Canada: B.C. Court Of Appeal Rolls Back Aboriginal Groups' Multi-Million Dollar Award For Court Costs

Last Updated: November 10 2011
Article by Joan M. Young

Costs orders in Aboriginal and constitutional litigation have been a challenging issue for the courts. For instance, plaintiff groups often assert that they are entitled to greater costs awards than ordinary litigants given the public importance of their claims. In the case of Aboriginal groups, their asserted claims for rights and title more often than not anchor the basis for seeking extraordinary orders regarding costs. The British Columbia Court of Appeal's recent decision in Ahousaht Indian Band and Nation v. Canada1 however set aside a trial judge's multi-million dollar costs order arising out of the Ahousaht Indian Band's successful aboriginal rights claim for a commercial fishery. The result is a dramatic 90% reduction in the Ahousaht's entitlement to court costs from $3.145 million to close to $350,000.2

By way of background, the Ahousaht Indian Band along with several other aboriginal groups advanced claims for an aboriginal right to fish and to sell fish, and for aboriginal title to their fishing territories extending out 100 miles from the west coast of Vancouver Island. After a multi-year trial, the Plaintiffs were successful in establishing that they did have aboriginal rights to fish commercially, but only nine miles out instead of the 100 miles sought. The additional claim for aboriginal title was dismissed. The findings were substantially upheld on appeal.

Normally in civil claims, the successful party is entitled to payment of costs and expenses on the Supreme Court Tariff. An award of costs under the Supreme Court Tariff is intended to compensate a party for some, but not all, of the legal fees and expenses incurred in the successful prosecution or defence of a claim. Full indemnity is not a principle reflected in the Supreme Court Tariff. In the Ahousaht case, the Plaintiff aboriginal groups, nonetheless, sought an order for special costs assessed against the Government of Canada for the amount equivalent to the legal fees they incurred in prosecuting the action, or alternatively an order for increased costs in excess of the regular Tariff. The plaintiffs in this case estimated their legal fees for the trial, excluding expenses, to be $3,700,000 and that an award of ordinary costs on the Supreme Court Tariff would only be about $270,160.

In advancing their position, the Plaintiffs argued that an order of special costs was appropriate in constitutional cases involving matters of significant public interest where the successful parties have no direct personal proprietary or pecuniary interest in the outcome of the litigation. Moreover, the Plaintiffs asserted that the Government of Canada had a superior capacity to bear the costs of the proceeding and the Plaintiffs did not conduct the proceeding in an abusive, vexatious, or frivolous manner.

As a starting point, the general rule is that special costs are awarded to penalize abusive or vexatious conduct in litigation, none of which was alleged in this case. Nonetheless the trial judge went on to award 85% of the Plaintiffs' special costs against the Government of Canada.3

There are Aboriginal law cases in which substantial pre-trial costs awards have been made such as Tsilhqot'in Nation v. Canada4 (Attorney General) where the Court considered an application by the plaintiff, who had made claims to aboriginal rights and title in respect to certain lands within the Cariboo region, for an order that Canada pay the plaintiff's legal fees and disbursements in advance of trial. The Court held that the claim to aboriginal rights and title were "likely to be of significant precedential value" and that the plaintiff was entitled to payment of interim legal fees at 50% of special costs. Similarly, in British Columbia (Minister of Forests) v. Okanagan Indian Band5 the Aboriginal band applied for and was granted an advance order for special costs in advance of trial. The trial judge cited these cases as well as Victoria (City) v. Adams6 to support her conclusion that this case was of significant importance to warrant an award of special costs. She applied the four part test set out in Adams and held that the Plaintiffs' claim was of "profound" importance to British Columbians. The four part test is as follows:

  • The case involves matters of public importance that transcend the immediate interests of the named parties, and which have not been previously resolved;
  • The successful party has no personal, proprietary or pecuniary interest in the outcome of the litigation that would justify the proceeding economically;
  • As between the parties, the unsuccessful party has a superior capacity to bear the costs of the proceeding; and
  • The successful party has not conducted the litigation in an abusive, vexatious or frivolous manner

In overturning the trial judge's costs award, the B.C. Court of Appeal clearly resiled from the trial judge's analysis that aboriginal groups' claims for rights and title are de facto matters of public importance justifying a departure from the ordinary rules for awarding costs. The Court of Appeal noted that the legal principles applicable in the case were not novel and had been set out in other several earlier cases such as R v. Sparrow, R. v. van der Peet, R v. Gladstone, and R v. N.T.C. Smokehouse. The fact that the trial was long and difficult, and involved matters of public importance and interest did not elevate the entire proceeding to one that made it an "exceptional" case entitling the Aboriginal groups to special costs. What constitutes "exceptional" litigation was not articulated, but it seems plain that the guiding legal principles must be ones which have not already been determined in other similar cases. To find otherwise would open the door to awards of this nature in all cases of aboriginal rights and title, and would carve out an aboriginal law exception to the ordinary application of the Supreme Court Tariff.

Another important consideration for the court was that the Aboriginal groups in question were pursuing a claim which engaged their direct economic interest; namely the right to fish commercially. The Court of Appeal rejected the trial judge's characterization of the claim as one which transcended pecuniary interests. The finding of an economic component made the claim much less of a public interest claim and more of a claim for the establishment of private, albeit collective, rights.

The question of whether this signals that the court is pulling back from the earlier costs decisions made in Tsilhqot'in and Okanagan Indian Band to a more principled analysis consistent with typical costs orders made by the court is yet to be known. Consistent with other costs cases, this decision does establish that the award of special costs will be limited to exceptional cases or ones in which the court's rebuke of a party's conduct is required. As Aboriginal groups become increasingly sophisticated users of the court system, and some with funding gained through a variety of sources such as private foundations, joint ventures with private sector companies, impact benefit agreements and government revenue sharing, the original underlying rationale for atypical costs orders decreases. Moreover, as many of the principles for determining the scope of asserted rights and title have been fully described by the courts, the public importance component of such litigation becomes less obvious. The likelihood of the court to provide significant advance funding orders or special costs orders may continue to diminish as these claims become more routine and mainstream in our courts.

Footnotes

1 2011 BCCA 425

2 85% of Scale "C" court costs

3 15% of the costs was attributed to the claims against British Columbia which the Plaintiffs, for the most part, withdrew at the end of the trial and no costs against British Columbia were sought.

4 2002 BCCA 434

5 2003 SCC 71

6 2009 BCCA 563
http://www.courts.gov.bc.ca/jdb-txt/CA/11/04/2011BCCA0425.htm

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2011 McMillan LLP

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