In a 44 page cost decision Pizzitelli J. discusses how much costs should be given to CRA (the Respondent) with respect to the abusive charity gifting tax scheme, GLGI, that he had previously provided a judgment in.   The hearings on the case were over 25 days – certainly quite a thorough vetting of the issues.  You can read the full GLGI cost decision here.  Pizzitelli J. notes:

“While I appreciate the Promoter may bear the direct responsibility for the sham it has perpetrated on the Appellants and the Canadian public at large and benefited to the extent of millions of dollars in cash contributions, the Appellants and Bound Appellants did blindly or willingly jump on the Program train in expectation of receiving a net cash advantage from their donation. As I indicated in paragraph 88 of my Reasons in this matter: ..When otherwise good people turn a blind eye to the obvious reality surrounding them, they cannot lay blame on others for the consequences that follow from the fraud or sham of others. They certainly should not expect the Canadian public to fund their losses. Accordingly, I am not prepared to limit liability for costs solely to the Promoter as requested by the Appellants and Bound Appellants.”

Here are some excerpts from the cost decision:

“Pizzitelli J.

[1] The Respondent was totally successful in the trials of the above matters involving a charitable donation scheme which spanned over 25 days of hearings including one week of oral argument supplemented by detailed written argument given by both sides. The Respondent was awarded costs in the decision with a proviso that if any party disagreed with such order as to costs they were invited to make submissions within 30 days, a period that was extended by the Court upon request.

[2] Based on the order of costs, the Respondent submitted a Bill of Costs seeking Tariff B fees of $41,075 and disbursements in the total amount of $491,136.95, which included expert witness fees of its expert, FTI, in the amount of $422,286.20. It should be noted that both sides gave testimony of one expert witness, after each side was disqualified in attempting to bring the testimony of a second expert witness. In the Bill of Costs above referenced, the Respondent did not include the expenses incurred in connection with JS, the person tendered as its second expert witness whose qualifications were not accepted by the Court.

[3] Notwithstanding that the Respondent has only claimed Tariff costs, the Appellants, in its initial submissions and subsequently in reply submissions, argues that such fees should not be allowed or dramatically reduced on essentially the following basis:
1. That these were “test cases” and hence each party should bear its own costs;
2. That the Promoter should be solely liable for costs, which position was taken only in reply submissions;
3. In the alternative, that the costs be allocated amongst thousands of taxpayers who were similarly assessed under this tax donation scheme or affected by the decisions; including alternatively taxpayers at the objection stage or those at the appeals stage or those who agreed to be bound by this decision under the Court Rules or by agreement with the Respondent at the objection stage; either on a several or joint and several basis.
4. That in any case, the total of fees and disbursements claimed do not reflect the reasonable expectation of the Appellants as to the cost liability in the event of their dismissal; and
5. That the quantum of expert fees should be reduced, notwithstanding the reasonable expectation of the Appellants in 4 above.

[4] The Respondent advised the Court it was satisfied with the costs order in the decision but reserved the right to make submissions if the Appellants disagreed with such costs. Accordingly, the Respondent’s submissions essentially contest those of the Appellants and request that the 5 Appellants who agreed to be bound by the decision in this matter, namely in the matters of Sergiy Bilobrov, 2009-3498(IT)G, Melba Lapus, 2009-3503(IT)G, Janice Moshurchak, 2009-3515(IT)G, Mylyne Santos, 2009-3510(IT)G and Penny Sharp, 2009-3514(IT)G (the “Bound Appellants”) be jointly and severally responsible for those costs and in the alternative, that GLGI Inc. (the “Promoter”) also be jointly and severally responsible, all of which will be addressed later when discussing who shall be responsible for costs.


[7] Since the Respondent’s submissions, together with those of some of the Bound Appellants make reference to the Promoter’s responsibility for costs, the Court ordered that the Promoter be notified and given opportunity to make submissions on costs; which Order was served on the Promoter together with the submissions. The Respondent also served copies of its costs submissions on the Promoter as well as its lawyers and some of its officers to maximize chance of receipt thereof. The Promoter did not reply with any costs submissions although in the further reply submissions of the Appellants, prepared by their counsel who was initially retained by the Promoter, the Appellants ask that if costs are to be awarded that they be awarded against only the Promoter as the first alternative.

