Docket: A-427-16
Citation: 2017 FCA 120
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CORAM:
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DAWSON J.A.
DE MONTIGNY J.A.
WOODS J.A.
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BETWEEN:
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ANIZ ALANI
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Appellant
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and
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THE PRIME
MINISTER OF CANADA, THE GOVERNOR GENERAL OF CANADA AND THE QUEEN'S PRIVY
COUNCIL FOR CANADA
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Respondents
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REASONS FOR
JUDGMENT
DAWSON J.A.
[1]
The appellant commenced proceedings in the
Federal Court seeking a declaration that “the Prime
Minister of Canada must advise the Governor General to summon a qualified
Person to the Senate within a reasonable time after a Vacancy happens in the
Senate.” The appellant argued that the Prime Minister is
constitutionally required to recommend appointments to fill vacancies in the
Senate.
[2]
The Federal Court dismissed the appellant’s
application on the basis that it had become moot, and ordered the appellant to
pay the respondents’ costs (2016 FC 1139). These costs were subsequently
assessed on consent in the amount of $20,489.52.
[3]
On this appeal from the judgment of the Federal
Court the appellant does not challenge that aspect of the judgment that
dismissed the application on the grounds of mootness. Rather, the appellant
asks that the order of the Federal Court be set aside and substituted with an
order that the appellant pay costs and disbursements incurred by the
respondents only for steps taken after December 3, 2015. December 3, 2015 is the
date on which the government announced the establishment of the Independent
Advisory Board for Senate Appointments. This date is said to be the earliest
date on which the application became moot. Costs assessed on this basis total
$4,680.14.
[4]
In order to situate the issues raised on this
appeal it is necessary to understand both the costs submissions made before the
Federal Court and the resulting reasons of the Federal Court.
[5]
The appellant made two principal submissions in
the Federal Court. First, after reviewing jurisprudence to the effect that
costs may be awarded to an unsuccessful party who raises an issue of public
interest, the appellant sought in any event of the cause costs fixed in an
amount between $13,000 and $25,000, depending upon the Court’s assessment of
the complexity of the case. Second, in the alternative, the appellant asked
that if not successful, costs not be awarded against him. This submission was
made on the basis that the appellant had brought the application in the public
interest.
[6]
In response, the respondents submitted that
costs should follow the event and that the costs should be determined on an
assessment. The respondents challenged the appellant’s submission that he had
brought his application in the public interest. This submission was based on
the arguments that the appellant lacked public interest standing and that the
appellant did not lead evidence of “any significant
demand by the public at large for a court ruling on Senate vacancies”.
[7]
Faced with these conflicting positions, the Federal
Court’s reasons on the issue of costs were:
The respondents, while recognizing that Mr
Alani brought his application in good faith as a concerned and interested
citizen, point out that he has pursued his case in the face of clear indications
of mootness and has put the government to substantial legal costs. They ask the
Court to grant them costs calculated according to the usual tariff. I agree and
will make the corresponding order.
[8]
On this appeal the appellant acknowledges that
the Federal Court has full discretion over the amount of costs to be awarded.
The appellant does not challenge the “decision that he
be liable to pay some costs to the Respondents” (appellant’s memorandum
of fact and law at paragraph 35). This said, the appellant submits that the
Federal Court erred by failing to consider two relevant factors and this failure
resulted in an award of costs that was inconsistent with the reasons of the
Federal Court. The relevant factors said to be ignored are:
i.
By the earliest date on which the application
became moot, December 3, 2015, the only remaining step in the application was
the hearing of the application. Thus, it cannot be said that the appellant “pursued his case in the face of clear indications of
mootness and has put the government to substantial legal costs” as the
Federal Court found at paragraph 25 of its reasons.
ii.
The public interest nature of the case.
A third factor
referred to in the appellant’s memorandum of fact and law was withdrawn during
oral argument.
[9]
The respondents argue on this appeal that:
i.
The appellant never sought in the Federal Court an
order whereby he would enjoy an immunity from an award of costs incurred before
the application became moot. It follows that the appellant ought to be
precluded from seeking such an order for the first time in this Court.
ii.
Further, had this argument been advanced below,
Canada would likely have advanced a number of arguments including that: the
application was unfounded; the appellant lacked public interest standing; the
proceeding was not in the public interest; and, the appellant refused a reasonable
settlement offer made after the application became moot.
iii.
The Federal Court was entitled to exercise its
discretion as it did.
[10]
In oral argument counsel for the appellant
objected to the respondents’ reference to the settlement offer. Counsel argued
that except in certain limited circumstances not applicable in this case, Rule
422 of the Federal Courts Rules prohibits any “communication
respecting an offer to settle … until all questions of liability and the relief
to be granted, other than costs, have been determined.”
