Fontaine v. Canada (Attorney General), 2018 NUCJ 29

Nunavunmi Maligaliuqtiit NUNAVUT COURT OF JUSTICE Cour de justice du Nunavut Citation: Fontaine v. Canada (Attorney General), 2018 NUCJ 29 Date: 20180928 Docket: 08-05-401-CVC Registry: Iqaluit Applicant: Larry Philip Fontaine, et al. -and- Respondent: The Attorney General of Canada, et al. ________________________________________________________________________ Before: The Honourable Madam Justice Bonnie Tulloch Counsel (Applicant): Raymond Murray; Alison McEwan Counsel (Respondent): Wayne Schafer, Q.C. Location Heard: Iqaluit, Nunavut Date Heard: In writing Matters: Costs decision for NCJ judgment 2016 NUCJ 31 : an application to add Kivalliq Hall as a residential school pursuant to

Schedule F: Canada Indian Residential Schools Settlement Agreement (8 May 2006),

Article 12. REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. INTRODUCTION [ 1 ] The Indian Residential School Settlement Agreement [1] (“ IRSSA ”) attempts to provide a fair, comprehensive and lasting resolution of claims arising out of the existence and operation of Indian Residential Schools. In order to be considered an Indian Residential School for the purposes of the IRSSA , an institution must fit the definition provided in

Article 1.01 of the IRSSA . This definition includes those institutions listed in

Schedule “F” (“Additional Residential Schools”).

Article 12 of the IRSSA provides a process through which further institutions may be added to

Schedule “F”. [ 2 ] Pursuant to

Article 12, Simeon Mikkungwak and Nunavut Tunngavik Inc. (“NTI”) applied for an order declaring that Kivalliq Hall be added as an institution listed in

Schedule “F” for the period from 1985-1995. Kivalliq Hall is an institution located in Rankin Inlet, Northwest Territories (now Nunavut). If successful in their request to declare Kivalliq Hall an Indian Residential School under the IRSSA , the applicants also sought an extension of time for former Kivalliq Hall students to apply for compensation under the IRSSA . [ 3 ] For the reasons explained in Fontaine et al v The Attorney General of Canada et al , 2016 NUCJ 31 , this Court concluded that the applicants successfully demonstrated, on a balance of probabilities, that Kivalliq Hall meets the test set out in

Article 12 of the IRSSA . The Court therefore concluded that it must be added to

Schedule “F” of the IRSSA . This decision was upheld on appeal in Fontaine v The Attorney General of Canada , 2018 NUCA 4 . [ 4 ] At this time, the applicants’ request for an extension of time for former Kivalliq Hall students to apply for compensation under the IRSSA is still outstanding. Given my conclusion that Kivalliq Hall should be added to

Schedule “F” of the IRSSA , I invited the parties to make written submissions as to whether and for how long to extend the deadlines for filing Common Experience Payment (“ CEP ”) and Independent Assessment Process (“ IAP ”) applications. The parties opted to stay those issues pending the outcome of the appeal of the

Article 12 application. At this time, no submissions have been received from the parties. [ 5 ] I also invited the parties to make written submissions as to costs related to the

Article 12 application. They provided written submissions prior to requesting a stay of all matters pending appeal. Both parties were asked if they wished to make further submissions after the appeal was decided. They declined to do so. What follows is a

summary of the parties’ written cost submissions and my decision regarding the costs and disbursements claimed by Mr. Mikkungwak and NTI. II. POSITION OF THE PARTIES A. Mr. Mikkungwak and Nunavut Tunngavik Inc. [ 6 ] The applicants submit that they have been completely successful in all aspects of the notice of motion and are therefore entitled to costs.

They request that the court award costs on a full-indemnity basis, in the amount of $221,616.17, and disbursements amounting to $22,052.42, both inclusive of HST, for a total of $243,668.59. [ 7 ] The applicants submit that this Court has the discretion to assess and award costs on a full-indemnity basis. In making these submissions, the applicants rely on

Article 12.01(6) of the IRSSA as follows: Where Canada adds an institution to

Schedule “F” under

Section 12.02(4), Canada may provide the Requestor with reasonable legal costs and disbursements. [ 8 ] The applicants also rely on Winkler J.’s decision in Fontaine v Canada (Attorney General) , 2012 ONSC 3552 [“Stirland Lake

and Cristal Lake”] , to support the conclusion that the applicants should be reimbursed in full for all reasonable legal costs. [ 9 ] The applicants note the lengthy proceedings involved in this application and suggest that Canada’s delay in producing certain relevant documents led to increased legal costs. B. The Attorney General of Canada [ 10 ] Canada opposes an order fixing the costs of the motion as requested by the applicants. Canada requests that the Court stay the applicants’ request for costs until the related matters of time extensions for filing CEP and IAP applications have been dealt with.

