Date: 20110325
Docket: T-2172-99
Citation: 2011
FC 230
Ottawa, Ontario,
March 25, 2011
PRESENT: The Honourable Mr. Justice Phelan
BETWEEN:
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HARRY DANIELS, GABRIEL DANIELS,
LEAH GARDNER, TERRY JOUDREY and
THE CONGRESS OF ABORIGINAL PEOPLES
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Plaintiffs
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and
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HER MAJESTY THE QUEEN, as represented
by THE MINISTER OF INDIAN AFFAIRS AND
NORTHERN DEVELOPMENT and
THE ATTORNEY GENERAL OF CANADA
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Defendants
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AMENDED REASONS FOR ORDER AND ORDER
I. INTRODUCTION
[1]
The
Plaintiffs have moved for an advance order for costs in order that the final
preparation and trial scheduled to commence May 2, 2011 may be funded. The
action has been funded to date under the Test Case Funding Program (TCFP),
which funding is about to expire.
[2]
The
grounds for the motion are that (a) the Plaintiffs cannot afford to pay for the
litigation and no other realistic funding option exists; (b) the claim is
serious and there is a reasonable possibility of success; (c) it is contrary to
the public interest that the case not proceed because of the Plaintiffs’ lack
of financial means; and (d) the issues raised are of public importance and
remain unresolved.
II. BACKGROUND
[3]
There are
profound differences between the parties as to the nature of this action and
the justiciability of the issues which only a trial can settle. Whatever the
differences, there is no suggestion that the Plaintiffs have been wasteful or abused
the funding arrangement currently in place.
[4]
The
Plaintiffs have commenced this action for the purposes of securing a
declaration that Métis and non-status Indians are “Indians” for purposes of s.
91(24) of the Constitution Act. The effect of the end of a finding, it
is argued, is profound and critical to the 200,000 or more people who fall
within those groups.
[5]
This
action was commenced in 1999. However, in 2005 there was an agreement between
the Plaintiff, The Congress of Aboriginal Peoples (CAP), Andrew Lokan (counsel
to the Plaintiffs) and the Minister of Indian Affairs and Northern Development
on behalf of the Government of Canada to put the case under the TCFP under
which the Government of Canada paid for the costs from 1999 to 2005 and then ongoing
to date.
[6]
The TCFP
was created to fund important Indian-related test cases that had the potential
to create judicial precedent. The TCFP originally had a cap of $1 million for
any one case, which cap was later raised to $1.5 million.
[7]
The
problem which gives rise to this motion is that the Plaintiffs will reach the
$1.5 million cap sometime in March - approximately one month before the
commencement of trial. There is provision under the TCFP to extend the funding
and there is precedent for so doing. The Plaintiffs have requested such an
extension but to date the Government has not responded despite the fact that,
for this type of complex case, this is the eve of trial.
[8]
On this
motion the Plaintiffs put in extensive evidence from a representative of CAP as
to CAP’s financial condition and as to the seriousness of the case. There was
no evidence from the individual representative Plaintiffs.
[9]
The
Defendants have objected, largely on technical grounds, to this evidence of
seriousness of the case in that the inclusion as “facts” of the Royal
Commission on Aboriginal Peoples and the inclusion of experts’ reports is
inadmissible. The Defendants have put in no evidence on this motion.
[10]
The Court
allowed the Royal Commission Report in as an “authority” rather than as fact
evidence. The expert evidence was allowed, not for the truth of the content, but
more in the nature of a pleading and argument directed at the issue of the seriousness
of the case and the reasonable possibility of success. However, the past
comments of judges and prothonotaries of this Court on motions in this action are
more compelling and relevant to that issue.
[11]
There have
been several interlocutory motions in this case, some being attempts by the
Defendants to strike all or parts of the claim. Commencing with Prothonotary Hargrave
in 2002 on the first motion to strike, where he referred to the issues in this
case as questions of great importance through to Justice Hugessen’s adoption
(in the second motion to strike a year later) of Prothonotary Hargrave’s
reasoning, with considerations along the way of Justice Martineau and
Prothonotary Lafrenière, this Court has consistently found the issues in this
case to be of public importance and deserving of a hearing.
