T-1702-02
Vancouver, British Columbia, August 31, 2006
PRESENT: Roger R. Lafrenière, Esquire,
Prothonotary
Docket: T-850-99
BETWEEN:
PHYLLIS RANDALL, LONNIE DODGE, JOSIE DODGE, ROBERT K. SCOTT, BRIAN WELCH, FLOYD SCOTT, ANTHONY DODGE (A.K.A. ARTHUR DANIEL SIMONS), MABEL HAWCO, CHRISTOPHER HAWCO SR., SUSAN DELEARY, WILLIAM DELEARY, LISA BRUMMITT, LAURA BRUMMITT MERCER, WALLACE KENNEY, RENA H. THOMPSON, PAMELA DODGE, TERESA JACOBS, ELLA ROBITAILLE, CAROLINE JUNE WELCH, TONY DONOVAN, JO ANN WILSON, ROBERT DODGE, JOSEPH CHAMBERLIN, MARGARET VANDERWEIDE, MARIE DUCKWORTH, SHAWN DUCKWORTH, IAN DUCKWORTH, DAVID MCPHEE, JANICE DODGE, DANIEL CHAMBERLIN, NANCY LAMOREUX, JAMES ALLAN DODGE, SANDRA DODGE, WENDY DONOVAN CAMPBELL, DARRYL R. JACOBS, EDWARD A. JACOBS, ANGELA HIGGINS, WILLIAM DODGE, FLORENCE DODGE, STANLEY JAMES SCOTT, STEVEN SCOTT, DANIEL SCOTT, JACK SCOTT, MARY FRANCES DUCKWORTH, CANDICE BRUMMITT, VICKY BAKELAAR-CORNELL, MICHAEL CORNELL, WILLIAM DUNN, SARA ANN SCOTT, PAT BRUMMITT, WILSON DODGE, SR., ELIZABETH DODGE, WILSON DODGE, JR., WILSON DODGE, III, MYRTLE JOYCE, EVA TYLER, RONALD DOOLITTLE
Plaintiffs
and
CALDWELL FIRST NATION OF POINT PELEE AND PELEE ISLAND BAND COUNCIL, LARRY JOHNSON, HENRY SOLOMON, FRANKLIN SOLOMON, and DONALD SOLOMON
Defendants
Docket : T-1702-02
BETWEEN:
Lonnie Dodge
Applicant
and
Larry Johnson, Franklin Solomon, The Caldwell First Nation of Point Pelee and Pelee Island Band Council and John C. Peters
Respondents
REASONS FOR ORDER AND ORDER
[1] By motion dated February 8, 2006, the Defendants in Court File No. T-850-99 and the Respondents in T-1707-02 (collectively referred to in these reasons in the singular as the Band Council) seek a lump sum award of costs of the proceedings against the Plaintiffs in T-850-99 and the Applicant in T-1707-02 (the Claimants), as well as against the Plaintiffs’ former solicitor on a substantial indemnity basis. In the alternative, the Band Council seeks directions that costs be assessed in accordance with the upper range of Column V of Tariff B and that those costs be doubled.
[2] The motion is brought following a court-assisted mediation held on November 19, 2004, during which the parties agreed to settle the two proceedings.
[3] The issues to be addressed on this motion are whether an order for costs can be made in the absence of a formal order or judgment of the Court, and if so, whether this is an appropriate case in which to award costs in favour of the Band Council.
Facts
[4] The proceedings in T-850-99 were commenced by way of application for judicial review in May 1999 by a group of dissident band members of the Caldwell First Nation of Point Pelee and Pelee Island (Caldwell First Nation). The catalyst behind the proceedings was a Land Claim Settlement (Settlement) negotiated between the Caldwell Band council and the federal government.
[5] On April 8, 2000, Caldwell band members were scheduled to vote on whether to ratify the terms of the proposed Settlement. The government had agreed to pay $23,400,000 in settlement of the Caldwells' claims relating to their eviction from their lands without a proper surrender. The Settlement was characterized by the Band Council as the single most important event in the history of the Caldwells. The Claimants, however, had serious concerns regarding the propriety of the actions of the Band Council with respect to the negotiation of the Settlement, and the manner in which the ratification vote was being conducted. They therefore brought an application for judicial review in T-850-99 and moved for an interim and interlocutory injunction restraining the Band Councillors and Chief from conducting the ratification vote.
[6] In seeking to restrain the ratification vote, the Claimants alleged that the Chief, Larry Johnson, was not validly elected, and that the Chief and members of Council, the other individual defendants, had refused to conduct regular elections for the positions of Chief and Council in accordance with the Band's customs and traditions, notwithstanding repeated demands that such elections take place. They also alleged that the Chief and Council had breached their positions and duties by altering and manipulating the Membership Code of the Band so as to ensure an outcome on the ratification vote acceptable to the Chief and Council.
