Date: 20161013
Docket:
T-653-10
Citation:
2016 FC 1140
Toronto, Ontario, October 13, 2016
PRESENT: The
Honourable Madam Justice Heneghan
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BETWEEN:
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CALWELL FISHING
LTD., MELVIN GLEN CALWELL, DALE VIDULICH, GERALD WARREN, AQUAMARINE
TRANSPORTATION LTD., AND GEORGE MANSON
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Plaintiffs
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and
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HER MAJESTY THE
QUEEN IN RIGHT OF CANADA
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Defendant
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ORDER AND REASONS
I.
INTRODUCTION AND BACKGROUND
[1]
By Judgment and Reasons dated March 11, 2016,
the within action against Her Majesty the Queen in Right of Canada (the “Defendant”)
was dismissed.
[2]
By Direction issued on March 11, 2016, the
parties were invited to serve and file written submissions on costs, should
they be unable to agree.
[3]
The Defendant served and filed submissions on
March 21, 2016, seeking her costs in the amount of $110,000.00. The draft Bill
of Costs attached to the submissions shows her costs totalled $113,332.02.
[4]
By letter dated March 30, 2016, the Defendant
sought to correct an omission in her draft Bill of Costs, that is the fee paid
for the expert evidence of Mr. Stuart Nelson. A revised draft Bill of Costs
showed the Defendant’s costs were $177,312.02. She claimed costs in the lump
sum of $160,000.00, rather than $110,000.00.
[5]
Calwell Fishing Ltd., Mr. Melvin Glen Calwell,
Aquamarine Transportation Ltd. and Mr. George Manson (collectively the
“Plaintiffs”) filed responding submissions dated March 31, 2016.
[6]
By Oral Direction dated April 1, 2016, the
parties were directed to appear on April 15, 2016 to make oral submissions on
costs. A second Oral Direction dated April 13, 2016, invited the parties to
address at the hearing the Supreme Court of Canada decision in Carter v.
Canada (Attorney General), [2015] 1 S.C.R. 331.
II.
SUBMISSIONS
A.
The Defendant’s Submissions
[7]
The Defendant submits that there is no reason to
depart from the general rule that costs should follow the event; see the
decision in Aird v. Country Park Village Properties (Mainland) Ltd.,
2004 FC 945. She argues that she was successful on the main issue in this
proceeding, that is whether the elements of a regulatory taking were made out.
[8]
The Defendant claimed her costs in the higher
end of the range in Column III of Tariff B of the Federal Courts Rules,
SOR/98-106 (the “Rules”). She submits that the higher end is warranted due to
the complexity of the issues and the amount of work, relying upon Rules
400(3)(c), 400(3)(n.1), and 400(3)(g) of the Rules. In this regard, she points
out that she reviewed 2713 documents, conducted oral examinations over eight
days, cross-examined the Plaintiffs’ witnesses over four days, and brought two
substantial motions.
[9]
The Defendant also submits that the expert
witness disbursement is reasonable because that evidence was necessary to
establish the proximate causes of the Plaintiffs’ business losses.
[10]
The Defendant argues that the Plaintiffs did not
meet the elements of a public interest litigant set out in McEwing et al. v.
Canada (Attorney General) et al.), 439 F.T.R. 149, otherwise known as Bielli.
[11]
In that case, the following factors are referred
to as indicia of a public interest litigant:
a) The proceeding involves issues the
importance of which extends beyond the immediate interests of the parties
involved.
b) The person has no personal, proprietary
or pecuniary interest in the outcome of the proceeding, or, if he or she has an
interest, it clearly does not justify the proceeding economically.
c) The issues have not been previously
determined by a court in a proceeding against the same defendant.
d) The defendant has a clearly superior
capacity to bear the costs of the proceeding.
e) The plaintiff has not engaged in
vexatious, frivolous or abusive conduct.
[12]
The Defendant takes issue with the first three
factors. She argues that this case does not involve issues of importance which
extend beyond the immediate interests of the parties; the Plaintiffs have a
pecuniary interest in the outcome; and the case is not novel.
[13]
The Defendant argues that “this case is historically interesting, but it's really of no
application going forward. The case, it relates to regulatory measures taken by
DFO decades ago.”
[14]
The Defendant submits that this proceeding was
driven by the immediate interests of the Plaintiffs, which is illustrated by
the relief they sought, that is a declaration of personal entitlement to
compensation. She argues that the Court did not address the alternate declarations
sought by the Plaintiffs which extended beyond the interests of the Plaintiffs.
[15]
The Defendant submits that the Plaintiffs had a
pecuniary interest in the proceeding since they maintained throughout the proceeding
that they were relying upon the good faith of the Defendant to pay them in
accordance with any declaration granted in this proceeding.
[16]
The Defendant argues that the Plaintiffs’ own
expert evidence showed that their potential pecuniary interest in the outcome
of the proceeding was sufficiently large to “justify
this proceeding economically”.
