Goodswimmer v Canada (Attorney General), 2022 ABKB 841

Court of King’s Bench of Alberta Citation: Goodswimmer v Canada (Attorney General), 2022 ABKB 841 Date: 20221214 Docket: 9703 06332 Registry: Edmonton Between: Chief Melvin Goodswimmer and Jerry Goodswimmer, Walter Goodswimmer, Francis Goodswimmer, Pierre Chowace, Mildred Chowace and Donald Badger, Councillors of the Sturgeon Lake Indian Band and on Behalf of the Sturgeon Lake Indian Band and the Sturgeon Lake Indian Band Plaintiffs - and - The Attorney General of Canada and His Majesty the King in Right of Alberta Defendants - and – The Attorney General of Canada and His Majesty the King in Right of Alberta Third Party _______________________________________________________ Ruling on Costs of the Honourable Justice D.A.

Sulyma _______________________________________________________

Introduction [ 1 ] This is a costs decision arising from an application to strike and/or summarily dismiss claims over a Treaty Land Entitlement (TLE) Agreement between the Sturgeon Lake First Nation (SLCN) and Canada and Alberta: Goodswimmer v Canada (Attorney General) , 2016 ABQB 384 . The Plaintiffs unsuccessfully appealed that decision: Goodswimmer v Canada (Attorney General ), 2017 ABCA 365 , and then unsuccessfully sought leave to appeal Chief Melvin Goodswimmer, et al v Attorney General of Canada, et al , [2018] SCCA No 1.

The Bills of Costs submitted by Canada and Alberta also include costs for a number of related applications, and Canada also applies for partial costs of the litigation to date. Overview Alberta and Canada’s Costs Applications [ 2 ] Alberta filed its Notice of Application to determine Costs on November 13, 2020, and sought the following from SLCN : 1. Undertakings Application: Costs of Alberta’s April 2014 application to compel responses to undertakings ( 2014 ABQB 726 ) at Alberta Rules of Court , Alta Reg 124/2010 ,

Schedule C, Column 1 in the amount of $5,581.21; 2. Notice to Admit Application : Costs of SLCN’s November 2014 application to set aside Alberta’s Notice to Admit, at

Schedule C, Column 1 in the amount of $829.55; 3. Stay Applications: Enhanced Costs of SLCN’s September 29, 2016 and January 3, 2017 stay applications, and Alberta’s December 5, 2016 application to modify order at two times

Schedule C, Column 5 for a total of $25,301.06; 4. Strike/dismiss Application: Enhanced costs of Alberta’s November 4, 2014 application to strike/dismiss and SLCN’s application to amend the Statement of Claim ( 2016 ABQB 384 ), and costs related to the portions of the action struck at two times

Schedule C, Column 5 for a total of $249,772.57; and 5. Costs of this Application . [ 3 ] On November 16, 2020, Canada also applied for costs as follows: 1. Undertakings Application: Costs of Canada’s application to compel answers to undertakings ( 2014 ABQB 726 ) in the amount of $5,630.36; 2. Stay Applications: Costs of Plaintiffs’ unsuccessful applications to stay the Undertakings Decision (filed May 24, 2016 and September 29, 2016; decision rendered November 25, 2016 unreported) in the amount of $30,041.01; 3.

Strike/dismiss Application: Costs of Canada’s application to strike and dismiss the Treaty Land Entitlement (TLE) claims, and the related applications by the Plaintiffs (setting the terms of the Order: 2017 ABQB 17 ) in the amount of $525,783.96; 4. Partial Bill of Costs for the TLE action: Canada’s costs for successfully defending the TLE claims that were struck or dismissed, less the costs of the Undertakings Application, the Strike/dismiss Application, and the Stay Applications, in the amount of $973,807.45; 5. Costs of this Application [ 4 ] Further, Canada seeks the following: 1. All costs be assessed at

Schedule C, Column 5, 2. A multiplier of five be applied to Column 5 for the costs in the Strike/dismiss Application and the Stay Applications; 3. 75% of the costs in the Stay Applications be paid by the Plaintiffs’ former counsel, Rath and Company; and 4. 25% of the costs in the Strike/dismiss Application be paid by the Plaintiffs’ former counsel, Rath and Company. Overview of SLCN’s Submissions [ 5 ] SLCN submits that reduced costs should be awarded in this case in the interests of access to justice and public interest.

