Docket: A-541-14
Citation:
2016 FCA 39
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CORAM:
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PELLETIER J.A.
STRATAS J.A.
GLEASON J.A.
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BETWEEN:
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ROCCO GALATI,
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CONSTITUTIONAL
RIGHTS CENTRE INC.
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Appellants
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and
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THE RIGHT HONOURABLE
STEPHEN HARPER, HIS EXCELLENCY THE RIGHT HONOURABLE GOVERNOR GENERAL DAVID
JOHNSTON,
THE
HONOURABLE MARC NADON, JUDGE OF THE FEDERAL COURT OF APPEAL, THE ATTORNEY
GENERAL OF CANADA, THE MINISTER OF JUSTICE
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Respondents
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REASONS
FOR JUDGMENT
PELLETIER J.A.
[1]
Mr. Galati, on his own behalf, and the Constitutional
Rights Center (CRC) appeal from the costs portion of the Federal Court’s
decision, reported as 2014 FC 1088, dismissing their application for various
heads of relief in relation to the appointment of Mr. Justice Marc Nadon, a
judge of the Federal Court of Appeal, to the Supreme Court of Canada. The
Federal Court denied their motions for solicitor-client costs and made a single
award of costs in favour of both appellants fixed on a lump sum basis at
$5,000. Mr. Galati and the CRC appeal from that decision arguing that they have
a constitutional right to solicitor-client costs. They also argue that the
Federal Court should have awarded them such costs pursuant to its discretionary
power pursuant to Rule 400 of the Federal Courts Rules, SOR/98-106.
[2]
For the reasons which follow, I would dismiss
the appeal.
I.
FACTS
[3]
On or before October 3, 2013, the Governor in Council
appointed Justice Marc Nadon, a former advocate of Quebec and a member of the
Federal Court of Appeal, to the Supreme Court of Canada to occupy one of the
three seats on the Supreme Court which are reserved for persons appointed “from among the judges of the Court of Appeal or of the
Superior Court of the Province of Quebec or from among the advocates of that
Province”: see section 6 of the Supreme Court Act, R.S.C. 1985,
c. S-26 (the Act). It was known at the time that there was an issue
about the eligibility of judges of the Federal Courts to occupy those seats, as
evidenced by the fact that, at the same time as he announced his intention to
appoint Justice Nadon to the Supreme Court, Prime Minister Harper released
legal opinions prepared at the Government’s request, all of which held that
such an appointment did not contravene section 6 of the Act.
[4]
Mr. Galati and the CRC did not share this view
and on Monday October 7, 2013, they filed a joint notice of application in the
Federal Court (the Joint Application) in which they sought various heads of
relief, on the ground that a judge of the Federal Court or the Federal Court of
Appeal was ineligible, by the terms of section 6 of the Act, to be
appointed to one of the three “Quebec” seats on
the Supreme Court. They sought to have Justice Nadon’s appointment set aside.
[5]
Perhaps because of the Joint Application,
perhaps because of the concerns of the Quebec Bench and Bar which prompted the
Governor in Council to seek out legal opinions in the first place, the Governor
in Council referred the interpretation of sections 5 and 6, as well as its
proposed amendments to the Act, to the Supreme Court (the Reference)
which ultimately ruled that former advocates of Quebec, including any
former Quebec advocate appointed to one of the Federal Courts, were ineligible
to occupy one of the “Quebec” seats on the Supreme
Court. Justice Nadon’s appointment to the Supreme Court was held to be invalid:
see Supreme Court Act ss.5 and 6, 2014 SCC 21.
[6]
Following the issuance of the Joint Application
on October 3, 2013, a case management conference was held before Mr. Justice
Zinn, and was adjourned to October 24, 2013.
[7]
When the case management conference resumed, an order
was made setting a timeline for the filing of materials as well as a hearing
date for the Attorney General’s motion for a stay of the Joint Application
pending the disposition of the Reference, a motion which Mr. Galati and the CRC
(sometimes referred to as the Joint Applicants) intended to oppose.
