Case Commentary: Watts v The King, 2024 TCC 100 – Enhanced Costs Of Litigation

In August 2024, the Tax Court of Canada delivered its judgment in Watts v The King, 2024 TCC 100, awarding the Crown (CRA) costs beyond the standard tariff amounts, commonly referred to as "enhanced costs," in a lump sum of $30,000.

In making this decision, the Tax Court exercises its broad discretion in awarding costs provided under subsection 147(3) of the Tax Court of Canada Rules (General Procedure) in response to the conduct of the appellant taxpayer, Miriam Watts, which the Court found to be improper.

Improper Conduct of the Taxpayer

For context, Lawrence Watts, the husband of the appellant Miriam Watts, was subject to a search warrant carried out by the CRA. The documents seized from the search were used to convict Lawrence of creating false tax returns leading to fraudulent refunds. Lawrence was imprisoned as a result.