[9] It should be noted that neither of the Appellants nor the Bound Appellants have attacked the reasonableness of the Respondent’s legal fees portion of the costs claimed amounting to $41,075 of the total of fees and disbursements claimed in its Bill of Costs above; other than to argue no fees should be payable in test cases or, in the case of one of the Bound Appellants, that such legal fees should be reduced by the amount of pre-trial cost orders totalling $13,000, the latter to be discussed when dealing with quantum issues later on. In fact, none of them have made any representations on the factors to consider in Rules 147(3)(a) to (i.1) of the Tax Court of Canada Rules (General Procedure) (the “Rules”) applicable to these appeals and focus only on the “other factors” in Rule 147(3)(j) thereof dealing with other matters relevant to the question of costs to support its arguments. The Respondent on the other hand has made reference to all the factors in its submissions which I will address shortly.

[10] There is no dispute that Rule 147 grants the Court complete discretion in determining the amount of costs, their allocation and the persons required to pay them and that Rule 147(3) sets out the factors that the Court may consider in exercising such discretion which must be considered on a principled basis. Having regard to the costs submissions made, the relevant provisions of Rule 147 read as follows:
147 (1) The Court may determine the amount of the costs of all parties involved in any proceeding, the allocation of those costs and the persons required to pay them.

(3) In exercising its discretionary power pursuant to subsection (1) the Court may consider,
(a) the result of the proceeding,
(b) the amounts in issue,
(c) the importance of the issues,
(d) any offer of settlement made in writing,
(e) the volume of work,
f) the complexity of the issues,
(g) the conduct of any party that tended to shorten or to lengthen unnecessarily the duration of the proceeding,
(h) the denial or the neglect or refusal of any party to admit anything that should have been admitted,
(i) whether any stage in the proceedings was,
(i) improper, vexatious, or unnecessary, or
(ii) taken through negligence, mistake or excessive caution,
(i.1) whether the expense required to have an expert witness give evidence was justified given
(i) the nature of the proceeding, its public significance and any need to clarify the law,
(ii) the number, complexity or technical nature of the issues in dispute, or
(iii) the amount in dispute; and
(j) any other matter relevant to the question of costs.

(4) The Court may fix all or part of the costs with or without reference to Schedule II, Tariff B and, further, it may award a lump sum in lieu of or in addition to any taxed costs.
[11] This matter did not involve any settlement offers to which the provisions of Rules 147(3.1) to (3.8) would be applicable.
[12] I am in agreement with the arguments made by the Respondent with respect to those factors in paragraphs 147(3)(a) to (i.1) which in my opinion would have justified an award of costs higher than the Tariff costs claimed.

[13] Under paragraph (a) of the factors the Respondent was entirely successful on all the various issues in play at trial: on the issue of donative intent, on the validity of the trust for several reasons and on the lack of trust property, on the issue of the Program sham and on the valuation issue of the software donations in kind. These various issues created in my opinion a level of complexity and volume of work within the factors of paragraphs (e) and (f), clearly evidenced by the mass of Exhibits that included 17 plus volumes of Joint Documents, four proposed Expert Witness Reports, a Partial Agreed Statement of Facts respecting some evidence and about 30 separately entered Respondent’s Exhibits and a few of the Appellants. The hearing required over 25 sitting days, including one week of oral argument. Written argument was also tendered by both parties in support of their positions. The hearing took place in 3 cities; Vancouver, Toronto and Halifax, (the latter to accommodate the Appellants’ witness which included a hearing on a Saturday), during which about a dozen witnesses were called to testify including 6 witnesses called by the Appellants, themselves included.

[14] The Appellants refused to admit various facts under factor (h), including that the Program was promoted on the basis the participants would receive tax credits in excess of cash paid to participate even though the promotional materials in evidence clearly established this. These resulted in an unnecessarily lengthened trial and put the Respondent to substantially increased effort.