[8]
After carefully considering the Attorney General’s
motion for a stay (for a period of 7.6 hours, in Mr. Galati’s case), the Joint
Applicants eventually consented to a stay of the Joint Application in exchange
for the Attorney General’s undertaking not to oppose their application for
intervener status in the Reference.
[9]
Mr. Galati and the CRC were granted intervener
status and appeared at the hearing of the Reference.
[10]
Following the release of the Supreme Court’s
decision, a further case management conference was held where, by agreement of
the parties, it was ordered that the final disposition of the Joint Application
and the question of costs would proceed by way of written submissions.
[11]
In that context, both the Joint Applicants filed
motions seeking:
a) A declaration that where a private citizen brings a constitutional
challenge to legislation and/or executive action, going to the “architecture of the Constitution”, from which he/she
derives no personal benefit, per se, and is successful on the constitutional
challenge, that he /she is entitled to solicitor-client costs of those
proceedings, as to deny those costs constitutes a breach of the constitutional
right to a fair and independent judiciary;
b) That the Applicant be granted leave to issue a notice of
discontinuance in the within application;
c) That the Applicant be granted his solicitor-client costs of the
within application, including the within motion; and
d)
Such further order and/or direction as this
Court deems just.
[12]
Mr. Galati argued for an award of costs in his
favour calculated on the basis of 56.4 hours of service at an hourly rate of
$800, plus disbursements in the amount of $638, for a total award (including
tax) of $51,706. The CRC claimed costs of $16,769 based on 14.55 hours of
service by its counsel, Mr. Slansky, at an hourly rate of $800. In argument,
Mr. Galati acknowledged that his regular hourly rate is not $800 as his
clientele do not have the means to pay such an exalted rate. He advised that
$800 per hour is the rate for substantial indemnity pursuant to Part 1 of
Tariff A of the Ontario Rules of Civil Procedure, R.R.O. 1990 Reg. 194,
for lawyers of his year of call and experience.
[13]
The Attorney General opposed Mr. Galati’s and
the CRC’s motions and filed a cross motion seeking the dismissal of the Joint
Application. On the question of costs, the Attorney General argued that since,
as of the date of the argument, no judgment had been rendered in the Joint
Application, there was no successful party and therefore no basis for an order
for costs. In any event, the Attorney General argued that there was no
constitutional right to costs. If an order of costs were to be made, having
regard to the factors mentioned in Rule 400(3) of the Federal Courts Rules,
SOR/98-106, it should be a single award assessed on Column III of Tariff B.
II.
THE DECISION UNDER APPEAL
[14]
In its decision, the Federal Court noted that
Mr. Galati and the CRC provided no authority for the proposition that there was
a constitutional right to solicitor-client costs in the circumstances described
in their motions. Such authority as there was consisted of a Tax Court of
Canada case, Lee v. Canada (Minister of National Revenue), [1991] T.C.J.
No. 243, in which it was held that there was no constitutional right to an
award of costs, let alone solicitor-client costs. The Federal Court agreed with
the position taken by the Tax Court of Canada as to the absence of a
constitutional right to costs. Furthermore, having regard to the principles
governing the award of solicitor-client costs, there was no basis for making an
order of that nature in this case since there was no conduct on the part of the
respondents which would justify such an award, nor were there any other
circumstances which would justify the highest award of costs: Reasons,
paragraph 12.
[15]
That said, the Federal Court accepted that “but for the applicants commencing this application, it was
unlikely that the Reference would have occurred.” In the end result,
even though the Federal Court dismissed the application, it awarded Mr. Galati
and the CRC costs jointly in the amount of $5,000 because “one could argue that the applicants have done Canada a
service and should not be out-of-pocket in so doing:” see Reasons at
paragraph 13.
III.
