Date: 20060831
Docket: T-850-99
T-1702-02
Citation: 2006
FC 1054
Vancouver, British
Columbia, August 31, 2006
PRESENT: Roger R. Lafrenière, Esquire,
Prothonotary
Docket: T-850-99
BETWEEN:
PHYLLIS RANDALL, LONNIE DODGE, JOSIE DODGE, ROBERT K. SCOTT, BRIAN
WELCH, FLOYD SCOTT, ANTHONY DODGE (A.K.A. ARTHUR DANIEL SIMONS), MABEL HAWCO,
CHRISTOPHER HAWCO SR., SUSAN DELEARY, WILLIAM DELEARY, LISA BRUMMITT, LAURA
BRUMMITT MERCER, WALLACE KENNEY, RENA H. THOMPSON, PAMELA DODGE, TERESA JACOBS,
ELLA ROBITAILLE, CAROLINE JUNE WELCH, TONY DONOVAN, JO ANN WILSON, ROBERT
DODGE, JOSEPH CHAMBERLIN, MARGARET VANDERWEIDE, MARIE DUCKWORTH, SHAWN
DUCKWORTH, IAN DUCKWORTH, DAVID MCPHEE, JANICE DODGE, DANIEL CHAMBERLIN, NANCY
LAMOREUX, JAMES ALLAN DODGE, SANDRA DODGE, WENDY DONOVAN CAMPBELL, DARRYL R.
JACOBS, EDWARD A. JACOBS, ANGELA HIGGINS, WILLIAM DODGE, FLORENCE DODGE,
STANLEY JAMES SCOTT, STEVEN SCOTT, DANIEL SCOTT, JACK SCOTT, MARY FRANCES
DUCKWORTH, CANDICE BRUMMITT, VICKY BAKELAAR-CORNELL, MICHAEL CORNELL, WILLIAM DUNN,
SARA ANN SCOTT, PAT BRUMMITT, WILSON DODGE, SR., ELIZABETH DODGE, WILSON DODGE,
JR., WILSON DODGE, III, MYRTLE JOYCE, EVA TYLER, RONALD DOOLITTLE
Plaintiffs
and
CALDWELL FIRST NATION OF POINT PELEE AND PELEE
ISLAND BAND COUNCIL, LARRY JOHNSON, HENRY
SOLOMON, FRANKLIN SOLOMON, and DONALD SOLOMON
Defendants
Docket : T-1702-02
BETWEEN:
Lonnie Dodge
Applicant
and
Larry
Johnson, Franklin Solomon, The Caldwell
First Nation of Point Pelee and Pelee Island Band
Council and John C. Peters
Respondents
REASONS FOR ORDER AND ORDER
[1]
By motion
dated February 8, 2006, the Defendants in Court File No. T-850-99 and the
Respondents in T-1707-02 (collectively referred to in these reasons in the
singular as the Band Council) seek a lump sum award of costs of the proceedings
against the Plaintiffs in T-850-99 and the Applicant in T-1707-02 (the Claimants),
as well as against the Plaintiffs’ former solicitor on a substantial indemnity
basis. In the alternative, the Band Council seeks directions that costs be assessed
in accordance with the upper range of Column V of Tariff B and that those costs
be doubled.
[2]
The motion
is brought following a court-assisted mediation held on November 19, 2004,
during which the parties agreed to settle the two proceedings.
[3]
The issues
to be addressed on this motion are whether an order for costs can be made in
the absence of a formal order or judgment of the Court, and if so, whether this
is an appropriate case in which to award costs in favour of the Band Council.
Facts
[4]
The
proceedings in T-850-99 were commenced by way of application for judicial
review in May 1999 by a group of dissident band members of the Caldwell First
Nation of Point Pelee and Pelee Island (Caldwell First Nation). The catalyst behind the proceedings was a Land Claim Settlement
(Settlement) negotiated between the Caldwell Band council and the federal
government.
[5]
On April
8, 2000, Caldwell band members were scheduled
to vote on whether to ratify the terms of the proposed Settlement. The
government had agreed to pay $23,400,000 in settlement of the Caldwells' claims relating to their
eviction from their lands without a proper surrender. The Settlement was characterized
by the Band Council as the single most important event in the history of the Caldwells. The Claimants, however, had
serious concerns regarding the propriety of the actions of the Band Council
with respect to the negotiation of the Settlement, and the manner in which the
ratification vote was being conducted. They therefore brought an application for
judicial review in T-850-99 and moved for an interim and interlocutory
injunction restraining the Band Councillors and Chief from conducting the
ratification vote.
[6]
In seeking
to restrain the ratification vote, the Claimants alleged that the Chief, Larry
Johnson, was not validly elected, and that the Chief and members of Council,
the other individual defendants, had refused to conduct regular elections for
the positions of Chief and Council in accordance with the Band's customs and
traditions, notwithstanding repeated demands that such elections take place. They
also alleged that the Chief and Council had breached their positions and duties
by altering and manipulating the Membership Code of the Band so as to ensure an
outcome on the ratification vote acceptable to the Chief and Council.
