Edmonton Flying Club v. Edmonton Regional Airports Authority, 2013 ABQB 108

Court of Queen ’ s Bench of Alberta Citation: Edmonton Flying Club v. Edmonton Regional Airports Authority, 2013 ABQB 108 Date: 20130301 Docket: 1103 11120, 0903 16530, 1003 00819, 1103 06357, 1103 12234 Registry: Edmonton Between: 1103 11120 Edmonton Flying Club and 1222663 Alberta Ltd. Plaintiffs - and - Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between: 0903 16530 Airco Aircraft Charters Ltd.

Plaintiff -and- Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between: 1003 00819 Edmonton Flying Club Plaintiff -and- Edmonton Regional Airports Authority and Edmonton Airports Inc. Defendants and Between: 1103 06357 Edmonton Flying Club Plaintiff - and - Edmonton Regional Airports Authority and the City of Edmonton Defendants and Between: 1103 12234 Morningstar Air Express Inc., Morningstar

Partners Ltd. and Morningstar Air Corporation Plaintiffs - and - Edmonton Regional Airports Authority, the City of Edmonton, Shell Canada Limited and Shell Canada OP Inc. Defendants _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary [1] Having attended at the hearing and made submissions, Edmonton Flying Club and Airco Aircraft Charters now ask forcosts of the unsuccessful recusal hearing brought by the City of Edmonton.

The City of Edmonton argues that no costs should beawarded since recusal applications do not involve the parties opposite, and the standard principles underlying costs awards therefore haveno application. [2] The applicants are entitled to costs from the City of Edmonton. [3] On recusal applications, costs should be awarded according to the usual principle that the loser pays costs to the winnerwhenever the party bringing the recusal application should reasonably have expected any of the other parties to take a position onrecusal.

Here, the City of Edmonton should reasonably have expected that the two parties opposite would take a position on the recusalmotion because: the recusal application arose out of comments made at an earlier application in these proceedings at which those otherparties had made submissions; a delay in proceedings having an already relatively complicated procedural background caused by theneed to appoint a new case manager would be contested by the parties opposite given the City’s position that it intended to close theairport relatively soon.

Cases and authority cited [4] By the City of Edmonton: D.M.M. v T.B.M. (2011), 311 BCAC 146 (YukCA), 2011 YKCA 8; Makowsky v John Doe ,2007 BCSC 1231 , [2007] B.C.J. No. 1809; 2007 BCSC 1231; Taylor Ventures Ltd. (Trustee of) v Taylor [2005] B.C.J.

No.1050, 2005 BCSC 689. [5] By Airco Aircraft Charters: Direk v Ontario (Attorney General) 2011 ONSC 7356, [2011] O.J No. 5686; ThyssenkruppElevator (Canada) Ltd v 1147335 Ontario Inc. 2011 ONSC 5073, [2011] O.J No. 3847; Schreiber v Mulroney, (ON SC), [2007] O.J No. 3191 (SC); Ritter v Hoag 2003 ABQB 387, 335 A.R. 185. [6] By the court: Webb v Hay (1994) 181 C.L.R. 41; Arsenault-Cameron v Prince Edward Island, (SCC),[1999] 3 S.C.R. 851, [1999] SCJ No. 75; Re Pinochet, [1999] UKHL 52; Mugesera v Canada (Minister of Citizenship andImmigration), 2005 SCC 39 , [2005] 2 S.C.R. 91; 2005 SCC 39; Mireskandari v Law Society (Solicitors Regulation

Authority),[2009] EWHC 2224 (Ch); Wewaykum Indian Band v. Canada, 2003 SCC 45 , [2003] 2 S.C.R 259; 2003 SCC 45;Rocky Layman Energy Inc. V Four Winds Energy Services Ltd. 2006 ABCA 309. 1. Background [7] The proceedings that led to this application are summarized in previous written decisions: 2012 ABQB 563; 2012 ABQB664; 2012 ABQB 784; 2013 ABQB 46. [8] Both Edmonton Flying Club and Airco were present and made submissions on the City of Edmonton’s application to settlethe minutes of a severance hearing by including reference to expropriation proceedings initiated after the severance hearing.

The City ofEdmonton’s application for recusal arose out of comments I made on the settlement of the minutes hearing. [9] Both Edmonton Flying Club and Airco made submissions on the recusal application, and the latter indeed prepared a brief. [10] All of the parties to the litigation were given notice of the recusal application. Only Edmonton Flying Club and AircoAircraft Charters appeared. Indeed, the latter two parties also attended at a meeting with the Associate Chief Justice which was a preludeto the bringing of a formal application for recusal. 2.

