http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/107849/index.do 
Canada v. Diflorio (January 20, 2015 – 2015 FCA 11, Dawson, Stratas, Boivin (Author) JJA).
Précis: Mrs. Diflorio was assessed GST in the amount of $16,536.33 on the basis she was a partner in her husband’s illicit performance enhancing drug business. She won her informal procedure appeal in the Tax Court of Canada and she was awarded “actual costs incurred for counsel”. The Crown appealed the costs award. The Federal Court of appeal held that under 18.3009(1)(c)(i) of the
Tax Court of Canada Act, R.S.C. 1985, c. T-2 the Tax Court had no jurisdiction to award costs in an informal procedure GST appeal where the amount at issue exceeded $7,000.
Decision: The taxpayer’s husband had a business selling illegal performance enhancing drugs used in horse racing. CRA assessed both husband and wife for GST on the basis that they were partners in the business. Mrs. Diflorio launched an informal procedure appeal in the Tax Court, succeeded and was awarded costs:
[4] Concerned about the Tax Court’s jurisdiction to make a costs award, on March 12, 2014, the appellant (the Crown) sent a letter seeking reconsideration of the award of costs by the Tax Court. The Crown submitted that pursuant to subparagraph 18.3009(1)(c)(i) of the
Tax Court of Canada Act, R.S.C. 1985, c. T-2, cost awards may only be awarded in appeals under Part IX of the
Excise Tax Act in cases in which the amount in dispute does not exceed $7,000. The Crown therefore submitted that the amount in dispute was $16,536.33 and thus in excess of the $7,000 limitation.
[5] The Tax Court responded to the Crown’s letter and issued an amended judgment on April 22, 2014 replacing its judgment issued on March 5, 2014. In that amended decision, the Tax Court increased the costs to “actual costs incurred for counsel” (effectively solicitor and client costs) but provided no reasons.
The Crown appealed the costs award to the Federal Court of Appeal. The Court agreed with the Crown’s position:
[8] On this appeal, the respondent argued that the amount in dispute totalled less than $7,000. I cannot agree. Without doubt, as defined in paragraph 2.2(2)(c) of the
Tax Court of Canada Act and, on the basis of (i) the Notice of Appeal before the Tax Court (Appeal Book, vol. 1 at p. 38); (ii) the Crown’s reply to the Notice of Appeal (Appeal Book, vol. 1 at p. 45) and; (iii) the Tax Court’s reasons at paragraph 3, the amount in dispute in the appeal before the Tax Court was $16,536.33.
[9] After considering the parties’ submissions, I am of the view that the Tax Court acted without jurisdiction when it awarded costs in favour of the respondent. Our Court held in
Canada v. Moncton Computer Exchange Ltd., 2001 FCA 381, 284 N.R. 229 at paragraph 22 that subsection 18.3009(1) “must be read as limiting the jurisdiction of the Tax Court [of Canada] to award costs in any GST or GST/HST appeal under the informal procedure”. This provision clearly ousts the Tax Court’s discretion to award any costs at all in cases in which the amount in dispute exceeds $7,000, such as the present case. It follows that the Tax Court erred in law when it awarded costs.
The appeal was allowed but “in the unique circumstances of this case” each party was to bear their own costs [para. 10].