[7]
On April
14, 2000, Madam Justice Dawson allowed the Claimants’ motion and issued an
interim injunction restraining and enjoining holding of the ratification vote
until after June 30, 2000. (In a subsequent application in T-1707-02, Lonnie
Dodge, moved for an interim injunction to further restrain the holding of the
Settlement ratification vote until after the disposition of the proceedings in
T-850-99 or T-1707-02. The motion was heard by Madam Justice Heneghan on January
13, 2003 and was dismissed on the basis that Mr. Dodge had failed to
demonstrate that he would suffer irreparable harm.)
[8]
The
Settlement ratification vote took place on August 8, 2003 and was defeated. On
the basis of this vote, the Claimants withdrew the bulk of their allegations at
a pre-trial conference held January 14, 2004. The remaining allegations were settled
at a mediation conducted with the parties on November 19, 2004. The Minutes of
Settlement provided, among other things, that a custom election code (“CEC”)
for the Caldwell First Nation would be drafted and presented to the membership
on or before June 30, 2005, and that ratification of the CEC would be sought by
December 31, 2005. The parties were unable to agree on the issue of costs,
however, and therefore expressly reserved the right to bring a motion for costs.
[9]
A vote was
held on January 19, 2006 and the CEC was ratified by a majority of the members.
[10]
The
Claimants elected not to seek their costs. The Band Council’s motion for costs
against the Plaintiffs’ former solicitor was severed on consent of the parties
and deferred pending disposition of the present motion.
[11]
Notwithstanding
being privy during the mediation to information exchanged between the parties
on a without prejudice basis for the purpose of settlement negotiations, as
well as the parties’ confidential interests and positions, the parties jointly
requested that I deal with the present motion because of my intimate knowledge
of the proceedings as case manager since 1999. In light of the consent of the
parties, as well as their insistence, I acceded to their request.
Analysis
[12]
The Band
Council submits that the Court should exercise its discretion pursuant to Rule
400 of the Federal Court Rules, 1998, SOR/98-106 (FCR) to make a cost
award in its favour. It claims to be entitled to costs on the grounds that:
(1) it was the successful party; and (2) the Claimants were vexatious and
unreasonable in the manner in which they pursued the action, thereby requiring the
Band Council to incur undue costs. The Band Council submits that the Claimants’
claims were unfocused, broad and chaotic. They also contend that the
allegations made against the Band Council were abusive, vexatious and
scandalous in nature and that the focus of the Claimants’ litigation was to
attack members of the Band Council personally. As such, the Band Council
submits, the Claimants’ conduct should be sanctioned by a substantial award of
costs.
[13]
Under Rule 400 of the
FCR, the Court has discretion as to whether costs are payable by one party to
another and the amount of those costs. In deciding what order, if any, to make
on costs, the Court will generally have regard to all 14 factors which are listed
in subsection 400(3): Francosteel
Canada Inc. v. African Cape (The), [2003] 4 F.C. 284; 2003 FCA 119. The onus is on the Band
Council to establish that there is a sufficient basis for the Court to conclude
that an exercise of its discretion to award costs is warranted.
[14]
The result of the proceeding usually carries
significant weight because, as a general rule, costs should follow the
event: Merck & Co. v. Novopharm Ltd. (1998), 82C.P.R. (3d) 457
(F.C.T.D.) at 464. Where success has been fairly evenly divided, however,
there should normally be no order as to costs: Lubrizol Corp. v. Imperial
Oil Ltd. (1996), 67 C.P.R. (3d) 1 (F.C.A.) at 25.
[15]
The Band Council claims that it would have prevailed had the
proceedings gone to hearing. However, the fact is that the two proceedings were settled by the parties without any concessions
having been made by the parties. In the absence of a hearing on the merits, “success”
is an elusive concept, and capable of being measured quite differently by the
parties. The Minutes of Settlement cannot be construed as evidence of an admission
or concession of liability for costs or wrongdoing by the Claimants.
[16]
The Band Council relies on comments of Justice Paul Rouleau in RCP
Inc. v. Minister of National Revenue, [1986] 1 F.C. 485 (T.D.) (RCP)
in support of its proposition that costs may be recovered even where the
proceeding is settled. In RCP, Justice Rouleau determined that the applicant
should not be denied its costs simply because they obtained the relief they
sought in the form of a settlement. He concluded that equity dictated that the
respondents should not be allowed to avoid paying costs by settling the matter
when it becomes apparent that the applicant would be successful at a trial of
issues. However, the respondents in RCP had conceded the relief sought
by the applicant. The Claimants in these proceedings have made no similar
admission or concession.