General principles relating to the award of costs on recusal applications [11] Because costs are in the discretion of the court, relatively few principles of general application restrict the exercise of thatdiscretion although the following principles are generally recognized: the court’s discretion must be exercised judicially; costs usuallyfollow the event, i.e. costs are paid to the winner by the loser; costs are usually assessed on a pay-as-you-go basis; and, costs are usuallyawarded on a party and party basis. [12] The City of Edmonton invokes the second of those principles in this application; it argues that the principle that costs are paidto the winner by the loser has no application here since recusal is not inter party-process but process between a party and the judge.

Thatdistinction between costs in recusal proceedings and in normal contested proceedings has been recognized in the case law. Moreover, itscorrectness is easily established: even if all parties in a lawsuit agreed that a particular judge should not preside, that agreement alonewould not disqualify the judge from presiding whereas, and even if all parties wanted a particular judge to hear an application but thejudge herself had determined that she was disqualified, the judge could not be obliged to sit. In

summary, I agree with the City’s positionthat costs on recusal applications constitute a unique category of cost situations calling for a tailored application of general costsprinciples. [13] Moreover, as the City of Edmonton also correctly observes, it is not possible to discern from the case law principles ofgeneral application on cost awards on recusal applications: costs are awarded, or not, typically without elucidating commentary: seecases cited above. However, certain of those decisions include brief comments about costs on recusal applications.

For ease of reference,I note the following: D.M.M. v T.B.M. (Yukon Territory Court of Appeal at paras. 42 to 44) On the [recusal] application, Justice Gower was not being called upon to make a decision as between the parties and the order he madedismissing the recusal application did not require either party to do, or refrain from doing, anything. Moreover, the recusal application brought in this case was not one in which allegations of bias or the apprehension of bias were being

used as a means of forum shopping, for the purposes of delay, or to thwart the possibility of a decision being reached. In the circumstances described, I am of the view that this was not a case in which costs ought to have been ordered against the appellant. Makowsky v John Doe (B.C. Supreme Court at para. 35) I appreciate that applications of this kind [recusal] are not brought lightly and the failure of such a motion should not be sanctioned in costs unless the judge is satisfied that the application has been brought for an improper purpose. No improper purpose arose in this case.

The parties will pay their own costs. (At para. 13 of the same decision, the judge noted that the party opposite indicated, at the recusal hearing, that there was no basis in law for disqualification, but “ they did not however make detailed submissions ” .) Direk v Ontario (Attorney General) (Ont. Sup. Ct. of Justice at para. 16) In the ordinary course in civil proceedings in Ontario, the party who succeeds on a motion is entitled to an award of costs against the unsuccessful party.

Ural and Kemal were plainly the unsuccessful parties on the recusal motion and I see no reason to depart from the ordinary approach. Schreiber v Mulroney (Ont. Sup. Ct. of Justice at para. 6) With respect to the costs of the recusal motion, Mr. Anka did not propose that the costs should not follow the event. In any event, there is no reason for costs not to follow the event and I order Mr. Schreiber to pay such costs to Mr. Mulroney.

Mireskandari v Law Society (Chancery Division at para. 92) . . . and perhaps more simply, the costs should be treated as costs in the case, because the application [for recusal] was made in the course of proceedings which I have found to lack merit and to justify an award of costs on the indemnity basis. [ 14 ] The only comment I will make about the excerpted case law is that, whether a party is ordered to so something, or to refrain from doing something, is not, in my view, a usual factor in determining whether costs should be awarded; indeed, costs are typically awarded on contested applications for declarations. [ 15 ] I commence my search for a principle relating to the costs on recusal applications by following up a suggestion by Airco that it may be useful to distinguish amongst different types of recusal applications.

Deane J. in the High Court of Australia decision in Webb , identified four, sometimes overlapping, types of disqualification cases: 12. The first is disqualification by interest, that is to say, cases where some direct or indirect interest in the proceedings, whether pecuniary or otherwise, gives rise to a reasonable apprehension of prejudice, partiality of prejudgment. The second is disqualification by conduct, including published statements. That category consists of cases in which conduct, either in the course of, or outside, the proceedings, gives rise to such an apprehension of bias.

The third category is disqualification by association. It will often overlap the first . . . . . and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by

extraneous information. It will commonly overlap the third . . .. and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias. [ 16 ] In

summary then, Deane J. notes that there are two basic types of recusal application, one involving a judge ’ s relationships (e.g. family members, ties to an organization such as Amnesty International, or to a government legal service, or pre-appointment advocacy) and another involving a judge ’ s conduct of the specific, and related, proceedings.

Different principles may apply to those two general categories. [ 17 ] I agree with Airco that, where a judge ’ s relationships are the basis for the recusal application, it will often be the case that other parties to litigation have nothing to add to the application and would not appear, and would therefore not ask for costs. [ 18 ] However, even in such a situation, the non-involvement of other parties cannot, in my view be taken as a given.

For example, in Makowsky , the representative of the defendant law firm stated in correspondence that he was not aware that the judge ’ s son was employed as an associate by his firm.

