Food City Limited (Appellant)
v.
Minister of National Revenue (Respondent)
Trial Division, Kerr J.—Ottawa, November 17
and 30, 1972.
Costs—Taxation—Practice—Order for lump sum—Feder-
al Court Rules 344, 346.
APPLICATION.
David French for appellant.
M. J. Bonner for respondent.
KERR J.—Two appeals herein by the said
appellant against assessments of income tax
were heard by the Exchequer Court of Canada,
and by a judgment of that Court rendered on
May 21, 1971, the appeals were allowed and the
assessments in issue were referred back to the
respondent for re-assessment; and the judgment
awarded costs of the appeals to the appellant, to
be taxed.
Now the appellant applies for an order under
this Court's Rule 344 directing that the costs be
paid to the appellant in each of the actions in
lump sums, and for an order that the time to
apply under Rule 344(7) be extended for that
purpose.
Rule 344(1) and (7) are as follows:
Rule 344. (1) The costs of and incidental to all proceed
ings in the Court shall be in the discretion of the Court and
shall follow the event unless otherwise ordered. Without
limiting the foregoing, the Court may direct the payment of
a fixed or lump sum in lieu of taxed costs.
(7) Any party may
(a) after judgment has been pronounced, within the time
allowed by Rule 337(5) to move the Court to reconsider
the pronouncement, or
(b) after the Court has reached a conclusion as to the
judgment to be pronounced, at the time of the return of
the motion for judgment,
whether or not the judgment includes any order concerning
costs, move the Court to make any special direction con
cerning costs contemplated by this Rule, including any
direction contemplated by Tariff B, and to decide any
question as to the application of any of the provisions in
Rule 346. An application under this paragraph in the Court
of Appeal shall be made before the Chief Justice or a judge
nominated by him but either party may apply to a Court
composed of at least 3 judges to review a decision so
obtained.
On the hearing of the application counsel for
the respondent opposed the requested extension
of time and submitted also that the costs should
be taxed in the usual manner pursuant to Rule
346 rather than by direction of the Court in a
lump sum. Rule 346(1) and (2) read as follows:
Rule 346. (1) All costs between party and party shall be
as determined by, or pursuant to, the Court's judgment and
directions and, subject thereto, Tariff B in the Appendix to
these Rules and this Rule are applicable to the taxation of
party and party costs.
(2) Costs shall be taxed by
(a) a prothonotary, each of whom is a taxing officer, or
(b) an officer of the Registry designated by order of the
Court as a taxing officer,
subject to review by the Court upon the application of any
party dissatisfied with such a taxation.
The judgment of the Exchequer Court was
rendered only a few days before the Federal
Court Act and the Rules of this Court came into
force. The new tariffs of costs prescribed by
those Rules are different from the tariffs of the
Exchequer Court, and it was held by the Associ
ate Chief Justice in his reasons for judgment, in
National Capital Commission v. Bourque [1971]
F.C. 133, that the new tariffs shall apply to
costs incurred before, as well as after they came
into force, when they have not been taxed
before the new tariffs came into force, and he
pointed out that this does not mean that an
applicant must be content with the new tariffs,
for it is possible under section 3 of Tariff B to
have the amounts of the tariff increased by
direction of the Court under Rule 344(7), ante.
Tariff B, section 3, is as follows:
3. No amounts other than those set out above shall be
allowed on a party and party taxation, but any of the above
amounts may be increased or decreased by direction of the
Court in the judgment for costs or under Rule 344(7).
It does not appear to me that the respondent
has been prejudiced by the appellant's delay in
moving to have its costs taxed or to obtain a
direction by the Court for payment of a lump
sum in lieu of taxed costs. The application to
direct payment of a lump sum is before the
Court and the merits respecting the amount of
costs have been spoken to, and in all the cir
cumstances I will determine the amount of costs
now rather than put the parties to taxation with
its possibility that the matter would come before
the Court again for review in the event of dis
satisfaction with the taxation, although I think
that where a judgment provides for costs to be
taxed the procedure for taxing under Rule 346
should normally be followed, in the absence of
circumstances warranting a special direction
concerning costs under Rule 344(7).
The appellant is a wholly-owned subsidiary of
Sobeys Stores Limited, which has developed an
extensive chain of stores and shopping centres
in the Maritime Provinces, in the course of
which numerous sites have been acquired and
developed, and some have been sold, including
the two properties concerned in these appeals.
The appellant's solicitors considered it neces
sary in the appeals to deal with the inter-corpo
rate relationships of the appellant and its parent
company and affiliates, and their real estate
transactions, as the result of those appeals
might also affect other land transactions income
tax-wise. The two appeals were heard on
common evidence. The trial lasted 2 days. The
appellant was represented by two counsel. Pre
viously, there had been a common discovery
lasting 2 to 3 hours. The affidavit in support of
this application stated that approximately 20
hours were spent in preparation for the discov
ery and an additional 15 hours in providing
answers to questions for which counsel for the
respondent required undertakings, and that the
time spent directly in preparation for the trial
was in excess of 130 hours. The assessments in
issue in the appeals were in respect of profits of
$23,000 realized on the sale of one property and
$28,000 realized on the sale of another. The
affidavit indicated disbursements incurred in the
amount of $163.45. The bills of costs submitted
by the appellant amounted to $1,221.95 in one
of the appeals, and $1,171.50 in the other. It is
understandable that the appellant's solicitors
and counsel would consider it necessary to have
regard for the implications of the appeals on
other real estate sales of the companies, and
would prepare for the appeals with that in mind,
but I do not think that more than the costs
prescribed in Tariff B is warranted. I think that
an appropriate amount of costs on a party and
party basis for services of solicitors and counsel
for the appellant, and the said disbursements,
would be in the order of $1,200.00 in total for
the two appeals, treating the appeals as Class II
cases.
The Court therefore directs that the respond
ent pay the appellant a fixed or lump sum total
of $1,200.00 in lieu of taxed costs in these
appeals.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.