In particular, it argues that the TLE Agreement issue and the issue of “land in severalty” were inextricably tied. “Land in severalty” raised an issue that had not yet been resolved – whether an individual member with an entitlement to elect land in severalty had enforceable claims that survived the TLE Agreement. [ 6 ] SLCN alternatively submits that if costs are awarded, the Court should exercise its discretion to award costs less than

Schedule C, Column 5, suggesting that the TLE Agreement issue was only a small part of the overall claim, and that while damages were sought, the primary relief was declaratory. [ 7 ] Conceding that the Strike/dismiss Application was complex and lengthy, SLCN asserts that the complexity was created by

its former counsel and should therefore be addressed in Canada’s application to have counsel bear a portion of the costs personally. [ 8 ] SLCN also asserts that the Partial Bill of Costs for defending the action is unreasonable, in particular contesting the “Client department research charges” of $778,608.87. Overview of Plaintiffs’ Former Counsels’ Submissions [ 9 ] Mr. Rath and Mr. Freeman are former counsel for SLCN and are separately represented. They argue that there is a very high threshold to be met in seeking costs against a lawyer personally that has not been met here.

Further, they suggest that the scale of costs sought by Canada is excessive and improper. Moreover, they assert that they did not receive timely and accurate notice of Canada’s intention to seek personal costs against them. Finally, they argue that they did not engage in serious misconduct in either the Strike/dismiss Application or the Stay Applications. Facts [ 10 ] This matter has a lengthy history (see 2016 ABQB 384 at paras 193-230 ). Procedurally, in 2012 Canada successfully applied to strike the action under r. 3.68, or alternatively for

summary judgment under r 7.3, and Alberta brought a successful application to strike the claims against it. There were numerous applications heard before the Strike/dismiss Application was heard, as referenced above. Each of these applications are briefly summarized below: 1. Undertakings Decision and Order [ 11 ] Alberta applied to compel answers to undertakings, filing its affidavit in support on January 31, 2014. SLCN filed the affidavit of Mr. Karl Moses in response on March 17, 2014. Both affiants were questioned on their affidavit.

Alberta filed its brief on March 28, 2014, SLCN filed a late affidavit on March 28, 2014, and its Brief on April 4, 2014. [ 12 ] This Court gave an oral decision from the Bench on some of the undertakings and reserved on 13 other undertakings that SLCN objected to, asserting solicitor-client privilege. On May 29, 2014, the parties returned to court to settle the terms of the Order and the Court directed costs be determined once the reserve decision was issued. The reserve decision on the undertakings (the Undertakings Order) was issued December 4, 2014, requiring SLCN to answer the 13 questions ( 2014 ABQB 726 ).

That Order was silent as to costs. [ 13 ] SLCN unsuccessfully appealed the Undertakings Order ( 2015 ABCA 253 ), and its application to the Supreme Court of Canada for leave to appeal was dismissed with costs ([2015] SCCA No. 394). [ 14 ] Canada supported Alberta’s application, and Canada was added as a respondent to SLCN’s appeal of the Undertakings Order. 2. Notice to Admit Application [ 15 ] Alberta served SLCN with a Notice to Admit under r 6.37, and rather than respond to the Notice, SLCN filed an application to set aside the Notice to Admit. The application proceeded on written submissions only.

SLCN’s application was dismissed; the Court held that the Notice to Admit was not improper questioning and that objections to the admissions sought should have been raised in the reply to the Notice to Admit, not in a Court application. [ 16 ] Canada was not a party to that application and did not seek any costs in relation to it. 3. Stay Applications of the Undertakings Order [ 17 ] SLCN brought a series of stay applications, seeking to avoid compliance with the Undertakings Order.

A brief chronology is helpful here: • As mentioned, the Undertakings Decision was bifurcated with some of the undertakings being resolved at the hearing and 13 others reserved.

Following the hearing, the parties were unable to agree on the terms of the order for those questions decided orally, necessitating a return to Court on May 29, 2014 ; • The reserved portion of the Undertakings Decision (the Undertakings Order) was issued on December 5, 2014 ; • SLCN appealed the Undertakings Order, and the Court of Appeal rendered its decision on July 27, 2015 , requiring SLCN to answer the undertakings; • SLCN then sought leave to appeal to the Supreme Court of Canada, which was dismissed, with costs, on March 10, 2016 ; • The Strike/dismiss Application was heard over 15 days between January and April 2015 with the decision issued in July 2016.

