R. v. Dickie – FCA: Federal Court of Appeal sustains award of 60% of actual costs – appeal dismissed from the bench

Bill Innes on Current Tax Cases

http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/66806/index.do New Window

Canada v. Dickie[1] (February 12, 2014) is a consolidated appeal from a decision in the Tax Court on the merits:

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/30872/index.do New Window

and a costs award:

http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/30959/index.do New Window

The Tax Court found that Mr. Dickie’s sole proprietorship:

…  was not to be included in his income as determined for the purposes of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act) as a result of the provisions of paragraph 81(1)(a) of the Act and section 87 of the Indian Act, R.S.C. 1985, c.I-5 and from the order of Pizzitelli, J. (2012 TCC 327) awarding costs of $90,000 ($80,000 plus $10,000 in disbursements).   [Para. [1] of the Federal Court of Appeal reasons.]

It is noteworthy that the costs award represented 60% of the appellant’s costs computed on a solicitor and client basis.

The appeal was dismissed from the bench both on the merits and on the quantum of the costs award:

[4]               As noted by this Court in Horn v. The Queen, 2008 FCA 352, it is the role of the trial judge to assess the weight to be given to the various connecting factors in determining whether the exemption from taxation as provided in section 87 of the Indian Act will be applicable to any particular income. It is not the role of this Court, unless the trial Judge has committed a palpable and overriding error in assessing the factors or has committed an error of law, to substitute its view of the relative weight to be given to the various factors.

[5]               We have not been convinced that the Tax Court Judge committed any palpable and overriding error in assessing the factors. As a result the appeal from the decision of the Tax Court Judge that the income of Mr. Dickie from his sole proprietorship is not to be included in determining his income under the Act, will be dismissed.

[6]               With respect to the amount awarded for costs, section 147 of the Tax Court of Canada Rules (General Procedure) provides the Tax Court Judge with discretion to award an amount for costs and subsection 147(3) of these Rules sets out certain considerations that may be taken into account by the Court in exercising the discretion to award costs under section 147 of the Rules. The Tax Court Judge provided reasons to explain why the considerations would justify the costs that he awarded and we have not been convinced that the Tax Court Judge committed any error that would warrant our intervention in awarding costs of $90,000.

[7]               As a result these appeals will be dismissed, with one set of costs.

[1] 2014 FCA 40.