ISSUES
[16]
Mr. Galati and the CRC raise two issues. The
first is that the Federal Court Judge erred in failing to analyze their claim
that, in the case of public interest litigation which satisfies the test they
propose, there is a constitutional requirement that a successful litigant be
awarded his solicitor-client costs because the failure to do so is a breach of the
constitutional right to a fair and impartial judiciary. The second issue is
that, even if there is no constitutional right to solicitor-client costs, the
Federal Court judge erred in failing to award them such costs in the
circumstances of this case.
[17]
In the alternative, Mr. Galati argues that the
Federal Court’s reasons are unintelligible for purposes of appellate review.
Having conducted such an appellate review, I find no merit to this allegation.
IV.
STANDARD OF REVIEW
[18]
Costs are within the discretion of the presiding
judge: see Rule 400(1) of the Federal Courts Rules, SOR/98-106 (the Rules).
As such, an award of costs is a discretionary decision, reviewable on a highly
deferential standard, unless it can be shown that the Court erred in law in
making the award of costs it did: see Turmel v. Canada (Attorney General),
2016 FCA 9, at paragraphs 11-12.
V.
DISPOSITION
[19]
Since Mr. Galati and the CRC criticize the
Federal Court for not analyzing their claim to solicitor client costs, I am
required to step outside the four corners of the Federal Court’s decision to do
that which the Joint Applicants ask us to do.
[20]
The first point to be disposed of is the hourly
rate used by the Mr. Galati and the CRC in their respective claims for costs.
Their claim to be entitled to the substantial indemnity rate of $800 which
apparently would apply to these counsel under the Ontario Rules of Civil
Procedure is puzzling. Mr. Galati and Mr. Slansky are both experienced
counsel who presumably know that the costs of litigation conducted in the
Federal Courts are awarded in accordance with the Federal Courts Rules.
They would also presumably know that the Federal Courts Rules do not
provide for an hourly rate benchmark (other than an amount per unit of service
as described in the Tariff) such as the Rules of Civil Procedure apparently
do. Given this knowledge, it is surprising that Mr. Galati would seek an order
of costs in excess of what he would have billed a client for the same services.
[21]
As a self-represented litigant, the best Mr.
Galati could hope for, under the Federal Courts Rules and the jurisprudence on
self-represented litigants is to recover his regular hourly rate: see Thibodeau
v. Air Canada, 2007 FCA 115, [2007] F.C.J. No. 404, at paragraph 24.
[22]
I might add that a claim for solicitor-client
costs by a self-represented litigant is an oxymoron. A self-represented
litigant, by definition, has no counsel and therefore no out-of-pocket expenses
for which full indemnity is appropriate.
[23]
As for the CRC, its claim for solicitor-client costs
would be limited to its actual out-of-pocket expense for legal fees. If, as
appears to be the case given Mr. Slansky’s request that any costs awarded be
paid to him personally, counsel is acting pro bono, then the same
considerations apply. Any award of solicitor-client costs would be limited to
Mr. Slansky’s regular hourly rate. One is left to wonder why experienced
counsel before the Federal Courts would seek costs calculated on a basis other
than that provided by the Federal Courts Rules.
[24]
This appeal raises two questions: is there such
an entitlement to solicitor client costs (on any basis) and, if there is, do
the Joint Applicants satisfy the conditions applicable to the award of such
costs?
[25]
Both Mr. Galati and the CRC raise, in slightly
different ways, the issue of the economic imbalance between litigants who
challenge legislative or executive action on constitutional grounds. The
government has the full resources of the state available to it to defend its
position while challengers who act in the public interest must rely on private
resources and the goodwill of pro bono counsel to advance their case.
The former Court Challenges Programme was designed to deal with this imbalance
but has been cancelled.
