Ludco Enterprises Ltd. et al. v. Ministre du Revenu national, 2002 FCA 450

• Judge: Desjardins, Décary and Létourneau, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: November 18, 2002
• Jurisdiction: Canada (Federal)
• Citations: 2002 FCA 450;(2002), 298 N.R. 352 (FCA)

Ludco Ent. Ltd. v. MNR (2002), 298 N.R. 352 (FCA)

MLB headnote and full text

Temp. Cite: [2002] N.R. TBEd. DE.012

Ludco Enterprises Ltd., David Ludmer, Brian Ludmer and Cindy Ludmer (appellants) v. Her Majesty the Queen (respondent)

(A-884-97; 2002 FCA 450)

Indexed As: Ludco Enterprises Ltd. et al. v. Ministre du Revenu national

Federal Court of Appeal

Desjardins, Décary and Létourneau, JJ.A.

November 18, 2002.

Summary:

Revenue Canada reassessed the taxpayers for the taxation years 1981-1985, disallowing their deduction of interest costs on monies borrowed to purchase shares. The taxpayers appealed.

The Tax Court of Canada affirmed the reassessments. The taxpayers appealed.

The Federal Court of Canada, Trial Divi­sion, in a decision reported 139 F.T.R. 241, dismissed the appeals. The taxpayers appealed.

The Federal Court of Appeal, Létourneau, J.A., dissenting, in a decision reported 240 N.R. 70, dismissed the appeals. The tax­payers appealed.

The Supreme Court of Canada, in a deci­sion reported 275 N.R. 90, allowed the appeal, set aside the judgment of the Federal Court of Appeal and the taxpayers' reassessments for the 1981 to 1985 taxation years, and remitted the matter back to Rev­enue Canada for reassessment in conformity with its reasons. The taxpayers were granted costs throughout. The taxpayers moved for directions to the assessment officer as to costs and sought an extension of time to bring the motion.

The Federal Court of Appeal granted an extension of time to bring the motion and gave directions as to costs.

Editor's Note: For related proceedings invol­ving these parties see 72 F.T.R. 175 and 182 N.R. 125.

Courts - Topic 4110

Federal Court of Canada - Jurisdiction - Federal Court of Appeal - Practice - Costs - Taxpayers' appeal to the Supreme Court of Canada was successful - The taxpayers were awarded costs throughout - They sought directions under rule 403 of Federal Court Rules, 1998, respecting increased costs - Rule 403(1)(a) of the Federal Court Rules, 1998, imposed an 30 day limitation period after judgment was pronounced for direc­tions to an assessment officer - They sought an extension of the time limit - The Federal Court of Appeal granted the exten­sion - New reassessments of the taxpayers' tax liability had to be made - The complex litigation lasted 14 years, involved numer­ous witnesses and experts as well as intri­cate and novel issues of national interest - The Minister suffered no prejudice by reason of the delay - See paragraphs 3 to 6.

Practice - Topic 7063

Costs - Party and party costs - Counsel fees - Special or additional counsel - Tax­payers' appeal to the Supreme Court of Canada was successful - They were awarded costs throughout - The litigation lasted 14 years - It was a complex case which involved numerous witnesses and experts and intricate and novel issues of national interest - The taxpayers sought directions under rule 403 of Federal Court Rules, 1998, directing the assessment officer to award costs in their favour based on Column IV of Tariff B and allowing fees for a second counsel at the hearing before the Court of Appeal for an amount equal to half the fees awarded for first counsel - The Federal Court of Appeal allowed the motion - See paragraphs 7 to 11.

Practice - Topic 7111

Costs - Party and party costs - Special orders - Increase in scale of costs - Appli­cation for (incl. extension of time) - [See Courts - Topic 4110 ].

Practice - Topic 7114

Costs - Party and party costs - Special orders - Increase in scale of costs - Novel or important issues - [See Practice - Topic 7063 ].

Practice - Topic 7115

Costs - Party and party costs - Special orders - Increase in scale of costs - Diffi­culty and complexity of proceedings - [See Practice - Topic 7063 ].

Cases Noticed:

Manitoba Fisheries Limited v. Canada, [1980] 1 F.C. 36 (T.D.), affd., [1980] 2 F.C. 217; 35 N.R. 129 (C.A.), refd to. [para. 3].

Counsel:

Gary Du Pont, for the appellant (written representation).

Solicitors of Record:

Davies Ward Phillips & Vineberg LLP, Montreal, Quebec, for the appellant;

Morris Rosenberg, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the respondent.

This motion was dealt with in writing without the appearance of the parties by Desjardins, Décary and Létourneau, JJ.A., of the Federal Court of Appeal. Létourneau, J.A., delivered the following reasons for order of the court on November 18, 2002.