[7] On April 14, 2000, Madam Justice Dawson allowed the Claimants’ motion and issued an interim injunction restraining and enjoining holding of the ratification vote until after June 30, 2000. (In a subsequent application in T-1707-02, Lonnie Dodge, moved for an interim injunction to further restrain the holding of the Settlement ratification vote until after the disposition of the proceedings in T-850-99 or T-1707-02. The motion was heard by Madam Justice Heneghan on January 13, 2003 and was dismissed on the basis that Mr. Dodge had failed to demonstrate that he would suffer irreparable harm.)
[8] The Settlement ratification vote took place on August 8, 2003 and was defeated. On the basis of this vote, the Claimants withdrew the bulk of their allegations at a pre-trial conference held January 14, 2004. The remaining allegations were settled at a mediation conducted with the parties on November 19, 2004. The Minutes of Settlement provided, among other things, that a custom election code (“CEC”) for the Caldwell First Nation would be drafted and presented to the membership on or before June 30, 2005, and that ratification of the CEC would be sought by December 31, 2005. The parties were unable to agree on the issue of costs, however, and therefore expressly reserved the right to bring a motion for costs.
[9] A vote was held on January 19, 2006 and the CEC was ratified by a majority of the members.
[10] The Claimants elected not to seek their costs. The Band Council’s motion for costs against the Plaintiffs’ former solicitor was severed on consent of the parties and deferred pending disposition of the present motion.
[11] Notwithstanding being privy during the mediation to information exchanged between the parties on a without prejudice basis for the purpose of settlement negotiations, as well as the parties’ confidential interests and positions, the parties jointly requested that I deal with the present motion because of my intimate knowledge of the proceedings as case manager since 1999. In light of the consent of the parties, as well as their insistence, I acceded to their request.
Analysis
[12] The Band Council submits that the Court should exercise its discretion pursuant to Rule 400 of the Federal Court Rules, 1998, SOR/98-106 (FCR) to make a cost award in its favour. It claims to be entitled to costs on the grounds that: (1) it was the successful party; and (2) the Claimants were vexatious and unreasonable in the manner in which they pursued the action, thereby requiring the Band Council to incur undue costs. The Band Council submits that the Claimants’ claims were unfocused, broad and chaotic. They also contend that the allegations made against the Band Council were abusive, vexatious and scandalous in nature and that the focus of the Claimants’ litigation was to attack members of the Band Council personally. As such, the Band Council submits, the Claimants’ conduct should be sanctioned by a substantial award of costs.
[13] Under Rule 400 of the FCR, the Court has discretion as to whether costs are payable by one party to another and the amount of those costs. In deciding what order, if any, to make on costs, the Court will generally have regard to all 14 factors which are listed in subsection 400(3): Francosteel Canada Inc. v. African Cape (The), [2003] 4 F.C. 284; 2003 FCA 119. The onus is on the Band Council to establish that there is a sufficient basis for the Court to conclude that an exercise of its discretion to award costs is warranted.
[14] The result of the proceeding usually carries significant weight because, as a general rule, costs should follow the event: Merck & Co. v. Novopharm Ltd. (1998), 82C.P.R. (3d) 457 (F.C.T.D.) at 464. Where success has been fairly evenly divided, however, there should normally be no order as to costs: Lubrizol Corp. v. Imperial Oil Ltd. (1996), 67 C.P.R. (3d) 1 (F.C.A.) at 25.
[15] The Band Council claims that it would have prevailed had the proceedings gone to hearing. However, the fact is that the two proceedings were settled by the parties without any concessions having been made by the parties. In the absence of a hearing on the merits, “success” is an elusive concept, and capable of being measured quite differently by the parties. The Minutes of Settlement cannot be construed as evidence of an admission or concession of liability for costs or wrongdoing by the Claimants.
[16] The Band Council relies on comments of Justice Paul Rouleau in RCP Inc. v. Minister of National Revenue, [1986] 1 F.C. 485 (T.D.) (RCP) in support of its proposition that costs may be recovered even where the proceeding is settled. In RCP, Justice Rouleau determined that the applicant should not be denied its costs simply because they obtained the relief they sought in the form of a settlement. He concluded that equity dictated that the respondents should not be allowed to avoid paying costs by settling the matter when it becomes apparent that the applicant would be successful at a trial of issues. However, the respondents in RCP had conceded the relief sought by the applicant. The Claimants in these proceedings have made no similar admission or concession.
[17] In fact, from the Claimants’ perspective, success, if any, was theirs. They ultimately succeeded in delaying the settlement ratification vote by four years, by which time the Band membership had been sufficiently apprised of all the issues underlying the vote; and that they were able to influence changes to the Band electoral process through the CEC. As eloquently stated by Lonnie Dodge, one of the Plaintiffs in T-850-99 and the Applicant in T-1702-2, in his affidavit filed in response to the motion, at paragraphs 42, 45:
Since the commencement of our action, the settlement agreement which was a significant part of our actions, was voted down; Chief Larry Johnson has been found in contempt of court, an election process has been used with regards to the settlement agreement vote, whereby a membership list was made available to us prior to the election, a third party without conflict oversaw the settlement agreement votes, the efforts of the Chief to locate the Band in the Chatham-Kent area has been turned down by the Band and at least we have some semblance of an election code being put forward for the Band to vote on.
