Auer v Auer, 2021 ABQB 860

Court of Queen’s Bench of Alberta Citation: Auer v Auer, 2021 ABQB 860 Date: 20211101 Docket: 4803 156019 Registry: Edmonton Between: Roland Nikolaus Auer Applicant - and - Attorney General of Canada Intervenor _______________________________________________________ Ruling on Costs of the Honourable Mr. Justice T.G. Rothwell _______________________________________________________ A. Introduction [ 1 ] On May 11, 2021 I dismissed Mr. Auer’s vires challenge of the Federal Child Support Guidelines , SOR/97-175 [ Guidelines ].

My reasons are reported at: Auer v Auer , 2021 ABQB 370 [ Auer ]. [ 2 ] The Attorney General of Canada [AGC] was an Intervenor in the proceedings and seeks costs arising out its participation in the judicial review. The parties are unable to agree upon costs.

[3] Aysel Auer, the Respondent, did not participate in the judicial review and seeks no costs and no party seeks costs against her. [4] The judicial review was heard over 2.5 days in December of 2020 and involved the review of extensive affidavit evidence aswell as three expert reports. The parties also filed lengthy and detailed submissions. The parties’ evidence is summarized at paras 18-20of the Auer decision. [5] For the reasons that follow I find that the AGC is entitled to costs but that the costs award should take into account thepublic interest aspect of the case. B. Position of the Parties Mr.

Auer [6] Mr. Auer requests that this Court award no costs payable against him arising out this judicial review or, in the alternative,that a very modest amount be awarded against him. Mr. Auer relies on three primary factors in support of his request for no costs or verymodest costs: (

a) the public interest nature of the litigation; (

b) AGC’s status as an Intervenor in this matter; and (

c) the subject matter ofthe AGC’s expert witness. AGC [7] The AGC seeks triple costs for all steps of the judicial review on Column 1 of

Schedule C as well as disbursementsincluding the cost of their expert report. The triple

Schedule C costs total $40,455 and the disbursements are $58,327.77. The AGC’sexpert accounts for $54,751 of the disbursements. [8] The AGC advances the position that while it was an Intervenor its participation was essential to defend the vires of theGuidelines and that the complexity and general importance of the matter warrants triple costs on Column 1. Moreover, the AGC arguesits decision to retain an expert was both reasonable and prudent in the circumstances. The AGC disputes that Mr. Auer is a public interestlitigant. C.

Law [9] Rule 10.31 of the Alberta Rules of Court, Alta Reg 124/2010 [Rules of Court] contemplates a cost award being made at theconclusion of a matter and Rule 10.33 sets out factors that the Court may consider, namely: (

a) the result of the action and the degree of success of each party; (

b) the amount claimed and the amount recovered; (

c) the importance of the issues; (

d) the complexity of the action; (

e) the apportionment of liability; (

f) the conduct of a party that tended to shorten the action; (

g) any other matter related to the question of reasonable and proper costs that the Court considers appropriate. [10] Factors (

b) and (

e) have no relevance to this matter and (

f) has little relevance either. [11] It is well established that: • The successful party is generally entitled to costs: Rule 10.29; • Costs are discretionary subject to specific requirements in the Rules; • Discretion over costs must be exercised judicially and in accordance with established principles; • In appropriate circumstances costs may be increased beyond that provided for in the Schedule; • Costs may be awarded to or against the AGC: Crown Liability and Proceedings Act, RSC 1985, c C-50, s 28(1); and • Costs ought not to be oppressive.

B&R Development Corp v Trail South Developments Inc, 2011 ABQB 706 at paras 4-8; Mikkelsen v Truman Development Corp,2016 ABQB 255 at paras 21 and 23; Pharand Ski Corp v Alberta (1991), (AB KB), 81 Alta LR (2d) 304 at 398; andElders Advocates of Alberta Society v Alberta Health Services, 2021 ABCA 67 at para 14 [Elders] [12] In the present case the AGC was successful in defending Mr. Auer’s judicial review and it should ordinarily be entitled to anaward of costs. However, this matter has a unique procedural background and did raise issues of general importance that warrant

consideration of whether it is appropriate to depart from the general rule that the unsuccessful party should pay costs. D. Analysis Intervenor Status of AGC [ 13 ] Mr. Auer cites the decision of Stoney Tribal Council v PanCanadian Petroleum Ltd , 2000 ABCA 164 at para 2 [ Stoney Tribal Council ] for the proposition that intervenors are generally not entitled to costs. In that case Chevron Canada Resources (Chevron) was granted intervenor status to respond to a constitutional issue raised by the Stoney Tribal Council.

