Docket: A-105-16
Citation: 2016 FCA 206
Present: WEBB
J.A.
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BETWEEN:
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EDGAR SCHMIDT
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Appellant
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and
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ATTORNEY
GENERAL OF CANADA
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Respondent
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REASONS
FOR ORDER
WEBB J.A.
[1]
Mr. Schmidt has brought a motion for an order
that the Attorney General of Canada pay his legal costs, retroactive to the
date of appeal. Mr. Schmidt is also proposing that a direction be issued that
he file a litigation budget with the Court Registry within seven days of such
direction subject to amendment by him with leave of the Court.
[2]
Mr. Schmidt had filed a statement of claim in
the Federal Court challenging the Department of Justice’s interpretation of its
requirements to examine proposed legislation or regulations. Prior to the
hearing of the matter before the Federal Court, Mr. Schmidt obtained an order
of the Federal Court that the Attorney General of Canada would pay his costs of
that hearing.
[3]
Mr. Schmidt was unsuccessful before the Federal
Court and has filed an appeal of that decision. By this motion he is seeking the
same entitlement to costs that he had before the Federal Court. His argument is
essentially that since he was awarded advanced costs by the Federal Court, he
should also be entitled to advanced costs in relation to the appeal of the
decision of the Federal Court.
[4]
The Supreme Court of Canada in R. v. Caron,
2011 SCC 5, [2011] 1 S.C.R. 78, set out the criteria that will govern an
advanced costs award:
39 The
Okanagan [British Columbia (Minister of Forests) v. Okanagan Indian
Band, 2003 SCC 71, [2003] 3 S.C.R. 371] 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) [Little Sisters Book and
Art Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2,
[2007] 1 S.C.R. 38]:
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 [by Binnie J.]; para. 37.]
[5]
The criterion that the party seeking advanced
costs “genuinely cannot afford to pay for the
litigation” is reiterated in Caron. It is also evident that all
three of these criteria must be met as the Supreme Court noted that there are
three criteria and that “[e]ven where these criteria
are met there is no "right" to a funding order”.
[6]
In paragraph 41 of Caron the Supreme
Court specifically addressed the issue of whether Mr. Caron could afford to pay
the litigation costs. The Court stated that:
41 …The
Queen's Bench judge declared himself "satisfied that Mr. Caron has no
realistic means of paying the fees resulting from this litigation, and that all
other possibilities for funding have been canvassed, but in vain" (para.
31). The Crown's objection on this point was not accepted in the courts below
and those courts made no palpable error in reaching the conclusion they did.
[7]
The requirement that the party seeking advanced
costs must demonstrate that he “genuinely cannot afford
to pay for the litigation, and no other realistic option exists for bringing
the issues to trial” is still a requirement that must be satisfied.
[8]
Mr. Schmidt argues that his case can be
distinguished because he does not have anything to personally gain from the
litigation. However, there is no indication in Okanagan or Caron,
that this requirement is only applicable if the party has something to gain
from the litigation. In my view, this is not a basis upon which these cases can
be distinguished. It should also be noted that these cases of the Supreme Court
were heard as appeals from costs decisions made at the trial level. These cases
did not address the issue of whether advanced costs should be awarded for an
appeal. Whether it is appropriate to award advanced costs to an unsuccessful
litigant to have the taxpayers fund his appeal or whether additional criteria
should be considered in awarding advanced costs for an appeal are matters that will
be left for another case. In any event, the criteria for awarding advanced
costs for an appeal should not be less than the criteria for awarding such costs
for a trial.
[9]
In this case, there is no financial information
concerning Mr. Schmidt’s income or assets. Although at the time of the Federal
Court order Mr. Schmidt had been suspended from his job as a lawyer with the
Department of Justice without pay (and hence had no employment income), he is
now retired. There is no indication of whether he is now receiving a pension.
[10]
Mr. Schmidt, in his affidavit dated July 25,
2016, stated that individuals had donated $3,253 towards the disbursements of
this appeal. Therefore, it is far from clear that this appeal would be unable
to proceed if advanced costs were not ordered.
[11]
As a result, Mr. Schmidt has not satisfied the
first requirement that he is unable to afford to pay for this appeal. Having
failed to establish that the appeal could not proceed without the advanced
costs award it is not necessary to consider the other criteria and his motion
is dismissed.
[12]
There is another matter that neither party
addressed. Rule 400 of the Federal Courts Rules, SOR/98-106, states
that:
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400 (1) The Court shall have full discretionary power over the amount
and allocation of costs and the determination of by whom they are to be paid.
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400 (1) La Cour a le pouvoir discrétionnaire
de déterminer le montant des dépens, de les répartir et de désigner les
personnes qui doivent les payer.
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[13]
The panel hearing an appeal decides the issue of
what costs, if any, should be awarded and to whom such costs should be awarded.
If a motion awarding advanced costs for an appeal is granted on a motion, this
would mean that the single judge who decides the motion will be awarding the
costs of the appeal to one party and therefore effectively prejudging the award
of costs for an appeal. Neither party addressed the issue of whether a single
judge would have that authority or whether it would be appropriate for such a
motion to be heard by a panel of three judges who may not be the same three
judges who will hear the appeal. This is another issue that will be deferred to
another case.
[14]
As a result, I would dismiss the motion for an
order that the Attorney General of Canada pay Mr. Schmidt’s costs of this
appeal. The costs of this motion shall be in the cause.
"Wyman W. Webb"
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