Tax Court of Canada Rules (General Procedure) (SOR/90-688a)

Calling Adverse Party as Witness

• 146 (1) A party may secure the attendance of a person who is,

  • (a) an adverse party, or

  • (b) an officer, director or employee of an adverse party,

  as a witness at a hearing by,

  • (c) serving the person with a subpoena, or

  • (d) serving on the adverse party or the counsel of record for the adverse party, at least five days before the commencement of the hearing, a notice of intention to call the person as a witness,

  and at the same time, paying or tendering witness fees and expenses calculated in accordance with Schedule II, Tariff A.

• (2) Where a person referred to in subsection (1) is in attendance at the hearing a party may call the person as a witness without previous notice or the payment of witness fees and expenses.

• (3) A party calling a witness referred to in subsection (1) may cross-examine the witness.

• (4) Where a person required to testify under this section,

  • (a) refuses or neglects to attend at the hearing or to remain in attendance at the hearing,

  • (b) refuses to be sworn, or

  • (c) refuses to answer any proper question put to that person or to produce any document or other thing which that person is required to produce,

  the Court may grant judgment in favour of the party calling the witness, adjourn the hearing or give such other direction as is just.

Lead Cases

• 146.1 (1) This section applies if

  • (a) two or more appeals have been filed before the Court;

  • (b) the Court has not made a decision disposing of any of the appeals; and

  • (c) the appeals give rise to one or more common or related issues of fact or law.

• (2) The Court may give a direction

  • (a) specifying one or more of the appeals referred to in subsection (1) as a lead case or lead cases; and

  • (b) staying the related appeals.

• (3) If the Court gives a direction, each party in a related appeal who agrees to be bound, in whole or in part, by the decision in the lead case shall, within 10 days, file Form 146.1 with the Court.

• (4) If a party does not agree to be bound by the decision in the lead case, in whole or in part, or does not file Form 146.1 with the Court, the Court shall give a direction that the appeal is no longer stayed.

• (5) The Court may, on its own initiative or at the request of a party, give directions with respect to the related appeals, provide for their disposal or take further steps with respect to those appeals.

• (6) If a lead case or lead cases are withdrawn or disposed of before the Court makes a decision in relation to the common or related issues, the Court shall give directions as to

  • (a) whether another appeal or other appeals are to be heard as the lead case or lead cases; and

  • (b) whether any direction affecting the related appeals should be set aside or amended.

Costs

General Principles

• 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.

• (2) Costs may be awarded to or against the Crown.

• (3) In exercising its discretionary power pursuant to subsection (1) the Court may consider,

  • (a) the result of the proceeding,

  • (b) the amounts in issue,

  • (c) the importance of the issues,

  • (d) any offer of settlement made in writing,

  • (e) the volume of work,

  • (f) the complexity of the issues,

  • (g) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding,

  • (h) the denial or the neglect or refusal of any party to admit anything that should have been admitted,

  • (i) whether any stage in the proceedings was,

    • (i) improper, vexatious, or unnecessary, or

    • (ii) taken through negligence, mistake or excessive caution,

  • (i.1) whether the expense required to have an expert witness give evidence was justified given

    • (i) the nature of the proceeding, its public significance and any need to clarify the law,

    • (ii) the number, complexity or technical nature of the issues in dispute, or

    • (iii) the amount in dispute; and

  • (j) any other matter relevant to the question of costs.

• (3.1) Unless otherwise ordered by the Court, if an appellant makes an offer of settlement and obtains a judgment as favourable as or more favourable than the terms of the offer of settlement, the appellant is entitled to party and party costs to the date of service of the offer and substantial indemnity costs after that date, as determined by the Court, plus reasonable disbursements and applicable taxes.

• (3.2) Unless otherwise ordered by the Court, if a respondent makes an offer of settlement and the appellant obtains a judgment as favourable as or less favourable than the terms of the offer of settlement or fails to obtain judgment, the respondent is entitled to party and party costs to the date of service of the offer and substantial indemnity costs after that date, as determined by the Court, plus reasonable disbursements and applicable taxes.

• (3.3) Subsections (3.1) and (3.2) do not apply unless the offer of settlement

  • (a) is in writing;

  • (b) is served no earlier than 30 days after the close of pleadings and at least 90 days before the commencement of the hearing;

  • (c) is not withdrawn; and

  • (d) does not expire earlier than 30 days before the commencement of the hearing.

• (3.4) A party who is relying on subsection (3.1) or (3.2) has the burden of proving that

  • (a) there is a relationship between the terms of the offer of settlement and the judgment; and

  • (b) the judgment is as favourable as or more favourable than the terms of the offer of settlement, or as favourable or less favourable, as the case may be.

• (3.5) For the purposes of this section, substantial indemnity costs means 80% of solicitor and client costs.