[15] There is no doubt in my mind as well that under factor (i.1) the expense required to have an expert witness give evidence was justified by the Respondent. Firstly, its expert witness was necessary to address the expert testimony of the Appellants’ expert witness and secondly, the issue of the value of software is a complex, technical and business matter beyond the ability of the Court to address without such assistance.

[16] Under factor (d), “any offer of settlement made in writing”, I also take note of the fact that the Appellants and all Bound Appellants in these proceedings were given written settlement offers they ultimately declined to accept notwithstanding several deadline extensions granted to them. Such extensions totalled almost 8 months. The Appellant, Mrs. Juanita Mariano (“Mariano”), in fact initially accepted such offer then changed her mind by which time the offer was no longer in play – too late to change her mind.

[17] Having regard to the above, it is clear the issues in dispute were factually complex pursuant to factor (f), made more complex by the complex structure of the donation program (the “Program”) involving cash and in-kind donations, trusts, the involvement of various administrative, management and supplier parties, including U.S. and offshore entities, allegations of sham, as well as the technical valuations of the Appellants’ expert witness and the 2 valuations by the Promoter’s valuators that formed part of the Program materials. The Respondent was forced to review and consider all these materials and facts.

[18] Counsel for the parties conducted themselves professionally and admirably throughout this trial such that it can be easily said there were no improper, vexatious or unnecessary stages in the actual trial proceedings under factor (i). However, the able, professional and efficient conduct of the Appellants’ counsel in their carriage of these actions does not derogate from the lengthy, complex, and unnecessarily lengthened trial that resulted partially due to the conduct of their clients; both the Appellants, by their refusal to make admissions, and the Promoter of the Program which will be discussed later.

[19] Although the “amount in issue” under factor (b) was not directly addressed by the Appellants’ submissions, it was indirectly addressed in their submissions relating to “other factors” in paragraph (j) in respect to the reasonable expectations of the Appellants, which I will discuss in more detail shortly. For the purposes of this factor (h) however, it is clear the Appellants feel the amount of taxes in issue is not significant – relative to the amount of costs claimed as they state in paragraph 10 of its costs submissions:
10. …The cost exposure would have completely outweighed the potential benefit of pursuing the appeals….

[20] The Respondent admits that the amount of tax in dispute, even including the amounts of the Bound Appellants, are not significant however, also points out that the amount of charitable tax credits claimed by the Appellants is significant.

[21] The evidence was also that Mariano made a cash payment of $7,500 and claimed a donation receipt of $45,044 for which she expected to receive a total federal and provincial tax credit of $16,362.99 for 2005. Douglas Moshurchak (“Moshurchak”) made a cash payment of $14,250 in 2004 and claimed a donation receipt of $57,044 for which he expected a combined tax credit of $18,777.76. For 2005, Moshurchak made a net cash payment of $100,000 ($116,000 if you include his $16,000 negotiated kickback from his commissioned adviser who donated same on his behalf) for which he claimed a donation receipt of $928,052 and expected a combined tax credit of $357,208.44.

[22] Taken together, the total combined federal and provincial tax credits in dispute do not equal the costs claimed, although they came close at about $392,409. However, if one adds the charitable tax credits claimed by the Bound Appellants according to the relevant pleadings, then the total amount of charitable tax credits claimed is very significant relative to costs. If one looks at the amount of the proposed donations claimed giving rise to the tax credits; such amounts are very significant relative to costs; more than double. Having regard to the above, this factor is not determinative either way and so I give little weight to this particular factor in the circumstances.

[23] Moreover, I agree with Hogan, J. in Otteson v The Queen, 2014 TCC 362, 2015 DTC 1025, at paragraph 17:
In my opinion, it is inappropriate to draw a simple straight line between the amount in issue and the actual amount of a costs award. In determining a proper award, it is more appropriate to examine what percentage of the costs incurred by successful parties has been covered by the Court's costs awards. The point of costs awards is to provide compensation for the legal expenses incurred by the successful party.