At the time the Strike/dismiss applications were heard (January – April 2015), SLCN still had not complied with the Undertakings Order; • SLCN brought its first stay application (Stay Application 1) of the Undertakings Order on May 24, 2016, after the Undertakings Order had been fully appealed to the Court of Appeal and the Supreme Court of Canada ( 2015 ABCA 253 and ([2015] SCCA No 394). This Court directed that the application not proceed, as the decision in the Strike/dismissal Application was upcoming; • On July 8, 2016 , this Court issued its decision in the Strike/dismissal Application;

• SLCN filed a Notice of Appeal of the Strike/dismiss Decision on August 4, 2016 ; • On September 29, 2016 , SLCN brought its second stay application (Stay Application 2), which this Court refused on November 25, 2016 ; • On December 5, 2016, Alberta brought a further application to modify the Order from November 25, 2016, to set a certain date for providing the undertakings.

The Court noted that the costs of both applications “remain to be argued and determined”; • On December 12, 2016 , SLCN filed a notice of appeal to the Alberta Court of Appeal of the November 25, 2016 decision dismissing Stay Application 2; • On January 3, 2017 , SLCN filed a further application for a stay of the November 25, 2016 decision pending the appeal (Stay Application 3), which this Court dismissed; • On February 3, 2017, SLCN filed an application for a stay with the Court of Appeal (Stay Application 4), and on February 21, 2017 , the application was referred to the panel hearing the appeal of the Strike/dismiss Decision.

Ultimately, the Court of Appeal heard the appeal of Stay Application 3 (essentially Stay Application 4) and the Strike/dismiss Decision at the same time; and • The Court of Appeal issued its decision on October 6, 2017 ( 2017 ABCA 326 ). On the question of the stay, the Court of Appeal held (at para 6) that the answers to the undertakings should have been provided “no later than the initial order of December 4, 2014,” and further ordered they be provided “forthwith”. 4.

Applications to Strike/dismiss [ 18 ] Alberta and Canada both seeks costs for the Applications to strike SLCN’s TLE claims and SLCN’s application to amend its Fourth Amended Statement of Claim. That Statement of Claim raised numerous causes of action, including breach of fiduciary duty in negotiating the TLE Agreement, failure to provide the full TLE, and lack of informed consent in release signed by SLCN in 1990 when entering into the TLE Agreement in settlement of its 1987 claim.

The TLE, thus, was a focus of the claims against Alberta. [ 19 ] SLCN sought $11 billion in damages and declaratory relief that the Defendants were required to provide lands or further cash compensation based on TLE based on its current population in perpetuity. [ 20 ] This Court granted the applications to strike and dismiss all the claims raised in the application.

The decision was upheld at the Court of Appeal and leave to appeal was dismissed by the Supreme Court of Canada. [ 21 ] Alberta and Canada only sought to strike/dismiss specific portions of the Statement of Claim and some portions of the claim remain. Alberta and Canada state that they have repeatedly asked SLCN to amend its Statement of Claim to reflect the Court’s order; no amended Statement of Claim has been filed. TLE Claims [ 22 ] Canada seeks costs for defending the TLE claims, less the costs of the Undertakings Application, the Strike/dismiss Application, and the Stay Applications.

These costs include significant disbursements incurred for research Issues [ 23 ] The issues raised here are: SLCN • Is this case suitable for a no-costs order? Alberta • Is Alberta entitled to its Bills of Costs for SLCN’s Notice to Admit Application? • Is Alberta entitled to its Bill of Costs for the Undertakings Application? • When are enhanced costs available? • What Column of

Schedule C should apply to Alberta’s Bills of Costs? o Any multiplier? • Is Alberta entitled to enhanced costs for the Stay Applications? • Is Alberta entitled to enhanced costs for the Strike/dismiss Application? Canada

• What Column of costs is Canada entitled to? • Is Canada entitled to the costs it seeks for the Undertakings Application? • Is Canada entitled to the costs it seeks for the Stay Applications? o Any multiplier? o Any portion to be paid by former counsel themselves? • Is Canada entitled to the costs it seeks for the Strike/dismiss Application and the related Applications by the Plaintiffs? o Any multiplier? o Any portion to be paid by former counsel themselves? • Is Canada entitled to the costs it seeks for all other portions of the TLE Action claims? o What are the costs in relation to?