[26]
The Supreme Court has recognized this gap but has
declined to close it by judicial fiat. In Little Sisters Book and Art
Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2,
[2007] 1 S.C.R. 38, at paragraph 4, the Supreme Court held that “[c]ourts should not seek on their own to bring an
alternative and extensive legal aid system into being.” This position
was re-affirmed in Carter v. Canada (Attorney General), 2015 SCC 5,
[2015] 1 S.C.R. 331 (Carter)at paragraph 137, where the Court dealt with
an argument much like the one made by the Joint Applicants but in the context
of the Court’s normal discretionary power to award costs. There, the Supreme
Court held that an award of special costs in public interest litigation would
be justified if certain conditions were met. The first is that the issues
raised must be truly exceptional, having significant and widespread societal
impact. Secondly, not only must the litigants must have no personal financial
interest in the litigation, they must show that it would not have been possible
to effectively pursue the litigation with private funding: see Carter at
paragraph 140.
[27]
The Joint Applicants have modified this test by
substituting for the requirement that the litigation have widespread societal
impact, the condition that the litigation must go to the “architecture of the Constitution”. They also make
explicit the requirement that the applicants must be successful in the
litigation. Before addressing the question of the Joint Applicants’ right to
solicitor client costs, whether pursuant to the Constitution or otherwise, it
makes sense to see if the Joint Applicants satisfy the conditions for the award
of such costs.
[28]
The difficulty confronting the Joint Applicants
is that they were not successful in their application. The Federal Court found
that the Joint Application “was derailed and supplanted
by the Reference”: see Reasons at paragraph 12. It was therefore
dismissed for mootness. Mr. Galati and the CRC take the position that because
the Reference produced the result which they sought in the Joint Application,
they were successful and entitled therefore to their solicitor client costs. It
doesn’t work that way. The fact that their application apparently set in motion
a series of events which led to the conclusion which they hoped to achieve in
their application does not make them successful litigants. It may make them
successful politically or in the popular press, but that is a different matter.
They can only claim costs in relation to the judicial treatment of the Joint
Application which, as noted, was dismissed. To hold otherwise would be to
create something in the nature of a finder’s fee for constitutional litigation.
[29]
To the extent the right to solicitor client
costs accrues only to successful litigants, the Joint Applicants do not satisfy
that test. Given this finding, it is not necessary for me to examine the other
elements of the test which Mr. Galati and the CRC propose other than to comment
that it is far from obvious that the interpretation of sections 5 and 6 of the Act
goes to the “architecture of the Constitution”.
[30]
Turning now to the Joint Applicants entitlement
to special costs pursuant to the Federal Court’s discretion over the award of
costs, and applying the Carter principles, I find that the applicants do
not meet that test either. As I pointed out above, the Joint Application was
not successful and that leads to the same conclusion in this scenario as in the
previous scenario. Be that as it may, Mr. Galati and the CRC make much of the
exceptional nature of the issues raised by the Joint Application. There is no
doubt that the issues raised were of significant importance, particularly to
the members of the Federal Courts, but the interpretation of sections 5 and 6
of the Act did not have widespread societal impact. When the partisan political
overlay is stripped away, this was a lawyer’s issue with very limited
consequences beyond legal circles. It certainly did not go to the “architecture of the Constitution”.
[31]
But, more importantly, the reason for which the
claim for solicitor client costs ought to fail, and, in my view, does fail, is
that it fails to meet the second criterion identified by the Court, namely that
it would not have been possible to effectively pursue the litigation with
private means. This refers to the litigation as it actually unfolded, not as it
might have unfolded. As it actually unfolded, the Joint Application required
some office time and a small number of attendances for a combined total of 71
hours of Mr. Galati’s and Mr. Slansky’s time. While this is not trivial, it is
not an insuperable burden for two lawyers with busy practices. Furthermore, the
burden on Mr. Galati and Mr. Slansky, to the extent that he was acting pro
bono, has been relieved by the Federal Court’s exceptional award of costs of
$5,000, even though they were unsuccessful, so that they might not be out of
pocket.
