Araya v. Nevsun Resources Ltd., 2017 BCSC 336

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Araya v. Nevsun Resources Ltd., 2017 BCSC 336 Date: 20170228 Docket: Vancouver Registry: S148932 Between: Gize Yebeyo Araya, Kesete Tekle Fshazion and Mihretab Yemane Tekle Plaintiffs And Nevsun Resources Ltd. Defendants Before: The Honourable Mr. Justice Abrioux Reasons for Judgment as to Costs Counsel for the Plaintiffs: R. Mogerman J. Winstanley Counsel for that Defendant: A. Nathanson G. Cameron K. Milinazzo, A/S Place and Date of Hearing: Vancouver, B.C. January 10, 2017 Place and Date of Judgment: Vancouver, B.C.

February 28, 2017 TABLE OF CONTENTS I: INTRODUCTION .. 3 II: BACKGROUND .. 4 III: DISCUSSION .. 5 A: Introduction .. 5 B: The Legal Framework . 6 C: The Parties’ Positions . 8 (a): The Plaintiffs . 8 (b): Nevsun .. 9 IV: DECISION .. 9 V: CONCLUSION .. 11

I: INTRODUCTION [ 1 ] In reasons for judgment dated October 6, 2016, which are indexed at 2016 BCSC 1856 (the “Reasons”), I provided my rulings with respect to certain preliminary applications brought by the defendant, Nevsun. [ 2 ] As I noted in the introduction to the Reasons: [1] This representative action proceeding was commenced in November 2014 and is still in its early stages. The plaintiffs, who are refugees from the State of Eritrea which is located in East Africa, make allegations of the most serious nature against the defendant Nevsun Resources Ltd. (“Nevsun”), a British Columbia mining company.

None of the plaintiffs or putative members of the class are residents of British Columbia or Canada. [2] The proceeding raises issues of transnational law being the term used for the convergence of customary international law and private claims for human rights redresses and which include: (

a) whether claims for damages arising out of the alleged breach of jus cogens or peremptory norms of customary international law such as forced labour and torture may form the basis of a civil proceeding in British Columbia; (

b) the potential corporate liability for alleged breaches of both private and customary international law. This in turn raises issues of corporate immunity and whether the act of state doctrine raises a complete defence to the plaintiffs’ claims. [ 3 ] The issue raised in this application is whether the circumstances of the preliminary applications were special or extraordinary such that the plaintiffs’ costs arising from the applications on which they were successful should be paid forthwith and in any event of the cause.

Determining this issue will involve considering whether a special rule exists such that jurisdictional or potentially dispositive applications should result in costs being paid forthwith and in any event of the cause. [ 4 ] For the reasons that follow, I find that the parties’ costs on those applications on which they were successful are not payable forthwith, but rather are payable in the cause. II: BACKGROUND [ 5 ] Nevsun brought five preliminary applications: (

a) an application pursuant to R. 21 - 8(2) and s. 11 of the Court Jurisdiction and Proceedings Transfer Act , S.B.C. 2003, c. 28 for a stay of the proceedings (the “Forum Application”); (

b) an application pursuant to R. 21-8(1)(

a) or alternatively, R. 9-5, to dismiss, stay or strike out the plaintiffs’ claim on the basis of the Act of State doctrine (the “Act of State Application”); (

c) an application pursuant to R. 9-5(1)(

a) and (

b) to strike out certain paragraphs of the notice of civil claim filed November 20, 2014 (the “CIL Application”); (

d) an application pursuant to R. 21-8(1) for a stay of the action on the basis that the court does not have jurisdiction over Nevsun in respect of the claim made against it in this proceeding (the “Subject Matter Competence Application”); and (

e) an application pursuant to R. 20-3(1) for an order that the plaintiffs may not continue this proceeding as a representative proceeding (the “Representative Action Application”) . Collectively these applications will be referred to as the “Preliminary Applications”. [ 6 ] Nevsun also applied to exclude certain portions of the plaintiffs’ evidence on the basis that it was inadmissible.

The issues in that regard included whether: • unattributed hearsay was admissible in the circumstances of the Preliminary Applications; • reports concerning Eritrea authorized by governmental and non-governmental agencies were admissible, and if so, for what purpose; • the reports by Mr. Dan Connell, tendered by the plaintiffs as an expert in Eritrean affairs, were admissible; • other evidence including that of former Eritrean judges and lawyers was admissible as expert evidence; and • Immigration Review Board (IRB) decisions and transcripts of a Parliamentary Subcommittee were admissible.

Collectively these issues will be referred to as the “Evidence Application”. [ 7 ] Nevsun filed separate notices of application with respect to each of the Preliminary Applications, but did not file a notice of application with respect to the evidentiary objections comprising the Evidence Application.

