Lameman v. Alberta, 2011 ABQB 724

Court of Queen ’ s Bench of Alberta Citation: Lameman v. Alberta, 2011 ABQB 724 Date: 20111123 Docket: 0803 06718 Registry: Edmonton Between: Alphonse Lameman on His Own Behalf and on Behalf of All Other Beaver Lake Cree Nation Beneficiaries of Treaty No. 6, and Beaver Lake Cree Nation Applicants (Plaintiffs) - and - Her Majesty the Queen In Right of the Province of Alberta and the Attorney General of Canada Respondents (Defendants) _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice K.D. Yamauchi _______________________________________________________ I.

Introduction and Facts [ 1 ] The Applicants seek leave to appeal an order of costs made by this Court in relation to an adjournment application, as required under rule 505 of the Alberta Rules of Court , Alta. Reg. 390/68 [“ Old Rules ”]. Old Rules r. 505(3) states:

505(3) No ... order made ... as to costs only shall be subject to any appeal, except by leave of the court ... making the order. [ 2 ] The Respondents filed their applications to strike portions of the Applicants' statement of claim in June of 2009 [the “Striking Applications”]. By the fall of 2010, the Striking Applications had already been adjourned on one occasion and were scheduled to be heard in December of 2010.

This Court directed that the Respondents file their briefs in support of the Striking Applications on or before August 30, 2010, and that the Applicants file their brief on or before November 1, 2010. In August of 2010, the Respondents had filed their extensive written briefs in support of their Striking Applications, in accordance with this Court’s direction. [ 3 ] In a case management meeting held on September 8, 2010, the Applicants did not mention the possibility of a further adjournment.

It was not until October 19, 2010, that the Applicants filed and served an application to adjourn the Striking Applications. This Court gave the Applicants a number of extensions to file their reply submissions for the Striking Applications. The Applicants did not file their written reply submissions, as directed by this Court. [ 4 ] On January 28, 2011, this Court granted the Applicants' request for the adjournment of the Striking Applications.

In its written decision on the adjournment application ( 2011 ABQB 40 [“Adjournment Decision”]), this Court stated that it was troubled by the approach the Applicants and their legal counsel had taken with respect to the litigation. It invited the parties to address the issue of costs: Adjournment Decision at para. 74. [ 5 ] In March of 2011, the Respondents each filed submissions on costs. They sought thrown-away costs related to preparing for the Striking Applications and costs for the adjournment application.

The Applicants filed reply submissions in April of 2011. [ 6 ] This Court released its decision regarding the costs on August 31, 2011 ( 2011 ABQB 532 [the “Costs Decision”]). In the Costs Decision, this Court awarded costs to each of the Respondents, on the basis of the Rules of Court,

Schedule C, Column III. It ordered that the Applicants pay immediately the costs of the application that resulted in the Adjournment Decision. It deferred the issue of thrown-away costs for consideration by the justice who will hear the Striking Applications. [ 7 ] In the Costs Decision, this Court attached, as Appendix "A", a

summary of the procedural history leading up to the Applicants’ adjournment request. This Court, as the case management judge, was familiar with the procedural history of this matter and, as well, the conduct of the parties. II. Issue [ 8 ] The sole issue before this Court is whether it should grant the Applicants leave to appeal the Costs Application. III. Analysis [ 9 ] A party seeking leave to appeal a costs order must meet a high threshold. The case law is clear that leave to appeal costs orders should be granted sparingly: Gutierrez v.

Jeske , 2005 ABQB 971 , 396 A.R. 1 at para. 4 . [ 10 ] The purpose of Old Rules r. 505(3) is to bring finality to costs orders and to conserve court resources by screening out appeals that are hopeless: Huang v. Telus Corp. Pension Plan (Trustee of) , 2005 ABQB 272 at para. 10 . Although it might seem unusual for an applicant to seek leave from the judge who made the initial costs order, the Old Rules allow for this procedure and the Alberta Court of Appeal has endorsed the practice: Roman Catholic Bishop of the Diocese of Calgary v.

Canada (AG) , 2010 ABCA 202 , 487 A.R. 348 at para. 10 , leave denied 2010 CarswellAlta 2468 (S.C.C.) [“ Roman Catholic CA ”]. The reasoning behind this procedure is that the judge who granted the original costs order has an understanding of the case and its nuances and is, therefore, in the best position to assess the prospects of a successful appeal: Prefontaine v. Bell , 2007 ABCA 244 at para. 11 .

[ 11 ] Rule 10.29 of the Alberta Rules of Court , Alta. Reg. 124/2010 [“ New Rules ”] states that the general rule is that a successful party to an application is entitled to costs. However, that general rule is subject to the court's ability to award costs under New Rules r. 10.31, which gives the court broad discretion. See e.g. Kent v. Martin , 2011 ABQB 163 , 45 Alta. L.R. (5th) 76 at paras. 9 and 10 . This Court was well aware of these rules when it rendered the Costs Decision. [ 12 ] In Scramstad v.