Law and Analysis SLCN seeks an order for no costs [ 24 ] SLCN seeks an order for no costs against it under r 10.32: 10.32 In a proceeding under the Class Proceedings Act or in a representative action, the Court, in determining whether a costs award should be made against the unsuccessful representative party, may take into account one or more of the following factors, in addition to any other factors the Court considers appropriate: (

a) the public interest; (

b) whether the action involved a novel point of law; (

c) whether the proceeding or action was a test case; (

d) access to justice considerations. [ 25 ] This was not an action under the Class Proceedings Act, SA 2003, c C-16.5 , and it is not clear to me that it was formally recognized as a representative action.

SLCN argues that the claims for land in severalty were representative claims that were of public interest, involved a novel point of law, constituted a test case, and involved access to justice considerations. [ 26 ] I will leave unanswered whether this was, in fact, a representative action, and address the remaining points. [ 27 ] The land in severalty claim was a small portion of the Fourth Amended Statement of Claim (see Appendix 1 and Sturgeon Lake Indian Band v Canada (Attorney General) , 2016 ABQB 384 at para 492 ).

In the decision that consisted of 614 paragraphs, only 20 paragraphs dealt with the land in severalty claim (paras 355-375).

The Court of Appeal dealt with the issue in 17 paragraphs of 125 total paragraphs ( 2017 ABCA 365 at paras 69-85 ). [ 28 ] Relying on Elder Advocates of Alberta Society v Alberta , 2020 ABQB 54 at para 34 , SLCN argues that costs should not be awarded against a person who commences public interest litigation based on a number of factors: • There are issues of importance extending beyond the parties’ immediate interests; • The person has no personal, proprietary or pecuniary interest in the outcome, or if the person has an interest, the interest does not justify the proceedings economically; • The issues have not been previously determined by a court in proceedings against the defendant; • The defendant has a superior capacity to bear the costs of the proceedings; and • The plaintiff has not engaged in vexatious, frivolous, or abusive conduct. [ 29 ] SLCN argues there is a public interest in settling, as a matter of law, whether an individual treaty right could be extinguished by a Chief and Council that extends beyond the parties’ immediate interests.

I agree with Alberta’s response to this argument. This Court struck the claims, including the land in severalty claims, as disclosing no reasonable cause of action; there can be no public interest in an action with no reasonable cause of action. This Court also struck the land in severalty claim as an abuse of process (para 260(7)) affirmed by the Court of Appeal (ABCA at para 54).

There can be no public interest in a claim that constitutes an abuse of process. [ 30 ] SLCN asserts that it had no interest in pursuing the action for its own pecuniary gain, suggesting that it sought only declaratory relief, and that it was pursuing the land in severalty claims for individuals with an entitlement to elect for land in severalty or a vested interest in land, rather than for itself. As Alberta notes, the claim was for over $11 billion, the declarations sought were “coercive in nature,” and sought additional land and damages (see also ABCA at para 122).

[ 31 ] As to the question of whether the issues had been previously determined, this Court held at para 537 that the judgment in the earlier action: ... determined the authority of the SLCN representatives to enter into the settlement, the validity of the approval of the settlement by the SLCN, the validity of the Referendum, and the authority of the SLCN representatives to provide the release. [ 32 ] As to land in severalty claims this Court held (at para 556): The same is true of the claims for land in severalty and damages for loss of use.

Lands in severalty claims arise from the same facts and allegations that the SLCN land entitlement under Treaty 8 had not been met. Land in severalty was raised in para 10 of the 1987 Statement of Claim, and was the subject of negotiations leading to settlement... [ 33 ] The Court of Appeal upheld this finding, saying that the pleadings supported the application of issue estoppel and abuse of process (at para 54). [ 34 ] I accept that the Defendants likely have greater capacity to bear the costs of the litigation but note that these costs are passed on to the public purse.

