Luca Teolis

The appellant sought enhanced costs on a solicitor-client basis following a successful motion to strike the respondent's reply.

The Tax Court of Canada declined to award solicitor-client costs, finding the respondent's conduct was not reprehensible, scandalous, or outrageous.

However, considering the volume of work required to address the defective 125-page reply, the Court awarded a lump sum of $10,000 in costs to the appellant, which exceeded the Tariff amount.

The appellant brought a motion to strike the respondent's Reply to the Notice of Appeal in its entirety.

The appellant argued the Reply contained overreaching denials, assumptions of mixed fact and law, conclusions of law, repetitive and colorful language, and improperly pleaded evidence.

The Tax Court of Canada agreed that the Reply contained numerous defects, including the improper pleading of evidence in the schedules and conclusions of law such as 'sham'.

The Court struck the Reply in its entirety but granted the respondent leave to file a fresh reply.