The Stoney Tribal Council withdrew its constitutional challenge and Chevron did not participate in the appeal.

The Court declined to grant Chevron its intervention costs. [ 14 ] The AGC cited Lynnview Ridge Residents’ Action Committee v Imperial Oil Limited , 2005 ABCA 375 [ Lynnview ] and Canadian Union of Postal Workers v Her Majesty in Right of Canada , 2017 ONSC 6503 [ CUPW ] in support of the proposition that costs, in appropriate circumstances, may be awarded to intervenors. [ 15 ] Intervenors are generally granted intervenor status to offer an argument that is useful and different and/or to assist the Court.

They generally take the record as they find it and their participation is limited: Suncor Energy Inc v Unifor, Local 707 A , 2014 ABQB 555 . [ 16 ] In Lynnview the Alberta Court of Appeal noted the following considerations with respect to the appropriateness of awarding costs to an intervenor, at para 25: I conclude that there are circumstances where an intervener with a special interest should be awarded costs.

Although the circumstances will vary, the factors to be taken into account in determining whether it is appropriate to deviate from the general rule include: • Has the intervener contributed to the court’s deliberations by adding a viewpoint that otherwise would not have been considered? Alternatively, did the parties themselves present the same arguments or points of view? • Is there legislation relevant to the case to suggest whether the intervener has a special interest or an important role to play? • What is the nature of the intervener’s special interest?

The interest might be financial, proprietary, non-pecuniary or other. [ 17 ] The Ontario Court of Superior Justice in CUPW identified six factors for consideration in its decision, at para 31: i. What is the nature and extent of the intervener’s interest in the issues that were before the court and in the outcome of the proceeding? ii. What was the nature and extent of the intervener’s involvement in the proceeding? iii. What are the intervener’s resources? iv. Was the intervener successful on the merits? v. Did one of the parties anticipate or provoke the intervener’s involvement? vi.

Did the terms of the order granting leave to intervene address the possibility of a cost award? [ 18 ] I note that there are similarities between the Lynnview and CUPW factors but I will focus primarily on the Lynnview factors as they emanate from the Court of Appeal of Alberta. [ 19 ] In the present case the AGC applied for intervenor status in order to defend the validity of the Guidelines . Gates J, by way of Order dated July 4, 2018, granted the AGC Intervenor status: 2018 ABQB 510 [ Auer Gates Order ].

In para 2 of Auer I noted that the AGC was in essence the Respondent in this judicial review. [ 20 ] It is clear that the AGC satisfies the first Lynnview factor as it clearly aided this Court in its deliberations both through the evidence it placed before the Court and its submissions. [ 21 ] Ms. Auer did not participate in the judicial review; therefore it was essential that the AGC participate in the judicial review to present fulsome argument on the vires of the Guidelines .

It is trite law that Courts should generally only hear a matter when a lis exists between the parties and both sides of an argument are properly argued. [ 22 ] The AGC also meets the second Lynnview factor as it has a special role in defending Canada’s legislation. [ 23 ] There are times when the necessity or usefulness of an intervenor is lacking and it would not be appropriate to award costs in their favour. [ 24 ] In the present case the participation of the AGC as an Intervenor was essential and helpful.

Justice Gates’ intervention Order did not address the AGC’s ability to seek costs or have costs awarded against them, but he described the AGC as having “rights and duties comparable to that of a party”. The ability to seek costs or have costs awarded against them falls, in my view, within the “rights and duties of a party”: Auer Gates Order at para 129 . [ 25 ] The third Lynnview factor has no real application in the present case.

[ 26 ] In my view the AGC did not assume the role of a typical intervenor and I distinguish the Stoney Tribal Council decision on its facts. The AGC was, in essence, an Intervenor in name only. [ 27 ] In conclusion, I find for the reasons set out above that in these circumstances it is appropriate for the AGC to seek costs, notwithstanding it participated in this matter as an Intervenor. Public Interest Litigation [ 28 ] Mr. Auer’s second argument in favour of no costs or a reduced costs award is the public interest nature of this judicial review. [ 29 ] Mr.

