PRACTICE |
Costs |
Wilson v. Canada
T-1677-79, T-3488-82, T-2518-89, T-2521-89, T-2522-89
Dawson J.
27/10/00
20 pp.
Plaintiff requesting review of award of costs pursuant to Federal Court Rules, 1998, r. 414; Crown moving for order disallowing interest otherwise owed to plaintiff in respect of costs assessed in plaintiff's favour in T-1677-79, T-3488-82 or order limiting interest owing to plaintiff--Plaintiff's income tax assessment appeals in T-1677-79, T-3488-82 allowed with costs on August 31, 1988--Also awarded judgment with costs in T-2521-89 on July 23, 1996--Crown successful in T-2518-89, T-2522-89 and awarded costs--After setting off assessed amounts of costs pursuant to Federal Court Rules, 1998, r. 408(2), sum of $1,079.66 certified as owing from defendant to plaintiff--Assessment officer giving broad interpretation to r. 408(2) (permitting set-off) in light of general principles contained in r. 3 (interpretation of Rules so as to secure just, most expeditious, least expensive determination of every proceeding)--Holding some basis for Crown's concern of lack of realistic means of recovery within jurisdiction if set-off not granted--Assessment officer holding not having jurisdiction to rule with respect to interest payable on costs--Holding neither r. 407 (part-and-party costs assessed in accordance with Tariff B) nor r. 409 (permitting consideration of factors in r. 400(3) in assessing costs) providing him with such jurisdiction--Assessment officer considering plaintiff's delay as factor in assessing amount of costs--(1) Whether Income Tax Act, ss. 222.1, 225.1 prohibiting Crown from collecting costs until all appeals determined--Plaintiff submitting as appeals outstanding, no enforceable awards of costs--Income Tax Act, s. 225.1(3) not precluding enforcement of collection if case further appealed once trial-level decision obtained--No error in principle in assessment officer's exercise of discretion under r. 408(2) to allow set-off--(2) Whether assessment officer erred in failing to assess interest on costs awarded to plaintiff--Crown Liability and Proceedings Act, s. 31(6) providing no interest shall be awarded on judgments against Crown for period prior to February 1, 1992--Prior to that date, Federal Court Act, s. 36 prohibiting award of interest on money owing by Crown in absence of contract or of statute providing therefor--In absence of such statute, no basis for award of pre-judgment interest on costs flowing from 1988 judgments--As for post-judgment interest, Federal Court Act, s. 41 providing judgment, including judgment against Crown, bears interest from time of giving judgment at rate prescribed by Interest Act, s. 3 (5% per annum)--Case law holding interest on judgment for costs running from date of judgment, not date of taxation--Crown Liability and Proceedings Act, s. 31(1) applicable with respect to interest on costs awarded in 1996 judgment, particularly pre-judgment interest--S. 31(1) providing laws relating to prejudgment interest in proceedings between subject and subject that are in force in province apply to any proceedings against Crown--As cause of action arose in Ontario, Courts of Justice Act relevant--S. 128(4)(c) thereof providing no award of pre-judgment interest on costs since November 25, 1977--As to post-judgment interest, Courts of Justice Act, s. 129(1) providing orders for payment of money made on or after January 1, 1985 bearing interest at post-judgment interest rate calculated from date of order--S. 129(1) applicable to causes of action arising after October 23, 1989--Not clear cause of action at issue in 1996 judgment arising after October 23, 1989 because judgment related to re-assessment of plaintiff's 1978 income and flowed from notice of reassessment issued on February 1, 1989--Prior to October 23, 1989 Courts of Justice Act, 1984, s. 140 permitting court, where it considers it just, to disallow interest, allow interest at rate higher or lower than that provided, or allow interest for period other than that provided--Therefore, plaintiff not entitled to pre-judgment interest on costs, but entitled to post-judgment interest subject to exercise of Court's discretion under s. 140, governed by case law of Federal Court, Ontario courts, depending upon whether judgment rendered prior to February 1, 1992--Minister of National Revenue v. Bethlehem Copper Corp. Ltd., [1977] 1 F.C. 577 (C.A.) holding interest on costs taxed in due course pursuant to judgment should run from time judgment delivered subject to contrary order--No contrary orders made herein--Thus plaintiff entitled to interest on 1988 judgments at 5% per annum as prescribed by Interest Act, s. 3--With respect to 1996 judgment, under Courts of Justice Act, s. 129 entitled to interest from date of judgment at post-judgment rate established under Courts of Justice Act to be 6%--Assessment officer erred in principle in relying on rr. 407, 409 as justification for non-assessment of interest on costs--Entitlement to interest depending upon terms of applicable legislation, order of presiding judge, prothonotary--Rules not authorizing assessment officer either to award, withhold interest--(3) Whether assessment officer erred in failing to consider properly factors in r. 400--Tariff B representing compromise between compensating successful party with costs, unduly burdening unsuccessful party--Only in exceptional cases should Court depart from Tariff B--Assessment officer given discretion when assessing costs to consider factors referred to in r. 400(3)--Given that discretion, on facts of case and long delay in bringing costs forward for assessment, no error in principle with respect to assessments--(4) Whether interest payable should be reduced because of plaintiff's delay in taxing costs--In view of reduction of amount of costs on basis of delay, not just to reduce interest to which plaintiff otherwise entitled--Purpose of awarding interest to ensure that through effluxion of time level of indemnity provided by award not eroded--Crown has had benefit of use of money otherwise would have been obliged to pay to plaintiff in respect of costs--Should not benefit by not being required to pay interest on award of costs in normal course--But for omission of assessment officer to include statutory allowance for post-judgment interest in certificate of assessment, no basis for setting aside assessment of costs--Crown's motion for order disallowing interest owed to plaintiff dismissed--Crown entitled to post-judgment interest on judgments--Federal Court Rules, 1998, SOR/98-106, rr. 3, 400, 407, 408(2), 409--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, ss. 222.1 (as enacted by S.C. 1994, c. 7, Sch. II, s. 183), 225.1 (as am. idem, s. 184; S.C. 1994, c. 7, Sch. VIII; c. 21, s. 103; 1998, c. 19, s. 225)--Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50, s. 31(6) (as am. by S.C. 1990, c. 8, s. 31)--Federal Court Act, R.S.C., 1985, c. F-7, ss. 36, 41--Interest Act, R.S.C., 1985, c. I-15, s. 3--Courts of Justice Act, R.S.O. 1990, c. C.43 ss. 128, 129, 140 (as am. by S.O. 1989, c. 67, s. 8).