In the alternative, Canada requests that the applicants be directed to submit their reasonable costs and disbursements to the taxing officer in Nunavut in accordance with Rule 648(1) of the Rules of the Supreme Court of the Northwest Territories , NWT Reg (Nu) 010-96 [“ Nunavut Rules ”], as well as the applicable rules, tariffs and rates in Nunavut . [ 11 ] Canada submits that the Court in Stirland Lake and Cristal Lake erred by interpreting

Article 12.01(6) of the IRSSA as providing a basis to provide significant costs greater than those provided under the Ontario costs regime. Canada also submits that

Article 12.01(6) does not apply in a case such as this where a court becomes involved in an

Article 12 application pursuant to

Article 12.01(5). [ 12 ] Canada further submits that the granting of costs on a full-indemnity, or solicitor-client basis are rare in courts throughout Canada and solicitor-client costs should only be awarded in exceptional circumstances. [ 13 ] Additionally, Canada submits that resorting to the Court for direction was reasonable under the circumstances. This was the first

Article 12 application to proceed in Nunavut and involved important issues and unique fact scenarios. In view of that, Canada submits that resorting to the Court for direction was in accordance with the IRSSA , the Nunavut Rules and guidance provided by Court Counsel and the Court. III. DISCUSSION AND ANALYSIS [ 14 ] The parties raise several issues of relevance to the determination of costs in this matter.

In particular: (1) timing and appropriateness of making a costs determination at this point in the proceedings; (2) determination of the appropriate costs regime to apply; and (3) whether costs on a full-indemnity basis are warranted. I address each of these issues in turn, below. 1. Is a costs determination appropriate at this stage in the proceedings? [ 15 ] The applicants submit that they have been completely successful in all aspects of the Notice of Motion. Canada submits that this assertion is both inaccurate and misleading. [ 16 ] The applicants’ Notice of Motion filed on April 23, 2013 sought an order:

a) Declaring that Kivalliq Hall be added as an institution pursuant to

Article 12 of the IRSSA for the period from 1985-1995;

b) Extending the timeline for former Kivalliq Hall students to apply for the CEP payment; and

c) Granting the applicants the costs of the application. [ 17 ] At the hearing of the application, the applicants additionally sought an extension of the timeline for former Kivalliq Hall students to file any IAP claims. [ 18 ] At this point in the proceedings, the declaration that Kivalliq Hall be added to

Schedule “F” as an institution pursuant to

Article 12 has been granted. On that point, the applicants were completely successful and these cost proceedings are related to that determination. [ 19 ] In the reasons provided related to my decision to add Kivalliq Hall as an Indian Residential School under the IRSSA , I invited the parties to make submissions as to the timeline extensions for CEP and IAP applications. No submissions have been received. Those matters, and any related cost determinations, are yet to be decided.

[ 20 ] While Canada points out that only one of the applicants’ requests has been granted to date, I consider it appropriate to deal with costs related to the

Article 12 application at this time. As mentioned above, any costs related to timeline extensions for CEP and IAP applications will have to be dealt with separately. Determination of those issues will not have any impact on the appropriate determination of costs in relation to the

Article 12 application. 2. What is the appropriate costs regime to apply? [ 21 ] The applicants’ submissions rely on the Ontario costs regime. While

Article 18.03 of the IRSSA provides that the governing law under the IRSSA is the law of Ontario, this choice of law provision applies only to substantive determinations. As cost determinations are a procedural matter, the law of the local court applies. [2] In this case, the costs regime in Nunavut is applicable . [ 22 ] Canada submits that any costs should be awarded in accordance with Rule 648(1) of the Nunavut Rules , which states: “Unless otherwise ordered, the costs of a solicitor shall be determined by the taxing officer, but shall not exceed the relevant amounts set out in

Schedule A.” [3] [ 23 ] The phrase “unless otherwise ordered” grants a court discretion as to the appropriate method of determination. The common practice in Nunavut is for courts to exercise discretion to award costs under Rule 643 of the Nunavut Rules . The Court’s authority to award costs in civil proceedings in Nunavut is derived from Rules 641 and 643(1) of the Nunavut Rules : [ 4] 643.

