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Ahamed: Taxpayer Delays Lead to Enhanced Costs

The Tax Court of Canada (“TCC”) recently exercised its discretion in Ahamed[1] to award costs to the Crown in excess of the amounts provided for in the tariff under the Rules.[2] The enhanced costs award was the result of the significant delays caused by the taxpayer’s conduct in the course of the appeal, both before and during the trial. The Ahamed decision is a valuable reminder of the importance of proper litigation conduct.

The TCC may exercise its discretion to award costs to a party in excess of the tariff, relying on section 147 of the Rules.[3] When deciding whether to exercise its discretion, the TCC will consider the factors in subsection 147(3).

In the Ahamed decision, the factors identified by the TCC in favour of costs beyond the tariff include:

  • The taxpayer filed an “ill-conceived” interlocutory motion that, among other things, requested disclosure of publicly available documents;[4]
  • The taxpayer sought to introduce documents and call witnesses, “notwithstanding the absence of any factual issue between the parties”, that required the TCC to hold “a number of trial management conferences”, including the final conference “just days before trial”;[5]
  • The taxpayer made an unnecessary motion during the trial to adduce evidence, then withdrew the motion after “squandering a considerable amount of valuable court time”;[6] and
  • The taxpayer refused to admit “until the last minute” that there were no facts at issue.[7]

In calculating the enhanced costs, the TCC listed ten cases in which enhanced costs were awarded.[8] The cases awarded enhanced costs ranging from 20%[9] to 50%[10]. The TCC determined that 35% of costs was an appropriate award, resulting in the Crown being awarded $95,980 in costs and disbursements.

Key Takeaways

As evidenced in Ahamed, the TCC may order enhanced costs against a party who takes unnecessary steps that delay proceedings. A taxpayer should bring motions or take other procedural steps where appropriate and not where they will result in unnecessary delay. Parties must also carefully consider requests to admit, which will either bind the party to certain facts or may result in enhanced costs if the request is refused but the fact should have been admitted.


[1]Canadian Western Trust Company as Trustee of the Fareed Ahamed TFSA v His Majesty the King, 2023 TCC 177.

[2] Tariff B of Schedule II of the Tax Court of Canada Rules (General Procedure), SOR/90-688a.

[3]Velcro Canada Inc. v. The Queen, 2012 TCC 273 at para 27.

[4]Ahamed v Canada, 2020 FCA 213 at para 13 and Ahamed TFSA v The King, 2023 TCC 177 at para 15.

[5]Ahamed TFSA v The King, 2023 TCC 177 at para 16.

[6]Ahamed TFSA v The King, 2023 TCC 177 at para 17.

[7]Ahamed TFSA v The King, 2023 TCC 177 at para 19.

[8]Ahamed TFSA v The King, 2023 TCC 177 at para 22.

[9]General Electric Capital Canada Inc v The Queen, 2010 TCC 490.

[10]Univar Holdco Canada ULC v The Queen, 2020 TCC 15.

tax Tax Court of Canada TCC



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