[24] In my opinion, a review of the above factors alone, before consideration of other factors to consider under paragraph 147(3)(j), would clearly have justified a claim by the Respondent of legal fees well in excess of the Tariff costs claimed and for expenses for an expert witness necessarily incurred, all as suggested by the Respondent herself in argument. However I will now address the other factors to consider under paragraph (j) that form the main basis of the Appellants’ arguments to complete the factors analysis including the effect on costs of being a lead case, the parties reasonable expectation of costs and the interpretation issues raised regarding the form and effect of the Agreement to be Bound pursuant to Rule 146.1.


[31] The Appellants argue that these cases are “test cases”, the other factor to consider, that constitutes sound reason for departing from the general rule of costs following the event. The Appellants argue that the Appellants were chosen as lead cases on an involuntary basis and that there were 16,000 taxpayers who participated in the GLGI program in the 2004 and 2005 years whose objections were not confirmed and that only about 25 taxpayers had launched actual appeals by mid-2015, including the Appellants and 5 other Appellants represented by the same counsel as the Appellants herein who agreed to be bound by this decision, while there were 27,000 additional donors by such later date whose appeals were still at the objection stage. The Appellants’ lead case argument is clearly set out in paragraph 21 of its initial written submissions which reads as follows:
1. It is submitted that, in the context of a Lead Appeal, it would be reasonable for a Lead Appellant (whose case would be used to dispose of potentially thousands of cases) to expect that he/she would not be forced to pay costs any greater than his/her pro-rata share of the costs. Also, it is further submitted that, if Lead Appellants were burdened with the full liability of the costs of a Lead Appeal, then no one would agree to be a Lead Appellant. To impose such a liability, in the context of a Lead Appeal would be punitive and would run contrary to the object and spirit of the Lead Cases provisions in Rule 146.1.

[40] Notwithstanding the above, the fact that the Appellants’ appeals may be lead cases or have precedential value is a factor that can be considered by a Court under the Rule 147(3)(j) “other factors” category, however, the Courts have made clear that in order to constitute special or sound reasons not to follow the practice of costs following the result, the issues before the Court must transcend the interest of the litigants and be of public interest or there must be misconduct by the successful party. See David Polowin Real Estate Ltd. v Dominion of Canada General Insurance Co., 93 OR (3d) 257. In Brown, Rip J. addressed this issue in the context of a similar argument by the appellant therein that due to the large number of appeals held in abeyance and cases at the objections stage that could all exceed 3,000, that their case, as the first case to be heard, should be considered a test case and the Crown should absorb its own costs, at paragraph 20:
…I cannot agree. This was not a test case. Simply because a provision of the Act is considered by a Court for the first time and may affect other taxpayers does not colour that appeal with the character of a test case. The normal income tax appeal-which this appeal was-is not a matter of public policy (as in Lachine General Hospital Corp. v. A.G. of Quebec) or touch on constitutional principles and in the public interest (as in Singh v. the Queen). It is simply a dispute between a taxpayer and the Crown as to whether the taxpayer was properly assessed tax. The principle purpose of these appeals was to settle a dispute between the parties, not necessarily to settle a point of law….

[41] In the case at hand there was no important issue of statutory interpretation, constitutional issue or serious matter of public interest in play. The law of trusts, sham, and donative intent applicable herein were well established. While the public always has a general interest in ensuring all laws are complied with and taxpayers pay their required taxes, this general interest existent in all tax cases does not elevate each case to that level of importance contemplated above. The Appellants have not established that these matters fall within the category of cases of Polowin, Vennell and Mangat above or those referred to by Rip J. in Brown above.

[42] I must also agree with the Respondent that the fact the Minister had thousands of cases at the objection stage that were not confirmed does not constitute special circumstances that justify departure from the usual costs rule. It would be administratively impossible for the Minister to confirm all cases in line on similar matters before any case should proceed, especially in cases like this one where donors participated in this Program over a span of several years, resulting in long delays in anyone getting to trial if the Minister were to be put to this task and the long list of complaints that would arise from taxpayers who want their day in Court, something I take judicial notice of the fact occurs frequently. Simply put, someone has to go first and a taxpayer who files an appeal must obviously do so with a view to getting his or her case heard in a reasonable period of time. I agree with the Respondent’s reasoning that if the Minister were required to confirm all objections at the same time or all before proceeding to trial, aside from administrative feasibility, the Minister would be put in the absurd position of practically never being entitled to costs.