[12]
This case
now stands on the cusp of trial with financing in issue. Counsel for the
Plaintiffs have been acting for hourly rates very significantly below market
rates and are prepared to continue to do so. Numerous experts’ reports have
been filed and these experts will also be required to testify at trial and be
paid. There will be the usual incidental expenses of travel, accommodation,
reporting, etc.
[13]
The
Plaintiffs seek an advance order for costs to enable this case to proceed to
trial and through to the end of the 6-8 weeks of trial scheduled. The funding
is to compensate counsel, to pay for experts and to cover normal travel, hotel
and related costs. The Plaintiffs seek an order in the range of $475,000. They
also suggest but do not demand that rates higher than under the TCFP are in
order and are consistent with other precedents.
III. ANALYSIS
[14]
The
parties agree that this Court, pursuant to Rule 400, has the jurisdiction and
wide discretion to make an advance order of costs. They also agree as to the
factors to consider although they differ as to emphasis of particular factors
and application of the factors to this case. They also agree that it is
appropriate for the trial judge to hear this motion, particularly in these
circumstances.
[15]
Orders for
advanced costs are highly unusual and are to be approached with caution. This
has been confirmed as late as three weeks ago in R. v. Caron, 2011 SCC
5, wherein the Supreme Court of Canada confirmed an advance cost order and
reiterated the three factors set out in British Columbia (Minister of
Forests) v. Okanagan Indian Band, 2003 SCC 71 (Okanagan).
[16]
As pointed
out in Caron, above, each case turns on its own facts but the Court must
consider three criteria and even then there is no assurance that a funding
order will follow:
38 Clearly,
this case is not Okanagan where the Court viewed the funding issue from
the perspective of a proposed civil trial not yet commenced. We are presented
with the issue of public interest funding in a different context. Nevertheless,
Okanagan/Little Sisters (No. 2) provide important guidance to the
general paradigm of public interest funding. In those cases, as earlier
emphasized in the discussion of inherent jurisdiction, the fundamental purpose
(and limit) on judicial intervention is to do only what is essential to avoid
an injustice.
39 The
Okanagan criteria governing the discretionary award of interim (or
"advanced") costs are three in number, as formulated by LeBel J., at
para. 40:
1. The
party seeking interim costs genuinely cannot afford to pay for the litigation,
and no other realistic option exists for bringing the issues to trial -- in
short, the litigation would be unable to proceed if the order were not made.
2. The
claim to be adjudicated is prima facie meritorious; that is, the claim
is at least of sufficient merit that it is contrary to the interests of justice
for the opportunity to pursue the case to be forfeited just because the
litigant lacks financial means.
3. The issues
raised transcend the individual interests of the particular litigant, are of
public importance, and have not been resolved in previous cases.
Even where these criteria are met there is no
"right" to a funding order. As stated by Bastarache and LeBel JJ. for
the majority in Little Sisters (No. 2):
In analysing these requirements, the court must
decide, with a view to all the circumstances, whether the case is
sufficiently special that it would be contrary to the interests of justice to
deny the advance costs application, or whether it should consider other
methods to facilitate the hearing of the case. The discretion enjoyed by
the court affords it an opportunity to consider all relevant factors that arise
on the facts. [Emphasis added; para. 37.]
…
A. Public Importance
[17]
The
Defendants do not seriously challenge that the constitutional issue raised in
this action is of public importance. It does, however, challenge whether it is
properly justiciable and, in the context of an advance cost order, that there
are other options (other cases) which will bring the issue to trial. In
particular, the Defendants refer to the Manitoba Métis Federation Inc. v. Canada (Attorney General) (2010 MBCA 71) case which is
proceeding to the Supreme Court of Canada.