Stannard , 1997 CarswellAlta 1215 , Girgulis J. said: 8 ...While it may be usual to award costs to the successful party against the losing party, that common award is not invariable and is always subject to the court's discretion. It is not unusual for costs to be dealt with in some other fashion and so long as the discretion is exercised judicially, the award of costs ought not to be impeached ... But because something is common or usual does not in any way restrict the court's discretion. Nor do normal or usual awards of costs make rules of law or binding precedents.

Where discretion is given by statute or by the rules, or as here, by both, it is not to be cut down or eroded by implication; it can only be restricted by legislation, or by rules, or by principles of law which bind the court's discretion.

Here there are no statutory restrictions; ... there are no limiting rules, and there is no rule of law which requires a court to exercise its discretion to award costs in favour of the successful party against the unsuccessful party and, not infrequently, awards of costs are made to the contrary... [ 13 ] A leave to appeal application does not give the parties an opportunity to re-argue the issue of costs: Roman Catholic Bishop of the Diocese of Calgary v. Canada (AG) , 2009 ABQB 231 at para. 5 , aff’d 2010 ABCA 202 [“ Roman Catholic QB ”].

However, because of the four part test provided by the court in Huang at para. 4 , and approved by the Alberta Court of Appeal in Roman Catholic CA at para. 14, the court hearing a leave to appeal application must provide the applicant sufficient latitude to address the factors included in the test. That four

part is as follows: (

i) the applicant must identify a good, arguable case having enough merit to warrant scrutiny by the court; (ii) the issues must be important, both to the parties and in general; (iii) the appeal must have practical utility; and (iv) the court should consider the effect of delay in proceedings caused by the appeal.

See also Gutierrez at para. 5 . [ 14 ] The court is limited, nevertheless, to hearing only enough to make the determination as to whether the applicant meets the four part test, and no more. [ 15 ] In considering whether this Court should grant the Applicants leave to appeal the Costs Decision, this Court must consider the standard of review that the Alberta Court of Appeal will apply when it considers an appeal from the Costs Decision. The Alberta Court of Appeal will not interfere with the Costs Decision unless this Court committed a clear, palpable and overriding error: Condominium Corp. No. 9813678 v.

Statesman Corp. , 2011 ABQB 489 at para. 14 ; Westersund v. Westersund , 1993 ABCA 219 , 157 A.R. 276 at para. 11 . [ 16 ] The Applicants bear the onus of proving that error. In Miller v. Miller , 2000 ABQB 764 , Clackson J. said: 3 In applications such as this, the burden of proof must fall upon the Applicant. The Applicant must show a reasonable prospect of success on appeal. That is not proof on a balance of probabilities, but it is a substantial hurdle because costs are wholly discretionary and a Court of Appeal is unlikely to interfere with an exercise of discretion.

Therefore, the Applicant must convince me that there is a reasonable prospect that a Court of Appeal will find that I failed to exercise my discretion judicially.

4 In my view, the judicial exercise of a discretion involves the consideration of fact, law and argument and a decision made on the basis of fact, law and argument. A decision made on the basis of caprice, temper or chance would involve an arbitrary, as opposed to judicial, exercise of discretion ... A. The Four Part Test 1. Whether the Issues Raised by the Applicants Have Sufficient Merit [ 17 ] Like Clackson J. in Miller at para. 2 , this Court finds that it is not appropriate at this stage for it to explain the reasoning which led it to the Costs Decision. The Costs Decision stands on its own.

To assess whether an appeal has a reasonable chance of success, this Court must consider whether it erred in law, unreasonably exercised discretion, considered irrelevant facts or misapprehended an important fact: Autoweld Systems Ltd. v. CRC-Evans Pipeline International Inc. , 2011 ABCA 243 at para. 8 ; Huang at para. 14 . As Clackson J. said in Miller : 5 ... [T]he issue is not whether some other Court may have come to a different conclusion based upon the facts or the law, but rather whether the conclusion that I came to was a reasonable judicial

interpretation of the facts and the applicable law. [ 18 ] In Scramstad , Girgulis J. said: 9 Therefore, in the relevant circumstances must be found a rationale which reasonably justified the trial judge in exercising his discretion in the way that he did. If that is clear, leave should not be granted because it is not an arguable case.

If that cannot be found, it is simply arbitrary and leave should be granted; and, perhaps, it should be granted in cases where it is difficult to see a sufficiently cogent rationale to justify the particular award of costs, assuming, of course, the matter does not involve a trivial amount or has some precedential value ... [ 19 ] The Applicants have failed to demonstrate that this Court made any such errors. The New Rules give this Court the ability to depart from the general rule that a successful party to an application will be awarded costs. See New Rules rr. 10.31 and 10.33.

