In what circumstances can a party obtain a large lump-sum cost
award after a favourable Tax Court decision?
That was the question considered by the Tax Court in Velcro
Canada Inc. v. The Queen (
2012 TCC 273), in which the Tax Court awarded the successful
taxpayer a lump sum cost award of $60,000 plus disbursements. The
Court's reasoning has provided some helpful clarification on
the manner in which the Court will determine the nature and amount
of a cost award.
In the main appeal (Velcro Canada Inc. v. The Queen,
2012 TCC 57), the Appellant taxpayer was successful in
establishing that a Dutch holding company was the "beneficial
owner" of royalties paid by a related Canadian company. (See
our previous commentary on the decision by FMC's Matt
Peters
here.)