[18]
In light
of the constitutional issue raised, the comments of this Court in earlier
proceedings in this case and the fact that this case has been funded to date under
a public interest funding program, it is not possible for the Defendants to
make out a case that this case lacks public importance.
[19]
The
question of justiciability is one that has been left for trial despite the
Defendants’ efforts to have the claim struck on that basis.
[20]
On the
question of whether other cases will provide the answer to the one framed in
this case, to so find would be to speculate on the reasons and results which
may be obtained in other cases.
[21]
It is
instructive that the Manitoba Court of Appeal in the Manitoba Métis case
dealt with CAP’s efforts to be an intervenor by noting that CAP’s position on
s. 91(24) would expand that case (the Appellants therein specifically denied
that they were asking for a determination that Métis are Indians under s.
91(24)) and that CAP’s position was being dealt with in this Court. The Manitoba
Métis case is of little assistance in this motion to the Defendants.
[22]
The issues
in the present case meet this condition. The public interest condition is
closely related to the next condition – prima facie merit.
B. Prima Facie Merit
[23]
It is
important to recognize that this condition is not the same as that in a motion
to strike or necessarily on a motion for summary judgment. A consideration of
this condition is not a trial within a trial and ought not embark the Court in
a significant review of merit or otherwise prejudice the outcome (Caron,
above).
[24]
The test
has been formulated in terms of seriousness and real possibility of success (Hagwilget
Indian Band v. Canada (Minister of Indian Affairs
and Northern Development),
2008 FC 574 (commonly referred to as the “Joseph” decision)).
[25]
The
condition has also been described as “the claim is at least of sufficient merit
that it is contrary to the interests of justice for the opportunity to pursue
the case to be forfeited just because the litigant lacks financial means” (Okanagan,
above).
[26]
While not
determinative, the earlier comments of this Court on the importance of the case
are persuasive that this is a serious case. So too is the fact that the case
has been publicly funded for 11 years. If there was no real possibility (not
probability) of success, it is hardly likely that the government would have
expended $1.5 million in supporting the case.
[27]
The Court
cannot see how it could be in the interests of justice to have the case
forfeited for lack of funds on the virtual eve of trial.
[28]
The
Defendants have advanced arguments which include the lack of standing of CAP;
the absence of a live dispute thus making this case similar to a reference; a
“floodgates” concern; the absence of evidence of prior attempts to raise money.
[29]
Issues of
standing have been dealt with in the motions to strike as has the issue of
reference like proceedings. The courts are more than able to control any sort
of “floodgates” threat. The absence of past efforts to raise funds, as occurred
in Caron, above, is understandable given the representative nature of
this proceeding and the fact that a funding arrangement was in place. The
Court’s priority must be on what lies ahead in the immediate future rather than
in the past.
[30]
None of
these arguments undercut the fact that “but for” funding, this case could not
be heard. Even if counsel were ordered to conduct the trial for free (or
volunteered to do so consistent with the standards of professional conduct
governing a member of the Bar), the need for expert evidence is clear as is the
need to cover the expenses of those experts and the related expenses of a trial
away from people’s homes.
[31]
Counsel
for the Plaintiffs have been acting at significantly reduced rates and it would
be unfair to require them to add an even larger subsidy to their already
significant contribution to the case. In the absence of further funding,
counsel could face the ethical issue of withdrawal from the case (even if a
court would permit it) or the Plaintiffs filing a discontinuance.
[32]
A further
aspect of the public interest and interest of justice is a consideration of the
loss to the public should the case not proceed. In addition to the loss of
resolution of this issue is the waste of money, time and effort. The public has
already contributed $1.5 million to the Plaintiffs’ costs. In addition, it is
reasonable to assume that the Defendants have expended at least that amount and
more. Its counsel was not acting for reduced compensation nor should they have been.
The point is that somewhere in the neighbourhood of $3 million of public money
would be wasted if this case does not proceed; the effort and work product
would likely be wasted as well.
