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Successful appellant in complex tax test case awarded $925,000 in costs for trial and appeal.
Following a successful appeal in a complex tax case, the appellant sought costs of the trial and appeal totaling over $1.3 million.
The respondent agreed costs should follow the event but argued the amounts were excessive.
The Court of Appeal declined to apply a 25% bump-up for a non-Rule 49 settlement offer, noting the respondent's obligation to protect the public purse in a test case.
The Court awarded the appellant costs of the appeal and trial fixed at $925,000 inclusive of disbursements and HST.
Court orders agreed costs payable to respondent after tax appeal.
Following an appeal involving a dispute between a corporate appellant and the provincial Minister of Revenue, the court addressed the issue of costs.
The parties agreed on a fixed amount for legal fees and disbursements payable to the respondent.
The court endorsed the agreement and ordered that the respondent recover the agreed costs.
The decision reflects the court’s approval of negotiated costs following the disposition of the appeal.
Interest from intra‑group refinancing held to be business income taxable in Ontario.
The appellant corporation appealed Ontario corporate tax assessments arising from interest income earned through refinancing transactions within a corporate group.
The appellant argued the interest constituted income from property and therefore fell outside the scope of Ontario taxation under the pre‑2005 Corporations Tax Act regime applicable to non‑Canadian incorporated corporations.
The court held that the interest income formed part of a business carried on in Canada because the corporation’s core purpose was to facilitate financing transactions within the corporate group and administer the resulting debt instruments in Canada.
As a result, the interest income constituted income from a business carried on in Canada within the meaning of s. 115 of the Income Tax Act and was taxable in Ontario.
The court upheld the Minister’s assessments and found it unnecessary to conduct a full GAAR analysis.