In a related comment, the Plaintiff’s abusive conduct in pursuing a cause of action it had previously settled and for which it entered into a release of those claims is relevant to the question of abusive, vexatious, and frivolous conduct. I further note SLCN’s failure to comply with an order of this Court, for which it repeatedly, abusively, and unsuccessfully sought stays (discussed later in these reasons). In light of these factors, I conclude that SLCN has not met the factors set out in Elder Advocates. [ 35 ] Moreover, the factors under r 10.32 are not met.

As noted above, I conclude that there was very limited to no public interest in this action. While the issue of land in severalty may have been somewhat novel, in this case the issue could not be directly addressed because the SLCN had released its claims to land in severalty (ABCA at para 71) and because there was no indication in the record of any person with an outstanding claim to land in severalty (ABCA at paras 75-76).

Before this Court and the Alberta Court of Appeal, SLCN argued unsuccessfully that the SLCN had no authority to settle the land in severalty claims, an argument that the Court of Appeal dismissed (ABCA at para 73), finding further that there was no duty to consult with individual members of a Band (ABCA at para 74). [ 36 ] SLCN suggests that this was a test case, but as Alberta notes, at no time in these proceedings did SLCN indicate that the issue of whether individual treaty rights could be discharged by communal settlement was a test case.

As I have already concluded, this case did not raise a novel issue or an issue of public interest. [ 37 ] Alberta also submits, and I agree, the issues before this Court did not raise a question of access to justice. Meritorious actions may be chilled by costs awards, but when claims are struck on the basis of no reasonable cause of action, on res judicata , and abuse of process, there is no basis on which to argue that the action was meritorious.

As noted in Pauli v ACE INA Insurance Co , 2004 ABCA 253 when assessing costs “there needs to be a balance between encouraging class actions that have potential merit and discouraging those that may be frivolous or vexatious” (para 31). In my view, any balancing in this regard favours awarding costs. [ 38 ] I conclude that this is not a case in which the Court should exercise its discretion and refuse to award costs to a successful defendant. I will award costs to the successful Defendants.

Alberta Is Alberta entitled to costs its Bills of Cost for SLCN’s Notice to Admit Application? [ 39 ] Alberta seeks ordinary costs for SLCN’s application to set aside Alberta’s Notice to Admit and Alberta’s application to compel answers to undertakings and to settle the terms of the order. Alberta seeks enhanced costs for SLCN’s repeated unsuccessful Stay Applications and for Alberta’s application to strike SLCN’s TLE claims. [ 40 ] The Court dismissed SLCN’s application to set aside the Notice to Admit on the basis of written submissions, and as the successful litigant, Alberta seeks only costs under

Schedule C, Column 1 for Item 7. Item 7 applies to applications without briefs, although here briefs were required. [ 41 ] Many of SLCN’s submissions dealt with Canada’s costs, and not Alberta’s, and did not expressly deal with the application to set aside Alberta’s Notice to Admit. [ 42 ] The Court found that the Notice to Admit did not constitute improper questioning, and the facts to be admitted or denied were not objectionable.

Further, the points SLCN raised could well have been raised in the reply to the Notice to Admit. [ 43 ] I conclude that Alberta should have its costs as sought on the application to set aside the Notice to Admit. That Bill of Costs totals $829.55 in fees and disbursements. Is Alberta entitled to its Bill of Costs for the Undertakings Application? [ 44 ] Alberta questioned SLCN’s representative in January 2013, leading to a number of undertakings that SLCN objected to answer. Alberta filed one affidavit in support of the application to compel answers, and SLCN questioned the witness on the affidavit.

SLCN filed two affidavits (one late and after Alberta had filed its brief in the application); Alberta questioned the affiant on the first affidavit. SLCN also filed a brief. [ 45 ] The Court decided some of the objections from the Bench, but reserved on 13 others, which were objected to on the basis of solicitor/client privilege. The parties were unable to agree on the form of order, and Alberta filed a further application to settle the terms, supported by an affidavit. The Court settled the terms of the order and ordered costs to be determined after receipt of the reserved decision.

