Citation: 2017
TCC 19
Date: 20170127
Docket: 2015-450(IT)G
BETWEEN:
FIDUCIE FINANCIÈRE
LAPIERRE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
AND
Docket: 2015-435(IT)I
BETWEEN:
GLENDA WAGNER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
AND
Docket: 2015-453(IT)I
BETWEEN:
RENAUD LAPIERRE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL
ENGLISH TRANSLATION]
REASONS FOR ORDER OF
JANUARY 6, 2017
Lamarre A.C.J.
[1]
Upon
a joint application made by the parties to the Court on June 9, 2016, a
one-day hearing of the appeal in 2015‑450(IT)G (Fiducie financière
Lapierre) was set for January 25, 2017, by order of the Court dated
June 22, 2016. Notices of Hearing dated June 23, 2016, also scheduled
the appeals of Renaud Lapierre and Glenda Wagner for hearing on
January 25, 2017. The three appellants were represented by the same
counsel.
[2]
On
November 25, 2016, the appellant Fiducie financière Lapierre, through its
then counsel, Robert Marcotte, advised the Court that the appeal hearing
would proceed as planned. Counsel for the respondent also confirmed to the
Court in a letter dated November 25, 2016, that the hearing would proceed
as planned.
[3]
On
January 4, 2017, the appellants changed counsel, and a Notice of Change in
Representation was filed with the Court.
[4]
On
January 5, 2017, the appellants’ new counsel, Bernard Roy, wrote to
the Court seeking to have the hearing of the appeals postponed on the grounds
that he would be out of town on January 25, 2017, and that he had sought
from the respondent the audit and objection files. The respondent did not
challenge the request for postponement.
[5]
In
an order dated January 6, 2017, I granted the application for an
adjournment, and, given the lateness of the appellants’ postponement request, I
awarded costs in the amount of $500 payable to the respondent upon receipt of
the order.
[6]
In
a letter dated January 12, 2017, counsel for the appellants asked the
Court rectify the order by removing the obligation for the appellants to pay
costs in the amount of $500 to the respondent, on the grounds that the latter
had not sought costs and the parties had not had an opportunity to make
submissions on that issue. The appellants argue that the part of the order
concerning costs is ultra petita.
[7]
The
respondent saw no need to make submissions or comments and has left this matter
up to the Court’s discretion.
[8]
For
the reasons below, I uphold the order of January 6, 2017, as to costs, and
the appellants are required to pay them forthwith.
[9]
First
of all, I note that the general procedure appeal is a Class C proceeding, which
means that it is an appeal in which the aggregate of all amounts in issue is
$150,000 or more (see Tariff A of Schedule II to the Tax Court of
Canada Rules (General Procedure) (Rules).
[10]
Costs
of $500 therefore represent a minimal amount relative to the amounts in issue.
Even if all the parties consent to the adjournment, the Court has the inherent
power to prevent and control abuses of its process, and the awarding of costs
is one mechanism for preventing or remedying “abusive delays or procedures” (Fournier
v. The Queen 2005 FCA 131, paragraphs 10-12).
[11]
This
power to control its process and the right to oversee the way in which counsel
carry out their work is inherent in all statutory courts, as per the doctrine
of jurisdiction by necessary implication.
[12]
The
Supreme Court of Canada refers to it in R. v. Cunningham, [2010] 1 S.C.R.
331, at paragraph 19:
[19] Likewise in the
case of statutory courts, the authority to control the court’s process and
oversee the conduct of counsel is necessarily implied in the grant of power to
function as a court of law. This Court has affirmed that courts can apply a
“doctrine of jurisdiction by necessary implication” when determining the powers
of a statutory tribunal:
. . . the
powers conferred by an enabling statute are construed to include not only those
expressly granted but also, by implication, all powers which are practically
necessary for the accomplishment of the object intended to be secured by the
statutory regime . . . .
(ATCO
Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4,
[2006] 1 S.C.R. 140, at para. 51)
Although
Bastarache J. was referring to an administrative tribunal, the same rule of
jurisdiction, by necessary implication, would apply to statutory courts.
[13]
The
Tax Court of Canada (TCC) is a superior court of record (section 3 of
the Tax Court of Canada Act), which has, according to its rules, a
discretionary power to award the costs and expenses it considers appropriate in
the circumstances of each appeal. Subsection 147(1) of the Rules reads as
follows:
147
(1) The Court may determine the amount of the costs of all parties involved in
any proceeding, the allocation of those costs and the persons required to pay
them.
