Court of Appeal for Ontario

CITATION: Inter-Leasing, Inc. v. Ontario (Revenue), 2014 ONCA 683

DATE: 20141003

DOCKET: C57387

BEFORE: Weiler, Hourigan and Pardu JJ.A.

BETWEEN

Inter-Leasing, Inc.

Appellant

and

The Minister of Revenue

Respondent

In the Matter of the Corporations Tax Act, R.S.O. 1990, c. 40, as amended

COUNSEL:

Al Meghji, Monica Biringer, Caroline D’Elia and Adam Hirsh, for the appellant

Anita C. Veiga and Ryan Mak, for the respondent

HEARD: May 13, 2014

On appeal from the judgment of Justice David Aston of the Superior Court of Justice dated June 26, 2013, with reasons reported at 2013 ONSC 2927.

COSTS ENDORSEMENT

[1] Inter-Leasing was successful on appeal, and seeks costs of the trial and the appeal in the amounts of $1,068,199.14 and $251,711.44 respectively.

[2] The respondent agrees that costs should follow the event, but asserts that the amounts claimed are excessive.

[3] This was a complex case, in some respects a test case. The amounts in issue were substantial, amounting to $36,000,000 in taxes and $19,000,000 in arrears interest. There was extensive documentary production, and four days of pretrial examination before the trial which lasted about six days. Both parties were granted leave to file 45 page facta on the appeal.

[4] Inter-leasing offered to settle for an amount more generous to the respondent than the outcome of the appeal. For this reason it submits that while the offer did not qualify as a Rule 49 offer, it should get a costs “bump up” of 25% after the offer. While this might be appropriate in other contexts, here the respondent had an obligation to protect the public purse, and other cases depended on this one. There was no improper conduct by the respondent which would justify increased costs.

[5] I agree with the appellant that the cost rates set out in the Information for the Profession set out in the preamble to Rule 57 of the Rules of Civil Procedure are now out of date, and that amounts calculated at 55%-60% of a reasonable actual rate might more appropriately reflect partial indemnity, particularly in the context of two sophisticated litigants well aware of the stakes.

[6] Even in this context, the amounts claimed exceed a fair and reasonable amount that these litigants would expect to pay or be awarded.

[7] In the end, balancing the above factors, I award costs of the appeal and the trial to the appellant, including disbursements and HST in the total amount of $925,000.

“K.M. Weiler J.A.”

“C.W. Hourigan J.A.”

“G. Pardu J.A.”