Auer relies on the Pauli v ACE INA Insurance Co , 2004 ABCA 253 [ Pauli ] and Elder Advocates of Alberta Society v Alberta , 2020 ABQB 54 , aff’d 2021 ABCA 67 [ Elder ] decisions for authority that the Court may order no or reduced costs when a case is one of public interest. [ 30 ] The AGC argues that the Pauli and Elder cases have no application in this matter as they involved representative actions and the

interpretation of Rule 10.32. While those decisions did involve representative actions, I do find that some of the factors considered in those cases relative to determining public interest are nonetheless appropriate in this case [ 31 ] I also note that in Vriend v Alberta , 1996 ABCA 274 [ Vriend ] the Court of Appeal noted that discretion exists to depart from the normal costs rule when a case is one of public interest. In Vriend , despite the existence of a Charter challenge and the existence of an historically disadvantaged individual, the Court did not depart from the normal costs rule. [ 32 ] In addition to the factors set out under Rule 10.33 I will also consider

a) matter of importance/novel legal issue;

b) pecuniary interest;

c) existence of constitutional issue;

d) disadvantage/vulnerability;

e) access to justice; and

f) resources of party seeking costs. Matter of Importance/Novel Legal Issue [ 33 ] The Court of Appeal, when considering Mr. Auer’s appeal of the Justice Gate’s intervention Order, noted that Mr. Auer “engaged the public interest” and that vires application “obviously has strong public implications”: see Auer v Auer , 2018 ABCA 409 at para 10 . [ 34 ] Neither party disputes that the Guidelines have broad application across Canada and were the subject of significant debate during their development and following their promulgation.

All cases have some precedential value; however, I would not describe this matter as particularly novel. It involved the application of established vires review and statutory

interpretation jurisprudence. [ 35 ] I have also considered my finding that the majority of the issues raised by Mr. Auer fell outside the scope of a vires review and sought to challenge policy decisions of the Governor-in-Council. Pecuniary Interest [ 36 ] The AGC does not accept Mr.

Auer’s description as a public interest litigant and argues that he has a pecuniary interest in the outcome of the proceedings and therefore he cannot be considered as a public interest litigant: Fono v Canada Mortgage and Housing Corporation , 2021 FCA 125 at para 16 and Chief Mountain v Canada (Attorney General), 2012 BCSC 1152 para 92 . [ 37 ] Mr. Auer argued strongly in his vires challenge that the Guidelines were not fair and preferred custodial parents over non- custodial parents. I do not question Mr.

Auer’s sincerity in challenging the Guidelines ; however he did have a personal interest in the outcome of the litigation including a pecuniary interest given his ongoing litigation concerning child support payments. [ 38 ] The AGC also points to a number of findings of Sulyma J in Auer v Auer , 2021 ABQB 584 regarding Mr. Auer’s litigation conduct to support their argument that he is not a public interest litigant. Mr. Auer objects and notes that they are different proceedings, on a different record with its own separate cost consequences. Mr.

Auer also notes that he has appealed Sulyma J’s decision. [ 39 ] I will have no regard to the findings of my colleague Sulyma J as those findings were made in a different proceeding and relate to the determination of child support as opposed to the vires of the Guidelines . [ 40 ] I am comfortable concluding that he has a pecuniary interest in the matter without having regarding to Sulyma J’s reasons. However, I do not find that the existence of a pecuniary interest will automatically preclude an individual from being characterized as a public interest litigant.

However, in this case, it does militate against a finding of public interest. Constitutional Issues [ 41 ] While this judicial review challenged the lawfulness of the Governor-in Council it is not a Charter challenge or a

section 91/92 division of powers challenge. It is not necessary for the matter to involve a Charter challenge in order for a matter to meet the public interest test; however, in my view, the existence of a Charter issue is more compelling given the interests that are generally at stake. That being said, ensuring government conduct is lawful is a matter of public interest. Disadvantaged/Vulnerable Litigant [ 42 ] Mr. Auer is a physician and based upon the record before the Court there is no suggestion that he has experienced any disadvantage or occupies a vulnerable position in society.

Access to Justice [ 43 ] Mr. Auer has been litigating this matter for approximately the last nine years and there is no suggestion that he is impecunious or that the matter will not proceed if costs are awarded. There have been several appeals to date, including one to the Supreme Court of Canada. Resources of Party Seeking Costs [ 44 ] I also reject the argument that the AGC’s ability to shoulder the costs of the litigation should lead to the conclusion that Mr. Auer should be exempt from a costs award: see Lynnview at para 26 . Like other litigants, the Crown may seek costs and have costs awarded against it.

There may be circumstances that warrant not awarding costs in favour of the Crown; however, those decisions should be made on a case by case basis and not solely upon the Crown’s status or its financial resources. [ 45 ] I accept that:

a) the introduction of the Guidelines in 1997 was controversial;

b) payors may not understand how s 3 amounts under the Guidelines are calculated;

c) the formula and assumptions underlying the table amounts in the Guidelines are technical and difficult to understand: see para 157 of Auer ; and

d) payors like Mr. Auer may not feel that the s 3 amounts are calculated in an equitable manner. To that end, this matter, to a degree, does engage a matter of public interest and importance (i.e. ensuring children of separated and divorced parents are adequately cared for and that payors understand how their obligations are calculated). [ 46 ] This judicial review did engage the public interest to a degree and does consider legislation that affects many Canadians.