4. The Appellants executed a Direction as part of the Program documentation that specifically referred to the contribution of 3 percent of the cash donations made to the Program foundation up to a maximum of $750,000 to a legal defense fund to pay legal fees in the event of a reassessment by the Canada Revenue Agency (“CRA”). The existence of a $750,000 legal defense fund is certainly evidence that the costs of litigating would be very large.
I do not accept that the Appellants did not reasonably expect such a level of costs in the circumstances. Rather, it is clear that the Appellants expected the costs of litigation to be very high in these matters and should have known that that the risk of success was unclear, if not even low, due to the many recent decisions of the Federal Court of Appeal on the issue of donative intent.
I also do not agree with the Appellants’ contention that even the Respondent did not reasonably expect its costs of litigation to be so high. The Appellants of course take this position only with respect to the Respondent’s claimed expert witness fees, arguing that the proposal given by FTI to the Respondent, dated June 20, 2011, for a range of between $235,000 and $325,000, was exceeded as obviously the final invoices totalled $422,000. The Appellants’ submissions note that actual proposal rates were lower than actual rates charged. For instance, the expert witness, Mr. Neil Mizrahi’s rate was quoted at $400 per hour in the 2011 proposal but actual rates charged on the invoices ranged between $400-500 per hour. Frankly, as the Respondent has argued, the proposal was dated in June of 2011 at which time the trial was, according to such proposal, scheduled for between November 21 to December 2, 2011. We know that the trial was later scheduled for June, 2012 but the Appellants requested two adjournments which pushed the ultimate trial date to March of 2015 and so it is not unexpected that fees rates would rise over a four year period. Moreover, the proposal is clear that fees would be charged on the basis of actual time spent in conducting the engagement based on its hourly rates, for which 2011 rates were listed and that the proposal only gave an estimate of total fees to be charged. In any event, there is no basis in law argued to suggest the Respondent’s actual disbursements should not be used as the basis for its claim, subject to the Appellants rights to challenge its reasonableness and quantum.

[47] The Appellants have not provided any evidence as to what its own expert witness, particularly Mr. Dobner, quoted and charged so it is not possible to weigh the reasonableness of the Respondent’s witness fees relative to their own or whether their final bills exceeded proposal estimates as a comparison.

[48] I am not prepared to find that the expert witness fees of the Respondent were not reasonably expected by the Appellants nor the Respondent herself based on the Appellants’ arguments. I will address the Appellants’ arguments regarding the quantum of the Respondent’s claimed expert fees shortly.

[49] What is clear to me however is not that the Appellants did not reasonably expect legal fees and disbursements to be at the level of those claimed by the Respondent, but rather that the Appellants, like the Bound Appellants, expected the Promoter of the Program to pay them. This is clear from the evidence at trial of the Directions signed by the Appellants referencing the defense fund and the evidence the Appellants’ expert witness fees were paid for by the Promoter who engaged its services. It is also clear from the Appellant Mariano’s letter to this Court dated February 22, 2016 on costs where she stated “I had been under the premise that GLGI would finance the cost of litigation”. It is further evidenced by the admissions in argument that the Promoter paid the Appellants’ counsel fees whom it engaged, as well as the submissions of some of the Bound Appellants. I will discuss this matter in more detail when addressing the issue of what persons should pay the costs as contemplated by Rule 147(1) above.

[101] I share the Respondent’s opinion expressed in paragraph 134 of its costs submissions: It is difficult to conceive of a fact pattern more supportive of an order of costs against the non-party Promoter than the one in these appeals….