(1) Notwithstanding anything else in this Part, the Court has discretion as to awarding of the costs of the parties, including third parties, to an action or a proceeding, the amount of costs and the party by whom or the fund or estate out of which the costs are to be paid, and the Court may (

a) award a gross sum in lieu of, or in addition to, any taxed costs; (

b) allow costs to be taxed to one or more parties on one scale and to another or other parties on the same or another scale; or (

c) direct whether or not any costs are to be set off… [ 24 ] Therefore, I rely on the court’s discretion under Rule 643 of the Nunavut Rules to award appropriate costs in this case and I decline to direct the parties to submit their costs to the taxing officer under Rule 648(1). [ 25 ] With respect to the submissions from both parties regarding

Article 12.01(6) of the IRSSA , I agree with Canada that this provision is not directly applicable in the present case. [ 26 ]

Article 12.01(6) states: “Where Canada adds an institution to

Schedule “F” under

Section 12.01(4), Canada may provide the Requestor with reasonable legal costs and disbursements.” [ 27 ] When a request to add an institution to

Schedule “F” has been made and Canada determines that it is a school as defined in the IRSSA ,

Article 12.01(6) provides an avenue for the successful applicant to apply for costs and disbursements related to the request. [ 28 ] In this instance, Canada refused the applicants’

Article 12.01(4) request. No costs were provided in relation to that refusal. [ 29 ] The applicants then applied to this court for a determination to recognize Kivalliq Hall as an Indian Residential School under

Article 12.01(5) of the agreement. The application succeeded. [ 30 ] As this ultimate decision was made by a court, rather than by Canada,

Article 12.01(6) is not directly applicable to this costs determination. [ 31 ] However, as discussed further below, the approach described in

Article 12.01(6) may nevertheless be relevant in determining the appropriate award of costs in decisions pursuant to

Article 12.01(5).

3. Are costs on a full-indemnity basis warranted? [ 32 ] The applicants request costs on a full-indemnity basis. Based on the good faith conduct of both parties in these proceedings, this is not a case in which costs are warranted on a full-indemnity basis.

However, in the unique context of this application, I find that reasonable costs are warranted. [ 33 ] Costs in the IRSSA context may be dealt with under the regular cost rules applicable to court proceedings. [5] In Rennie v Northwest Territories & Nunavut (Workers’ Compensation Board) , 2007 NUCJ 22 [ Rennie ] , Justice Johnson reviewed the costs regime in Nunavut . I find his comments to be of assistance in determining the appropriate approach in this instance. [ 34 ] As Justice Johnson notes, the successful party is generally entitled to party-and-party, or partial-indemnity costs. [6] In Nunavut ,

Schedule A of the Nunavut Rules establishes fixed tariff rates for partial-indemnity costs. However, the amounts set out in

Schedule A of the Nunavut Rules are dated and have failed to keep pace with the nature of litigation or general inflation. [7] Rather than relying strictly on the tariffs set out in

Schedule A, courts in Nunavut typically exercise their discretion under Rule 643 in determining the appropriate rate. This may take the form of increasing the

Schedule A tariffs by a certain factor, [8] or making a determination of a reasonable lump sum amount. [9] Where appropriate, and generally in rare and exceptional circumstances, courts may exercise their discretion to increase the costs award to provide almost full-indemnity. [10] [ 35 ] As noted by Canada, costs on a full-indemnity, or solicitor-client, basis are typically only awarded where the conduct of one of the parties was “reprehensible, scandalous or outrageous”. [11] Let me be clear in finding that neither party in these proceedings exhibited conduct that could be considered reprehensible, scandalous or outrageous.

Both parties have acted in good faith with respect to each other and the court throughout the proceedings. [ 36 ] In the unique context of administering the IRSSA , however, courts are “guided but not governed by the jurisprudence that regards a partial-indemnity as normative and a substantial indemnity award as punitive.” [12] It must be noted that cost considerations in the IRSSA context involve considerations not present in regular civil litigation. [13] Requests for costs in the IRSSA context require a court to exercise its discretion with regard to the “unique and extraordinary circumstances of the IRSSA ”, which include the important and valuable purpose of “achieving truth and reconciliation among the Aboriginal and non-Aboriginal citizens of Canada, the Canadian government, Aboriginal organizations, and the defendants responsible for the Indian Residential Schools.” [14] [ 37 ] The process of administering the IRSSA is unlike the typical adversarial process of civil litigation.