[ 8 ] The Subject Matter Competence Application was abandoned by Nevsun prior to it being heard. [ 9 ] I acceded to counsels’ joint submission that the Evidence Application be argued at the outset of the hearing of the Preliminary Applications. [ 10 ] The Evidence Application and the Preliminary Applications took four court weeks to be heard and there were supplementary written submissions filed. [ 11 ] The plaintiffs were successful on the Forum, Act of State, and CIL (Customary Intentional Law) Applications.

Nevsun was successful on the Representative Action Application. [ 12 ] Success was divided on the Evidence Application. III: DISCUSSION A: Introduction [ 13 ] The parties agree that the plaintiffs are entitled to recover their costs which arose from preparing and filing their response to the Subject Matter Competence Application in any event of the cause. That order is granted. In accordance with my decision below, these costs are not payable forthwith. [ 14 ] The plaintiffs initially sought an order that the costs of the Evidence Application be payable to them in the cause.

During the hearing, however, they indicated that they no longer sought costs in relation to their opposition to Nevsun’s evidentiary objections, but they maintained their submission that the various evidentiary rulings contained in the Reasons should be set out in the order itself. [ 15 ] I disagree. The Reasons contain detailed rulings with respect to unattributed hearsay, the Secondary Reports as defined in the Reasons, Mr.

Connell’s Reports, the evidence of the former judges and lawyers, the IRB Decisions and Parliamentary Subcommittee transcripts and certain other miscellaneous objections. [ 16 ] The portion of the Reasons relating to the Evidence Application consists of approximately 30 pages.

The evidentiary objections were of the nature frequently raised during the course of a complex trial and which result in rulings that are not contained in the final order itself. [ 17 ] I see no useful purpose or proper legal basis in delineating in the order the many evidentiary rulings which are contained in the Reasons. [ 18 ] Accordingly, what remains to be decided are the costs in relation to the Forum, Act of State, CIL and Representative Action applications. B: The Legal Framework [ 19 ] Rule 14-1(12) and (13) provide, in part, that:

(12) Unless the court hearing an application otherwise orders, … (

b) if the application is refused , the party who brought the application is not entitled to costs of the application even though that party is awarded costs at trial or at the hearing of the petition, but the party opposing the application, if any, is entitled to costs if that party is awarded costs at trial or at the hearing of the petition.

(13) If an entitlement to costs arises during a proceeding, whether as a result of an order or otherwise, those costs are payable on the conclusion of the proceeding unless the court otherwise orders. [Emphasis added] [ 20 ] In British Columbia (Minister of Forests) v. Okanagan Indian Band , 2003 SCC 71 at paras. 20-21 , the Supreme Court of Canada held that costs of interlocutory motions are usually awarded in the cause.

The “award must await the conclusion of the proceeding, as success or entitlement cannot be determined before that time”, as the traditional purpose of costs is: to indemnify the successful party in respect of the expenses sustained either defending a claim that in the end proved unfounded (if the successful party was the defendant), or in pursuing a valid legal right (if the plaintiff prevailed). [ 21 ] The general rule, therefore, is that, unless the court orders otherwise due to special circumstances, costs go to the successful party of a motion, but are not payable until after the conclusion of the trial, and only if that party is awarded costs at trial. [ 22 ] In Martel v.

Wallace , 2008 BCSC 436 , [ Martel ], Justice Chamberlist examined those circumstances where the court has departed from the general rule, and in doing so summarized at para 28 the “principles that courts have recognized” when dealing with costs of motions:

(1) Costs in the cause serve generally to maintain the balance that should be preserved between litigants until final judgment is rendered;

(2) It is preferable to have only a single assessment of costs, at which time all aspects of the litigation may be considered by the assessing officer;

(3) However, if the circumstances warrant, the court may order that costs be payable forthwith in any event of the cause in order to control its own process. For example, the court may make the order to deter unnecessary or unreasonable conduct in the proceedings;

(4) Costs may also be payable forthwith if it is unlikely that the matter will proceed to trial, or if the motion deals with a discrete issue that is severable from the remaining claims; and

(5) In making such an order, the court must remember that the order may prevent or hinder a meritorious claim from proceeding. [ 23 ] Costs have been ordered to a successful party in any event of the cause if the application was brought in relation to what the court found to be a discreet issue, such as a publication ban: see Thacker v.

Global Warranty Corporation , 2010 BCSC 190 at paras 7-8 . [ 24 ] In certain circumstances, and at the discretion of the court, costs have been awarded in any event of the cause where the defendant was unsuccessful in its jurisdictional challenge, but in other unsuccessful jurisdictional challenges the general rule has been followed. [ 25 ] Examples of the former are Babcock v. Canada (Attorney General) , [1999] B.C.J. 1963 (S.C.) at para. 8 , and Fairhurst v. Anglo American PLC , 2012 BCSC 45 at para 8 . Examples of the latter are Bier v. Continental Motors Inc. , 2016 BCSC 1393 at para 71 and Rakunas v.