[17]
In her oral submissions, the Defendant referred
to the expert reports of Mr. Hooge. In those reports, the losses of Aquamarine
were estimated to be approximately $658,000. The losses of Mr. Calwell and
Calwell Fishing were estimated to be between $841,000 and $1,022,000.
[18]
The Defendant further submits that this case is
not novel since an identical declaration was sought in Manitoba Fisheries
Ltd. v. The Queen, [1979] 1 S.C.R. 101.
[19]
The Defendant concedes that the fourth factor
was established, that she has a superior capacity to bear the cost of the
proceeding. She also admits that the fifth factor, that whether the Plaintiffs
engaged in abusive, vexatious or frivolous conduct, does not arise in this
case.
B.
The Plaintiffs’ Submissions
[20]
The Plaintiffs submit that each party should
bear their own costs since they meet the test for public interest litigants set
out in McEwing, supra.
[21]
The Plaintiffs argue that this proceeding
involved issues of public importance that transcended their personal interests.
They say that, despite their failure to meet the evidentiary burden of proof,
their pleadings and evidence led to a Judgment that provides a useful guide to
the applicable principles for those impacted by the Defendant’s management of
the public fisheries.
[22]
The Plaintiffs argue that this case raised
issues of public importance, specifically, the boundaries of the Minister of
Fisheries and Oceans’ in managing the fisheries as a common property
resource while balancing public and private interests.
[23]
The Plaintiffs submit that this proceeding
explored an underdeveloped area of jurisprudence relating to a unique area of
public law. They argue that the law surrounding the fisheries is unique because
it is the only common property resource in Canada.
[24]
The Plaintiffs submit that their action
attempted to establish a framework to assess the duties and powers of the
Defendant as a steward over the fisheries. They argue that this public importance
is not diminished simply because they were unsuccessful on the merits.
[25]
The Plaintiffs argue that they did not have a
pecuniary interest in the outcome of this proceeding because they did not seek
monetary relief. Rather, they relied upon the good faith of the
Defendant to act in accordance with any declaration granted.
[26]
The Plaintiffs claim that the issues raised in
this proceeding have not been previously determined. They submit that the novel
features of this case include the claims that no “wrongdoing” was alleged
against the Crown and their interest in access to the fisheries, as a common
property resource, was of value.
[27]
The Plaintiffs further submit that they do not
seek a substantial departure from the general rule that costs follow the event,
relying upon the decision in Victoria (City) v. Adams (2009), 100
B.C.L.R. (4th) 28 at paragraph 190, where the British Columbia Court of Appeal
said:
While similar, or even identical, factors
may apply to various forms of departure from the normal rule, that is not to
suggest that all forms of departure are of equal magnitude. The justification
necessary to grant an exceptional cost award is, in part, related to the
magnitude of derogation from the usual cost structure of the award being
considered. An award of interim costs requires one party to incur liability for
the other’s costs before the case has been heard and irrespective of the
outcome. These are truly exceptional orders. Likewise, as this Court observed
in Barclay at para. 37, an award of costs to an unsuccessful party
represents a more significant departure than an order that each side bear their
own costs. …
[28]
The Plaintiffs further argue, relying upon Rule
400(3)(i), that much of the difficulty with scheduling this proceeding was
driven by the appointment of new Counsel for the Defendant.
[29]
The Plaintiffs submit that the Court should not
rely upon the draft Bill of Costs submitted by the Defendant, in particular, the
disbursement claimed for the expert evidence.
[30]
Finally, the Plaintiffs request that if costs
are awarded, they be at a “level beyond the very modest
level.”
III.
DISCUSSION
[31]
Pursuant to Rule 400 of the Rules, the
award of costs is wholly within the discretion of the Court. Rule 400(3) sets
out a non-exhaustive list of factors which may be considered by the Court in
its exercise of discretion.
[32]
The Plaintiffs rely primarily upon the factor
set out in Rule 400(3)(h), which provides that the Court may consider whether
the public interest in having the proceeding litigated justifies a particular
award of costs.
[33]
An important principle underlying costs is that
an award of costs represents a compromise between compensating a successful
party and not unduly burdening an unsuccessful party; see the decision in Apotex
Inc. and Novopharm Ltd. v. Wellcome Foundation Ltd. (1998), 159 F.T.R. 233,
aff’d 199 F.T.R. 320 (C.A.).
[34]
A losing party who raises a serious legal issue
of public importance will not necessarily bear the other party’s costs; see the
decisions in Little Sisters Book and Art Emporium v. Canada, [2007] 1
S.C.R. 38 at paragraph 35 and Canadian Foundation for Children, Youth
and the Law v. Canada (Attorney General), [2004] 1 S.C.R. 76.
[35]
The Supreme Court of Canada in British
Columbia (Minister of Forests) v. Okanagan Indian Band, [2003] 3 S.C.R. 371
at paragraph 27, explained the significance of costs in public
interest litigation:
Another
consideration relevant to the application of costs rules is access to justice.