[46] The Court issued its reserved decision and ordered SLCN to answer the 13 undertakings (Undertakings Order). That order wassilent as to costs. [47] Alberta was ultimately primarily successful in these two applications. [48] SLCN unsuccessfully applied several times to this Court and to the Alberta Court of Appeal to stay the Undertakings Order(addressed below). [49] Alberta seeks ordinary costs based on

Schedule C, Column 1 for a total of $5,851.21 in fees and disbursements. [50] Again, these two applications did not include any of the factors in Elder Advocates - there was no novel question of law orsignificant public interest in Alberta seeking to obtain answers to questions that the Court, and the Court of Appeal, held wereanswerable. [51] I order costs in the amount sought by Alberta for these two applications.

When are enhanced costs available? [52] Alberta submits that enhanced costs are appropriate for the Stay Applications and the Strike/dismiss Applications, noting thatthe Stay Applications were repeated improper attempts to delay and avoid compliance with this Court’s binding order, and the numerousfactors under r 10.33 that are relevant to the application to the Strike/dismiss Application. [53] I will deal with Canada’s arguments in support of enhanced costs, appropriate tariff column, and multipliers later in thesereasons.

However, the general comments below are applicable to both Alberta’s and Canada’s applications. [54] The Alberta Court of Appeal, in JBRO Holdings Inc v Dynasty Power Inc, 2022 ABCA 258, noted the general rationale forcosts awards (at para 26): Costs awards are discretionary, informed by judicial principles of reasonableness, fairness, balance, and equity. The purpose of costs isto provide a degree of relief from litigation expenses to a successful party... [55] Similarly, the Supreme Court of Canada in B(

R) v Children's Aid Society of Metropolitan Toronto, (SCC),[1995] 1 SCR 315 noted (at 404-405): The long-standing rule regarding costs is that they are generally awarded to a successful party, absent misconduct on his or her part. Asuccessful litigant has a reasonable expectation that his or her costs will be paid by the unsuccessful party. The rationale for this rule isbased on the fact that, had the unsuccessful party initially agreed to the position of the successful one, no costs would have been incurredby the successful party.

Accordingly, it is only logical that the party who has been found to be wrong must be ready to support the costsof a litigation that could have been avoided. [56] The Rules of Court set out the rules related to costs.

Rule 10.33 lists the factors the Court may consider when assessing costs,including the result of the action and each party’s degree of success, the amounts claimed and recovered, the importance of the issues,the complexity of the action, any apportionment of liability, conduct of a party that tended to shorten the action, and “any other matterrelated to the question of reasonable and proper costs that the Court considers appropriate.” [57] Rule 10.33(2) goes on to note that the following may be considered: In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step ofthe action; (

b) a party's denial of or refusal to admit anything that should have been admitted; ... ... (

d) whether any application, proceeding or step in an action was unnecessary, improper or a mistake; ... ... (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct; (emphasis added) [58] Rule 10.31 provides that the Court may order one party to pay to another one or a combination of the following: 1(

a) the reasonable and proper costs that a party incurred to file an application, to take proceedings or to carry on an action, or that aparty incurred to participate in an application, proceeding or action, or (

b) any amount that the Court considers to be appropriate in the circumstances, including, without limitation, (

i) an indemnity to a party for that party's lawyer's charges, or

(ii) a lump sum instead of or in addition to assessed costs. ...

(3) In making a costs award under subrule (1)(a), the Court may order any one or more of the following: (

a) one party to pay to another all or part of the reasonable and proper costs with or without reference to

Schedule C; (

b) one party to pay to another an amount equal to a multiple, proportion or fraction of an amount set out in any column of the tariff in Division 2 of

Schedule C or an amount based on one column of the tariff, and to pay to another party or parties an amount based on amounts set out in the same or another column; (

c) one party to pay to another party all or part of the reasonable and proper costs with respect to a particular issue, application or proceeding or part of an action; (

d) one party to pay to another a percentage of assessed costs, or assessed costs up to or from a particular point in an action. [ 59 ] The Court of Appeal has discussed the relationship of actual costs incurred to the Tariff in

Schedule C. In Lux v Lux (Litigation Representative of) , 2022 ABCA 130 at para 5 , the Court of Appeal noted: ...Schedule C has long been considered very modest relative to actual fees incurred and has certainly been eroded by inflation over time. Moreover, the court has broad discretion to set costs, give lump sum awards, and to order enhanced costs, regardless of