Scenic Associates Limited , 2008 BCSC 444 at para 71 . [ 26 ] Fairhurst v. Anglo American PLC , 2012 BCSC 45 at paras 6-8 provides an example of the former. Costs were awarded in any event of the cause on the basis that the outcome of the jurisdictional challenge was “independent of and not relevant to the substance of the plaintiff’s action”, which was a proposed class action alleging conspiracy and price fixing. Shariff v. VI Fitness Centres Inc., 2016 BCSC 691 at para 9 is an example of the latter.

Costs were awarded according to the general rule on the basis that the interlocutory application “established a serious question to be tried” and for that reason the respondent could not “be said to have succeeded on an issue that [would] not be revisited at the hearing. C: The Parties’ Positions (a): The Plaintiffs [ 27 ] The plaintiffs’ position is that the applications on which they were successful warrant an exception to the general rule and should be payable in any event of the cause on the basis that: (

a) the applications went to the heart of the plaintiffs’ action; (

b) the defendant’s challenges to the court’s jurisdiction are independent of the action itself - the outcome is independent of and not relevant to the substance of the plaintiffs’ action; and (

c) the plaintiffs have borne the costs of two expensive and complicated jurisdiction motions, being the Forum and Act of State Applications (in addition to the CIL Application, and the abandoned Subject Matter Competence Application). [ 28 ] They argue that although the CIL Application was not, strictly speaking, about jurisdiction, it raised similar issues as did the jurisdiction motions and should therefore also be payable in any event of the cause. [ 29 ] They say that the costs of the Forum, Act of State and CIL Applications should also be paid forthwith. [ 30 ] In so far as the Representative Action Application is concerned, they submit that the ordinary rule should apply. (b): Nevsun [ 31 ] Nevsun’s position is that the general rule should apply and that the costs of all four motions should be to the successful party(ies) in the cause. [ 32 ] It submits that there is no general rule that costs of potentially dispositive motions are dealt with differently than those on other applications.

Parties, furthermore, should not be discouraged from bringing applications that may resolve certain issues and in the circumstances of this case, although the plaintiffs successfully resisted three of the Preliminary Applications, the core issues raised on the pleadings will proceed to trial.

IV: DECISION [ 33 ] It is for the plaintiffs to establish that the circumstances in this case warrant an exception to the general rule, and I conclude they have failed to do so. [ 34 ] This proceeding is in its early stages, and I agree with what Nevsun argues in its written submissions when referring to the Martel factors: Costs ought to be awarded in the cause to maintain the balance between litigants until trial (principle 1), satellite litigation on costs ought to be avoided (principle 2), there has been no litigation misconduct or impropriety by Nevsun (principle 3), and costs should not penalize a defendant who may ultimately succeed at trial or deter a defendant from seeking

summary disposition of an action “by the fear of

being mulcted in costs if, without being found at fault, he should fail in the performance of his task” (principle 5). [ 35 ] I also do not agree with the plaintiffs that the Preliminary Applications on which they were successful were discreet matters, separate and distinct from the action itself.

Although I decided that the action should proceed in British Columbia, the evidence led and the issues argued on the applications remain in issue and to be determined at the trial. [ 36 ] I would add that the Act of State and CIL Applications were essentially decided on the basis that in light of the novelty of the respective legal issues, namely whether CIL claims exist in Canada, and if the act of state doctrine applies in Canada to limit the Court’s subject matter competence, both applications addressed matters that should be decided at trial.

The Act of State application was brought pursuant to Rules 9-5 and 21-8, while the CIL Application was brought pursuant to Rule 9-5. [ 37 ] And the Reasons were clear that: • no findings of fact could or were being made with respect to the allegations against Nevsun either at the Bisha Mine or elsewhere, including its corporate offices in British Columbia; and • whether any of the plaintiffs had been at the Bisha Mine as alleged was very much in issue. [ 38 ] In the exercise of my discretion, I also take into account that due to the complexity and novelty of the issues raised on the Preliminary Applications, appeals of the order arising from the Reasons have been filed and are being proceeded with expeditiously.

This militates against costs being paid forthwith and in any event of the cause. [ 39 ] When I consider all the circumstances, I also conclude that assessing costs in slices and ordering that they be paid forthwith should be avoided. V: CONCLUSION [ 40 ] The costs of the Preliminary Applications are payable in the cause. [ 41 ] The costs of this application are also payable in the cause. “Abrioux J.”