…
If anyone is entitled to costs, it would be us and in the interest of creating harmony in the Band and trying to bring matters back together, we believe that no costs should be awarded in this case, and we should move forward with the development of the election code and with a fair and proper election for Chief and council. We believe that should take place as soon as possible. We signed the agreement in principle and in good faith, on the understanding that the next election will be open, transparent and fair and will occur soon after the Band approves a new code.
[18] Absent an acknowledgment by the Claimants that the Band Council would have succeeded if the proceedings had gone to hearing, the Court should not be speculating as to the likely outcome. Costs can be awarded, however, on the basis of the conduct of the parties during the course of the litigation, such as: (1) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (2) whether a party properly pursued or defended its case or a particular allegation or issue; (3) whether a party exaggerated its claim or raised a baseless defence; and (4) whether a party properly conceded issues or abandoned allegations during discoveries.
[19] Although I agree with the Band Council that the Claimants at times overreached their case by making broad and unfocussed allegations, I am not satisfied that their complaints about the membership list and ratification process were wholly without merit. Granted, the Claimants could have run their litigation in more efficient and effective manner. In addition, their claim did contain numerous personal allegations against members of the Caldwell First Nation Band council. However, the focus of their claim was on the electoral process, the accountability of the Band Council, and the propriety and the manner in which the Settlement had been negotiated.
[20] In exercising my discretion whether to award costs, I am guided the reasoning of Justice Frederick Gibson in CCH Cdn. Ltd. v. Law Society of Upper Canada (2000), 184 D.L.R. (4th) 186 at 190 in which he concluded that even unfocussed allegations that complicate the litigation may not warrant a cost award:
I am in agreement with the submissions of counsel for the defendant that the plaintiffs' allegations as set out in the statements of claim and the reliefs sought were extraordinarily broad and without specificity. As indicated in the reasons in these matters dated the 9th of November, 1999, it was only at the beginning of the trial that the plaintiffs focused their claims. It was also not until the beginning of trial that the plaintiffs dropped very significant claims for relief and focused their remaining substantive claim, that being for a permanent injunction, even though that claim continued to be stated in very broad terms. In summary, the plaintiffs presented an amorphous and moving target. While I am not satisfied that the conduct of the plaintiffs, at least once the trial commenced, "unnecessarily lengthened the duration of the proceedings", it certainly complicated the preparation for and presentation at trial for the defendant.
…
I find no basis on which to conclude that any step in these actions was improper, vexatious or unnecessary or taken through negligence, mistake or excessive caution. This finding is in spite of my earlier comments regarding commencement of three separate actions, failure on the part of the plaintiffs to specifically define their claims and the reliefs sought prior to the commencement of trial, extension by the defendant of its counterclaim to cover self-copying services, and failure by the defendant to effectively define its constitutional defences at an earlier stage of the proceedings. None of these factors, in my view, fits the description of an improper, vexatious or unnecessary step or amounted to a step taken through negligence, mistake or excessive caution.
[21] The Court must also be mindful about the chilling effect of awarding costs against a party after the conclusion of a mediation. It is now widely accepted that dispute resolution conferences have a significant role to play in the litigation process. A mediated settlement can produce solutions that exceed those available through the courts. Its success is contingent, however, upon the parties buying in to the process.
[22] The litigation between the Claimants and the Band Council brought a number of festering issues to a head, and resulted in negotiated settlement that will no doubt contribute to a better environment and understanding in the community, to the credit of all parties.
[23] Bearing in mind the entirety of the record before the Court, I am not satisfied that it would be appropriate to award costs against the Claimants who, in the end, were simply attempting to have their voices heard. Moreover, a cost award would be counterproductive as it would undermine the progress that has been achieved over the last six years in bringing the community together.
[24] Being substantially in agreement with the Claimants’ written submissions, I would exercise my discretion by declining to award costs to the Band Council.
ORDER
THIS COURT ORDERS that
1. The motion for costs against the Plaintiffs in T-850-99 and the Applicant in T-1707-02 is dismissed.
2. There shall be no order as to costs of this motion.
“Roger R. Lafrenière”
Prothonotary
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-850-99 & T-1707-02
STYLE OF CAUSE: Phyllis Randall et. al. v. Caldwell First Nation of Point Pelee and Pelee Island Band Council et al.
Lonnie Dodge v. Larry Johnson et al.
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: February 13, 2006
REASONS FOR ORDER LAFRENIÈRE P.
AND ORDER:
APPEARANCES:
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David R. Nash
|
|
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Carol L. Godby
|
FOR THE DEFENDANTS/RESPONDENTS |
SOLICITORS OF RECORD:
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McKenzie Lake LLP Barristers & Solicitors London, ON
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FOR THE PLAINTIFFS/APPLICANT |
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Harrison Pensa LLP Barristers & Solicitors London, ON |
FOR THE DEFENDANTS/RESPONDENTS |