http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/100119/index.do 
Klemen v. The Queen (December 16, 2014 – 2014 TCC 369) was a decision on costs in two related appeals involving the same subject matter – one income tax appeal and one GST appeal. The appellant argued for $50,000 plus disbursements, which he claimed represented roughly 75% of his actual costs. The Crown argued for one set of Tariff B, Class B costs:
[3] The costs award sought by the Appellant is significantly higher than the costs available to a successful party under the Tariff, which would be approximately $5,000 in this case.
[4] The appeals were heard together on common evidence on April 28, 2014. There were four issues in the appeals:
(a) Whether a second reassessment in respect of the 2004 taxation year was statute-barred;
(b) Whether the proceeds of a 2005 disposition of equipment (the “Equipment”) by the Appellant were on account of capital or income;
(c) What the adjusted cost base (“ACB”) of the Equipment was; and
(d) What amount of GST, if any, the Appellant was liable for in respect of the transfer of the Equipment.
[5] The Appellant was successful on the first and second issues. The Respondent was successful on the third issue. The parties had divided success on the fourth issue in that the Appellant was liable for some GST but for less than the amount sought by the Respondent.
[6] The Respondent argues that the parties experienced divided success at trial and that thus no order for costs should be made or, if one is made in the Appellant’s favour, that the Appellant should only receive one set of Tariff B, Class B costs.
The Tax Court reviewed the various factors applicable under the Rules:
• The result of the proceeding :
[11] Given that the Appellant was largely successful in his appeals, this factor weighs strongly in favour of granting him at least Tariff costs.
• The amount at issue:
[16] Thus, the total amount in issue is at most $112,961 (the total of the amounts indicated above). The costs award requested by the Appellant, not including disbursements, amounts to approximately 44% of this maximum amount in issue.
[17] This factor weighs in favour of granting some additional costs to the Appellant, although not the full amount of additional costs requested.
• The importance of the issues:
[18] The Appellant argues that, because the issues in the appeals were of significant financial importance to him, this factor supports an increased costs award in his favour. However, the jurisprudence suggests that the question is not how important the issues are to the individual taxpayer (one might expect that any taxpayer bringing an appeal to the Tax Court of Canada would consider his case to be of significant personal importance), but rather whether the decision on the issues will have significant precedential and jurisprudential value. For example, see Henco and General Electric Capital Canada Inc. v. The Queen.
[19] The issues in those cases were not of significant precedential value. That being so, this factor does not weigh in favour of granting increased costs to the Appellant.
[Footnotes omitted]
• Settlement offers:
[23] Given the closeness of the Appellant’s settlement offers to the ultimate result, it seems appropriate to grant some additional costs on the basis of the settlement offers, although not the substantial indemnity costs that the Appellant requests.
• Volume of work:
[25] The volume of work required of the Appellant’s counsel in this case was significantly increased due to the Appellant’s own failure to keep adequate records, and because of communication difficulties between the Appellant and his counsel.
[26] Furthermore, the billing history provided by the Appellant does not show any breakdown of what was done during the 244.70 hours of work, and the Respondent points out that an indeterminate portion of this work may be attributable to duplication resulting from changes in counsel, or related to matters that were resolved before trial.
[27] This factor does not weigh in favour of granting additional costs.
• Complexity of issues:
[28] The issues in this case were not particularly complex. The Appellant points to the number of issues involved in the case and the difficulty of gathering documents. However, these elements are factors to be considered in relation to the volume of work rather than the complexity of the issues.
[29] This factor does not weigh in favour of granting additional costs.
• Conduct of party that tended to shorten or lengthen unnecessarily the duration of the proceeding:
[31] The Respondent has not specifically addressed this issue, but I am wary of creating a practice of awarding increased costs on the basis of hindsight. As Justice Campbell Miller noted in Henco, “[f]or this factor to be determinative, it must be clear . . . that a party has acted unreasonably in its conduct.” The mere fact that the Respondent was unsuccessful on certain issues at trial does not mean that it was unreasonable to pursue those issues.
[Footnote omitted]
• The other factors listed in the rules were not applicable in these appeals.
In the result the Tax Court concluded that an award of 30% of the appellant’s actual costs, plus disbursements, would be reasonable under the circumstances, i.e., 4 times the applicable Tariff amount:
[32] The remaining subsection 147(3) factors do not apply in this case. The applicable factors do not justify the percentage of solicitor-client costs requested by the Appellant, but they do justify awarding some amount above Tariff costs. The Appellant requested 75% of his solicitor-client costs plus disbursements. An award of approximately 30% of solicitor-client costs plus disbursements seems appropriate in this case. For these reasons, I conclude that the Appellant is entitled to a lump sum of $20,000 plus disbursements.