[102] The Promoter not only funded the action herein but conducted the action from the sidelines if not directly from on-field. I take note of the following:

1. The Promoter prepared and arranged for the Appellants and in fact all participants in the Program to execute a Direction as part of the transactional documents wherein the Appellant, Mariano, as an example, agreed Global Learning Group Inc.(“Promoter”) will establish a legal fund equal to 3% of the amount of cash raised for the Foundation (to a maximum of $750,000) to pay legal fees in the event of a reassessment by the Canada Revenue Agency. To avail itself of the defense fund, the undersigned must consent to carriage of its appeal by the Promoter on behalf of the undersigned, with legal counsel of the Promoter’s choice, by way of binding test case, at Promoter’s option. The Direction signed by the Appellant, Moshurchak, made no reference “by way of binding test case, at Promoter’s option” but I note in the Promoter’s promotional material entered into evidence that the Promoter advised participants that if they are reassessed by the CRA “a lead case would be chosen and the entire program would be tested on that one case.”

2. It is absolutely clear from the above and from other evidence during the trial that the Promoter created a defense fund in anticipation of a challenge by the CRA, promoted the fact there might be a challenge as well as a test case, had full carriage of the action, had the right and did appoint and pay for the solicitors who conducted the action on behalf of the Appellants as test cases and was directly involved in instructing not only its solicitors but actually, through its representative, attended pre-trial conferences.

3. The Promoter hired the expert witnesses tendered by the Appellants at trial and paid for the Dobner report. The Promoter, through its principal, Mr. Robert Lewis, signed the engagement letter retaining PricewaterhouseCoopers to prepare the expert report and agreed to be solely responsible for payment of their services. At trial, it was clear that the expert, Dobner, who prepared the report received instructions from the Promoter or its representatives and not from the Appellants who seem to have had absolutely no role in the process.

4. The Promoter not only paid all the legal fees of the solicitors engaged to conduct the lead case but paid the costs assessed against the various Appellants by Boyle J. during case management conferences and well as those assessed by myself during the trial management conference which were agreed to in principle but not amount by its counsel at the time.

5. Although the Appellants’ costs submissions suggest there was no agreement on the part of the Promoter to pay any costs award, this is contrary to the positions taken by the Appellant, Mariano, in her letter to the Court advising that her expectation was that the Promoter was to pay same, as well as the position taken by various Bound Appellants, who in their submissions confirmed their understanding that the Promoter was to pay same and direct the action. Frankly, I find it rather incongruent to suggest that there was no legal obligation for the Promoter to pay costs in this matter when one considers the wide wording of the Direction creating the defence fund above to pay legal fees that did not restrict same to only legal fees of its own counsel nor in light of the promotional materials which talked of dealing with the matters by lead cases. Not only does this suggest strong prima facie evidence that the Promoter represented and agreed it would cover all costs associated with the “defense” but as indicated it actually did pay the cost awards earlier referred to in satisfaction of that obligation.

6. The Promoter clearly controlled all aspects of the Program, from negotiating master licences, arranging and paying for the valuations and legal opinions it utilized as part of its Program materials, hiring parties to administer the Program and collect funds, issue tax receipts and administer the Trust it was instrumental in instructing its solicitors to create, paying for all experts and lawyers involved and even preparing and making available templates for participants to use to file notices of objection with the CRA, which were utilized by both of the Appellants in this case as well as funded the lead case litigation. It controlled all aspects of the Program and it controlled the litigation that resulted therefrom. Frankly, the Appellants’ testimony was essentially relevant and substantially limited to the issue of donative intent and their understanding of the Program. The Appellants had realistically no role to play in dealing with the other issues in this trial; including in preparing and defending any of the valuations, expert reports, validity of the Trust and of the Program itself which I found to be a sham nor were they the source of the evidence tendered in support thereof including some fraudulent customs invoices tendered to substantiate the conversions of licences into CD’s. In short, the Promoter had far more participation and influence in the action than did the Appellants themselves.

 [103] Having regard to the above, I am of the view that the Promoter should also be responsible for costs in this matter. Even without reference to such aforesaid third-party cost precedents I would have arrived at the same conclusion pursuant to the broad discretion Rule 147 gives me. Finally, I will address the allocation of costs amongst those parties responsible therefore.