[14]
The
Federal Court of Appeal (FCA) recognized the discretionary power of the
TCC in an award of costs under section 147 of the Rules in The Queen v.
Lau, 2004 FCA 10, at paragraphs 3 and 5:
[3] An award of
costs is governed by rule 147 of the Court’s General Procedure Rules. That rule
vests the Tax Court would “full discretionary power” over payment of costs.
Criteria for the exercise at that discretion are set forth in subsection 147
(3). Subsection (4) confers an additional power which includes the awarding of
costs by way of lump sum. . . .
[5]
It can be seen that the awarding of costs under rule 147 is highly
discretionary although, of course, that discretion must be exercised on a
principled basis. We are all of the view that it was so exercised by the
Tax Court and that no basis has been shown for interfering with the judgment
below.
[Emphasis added.]
[15]
This
principle was reaffirmed by this Court in Spruce Credit Union v. The Queen,
2014 TCC 42, at paragraph 18:
[18]
In its later decision in Landry v. The Queen, 2010 FCA 135, the Court
commented on its earlier comments in Lau and emphasized again that the
Tax Court of Canada’s highly discretionary power to fix costs “must be
exercised on a principled basis” (at paragraph 22). In my view, the changed
wording of Rule 147(1) since the Lau and Landry decisions does
not in any way affect the nature, breadth, or scope of this Court’s power to
fix costs provided always it is exercised on a principled basis.
[Emphasis added.]
[16]
Under
the general procedure, in accordance with paragraph 147(3)(g) of
the Rules, the conduct of any party that tended to shorten or to lengthen
unnecessarily the duration of the proceeding is one of the factors that the TCC
may consider in awarding costs.
[17]
Further,
under the informal procedure, the Court may allocate costs to the respondent if
the actions of the appellant unduly delayed the prompt and effective resolution
of the appeal, and it may direct the payment of costs in a fixed sum (section 10
of the Tax Court of Canada Rules (Informal Procedure)).
[18]
In
this case, the appeals were called for a one-day hearing on January 25, 2017.
The Court sent the Notices of Hearing for the three proceedings on June 22
and 23, 2016. The appellants waited until January 4, 2017, to inform the
Court of a change in representation, more than six months after receiving the Notices
of Hearing and only 20 days before the hearing date.
[19]
By
applying for an adjournment at such a late date, on the grounds that their new
counsel was unavailable on the hearing date and that he had sought copies of
the audit and objection files from the respondent, the appellants delayed the
prompt and effective resolution of the appeals. In so acting, they wasted the
Court’s resources, as the time reserved for the hearing on January 25,
2017, could no longer be used. The TCC is an itinerant court, and adjournments
often affect arrangements made long in advance for the hearing, sometimes with
cost to the public purse. The Court has a strong interest in the timing
of its hearings, and, in this sense, there is prejudice (see UHA Research Society
v. Attorney General of Canada, 2014 FCA 134, at paragraphs 13‑14).
[20]
I
find that this Court has the power, as part of the regulation of its processes,
to award costs when a party’s conduct has a negative impact on the course of
the judicial process.
[21]
Here,
I echo the comments of the Federal Court of Appeal in Adams v. Canada (Royal
Canadian Mounted Police), [1994] F.C.J. No. 1480 (QL), 174 N.R. 314, at
paragraph 16:
. . . The
day has passed when courts could allow to litigants the luxury of being at
their beck and call. Courts are public institutions for the resolution of
disputes and cost substantial public money. Court congestion and delay is a
serious public concern. Parties who launch proceedings at any level with the intention
of putting them in a “holding pattern” for their own private purposes may be
called to account for their waste and abuse of a public resource. They also
risk having those proceedings dismissed.
[22]
I
find that the request for an adjournment was submitted late, with a detrimental
effect on public resources.
[23]
I
therefore reiterate my decision to award costs in the amount of $500 to the respondent,
payable by the appellants forthwith.
Signed
at Ottawa, Canada, this 27th
day of January 2017.
“Lucie
Lamarre”
Translation certified true
on this 27th day
of March 2017
Francie
Gow, BCL, LLB
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