[33]
The
Plaintiffs’ case would appear to be not without difficulties. However, as noted
by Justice Hugessen in Joseph, above, the fact that there may be
difficulties does not mean that there is an absence of reasonable possibility
of success.
[34]
Therefore,
on this condition, the Court finds that the Plaintiffs have met their burden.
C. Impecunity
[35]
The
Defendants have noted the absence of any evidence from the personal Plaintiffs
who are in positions similar to representative parties; one being Métis,
the other non-status Indian. While some evidence would have been helpful, there
is no serious suggestion that as “representative” Plaintiffs,
they were expected to fund the litigation for the other hundreds of thousands of
people who would benefit from a favourable judgment. The parties knew this from
the very beginning of the case and throughout it.
[36]
These
Plaintiffs as “representatives" are in a situation similar
to a plaintiff in a class action. Under the Court’s Rules, except in unusual
circumstances (none of which are applicable), such plaintiffs are not expected
or required to fund or be liable for litigation expenses and costs. Therefore,
the absence of financial evidence of these Plaintiffs does not undermine this
motion.
[37]
The
Defendants directed their attention to CAP, its legal capacity and standing.
Those arguments have been addressed earlier in this judgment.
[38]
The
evidence is overwhelming that CAP is in no position to fund this litigation.
CAP is in a deficit position and has been for some time. It is hardly in a
position to secure bank financing of a piece of litigation, the outcome of
which is unknown.
[39]
Most
importantly, CAP’s existence is completely dependant on federal government
funding. The programs it administers are funded in this manner. It is a
condition of that funding that the money be used for the programs and not for
litigation, least of all against the federal government.
[40]
The
evidence is also that CAP’s provincial members are not in any position to
contribute to the litigation for the same reason.
[41]
Therefore,
the Plaintiffs have made out their impecunity in these circumstances.
D. Other
Considerations
[42]
As
indicated in both Okanagan and Joseph, even if an applicant for
advanced cost order meets the three conditions, the Court may still refuse to
grant such an order.
[43]
Whether
this latest effort was intended to frustrate this litigation, as this Court had
found in respect of motions to strike, need not be decided. Crown counsel
vigorously defended her client as she is obliged to do. However, intended or
not denying funding now would have the same effect as the previous and
unsuccessful efforts to strike the action.
[44]
The case
is virtually ready for its hearing, court resources have been committed and the
amount of money requested, in the scheme of this litigation and litigation of
this type, is not staggering or startling.
[45]
The
Plaintiffs’ counsel has suggested rates which are $100 per hour more than was
funded under TCFP. There is precedent for such awards.
[46]
However,
in making an advance cost order, the Court has to be mindful that what is
necessary is an amount sufficient to ensure continuance of the action and not impose
a penalty on the Defendants. As an advance cost order is, in this case, an
interim order, costs are to be dealt with at the end of the trial. The parties
are at liberty then to seek further and a higher rate for costs in either or
any event of the case.
[47]
Consequently,
the rates applicable under the TCFP should be adequate for the purposes of
ensuring a trial and fair in the context of the history of this litigation.
IV. RELIEF
[48]
The Court
will grant this motion with costs. By the Court’s calculation based on the TCFP
rate and using the Plaintiffs’ proposed budget, the amount budgeted and thus to
be ordered is $345,000. This amount is neither a ceiling nor a floor. The Court
would add $30,000 for contingencies.
[49]
The
parties, having received these reasons, may file written submissions as to the
appropriate mechanism for oversight of the use of this amount. The more
complicated examples submitted are too elaborate for the short time that this
funding will be used. The use of the TCFP mechanism may pose other
difficulties. The parties are encouraged to find an agreeable mechanism rather
than have the Court impose one. The parties shall have seven (7) days to file
submissions.
ORDER
THIS COURT ORDERS that this motion is granted with
costs. The Defendants shall pay an amount for costs of $375,000 in such manner
and at such time as may be further ordered by the Court after having the
parties’ submissions thereon.
“Michael
L. Phelan”
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