In this context, an approach intended to reimburse the applicants for all reasonably necessary legal costs is appropriate. While I did not find that

Article 12.01(6) of the IRSSA is directly applicable in this matter, I agree with Winkler J.’s approach in Stirland Lake and Cristal Lake to award successful applicants with their “reasonable legal costs”. [15] As Winkler J. notes, this approach “is not synonymous with the full, substantial or partial-indemnity regimes used to fix costs in court proceedings. In other words, it does not reference a costs regime under the civil rules of court of any province.

It does however mean that a party will be reimbursed in full for its legal costs, subject to one qualification: those costs must have been reasonably necessary.” [16] 4. Application of the “Reasonableness” Standard [ 38 ] In exercising my discretion to determine the applicants’ “reasonable legal costs”, I find that the timing of the applicants’ initiation of this proceeding, and the consequent impact on the cost of administration of the IRSSA , is a relevant consideration.

The late initiation of these proceedings created complications and uncertainty, which ultimately led to increased costs in the administration of the IRSSA . [ 39 ] The IRSSA came into effect on September 19, 2007. The deadline for applying for the CEP was September 19, 2011, the fourth anniversary of the implementation date of the IRSSA . The initial request to add Kivalliq Hall as an Indian Residential School under the IRSSA was brought in late August 2011.

Initiating this application just prior to the CEP application deadline necessitated requests for extensions to CEP and IAP deadlines, in order to allow Kivalliq Hall students the opportunity to apply for compensation in the event that Kivalliq Hall was recognized as an Indian Residential School. [ 40 ] The CEP involved a fixed fund available to applicants and fixed application deadlines. [17] As a result of the late application in this case, the process for distributing the residue after meeting CEP claims was complicated by the need to take reserves pending the outcome of the application, and the ultimate determination of related individual CEP applications. [ 41 ] The administration of the IAP has been even more significantly impacted by this late application because Canada bears the responsibility of completely funding its administration.

This late application is anticipated to result in extending the required existence of the Indian Residential Schools Adjudication Secretariat in order to resolve any related claims, which will result in a corresponding increase in the costs of administration. [ 42 ] The timing of the initial request therefore increased the complexity of the administration of the IRSSA and the associated costs. Had the request and application been pursued with greater urgency, the overall cost of administration of the IRSSA would be reduced.

Considering the unique context of this application, I consider that these added costs of administration are relevant to take into account in

considering the appropriate costs award in this application. [ 43 ] Therefore, although the applicants have been successful in adding Kivalliq Hall to the list of Indian Residential Schools provided in

Schedule “F”, I find that some discount from the full legal costs claimed is appropriate considering the timing of the application. [ 44 ] The applicants submit that additional costs were incurred in this application due to Canada’s delay in producing relevant documents. On this point, Canada submits that all relevant documents were provided to the best of its ability as soon as the documents were located and reviewed.

I accept the applicants’ position that substantial numbers of new documents provided late in the proceedings contributed to increased legal costs, though I do not find Canada’s actions blameworthy. [ 45 ] Finally, I also find it relevant to consider that Canada’s position does not suggest that the actual amounts contained in the Bill of Costs submitted by the applicants were excessive, unreasonable or inappropriate under the circumstances. 5.

Conclusion on Costs [ 46 ] The applicants request legal costs totaling $221,616.17. [ 47 ] After reviewing the accounts of the applicants, and given my consideration of the above issues, including the applicants’ delay in initiating the proceedings as a contributory factor in the resulting complexity, I am exercising my discretion to award costs in the global amount of $190,000. [ 48 ] In this case, 85% of the applicants’ counsels’ actual costs incurred in preparing the application, participating in the discovery process, preparing for the hearing of the application, attending at the application, and dealing with post-hearing matters amount to $188,373.80.

I would round this amount up to $190,000. 6. Disbursements [ 49 ] The applicants request disbursements totalling $22,052.46. [ 50 ] While I acknowledge counsels’ need to travel for the hearing of the application and for examinations for discovery, the high costs for travel and hotels may have been reduced if other options to reduce or eliminate travel were considered, for instance, greater use of videoconferencing and other technologies. [ 51 ] Accordingly, I would grant the applicants disbursements in the amount of $20,000 inclusive of taxes. IV.

DISPOSITION [ 52 ] I award the applicants costs of the motion relating to the

Article 12 application in the amount of $190,000 inclusive of taxes for fees and a further $20,000 inclusive of taxes for disbursements, for a total of $210,000. Dated at the City of Iqaluit this 28th day of September, 2018 ___________________ Justice B. Tulloch

Nunavut Court of Justice