http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/110340/index.do 
Repsol Canada Ltd. v. The Queen (June 19, 2015 – 2015 TCC 154, C. Miller J.).
Précis: The taxpayer was completely successful in a decision blogged earlier on this site and had made a settlement offer which the Crown had refused (and which was more favourable to the Crown than the ultimate result):
[3] The issues in this case concerned the tax treatment of capital invested in a Liquid Natural Gas (“LNG”) terminal (the “Terminal”), including a jetty (the “Jetty”), in New Brunswick in the years 2005 to 2007; specifically, whether the Terminal and Jetty fell into Class 1 and Class 3 respectively for Capital Cost Allowance (“CCA”) purposes, and consequently not qualify for Investment Tax Credits (“ITCs”), or whether the assets fell into Class 43 and did qualify for ITCs. The trial was heard over three days in late October 2014 and I awarded judgment in favour of the Appellants on January 27, 2015.
[4] The Appellants were completely successful obtaining a more favourable judgment than contained in the Settlement Offer.
The Court allowed the taxpayer 80% of post-settlement offer costs, 50% of pre-settlement offer costs, almost all of the disbursements claimed and 80% of the costs on the costs hearing (plus disbursements on the hearing which the Court urged the parties to agree upon).
Decision: The Court reviewed the various salient facts in costs awards in excess of the Tariff and concluded that they all favoured the taxpayer:
[13] I turn now to the factors set out in Rule 147(3) of the Rules.
(a) Result
The Appellants were entirely successful in their Appeals.
(b) Amounts in issue
The Parties estimate the amount in issue in the $38,000,000 to $50,000,000 plus range. The Respondent suggests this is a neutral factor as it is incumbent on the Crown to protect the Canadian tax base and therefore pursue these assessments. While I do not dispute the Crown’s role, I do find the amount is significant and its importance is not outweighed by the Crown’s role.
(c) Importance of issues
The Crown argues the issues were of neutral importance only. The Appellants maintained the case is a classic illustration of the use of “textual, contextual and purposive interpretation to solve a complex interpretative problem” and such issues will become increasingly important, as will interpreting Court of Appeal decisions that pre date regulatory amendments. I do not find the Appellants’ general observations in this regard elevate the issues in this case to such importance that justifies increased costs. It is the role of our Court to interpret complex legislation – nothing extraordinarily important in that regard.
(d) Offer of settlement
This factor obviously came into play in the award of substantial indemnity costs for the post-Settlement Offer period; its importance rests there.
(e) Volume of work
The Appellants’ legal team recorded 1,855 hours for the 30 month period this matter was in litigation, while the Respondent recorded 1,035 hours. The Respondent simply states that volume of work by Appellants’ counsel is, in comparison, not reasonable for the conduct of a three-day trial. I do not share the Respondent’s view. It is easy to accuse an opponent of spending too much time on a file, but several factors should be considered before such a hasty criticism: the amount at issue was significant, the litigation covered 30 months, the onus was on the Appellants, the facts were complicated, experts were necessarily consulted though ultimately not called, economic policy and legislative history was researched, the provisions and regulations were complex, the clients were international. Factoring all these matters together and starting from a premise that reputable law firms serve their clients not just with diligence but with integrity, I conclude the volume of work in this matter was justified and was significant and thus favours some enhanced award.
(f) Complexity of issues
The facts were complex, including the technical construction and operation of the facility as well as the numerous commercial agreements documenting the arrangement. The legislation likewise was complex as was its development through a review of economic policy and legislative history. The argument was extensive. This favours some enhanced award.
(g) Conduct of Party re: shortening or lengthening trial
The Appellants rely on the weight put on this factor in the case of Dickie where Justice Pizzitelli concluded:
I do however also agree with the Appellant that having regard to the clear wording and intention of the Supreme Court of Canada’s decisions effectively reducing the importance of the commercial mainstream factor, if not obliterating it, that the Respondent could have shortened the proceeding by conceding this fact before trial.
The Appellants argue that I am faced with a similar situation in that they provided to the Respondent long before trial a research summary “in an attempt to persuade the Respondent that it was not necessary to put the processing issue before the Tax Court of Canada”. I do not see the Appellants’ position as being as strong as in the Dickie matter. Just because an argument is successful at trial does not mean the other side should have conceded it ahead of time. This was not a lengthy trial and the Respondent obviously made the decision that the processing issue deserved argument at trial, especially in light of the Federal Court of Appeal cases cited. I do not put this in the “myopic, speculative and obdurate” behaviour the Appellants suggest I should. This factor has little sway on costs.
(h) Improper, vexatious and unnecessary conduct
The Appellants raised several areas where they submit the Crown took unnecessary steps requiring the Appellants to expend significant amounts of time and money. Those actions were:
i. List of documents: The Crown initially provided a list of 217 documents. Just prior to examinations, counsel was asked if it was necessary for discoveries with respect to all such documents. The Crown eliminated 125 of the documents – nothing vexatious there.
ii. Agreed statement of facts: Without going into all the detail and back and forth between the Parties and the ultimately unsuccessful attempts to provide an agreed statement of facts, my impression is that efforts were made by both sides and no one side is so much more blameworthy in the failure as to conclude that that side acted improperly or vexatiously. It struck me more as the usual thrust and parry of litigation.
iii. Notice under section 30 of the Evidence Act: Seven days before trial, the Crown served the Appellants with a Notice of Production of a 960 page document entitled “Environmental Impact Statement – Liquid Natural Gas Marine Terminal and Multipurpose Pier”. The Appellants claim considerable time was spent before trial to prepare for the introduction of this evidence, while the Crown chose not to introduce it at trial. The Respondent simply states the rules of evidence permit a party to give such notice with no obligation that the documents be effectively entered into evidence. True, but if the Crown knew before trial that she was not going to enter this tome, she might have notified the Appellants. To complain on one hand that the Appellants spent too much time on the file and at the same time presenting a 1000 page report just before trial suggesting it would be introduced as evidence, and then not introducing it is, to be kind, contradictory.
iv. Joint Book of Documents: The day prior to the commencement of trial, I held a hearing to address several procedural matters. One such matter was the production of a Joint Book of Documents, which I understood had been contemplated and drafts of such prepared by the Crown. The Crown, however, was unable to reproduce the Joint Book and it fell to the Appellants to do so. Again, I would not classify this as vexatious behaviour though I would agree with the Appellants it put a heavier burden on them.
In summary on this factor, I disagree with the Appellants’ characterization of the nature of the Respondent’s behaviour, though I recognize the latter two steps created some additional headaches, if you will, for the Appellants and I do take that into account in my estimate. I note though that these steps were during the post Settlement Offer period which is already being compensated at 80% of solicitor-client costs.
In what may be a somewhat novel aspect of this decision the Court awarded the taxpayer 80% of its costs plus disbursements on the costs motion itself:
(ii) Does Rule 147(3.1) of the Rules extend to this costs application?
[9] I see no reason why it would not, given the wording of the Rule is simply substantial indemnity costs after the date of the Settlement Offer: it does not limit those costs to the date of judgment. The 80%, I find, applies to the costs of this Motion.
As a result the Court gave the taxpayer 80% of its post-settlement offer costs, 50% of its pre-settlement offer costs, almost all of the disbursements claimed and 80% of the costs incurred on the costs motion (plus disbursements which the Court urged the parties to agree upon).