[32]
For these reasons, then, the Joint Applicants
have not shown that they come within the class of litigants who might be
awarded solicitor client costs in public interest constitutional litigation,
whether by right or through the exercise of the Court’s discretion. It is
therefore unnecessary for me to deal with the argument as to constitutional
entitlement as it does not arise on these facts. That said, it sometimes occurs
that a party makes an argument that is so scandalous that it deserves to be
condemned, whether it arises on the facts of the case or not. This is such a
case.
[33]
The following passages from Mr. Galati’s
memorandum of fact and law encapsulates the argument which was made in this
case:
With respect to the Respondent’s position
that the right to solicitor-client costs has no nexus to a fair and independent
judiciary, the Appellant (Rocco Galati) states that in such cases, which
involve nothing but protecting the integrity of the constitution,
constitutionally offensive legislation, or Executive action violating the
“architecture of the constitution”, it has everything to do with a fair and
independent judiciary. While the state apparatus is fully and amply funded to
defend such violations, and a citizen who gets no personal benefit, per se,
from upholding the integrity, structure and dictates of the Constitution, in
successfully challenging such constitutional violations, to be denied his
solicitor-client costs doing so can only lead to one conclusion in fact and in
perception.
That conclusion is that any Court siding
with the state on such cases cannot be said to be “fair or independent” in the
least sense, in fact, and in perception, that Court would be, in fact and in
perception, ‘in bed’ with the state Respondents.
Mr. Galati’s memorandum of fact and law at
paragraphs 20-22 (emphasis in the original).
[34]
It is important to understand what is being said
here. Mr. Galati and the CRC state as a fact that a Court which, having agreed
that certain government action was inconsistent with the Constitution and
having therefore set it aside, will nonetheless be seen to be, and will in fact
be, “in bed” with the government if it fails to award
the successful applicant its solicitor client costs. The tie-in to the
Constitution is that this collusion deprives the affected litigant of its
constitutionally protected right to a fair and independent judiciary.
[35]
To be “in bed”
with someone is to collude with that person. I do not understand how one could
hope to protect the right to a fair and independent judiciary by accusing
courts of colluding with the government if they don’t give the applicant its
solicitor client costs. The entire Court system, it seems, must be alleged to
be actually or potentially acting in bad faith in order to instill public
confidence in the fairness and independence of the judiciary. This is
reminiscent of the gonzo logic of the Vietnam War era in which entire villages
had to be destroyed in order to save them from the enemy. The fact that this argument
is made in support of an unjustified monetary claim leads to the question “Whose interest is being served here?” Certainly not
the administration of justice’s. This argument deserves to be condemned without
reservation.
[36]
In the circumstances, I am of the view that the
Federal Court committed no error justifying our intervention and that even
when, particularly when, the Joint Applicants’ arguments are analyzed, this
appeal should be dismissed with costs. The Attorney General seeks total costs
in the amount of $1,000. In the circumstances, that is more than reasonable. I
would therefore dismiss the appeal with one set of costs to the Attorney
General fixed at $1,000, all inclusive.
"J.D. Denis Pelletier"
“I agree
Gleason J.A.”
STRATAS J.A. (Concurring
reasons)
[37]
I fully agree with my colleague’s reasons and
concur with his proposed disposition of this appeal. I wish to add a couple of
other observations.
[38]
At one point in his oral submissions, Mr. Galati
submitted that, like government lawyers, judges are paid by the government and
so if in circumstances such as these we do not order the government to pay
private sector lawyers like him, the court would appear to be biased.
[39]
The appearance of bias is to be assessed by the
informed, reasonable person viewing the matter realistically and practically: Committee for Justice and Liberty et al. v.
National Energy Board et al.,
[1978] 1 S.C.R. 369 at page 394. That person would be aware of a number
of things. Judges’ impartiality is secured by guarantees of security of tenure
and remuneration until retirement or age 75: Constitution Act, 1867,
30 & 31 Vict., c. 3, sections 99-100. A long string of Supreme Court cases
from Valente v. The Queen, [1985] 2 S.C.R. 673 to Provincial Court
Judges’ Assn. (New Brunswick) v. New Brunswick (Minister of Justice), 2005
SCC 44, [2005] 2 S.C.R. 286 has developed exacting requirements to ensure that
the judiciary remains fully independent from government while judicial
remuneration is set. And there are many cases where judges, paid by government,
have condemned government misconduct and have ordered government to do
something against its will.