[17]
In fact, from
the Claimants’ perspective, success, if any, was theirs. They ultimately succeeded
in delaying the settlement ratification vote by four years, by which time the
Band membership had been sufficiently apprised
of all the issues underlying the vote; and that they were able to influence
changes to the Band electoral process through the CEC. As eloquently stated by
Lonnie Dodge, one of the Plaintiffs in T-850-99 and the Applicant in T-1702-2,
in his affidavit filed in response to the motion, at paragraphs 42, 45:
Since the commencement of our action, the
settlement agreement which was a significant part of our actions, was voted
down; Chief Larry Johnson has been found in contempt of court, an election
process has been used with regards to the settlement agreement vote, whereby a
membership list was made available to us prior to the election, a third party
without conflict oversaw the settlement agreement votes, the efforts of the
Chief to locate the Band in the Chatham-Kent area has been turned down by the
Band and at least we have some semblance of an election code being put forward
for the Band to vote on.
…
If anyone is
entitled to costs, it would be us and in the interest of creating harmony in
the Band and trying to bring matters back together, we believe that no costs
should be awarded in this case, and we should move forward with the development
of the election code and with a fair and proper election for Chief and
council. We believe that should take place as soon as possible. We signed the
agreement in principle and in good faith, on the understanding that the next
election will be open, transparent and fair and will occur soon after the Band
approves a new code.
[18]
Absent an acknowledgment by the Claimants that the Band Council
would have succeeded if the proceedings had gone to hearing, the Court should
not be speculating as to the likely outcome. Costs can be awarded, however, on
the basis of the conduct of the
parties during the course of the litigation, such as: (1) whether it was
reasonable for a party to raise, pursue or contest a particular allegation or
issue; (2) whether a party properly pursued or defended its case or a
particular allegation or issue; (3) whether a party exaggerated its claim or
raised a baseless defence; and (4) whether a party properly conceded issues or
abandoned allegations during discoveries.
[19]
Although I
agree with the Band Council that the Claimants at times overreached their case
by making broad and unfocussed allegations, I am not satisfied that their
complaints about the membership list and ratification process were wholly
without merit. Granted, the Claimants could have run their litigation in more
efficient and effective manner. In addition, their claim did contain numerous
personal allegations against members of the Caldwell First Nation Band council.
However, the focus of their claim was on the electoral process, the accountability
of the Band Council, and the propriety and the manner in which the Settlement
had been negotiated.
[20]
In
exercising my discretion whether to award costs, I am guided the reasoning of
Justice Frederick Gibson in CCH Cdn. Ltd. v. Law Society of Upper
Canada (2000), 184 D.L.R. (4th) 186 at 190 in which he concluded
that even unfocussed allegations that complicate the litigation may not warrant
a cost award:
I am in agreement with the submissions of counsel
for the defendant that the plaintiffs' allegations as set out in the statements
of claim and the reliefs sought were extraordinarily broad and without
specificity. As indicated in the reasons in these matters dated the 9th of
November, 1999, it was only at the beginning of the trial that the plaintiffs
focused their claims. It was also not until the beginning of trial that the
plaintiffs dropped very significant claims for relief and focused their
remaining substantive claim, that being for a permanent injunction, even though
that claim continued to be stated in very broad terms. In summary, the plaintiffs
presented an amorphous and moving target. While I am not satisfied that the
conduct of the plaintiffs, at least once the trial commenced,
"unnecessarily lengthened the duration of the proceedings", it
certainly complicated the preparation for and presentation at trial for the
defendant.
…
I find no basis on which to conclude that any step in these
actions was improper, vexatious or unnecessary or taken through negligence,
mistake or excessive caution. This finding is in spite of my earlier comments
regarding commencement of three separate actions, failure on the part of the
plaintiffs to specifically define their claims and the reliefs sought prior to
the commencement of trial, extension by the defendant of its counterclaim to
cover self-copying services, and failure by the defendant to effectively define
its constitutional defences at an earlier stage of the proceedings. None of
these factors, in my view, fits the description of an improper, vexatious or
unnecessary step or amounted to a step taken through negligence, mistake or
excessive caution.
[21]
The Court must also
be mindful about the chilling effect of awarding costs against a party after
the conclusion of a mediation. It is now widely accepted that dispute
resolution conferences have a significant role to play in the litigation
process. A mediated settlement can produce solutions that exceed those
available through the courts. Its success is contingent, however, upon the
parties buying in to the process.
[22]
The litigation between
the Claimants and the Band Council brought a number of festering issues to a
head, and resulted in negotiated settlement that will no doubt contribute to a
better environment and understanding in the community, to the credit of all
parties.
[23]
Bearing in
mind the entirety of the record before the Court, I am not satisfied that it
would be appropriate to award costs against the Claimants who, in the end, were
simply attempting to have their voices heard. Moreover, a cost award would be
counterproductive as it would undermine the progress that has been achieved
over the last six years in bringing the community together.
[24]
Being
substantially in agreement with the Claimants’ written submissions, I would
exercise my discretion by declining to award costs to the Band Council.
ORDER
THIS COURT ORDERS that
1.
The motion
for costs against the Plaintiffs in T-850-99 and the Applicant in T-1707-02 is
dismissed.
2.
There
shall be no order as to costs of this motion.
“Roger
R. Lafrenière”
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