An applicant for an adjournment may be required to pay the costs of the application, even if successful, if the adjournment results from some fault of the applicant. In Andres v. Andres , 2011 ABQB 536 at para. 14 , Veit J. held that where fault can be attributed in relation to an adjournment, there will be costs implications. [ 20 ] As well, it is important that this Court exercise its discretion judicially: Canadian Acceptance Corp. v. Biluk (1978), 10 C.P.C. 178, [1978] O.J. No. 2333 (Dist.Ct.) at para. 13 .

For the Applicants to establish that this Court failed to exercise its discretion judicially, they must demonstrate that this Court breached the principles of natural justice, based its decision on irrelevant considerations, was arbitrary or acted in bad faith: Markdale Ltd. v. Ducharme , 1998 ABQB 1077 , 238 A.R. 321 at para. 26 . In the Costs Decision at paras. 5 and 12-13, this Court acknowledged the general rule on costs. It concluded, however, that, based on its reasoning in the Adjournment Decision, there were "exceptional circumstances".

Furthermore, this Court noted that the Applicants sought costs for their successful adjournment application and found that argument to be “preposterous”: Costs Decision at paras. 5 & 12-13. [ 21 ] This Court was very clear about its views on the Applicants’ conduct. In the Adjournment Decision at para. 70, it said that it was "extremely troubled by the approach [Applicants’ counsel] has taken with respect to this litigation". The particular reasons are amply set forth in the Adjournment Decision and this Court sees no useful purpose in repeating them here.

Suffice it to say that this Court noted the history of delays and extensions which weighed against a further adjournment. The Applicants argue that for this Court to depart from the rule that the successful party is entitled to its costs, this Court must find “misconduct, miscarriage in the proceedings, or oppressive and vexatious conduct on the part of the Applicants” or “intentional conduct where counsel knowingly intended to deceive the Court or be contemptuous of the Court”: Applicants’ Brief dated October 6, 2011, para. 6 (citations excluded).

[ 22 ] The Applicants further argue that misconduct worthy of awarding costs against a successful party must be intentional conduct where counsel intended to deceive the court or be contemptuous of the court. In support of this proposition, the Applicants cite Carbon v. Young , 2004 ABQB 95 , 353 A.R. 153. The court in that case was dealing with a situation in which a costs awards was made as against a solicitor and the factors that the court in that case outlined were those that a court should consider when making such an award. This Court has not awarded costs against the Applicants’ solicitor.

It has awarded costs as against the Applicants, so those factors are of limited value in this case. [ 23 ] New Rules r. 10.33 does not require the findings that the Applicants argue this Court must find. The wording of that rule is in keeping with the broad discretion given to courts when making costs rulings.

Ultimately, this Court granted the Applicants their adjournment, but stated that "any prejudice to the Respondents can be, and will be, dealt with in costs": Adjournment Decision at paras. 60 and 66. [ 24 ] This Court has been involved in the matter for years, is very familiar with the procedural history, and provided the Applicants with every opportunity not only to meet the issues it was facing, but to advise the Court in a timely way of those issues.

They did not and as a result, the Respondents incurred significant costs in proceeding on the basis that the Applicants would meet the time lines imposed by this Court. Slatter J., as he then was, said in Koppe v. Garneau Lofts Inc. , 2005 ABQB 727 , 385 A.R. 265: “... if the adjournment is the result of some fault of the applicant, the applicant is often required to pay the costs of the adjournment application, even if successful” (at para. 21). That is the case here and, as a result, the Applicants have not demonstrated a good, arguable case having enough merit to warrant scrutiny by the appellate court.

On his basis alone, leave to appeal should be denied. 2. General and Specific Importance of the Issues Raised by Applicants [ 25 ] When we are dealing with this factor, we must remember that we are dealing not with the issues of substance, which this Court dealt with in the Adjournment Decision, but the costs issue. Cost awards are discretionary and will depend on the specific facts of a particular case. This diminishes the precedential effect of a court ruling on costs: Huang at para. 17 . [ 26 ] This Court has made statements concerning the importance of the issues in this case. See e.g. Lameman v.

Alberta , 2011 ABQB 40 at paras. 65 and 72 . However, those statements relate to the substance of the case, with which the parties will deal in the Striking Applications. There is nothing in the Costs Decision that gives rise to or addresses new issues of law concerning costs or principles that the Alberta Court of Appeal must clarify.

The Costs Decision dealt with matters concerning this case and, in particular, its procedural history. [ 27 ] The Applicants argue that their impecuniosity will not allow them to proceed with the Striking Applications and, in support of their position, they provided this Court with the Supreme Court of Canada decision British Columbia (Minister of Forests) v. Okanagan Indian Band , [2003] 3 S.C.R. 371, 2003 SCC 71 . That case is not applicable to the case at Bar, as the court was dealing with a situation where the Band was seeking to have its interim costs paid by the provincial Crown.