[40]
In light of this, the informed, reasonable
person viewing the matter realistically and practically would never think that
judges are predisposed to the government just because the government pays them
and does not pay others. This sort of submission can unfairly affect the legitimacy
and public perception of the court. An officer of the court should never make
such a submission. See Es-Sayyid v. Canada (Public Safety and Emergency
Preparedness), 2012 FCA 59 at paragraph 50; R. v. S.(R.D.), [1997] 3
S.C.R. 484 at paragraph 113.
[41]
In this case, the Federal Court exercised its
discretion in the appellants’ favour, awarding them $5,000 in costs for work
done in starting a constitutional challenge that soon became moot. This is more
than what other litigants doing the same amount of work would receive under the
applicable law: Federal Courts Rules, R.S.C. 1985, c. F-7, Rule 400 and
Tariff B.
[42]
The appellants now come to this Court. They ask
us to order that the government respondents—i.e., the taxpayers—pay them
$800 an hour, an amount they admit exceeds the rate they normally charge their
clients. In his memorandum (at paragraph 15), Mr. Galati submits that if we do
not make that order, we will be acting in “breach of
the unwritten constitutional imperatives to the Rule of Law and
Constitutionalism.”
[43]
The constitutional principle of the rule of law,
enshrined in the preamble to the Canadian Charter of Rights and Freedoms, is
not an empty vessel to be filled with whatever one might wish from time to
time. Rather, it has a specific, limited content in the area of constitutional
law. See, e.g., British Columbia
v. Imperial Tobacco Canada Ltd.,
2005 FCA 49, [2005] 2 S.C.R. 473 at paragraph 58. See also the previous cases
in which we have reminded Mr. Galati of the doctrinal limits to this principle:
Yeager v. Day, 2013 FCA 258, 453 N.R. 385 at paragraph 13; Lemus
v. Canada (Citizenship and Immigration), 2014 FCA 114, 372 D.L.R. (4th) 567
at paragraph 15; Austria v. Canada (Citizenship and Immigration), 2014
FCA 191, 377 D.L.R. (4th) 151 at paragraphs 71-74; Toussaint v. Canada
(Citizenship and Immigration), 2011 FCA 146, [2013] 1 F.C.R. 3 at paragraph
60.
[44]
In rare circumstances of proven need, a party
can obtain an interim costs award (British Columbia (Minister of Forests) v.
Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371) or state funding
for counsel (e.g., R. v.
Rowbotham (1988), 41 C.C.C. (3d)
1 (Ont. C.A.)), in both cases on the basis of rates much lower than
those sought here.
[45]
But a constitutional right for lawyers acting as
public interest litigants to collect pay and bonuses from the public purse in
the amount of $800 an hour? I don’t see that in the text of the Constitution or
by necessary implication from it. Nor does the
Supreme Court see it: Little Sisters Book and
Art Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2, [2007] 1 S.C.R. 38 at paragraph 35;
Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331 at
paragraphs 139-141. I also reject the appellants’ submission that some
principle sitting invisibly alongside the visible text of our Constitution
somehow springs up to entitle them to $800 an hour.
[46]
The record discloses no
inability on the part of the appellants at the outset of this litigation or
even now to ask for donations to their cause. In this case, the appellants
chose to proceed with their litigation, with no reasonable expectation of receiving more than the normal level of costs under Rule 400
and Tariff B of the Federal Courts Rules. And as I have said, in the
circumstances of this case the Federal Court gave them even a little more than
that.
[47]
Like my colleague, I agree that there are no
grounds for setting aside the costs order of the Federal Court and I would
dismiss the appeal with costs in the amount of $1,000. Had the respondents
asked for more, I would have granted more.
"David Stratas"
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