However, when I balance all of the factors I am not able to conclude that it was of a nature that it meets the public interest test and should shield Mr. Auer from any costs consequences for the reasons outlined above. However, the matter does have some of the hallmarks of public interest litigation and it is appropriate in my view, to moderate the costs award.

Schedule C [ 47 ] The AGC properly notes that matters that do not seek monetary relief are assessed on Column 1:

Schedule C, s 1(4). Discretion does exist to award enhanced costs in appropriate cases. [ 48 ] In support of its request for triple costs the AGC points to the complexity of the case and its importance to the parties: Kissel v Rocky View (County) , 2020 ABQB 570 , Boyd v JBS Foods Canada Inc , 2015 ABCA 191 . [ 49 ] Having regard to the general importance of the matter, the complexity of the matter and the voluminous nature of the materials filed I conclude that it is appropriate to make an enhanced cost award.

However, I am not persuaded that triple the costs of Column 1 is appropriate given my finding that the matter did have a public interest aspect to it. [ 50 ] Instead I find it appropriate, having regard to all of factors, to award costs on Column 2 of

Schedule C. In my view this appropriately balances the importance and complexity of the matter with the public interest aspect of the matter. Expert Report [ 51 ] Mr. Auer provided two expert reports that were authored by two university professors with PhDs in economics. They both offered a critique of the Guidelines . [ 52 ] Mr. Auer objects to the AGC’s request for reimbursement of its expert costs primarily on the basis that the AGC’s expert, Professor D.A. Rollie Thompson, QC is a legal expert and not an economics professor. Mr.

Auer argues that Professor Thompson’s report focused heavily upon inter-jurisdictional comparisons and did not respond to the economic analysis of his experts. [ 53 ] Mr. Auer also expresses concern with the cost of Professor Thompson’s report and suggests that if he was retained as a legal expert that the cost of his report is not properly claimed as a disbursement. [ 54 ] Professor Thompson charged $300 per hour for the preparation of his report. There is no evidence before me respecting the costs of the Mr. Auer’s expert reports or other evidence respecting the reasonableness of Professor Thompson’s report.

Professor Thompson is recognized as a leading expert in the area of family law and specifically in the area of child and spousal support. While I did not find Mr. Auer’s expert reports to be of significant assistance in determining the vires issue I did consider a number of their critiques of the Guidelines . [ 55 ] I accept the AGC’s position that they are not judicial fortune tellers. It would have been imprudent to not engage an expert to respond to Mr. Auer’s expert reports. Professor Thompson’s report was useful and provided a helpful critique of both expert reports and also provided useful context.

I also reject the argument that Professor Thompson was a legal expert and therefore his expenses should be subsumed within

Schedule C costs. I do not accept that Professor Thompson’s report was a legal opinion or additional legal work that assisted the AGC. His report focused on responding to Mr. Auer’s experts and his inter-jurisdictional comparisons provided helpful context. [ 56 ] In conclusion, I do not find the cost of Professor Thompson’s report to be unreasonable. The retention of one expert to respond to two experts is also measured and reasonable. The AGC retained an expert in response to the judicial review initiated by Mr. Auer. While I found it appropriate to attenuate the costs under

Schedule C for steps taken in defending the judicial review, the cost of an expert report is a direct expense incurred by the AGC and it is a reasonable disbursement. I acknowledge that it is a significant amount; however, parties must consider costs consequences when commencing litigation and be prepared to accept adverse cost consequences if they are the unsuccessful party.

E. Conclusion [ 57 ] The AGC is awarded costs on Column 2 of

Schedule C for the steps taken in defending this judicial review and the disbursements set out in the Bill of Costs including the cost of Professor Thompson’s report. The AGC has also been largely successful in its application for an award of costs and it is entitled to costs for this application on Column 1 of

Schedule C for this application. [ 58 ] I thank counsel for their helpful and thorough submissions. Heard by way of submissions received on the 20 th day of July, the 20 th day of August and the 10 th and 24 th day of September, 2021. Dated at the City of Edmonton, Alberta this 1 st day of November, 2021. T.G. Rothwell J.C.Q.B.A. Appearances: Laura Warner Jensen Shawa Solomon Duguid Hawkes LLP for the Applicant, Roland Auer None for the Respondent, Aysel Auer Cameron G Regehr / Tessa la Bastide for the Attorney General of Canada