V. Allocation of Costs

[104] I find that the Appellants, the Bound Appellants and the Promoter shall be responsible for the costs of the Respondent as earlier calculated. While I appreciate the Promoter may bear the direct responsibility for the sham it has perpetrated on the Appellants and the Canadian public at large and benefited to the extent of millions of dollars in cash contributions, the Appellants and Bound Appellants did blindly or willingly jump on the Program train in expectation of receiving a net cash advantage from their donation. As I indicated in paragraph 88 of my Reasons in this matter: ..When otherwise good people turn a blind eye to the obvious reality surrounding them, they cannot lay blame on others for the consequences that follow from the fraud or sham of others. They certainly should not expect the Canadian public to fund their losses. Accordingly, I am not prepared to limit liability for costs solely to the Promoter as requested by the Appellants and Bound Appellants.

[105] The usual rule of allocating costs is that of joint and several liability for those found to be responsible for costs. See Makuz v The Queen, [2007] 1 CTC 2370, 2006 DTC 3464, at paragraph 3.

[106] In the circumstances however, an award of simple joint and several liability amongst all of the above parties would in my opinion offend the principle enunciated by Boyle J. in Martin above that the approach to fixing costs on a principled basis is that costs “should be compensatory and contributory, not punitive nor extravagant”. The Appellants and Bound Appellants had significantly different contributions to the Program and significantly different tax risks associated with it. As indicated above, Mariano contributed in one year only a sum of $7,500 in cash while Moshurchak contributed over two years for a total cash contribution of at least over $114,000. The Bound Appellants made contributions of sums in between the range of the Appellants. Moreover, even though the Appellants and Bound Appellants participated in the same Program, they received different allocations of software licences, ranging from 3 times to 8 times the cash contribution made; with at least the Appellant Moshurchak having negotiated a larger allocation for his second time larger cash donation. Thus charitable receipts were calculated on different basis. To hold all such persons to the same degree of cost liability would in my opinion be punitive to some and inadequately contributory from others.

[107] Accordingly, aware of the reality Rothstein J.A (as he was them) alluded to in Consorzio above, that an award of costs is not a scientific exercise, I find that each of the Appellants, Bound Appellants and the Promoter shall be jointly and severally liable for costs as earlier determined but that the maximum amount of costs for which each of the Appellants and Bound Appellants are liable for shall be capped; such that each of their liability for costs shall be limited to the proportion that their total Charitable Tax Credits claimed in respect of the Program for all years under appeal herein is to total of all Charitable Tax Credits claimed by all of them combined with respect to the Program for such years under appeal. For greater clarity, the total Charitable Tax Credits claimed by any of the Appellants or Bound Appellants shall include any Charitable Tax Credits claimed or claimable in respect of their charitable donations claimed for such years under appeal, including any Charitable Tax Credits transferred to any other person or claimable or transferable in future years. To avoid double counting, any Appellant or Bound Appellant, such as Janice Moshurchak, who received a transfer of any Charitable Tax Credit from another party (such as from her husband Douglas Moshurchak) shall not count such transferred Charitable Tax Credits in his or her total Charitable Tax Credit claimed. There shall be no limit to the Promoter’s liability for costs. This has the effect of treating the Appellants and Bound Appellants differently amongst themselves to avoid punishing any of them and permitting a fair contribution to costs but also treating them as a group who together with the Promoter will be responsible for the full amount of costs on a joint and several basis. VI. Conclusion

[108] As earlier determined the amount of costs shall be $491,136.95 as claimed by the Respondent less a reduction for any expert fees and disbursements charged by FTI for the services of Mr. Mizrahi and Mr. Tobias in attending to hear the evidence of any witnesses at trial or in preparing the Respondent’s counsel to cross-examine the Appellants’ witnesses claimed in the April 15, 2015 invoice of FTI to the Respondent. The taxing officer will be directed to determine such reduction based on the actual fees charged by such above persons in the said invoice if the parties are not able to agree amongst themselves within 30 days of the date of this Order. These Costs shall be allocated in accordance with paragraph [107] above.”