• (3.6) In ascertaining whether the judgment granted is as favourable as or more favourable than the offer of settlement for the purposes of applying subsection (3.1) or as favourable as or less favourable than the offer of settlement for the purposes of applying subsection (3.2), the Court shall not have regard to costs awarded in the judgment or that would otherwise be awarded, if an offer of settlement does not provide for the settlement of the issue of costs.

• (3.7) For greater certainty, if an offer of settlement that does not provide for the settlement of the issue of costs is accepted, a party to the offer may apply to the Court for an order determining the amount of costs.

• (3.8) No communication respecting an offer of settlement shall be made to the Court, other than to a judge in a litigation process conference who is not the judge at the hearing, until all of the issues, other than costs, have been determined.

• (4) The Court may fix all or part of the costs with or without reference to Schedule II, Tariff B and, further, it may award a lump sum in lieu of or in addition to any taxed costs.

• (5) Notwithstanding any other provision in these rules, the Court has the discretionary power,

  • (a) to award or refuse costs in respect of a particular issue or part of a proceeding,

  • (b) to award a percentage of taxed costs or award taxed costs up to and for a particular stage of a proceeding, or

  • (c) to award all or part of the costs on a solicitor and client basis.

• (6) The Court may give directions to the taxing officer and, without limiting the generality of the foregoing, the Court in any particular proceeding may give directions,

  • (a) respecting increases over the amounts specified for the items in Schedule II, Tariff B,

  • (b) respecting services rendered or disbursements incurred that are not included in Schedule II, Tariff B, and

  • (c) to permit the taxing officer to consider factors other than those specified in section 154 when the costs are taxed.

• (7) Any party may,

  • (a) within thirty days after the party has knowledge of the judgment, or

  • (b) after the Court has reached a conclusion as to the judgment to be pronounced, at the time of the return of the motion for judgment,

  whether or not the judgment included any direction concerning costs, apply to the Court to request that directions be given to the taxing officer respecting any matter referred to in this section or in sections 148 to 152 or that the Court reconsider its award of costs.

Costs on Discontinuance

148 Where under section 16.2 of the Act a party has discontinued a proceeding, the other party may tax the costs thereof and, if the taxed costs are not paid within four days after taxation, may enforce payment as if judgment therefor had been granted.

Costs on Settlement

149 Where a proceeding is settled on the basis that a party shall pay or recover costs and the amount of costs is not included in or determined by the settlement, the costs may be taxed under sections 153 to 159 on the filing of a copy of the minutes of settlement in the Registry.

Costs on Failure to Elect under Subsection 18(1) of the Act

149.1 On an appeal under the Income Tax Act, the Court may refuse or reduce costs otherwise payable to an appellant who, in circumstances in which the appellant could make an election under subsection 18(1) of the Act, does not make such an election.

Taxation of Costs

150 Subject to the directions of the Court costs shall be taxed under sections 153 to 159.

Special Provisions

• 151 (1) Unless the Court otherwise directs, and whatever the result of the proceeding,

  • (a) the costs of and occasioned by an amendment of a pleading made without leave shall be borne by the party making the amendment,

  • (b) the costs of or occasioned by an application to extend the time fixed by these rules or by a direction for doing an act, shall be borne by the party making the application,

  • (c) the costs of proving a document shall be borne by the party proving the document, if no request to admit the authenticity of the document was served under section 130,

  • (d) the costs of proving a document shall be allowed to the party proving the document if a request to admit the authenticity of the document was served under section 130 and the authenticity of the document was not admitted, and

  • (e) the costs of proving a fact shall be allowed to the party proving the fact, if a request to admit the fact was served under section 130 and the fact was not admitted, and the failure to do so has not been found by the Court to have been based on reasonable grounds.

• (2) Upon a taxation, such costs as may be allowed under subsection (1) shall be allowed, by way of set off or otherwise, without a special direction.

Liability of Counsel for Costs

• 152 (1) Where a counsel for a party has caused costs to be incurred improperly or without reasonable cause or to be wasted by undue delay, misconduct or other default, the Court may make a direction,

  • (a) disallowing some or all of the costs as between the counsel and the client,

  • (b) directing the counsel to reimburse the client for any costs that the client has been ordered to pay to any other party, and

  • (c) requiring the counsel to indemnify any other party against costs payable by that party.

• (2) A direction under subsection (1) may be made by the Court on its own initiative or on the motion of any party to the proceeding, but no such direction shall be made unless the counsel is given a reasonable opportunity to make representations to the Court.

• (3) The Court may direct that notice of a direction against a counsel under subsection (1) be given to the client in the manner specified in the direction.

Costs in Vexatious Proceedings

152.1 Where a judge has made an order under section 19.1 of the Act, costs may be awarded against the person in respect of whom the order has been made.