The impecuniosity of the Band was but one factor that the court considered in that case, and it would be wrong for this Court to overlay that single factor to the situation with which it is dealing, particularly given that the Applicants have never applied for Okanagan interim costs. [ 28 ] In any event, the Applicants cannot use their alleged impecuniosity as a shield to protect them from the Costs Decision, in this case. This Court’s ruling, as contained in the Adjournment Decision, sets forth the concerns it had with the way in which the Applicants have conducted these proceedings.

New Rules r. 10.33 required this Court to consider those concerns when it arrived at a decision concerning costs. The Applicants argue that their solicitors should not, or could not, reveal their alleged impecuniosity to this Court, based on solicitor and client privilege. This Court does not dispute that position. However, when it has a detrimental effect on the proceedings or has a prejudicial effect on parties opposite, it behoves them to attempt to allow the court to address their concerns. They are the ones who are in the best position to establish their own impecuniosity.

There was simply insufficient evidence before this Court on which it could reach that conclusion. [ 29 ] This Court considered the relevant legal principles when exercising its discretion to award costs, and its determination on

costs was based on the Applicants’ conduct and the specific procedural history of the case. While the costs ruling may be of importance to the Applicants, from a financial perspective, there is nothing in the proposed appeal which would be of general importance. 3. Practical Utility [ 30 ] An appeal of the Costs Decision may have practical utility to the Applicants. The appeal would not have broader practical application. [ 31 ] In Gutierrez , the court considered whether an appeal would have a broader practical utility.

In that case, the court concluded leave should not be granted as the costs award resulted from the exercise of a high level of discretion. The Applicants raise no issue that would allow the Alberta Court of Appeal to provide direction on the law with respect to costs and, in fact, that court in Autoweld has confirmed the cautious approach it would take concerning procedural rulings, of which the Costs Decision is one. 4. Delay [ 32 ] This Court need not comment on this issue, as it does not see any delay that would be occasioned by granting the Applicants’ leave to appeal the Costs Decision. B.

Other Issues Thrown-Away Costs [ 33 ] The Applicants argue that this Court erred in finding that the Respondents are entitled to their thrown-away costs, by awarding the Respondents their costs for preparation and filing of their briefs in anticipation of the Striking Applications. That is not what this Court ordered. This Court ordered that the judge hearing the Striking Applications will be in a better position to determine the thrown-away costs, or “wasted preparation,” because we will not know “the full amount of the wasted preparation until they file their final briefs”: Costs Decision at para. 11.

This is in keeping with the Alberta Court of Appeal’s decision in 566320 Alberta Ltd. v. Lethbridge (City of ) , 2005 ABCA 244 , 371 A.R. 270 at para. 10 . However, this Court did order that the Applicants forthwith pay the Respondents’ costs of the application that resulted in the Adjournment Decision. Costs in Relation to the Adjournment Application [ 34 ] The Applicants identify this as a separate argument, but this Court has already addressed it in discussing the four part test.

Consolidation With a Separate Appeal [ 35 ] This Court rendered a decision as to whether the Applicants may retain foreign legal counsel to assist it in this litigation: 2011 ABQB 396 [the “ Pro Bono Decision”]. The Applicants have appealed the Pro Bono Decision. The Applicants argue that if this Court were to grant it leave to appeal the Costs Decision, they will seek to consolidate the appeal of the Costs Decision with the appeal of the Pro Bono Decision.

[ 36 ] This Court finds that the appeal of the Costs Decision and the appeal of the Pro Bono Decision are separate and discrete. They are unrelated to each other, as the Costs Decision dealt with the costs arising from the Adjournment Decision. This Court did not deal with costs related to the Pro Bono Decision. There would be no judicial economy in having these appeals heard together and, in fact, hearing them together might cause unnecessary confusion.

The existence of an appeal concerning the Pro Bono Decision does not take away from the fact that the Applicants must still meet the four part test before this Court will grant it leave to appeal the Costs Decision. IV. Conclusion [ 37 ] For the foregoing reasons, this Court denies the Applicants leave to appeal the Costs Decision. [ 38 ] If the parties are unable to agree on the costs in relation to this decision, they may contact my assistant to

schedule a time when I will hear submissions. Heard on the 1 st day of November, 2011. Dated at the City of Edmonton, Alberta this 23 rd day of November, 2011. K.D. Yamauchi J.C.Q.B.A. Appearances: Jenny Biem, Woodward & Company for the Applicants Angela Edgington, Alberta Justice for the Defendant, Her Majesty the Queen in Right of the Province of Alberta Tanya Knobloch/Soniya Bhasiu Cynthia Dickens, Department of Justice Canada for the Defendant, Attorney General of Canada