It was probably the case, therefore, that the judge - who clearly did know that his son was employed at the defendant ’ s law firm - appreciated at least knowing that defence counsel was not aware of the relationship between the two persons who shared a last name and would have taken that lack of knowledge into account in not recusing himself. [ 19 ] Moreover, it must be recalled that, even where a recusal application is made on the basis of a judge ’ s relationships, if the application was not made in a timely way, or was made for an improper purpose, the other parties to the litigation may consider themselves prejudiced by the application to remove the judge, and may therefore legitimately oppose a recusal application. [ 20 ] Where a recusal application is, as in the situation here, based on a judge ’ s conduct of proceedings, there are additional factors that may come into play.

The other parties can be expected to know about the judge ’ s conduct in the previous proceedings and could be expected to be of assistance in shedding some light on the judge ’ s actions and comments. [ 21 ] Finally, it must be noted that parties are not required to appear on another party ’ s recusal application, and may choose not to do so for a variety of reasons. [ 22 ] I have therefore come to the conclusion that the decision about whether costs should be awarded on a recusal application should be determined not by whether the application is based on the judge ’ s relationships or on her conduct of proceedings, but rather, at least in part, by a determination as to whether the party making the recusal application should have had an objective, i.e. reasonable, expectation that other parties would participate in the recusal hearing.

If a party should reasonably have expected the other party(ies) to appear on the application, then the party bringing the recusal application should expect to pay those other parties costs if the recusal application fails or to obtain costs from them if the application is successful despite their submissions to the contrary.

The expectation of costs jeopardy is a natural outcome of realizing that it will cost money for other parties to prepare and present useful submissions and for the applicant party to assess and rebut those submissions. [ 23 ] The City of Edmonton states that, had it been successful on its recusal application, it would not have asked for costs from the parties which opposed its application. While that is a factor which a judge may take into account in a specific situation, it is too idiosyncratic a feature to become a principle on the award of costs in recusal situations.

In addition, a party ’ s decision not to ask for costs is, of course, different from a party ’ s entitlement to costs; another way of putting the real question on this application is to ask whether the City of Edmonton would have been entitled to costs from the parties opposite if the City ’ s application had been successful. [ 24 ] Finally, a general principle that costs were not to be awarded on recusal applications might have the inappropriate effect of encouraging parties to bring such applications.

As the case law establishes, and as the City of Edmonton recognizes, such applications should not be brought lightly.

3. Application of the general principles to the circumstances here [ 25 ] I have concluded that the City of Edmonton should have realized that the parties opposite would take a position on its recusal application.

In coming to that conclusion I rely on two main factors: - first, because the recusal application arose out of my comments on an earlier application at which the other parties had themselves made submissions, the City should have expected that the parties opposite would have a perspective on the context in which the comments were made with a view to assisting the court in its appreciation of whether those comments, taken in context, would be likely to raise in a reasonable person an apprehension of bias.

As the case law explains, the judge who is the subject of a recusal application is, in some ways, the person who is least likely to be able to make a dispassionate assessment of the reasonable person ’ s appreciation of the impugned comments; a judge in that situation is typically grateful for as much assistance as possible in arriving at the required decision.

Here, the submissions of the other parties were, in fact, useful on that issue, including, as they did, reference to their own arguments during the settlement of the minutes hearing, for example concerning possible limits on a municipality ’ s right to expropriate where its own contracts were in issue; - second, given the relative procedural complexity of the proceedings, as well as the fact that the City had earlier agreed to my acting as case manager, the need to find a replacement case manager and for that case manager to get up to speed on the background, would inevitably delay the proceedings.

Delay is a particular problem in the situation here where the City had indicated its intention to close the City Centre Airport in the relatively near future which could make Edmonton Flying Club ’ s position moot. [ 26 ] Moreover, in a general way, both Edmonton Flying Club and Airco Aircraft Charters brought value added to the recusal hearing through their positions as to the required process for such hearings and as to the standards for recusal which have been accepted in Canadian law. [ 27 ] In the result, the City of Edmonton will pay tariff costs to the Edmonton Flying Club and Airco Aircraft Charters for the recusal hearing and the hearing on costs of the recusal hearing.

Heard on the 6 th day of February, 2013. Dated at the City of Edmonton, Alberta this 1 st day of March, 2013. J.B. Veit J.C.Q.B.A. Appearances: Thomas H. Ferguson Q.C., Fasken Martineau DuMoulin LLP, and B. Savory, student-at-law, City Solicitor ’ s Office

for the City of Edmonton Jack N. Agrios, Q.C. for Edmonton Flying Club and 1222663 Alberta Ltd., Morningstar Air Express Inc., Morningstar Partners Ltd. and Morningstar Air Corporation Fred Kozak, Q.C., Reynolds Mirth Richards & Farmer LLP for Airco Aircraft Charterss Ltd.