This factor has increased in importance as litigation over matters of public
interest has become more common ... In special cases where individual litigants
of limited means seek to enforce their constitutional rights, courts often
exercise their discretion on costs so as to avoid the harshness that might
result from adherence to the traditional principles. This helps to ensure that
ordinary citizens have access to the justice system when they seek to resolve
matters of consequence to the community as a whole.
[36]
The parties submit that the criteria adopted by
Justice Mosley in McEwing, supra at paragraph 13, ought to be
applied here, in determining if costs should not be awarded against a person
who commences public interest litigation.
[37]
In Carter, supra the Supreme Court of
Canada recently reviewed the principles relevant to awards of costs in public
interest litigation. The parties were given the opportunity to address this
jurisprudence.
[38]
In my opinion, the decision is relevant here for
the proposition that costs should not automatically be awarded in respect of
public interest litigation in order to avoid creation of “an alternative and extensive legal aid system”; see Carter,
supra at paragraph 137.
[39]
In my opinion, the Plaintiffs have met the test as
public interest litigants set out above.
[40]
First, I agree with the Plaintiffs that this
case addressed a serious issue of public importance, that is the unique nature
of the public fishery as a common property resource, and the public
administration of that resource.
[41]
This case explored the constraints on the powers
of the Minister of Fisheries and Oceans, as a steward of the fisheries, which
requires the balancing of several different public and private interests. The
impact of these important issues extends beyond the parties to this action and is
not limited to the particular factual circumstances of this case.
[42]
The scope of the Defendant’s obligations to
manage the public fisheries as a common property resource has been the subject
of debate for more than 100 years; see the decision in Attorney-General of
British Columbia v. Attorney General of Canada, [1914] A.C. 153 (J.C.P.C.).
[43]
The issues raised in this case are not cut and
dry. According to the Index of Recorded Entries, the Defendant did not attempt to
strike out the Statement of Claim but chose to proceed to trial. In the course
of that trial the Respondent argued two motions.
[44]
The first motion sought an Order striking parts
of the Plaintiffs’ affidavits. The second motion, presented at the close of the
Plaintiffs’ case, sought an Order dismissing their action on the basis that no
evidence had been submitted to establish their claims. The motions were
unsuccessful.
[45]
The fact that the Respondent argued two motions
in the course of the trial demonstrates, in my opinion, that the issues raised
by the Plaintiffs were complex and significant.
[46]
Second, I am satisfied that the Plaintiffs did
not have a defined pecuniary interest in the outcome of this action.
[47]
The Plaintiffs sought declaratory relief. In
their closing submissions at trial, the Plaintiffs repeatedly said that they
relied upon the hope that the Defendant would “do the
honourable thing”.
[48]
In my opinion, there was no pecuniary interest
in the outcome, apart from the potential reliance by the Plaintiffs upon any
declaration, in consultations with the Defendant.
[49]
In any event, in my opinion, an interest in the
outcome of the proceeding is not the determinative factor; see the decision in Incredible
Electronics Inc. v. Canada (Attorney General) (2006), 80 O.R. (3d) 723. I
agree with the view expressed by Justice Perrell at paragraph 98 of Incredible
Electronics, supra that “altruism and having
little to gain financially work better as indicia than criteria for
qualification as a public interest litigant.”
[50]
I am satisfied that, although the Plaintiffs had
a personal interest in the outcome of this proceeding, the public interest was
served by the adjudication of the issues raised.
[51]
Third, the Defendant submits this case is not
novel. I disagree.
[52]
The Plaintiffs alleged that they had a property
interest in the Canadian fisheries and that their interest was taken by the
Defendant’s actions. Whether public access to the fisheries, a common property
resource, is “property” that can be the subject of a regulatory taking is an
issue that has not been previously resolved by a Court.
[53]
The Plaintiffs were unsuccessful at trial
because the evidence they submitted failed to establish the necessary elements
of their claim. In Harris v. Canada [2002] 2 F.C. 484 (T.D.) a similar
result ensued, where the plaintiffs’ action was dismissed because he had not
established his stated causes of action; see paragraph 213.
[54]
Nonetheless Justice Dawson, as she then was,
awarded costs in favour of the unsuccessful plaintiff, Mr. Harris. She
acknowledged the broad discretion conferred upon the Court by Rule 400 of the
Rules, and observed that such discretion must be exercised on a “principled basis”.
[55]
Justice Dawson also recognized the significance
of costs in the context of public interest litigation at paragraph 221, when
she said the following:
The question of costs is of considerable
significance when rationally deciding whether to bring an action. Where a
plaintiff lacks a personal, proprietary or pecuniary interest in an action the
plaintiff is effectively deterred from bringing the action, notwithstanding he
or she may have, as a matter of law, public interest standing.
[56]
In my opinion, the within action likewise raised
important issues that are in the public interest. This finding warrants a
departure from the general rule that costs follow the event.
[57]
Accordingly, in the exercise of my discretion, I
order that each party bear its own costs.
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