[11]
Before turning to the submissions of the parties,
it is important to remember that an award of costs is “quintessentially
discretionary” (Nolan v. Kerry (Canada) Inc., 2009 SCC 39, [2009]
2 S.C.R. 678, at paragraph 126). Rule 400(1) of the Federal Courts Rules gives
the Court “full discretionary power over the amount and
allocation of costs”.
[12]
An award of costs is to be reviewed on the
standard articulated by the Supreme Court in Housen v. Nikolaisen, 2002
SCC 33, [2002] 2 S.C.R. 235 (Hospira Healthcare Corporation v. Kennedy
Institute of Rheumatology, 2016 FCA 215, 402 D.L.R. (4th) 497, at paragraph
64 and following; Nova Chemicals Corporation v. Dow Chemical Company,
2017 FCA 25, [2017] F.C.J. No. 173, at paragraph 6). It follows that to succeed
on this appeal, the appellant must demonstrate an error of law or a palpable
and overriding error of fact or mixed fact and law.
[13]
I begin my analysis by rejecting the submission
of the respondents that because the appellant did not seek an order limiting an
award of costs against him to those costs incurred after the application became
moot, he cannot advance this position in this Court. In the Federal Court the
appellant sought costs even if he was unsuccessful. In the alternative, he
asked that if he was unsuccessful costs not be awarded against him. The
appellant did not know the basis on which the Federal Court would award costs.
It must be open to the appellant to argue that an award of the entire costs
against him was made in error and that the Court’s reasons do not support the
resulting award.
[14]
Put another way, the appellant’s argument is not
so legally and factually distinct from the issues argued in the Federal Court
so as to be an impermissible new issue.
[15]
Nor am I persuaded that the respondents are
prejudiced by consideration of this issue. The record demonstrates that the
respondents did argue in their costs submission that the appellant lacked
standing and that the proceeding was not in the public interest. The submission
as to costs followed immediately after the respondents’ submission that the
application lacked merit. Had the respondents complied with Rule 422 they could
have made reference to the settlement offer. Indeed, it is difficult to see why
the respondents did not ask the Federal Court to reserve the issue of costs so
that reference could be made to the settlement offer after the application was
dismissed and when costs remained the sole issue.
[16]
More will be said below about the settlement
offer. It is in the record, the application brought by the appellant has been
finally determined and I see no basis to preclude this Court from having regard
to the offer.
[17]
This leaves for consideration the appellant’s
arguments that the Federal Court erred by finding that he pursued his case in
the face of clear indications of mootness and by failing to have regard to the
public interest nature of the case.
[18]
I agree that at first blush it may seem somewhat
anomalous to find that a party pursued his case in the face of clear
indications of mootness in circumstances where the party took only a single
step after the application became moot. However, any seeming anomaly is
explained when one has regard to the settlement offer.
[19]
On January 21, 2016, after the application had
become moot, counsel for the respondents made a “with
prejudice” offer to settle. The offer was one whereby the parties would
immediately discontinue their respective proceedings before the Federal Court
and this Court on a without costs basis. The appellant did not accept the offer,
thus requiring the respondents to proceed with their appeal from an order
dismissing their motion to strike the application and the hearing of the
application.
[20]
In my view, on the basis of the appellant’s
rejection of the settlement offer the Federal Court committed no palpable and
overriding error in finding that the appellant continued to pursue his case in
the face of clear indications that it was moot. The effect of the offer was to
allow the appellant to walk away from the litigation once the application
became moot with no exposure to costs. The appellant chose not to.
[21]
As to the second asserted error, while I agree
that the reasons of the Federal Court were sparse, the Court did reference the
fact that the appellant had “brought his application in
good faith as a concerned and interested citizen”. In light of this
apparent allusion to a public, not private, interest and in the circumstance
where both the respondents and the appellant addressed the issue of public
interest in their costs submissions, I am not prepared to infer that the
Federal Court overlooked the appellant’s submission that he was a public
interest litigant.
[22]
Without doubt, there are cases of great public
moment where the issues are novel and advancing those issues is in the public
interest so that no award of costs ought to be made against the public interest
litigator. However, such litigants are not automatically immune from an award
of costs (Canadian Environmental Law Assn. v. Canada (Minister of the
Environment) (2000), 258 N.R. 95, 34 C.E.L.R. (N.S.) 159 (FCA)). It follows
that it was open to the Federal Court to make the costs order it did notwithstanding
the asserted public interest in the litigation. No error of fact or law has
been demonstrated.
[23]
It follows that I would dismiss the appeal. In
my view, this is an appropriate case for the parties to bear their own costs, so
I would not order costs in this Court.
“Eleanor R. Dawson”
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“I agree.
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Yves de
Montigny J.A.”
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“I agree.
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J. Woods J.A.”
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