lilly the Court allowed more flexibility because new rules had come into effect shortly before the motion was filed.

[12]     The respondent relied on R. v. Ontario Development Corp.[12] and Maytag Corp. v. Whirlpool Corp.[13] as authority for the Court to refuse to grant the extension.

[13]     In Ontario Development, the plaintiff applied for an extension of time under paragraph 344(7)(a) of the Rules, 25 months after the trial and three months after the appeal. The plaintiff cited unfamiliarity with the Rules as the reason for not making the application for increased costs within the deadline. Heald J.A., disallowed the plaintiff's request for an extension, stating:

. . . In my view, the fact that counsel was not familiar with the Rules of this Court regarding costs is not a satisfactory basis for seeking an extension. Under Rule 344(7) prior to April 2, 1987, the time within which an application for increased costs could be made was only ten days. That period was found, through experience, to be unrealistically short. The 1987 amendments extended that time to 30 days. It seems to me that a 30-day time period is realistic and reasonable. Parties to litigation, particularly at the appellate level, have a right to expect some degree of finality to the proceedings in cases such as this where there has been no indication that the matter is to proceed further. There are no special extenuating circumstances in this case that would warrant an extension of the time provided in the Rules from 30 days to approximately 100 days. If this respondent is entitled, in the circumstances outlined herein, to an extension amounting to more than three times the period set out in the Rules, it would be difficult to think of a case where such an application could be refused. An extension in these circumstances would be tantamount to amending Rule 344(7)(a).[14]

[14]     In Maytag, the applicant did not file a motion for an extension until two years after the Federal Court of Appeal rendered its decision in favour of the applicant. The applicant's reason for its delay was that it did not know whether the Supreme Court of Canada would hear the other party's appeal and if so, what the outcome would be. There was also no indication that the applicant was entertaining an application to increase its award of costs. The Federal Court of Appeal found that there was no justification for the two year delay in making the application and denied the applicant its request for an extension of time to file the motion requesting additional costs.

[15]     In Rosen v. Canada,[15] the appellant filed a notice of motion for an extension to bring a motion for reconsideration. Although the subject matter of the motion in Rosen is not the same as the subject matter of the motion in the present case, the Federal Court of Appeal stated the factors to consider in granting an extension of time as follows:

The normal factors in support of such a motion namely the intention to take proceedings within the prescribed time limits, the existence of an arguable case, the cause and actual length of the delay and whether there was prejudice caused by the delay...[16]

[16]     The appellant's reasons for not filing its application within the prescribed period are principally that its solicitor was not familiar with the Rules and was waiting for the Federal Court of Appeal's decision. The appellant also submits that it had an agreement with the respondent not to be reassessed until the Federal Court of Appeal's decision.

[17]     The Federal Court of Appeal clearly stated in Ontario Development and Maytag that unfamiliarity with the Rules and an appeal to a higher court are not sufficient reasons to warrant an extension of time. There is no provision in the Rules which states that the time limits to file an application do not apply in the event that a party appeals to a higher court. It is also irrelevant whether the respondent agreed not to reassess the appellant until after the Court of Appeal's decision as this has no bearing on costs.

[18]     The appellant has not produced a just reason for failing to comply with the Rules. This is not a case where the request for costs is complicated, the appellant had experienced counsel, the Rules were not new at the time of the Court's judgment, there is no evidence that the appellant intended to file its application on time and the respondent has not conceded that she will not be prejudiced by the granting of the extension.

[19]     The appellant's application for extension of time to request directions be given to the Taxing Officer is dismissed with costs. There is no need, therefore, to rule on the second issue.

Signed at Ottawa, Canada, this 26th day of March 2003.

"Gerald J. Rip"

J.T.C.C.

CITATION:

2003TCC174

COURT FILE NO.:

98-687(IT)G

STYLE OF CAUSE:

Atcon Construction Inc. and           Her Majesty the Queen

DEALT WITH IN WRITING WITHOUT APPEARANCE OF PARTIES

REASONS FOR DISMISSAL OF APPLICATION:

Gerald J. Rip

DATED:

March 26, 2003

WRITTEN REPRESENTATIONS BY:

D. Andrew Rouse

For the Appellant

John P. Bodurtha

For the Respondent

SOLICITORS OF RECORD:

D. Andrew Rouse

Mockler Peters Oley

Rouse & Williams                                         For the Appellant

Morris Rosenberg

Deputy Attorney General of Canada

Ottawa, Ontario                                            For the Respondent

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