Schedule C... [ 60 ] In McAllister v Calgary (City), 2021 ABCA 25 , the Court of Appeal considered the level of indemnification a successful party to protracted litigation should receive in costs, finding that the trial judge erred in awarding only the Tariff in

Schedule C, adjusted slightly for inflation. In particular, the Court noted that the trial judge erred in considering

Schedule C to be the default rules absent misconduct or complexity. The Court noted: “Costs awards may or may not be based on

Schedule C. A variety of means are countenanced by the Rules to arrive at a reasonable costs award” (at para 28), and (at para 29) summarized the discussion: To summarize,

Schedule C is merely one of a number of options or tools that may be used to achieve the outcome of reasonable and proper costs under Rule 10.31(1)(a). Other options include not making any reference to

Schedule C (Rule 10.31(3)(a)); or awarding costs pursuant to "a multiple, proportion or fraction of an amount set out in ...

Schedule C" (Rule 10.31(3)(b); or awarding a percentage of assessed costs (Rule 10.31(3)(d)). [ 61 ] The Court concluded that the party and party costs should represent partial indemnification of 40-50% of actual costs, assuming no misconduct by either party (at para 45). [ 62 ] In Weatherford Canada Partnership v Artemis Kautschuk und Kunstoff-Technik GmbH, 2019 ABCA 92 ( Weatherford ABCA ) the Court of Appeal noted that while costs are always in the discretion of the court, when the litigation is complex and the amount at stake exceeds Column 5, courts may award a multiplier of Column 5 to achieve the appropriate level of indemnification (at para 13).

In Stewart Estate v TAQA North Ltd, 2016 ABCA 144 , the Court of Appeal also noted that a multiplier may be added when there was misconduct by a party (at para 25). What column of

Schedule C should apply to Alberta’s Bills of Costs? Should a multiplier to the column be applied? [ 63 ] Alberta has sought costs on Column 5 in only two of its Bills of Costs, while Canada seeks Column 5 on all its Bills of Costs.

SLCN says that the costs should be based on a column less than Column 5, asserting that the primary relief sought in relation to land was declaratory relief and that the damages claims were related to other live claims in the action, such as the destruction of wildlife, the destruction and conversion of natural resources, and interference with aboriginal right to use land in the traditional territory.

In particular, SLCN submits that the declaratory relief was sought in relation to the TLE claims because it could not approximate damages without first having the TLE Agreement set aside. [ 64 ] As noted previously in relation to whether this litigation was in the public interest, the assertion that this claim was merely declaratory is not viable. The Fourth Amended Statement of Claim sought damages of $10 billion for the loss of use of land, including the lands that were subject to the TLE claims, as well as $1 billion in aggravated damages.

Further, Alberta notes that the claims regarding the destruction of wildlife, the destruction and conversion of natural resources, and interference with aboriginal right to use land in the traditional territory, were all claims in the original Statement of Claim which sought only $10 million in damages; it was after the TLE claims were added and other non-land related claims (for example breach of fiduciary duty, breach of trust and fraudulent concealment related to the TLE settlement) were added that the general damages for loss of use of land climbed to $10 billion. [ 65 ] Further both this Court and the Court of Appeal found that the claims for declaratory relief were coercive, not merely declaratory, with the Court of Appeal noting, at para 122: “The appellants want additional land or damages, which is far more than declaratory in nature: reasons at paras 479-80, 516 [of QB decision].” [ 66 ] The struck claims sought the following relief: a declaration that the Defendants have the obligation to provide lands to the Plaintiffs in perpetuity and lands in severalty to members who so elect.

Further, the claims sought declarations that the Plaintiffs were entitled to select oil and gas producing lands and any revenue from those lands from any existing mineral leases, and to cash compensation in lieu of land calculated on the mineral value of royalty revenues for hydrocarbon produced on land selected by the Plaintiffs.

These “declarations” all have more than declaratory effect since the result of such declarations would be an obligation to provide land and money. [ 67 ] I conclude that the claims were pecuniary and were made in relation, at least in part, to the portions of the claim that were struck and dismissed. The declaratory relief sought was not primarily declarative.

[ 68 ]

Schedule C costs are based on the amount claimed, and $11 billion far exceeds the claim amount under Column 5 of over $1.5 million. In Mudrick Capital Management LP v Wright , 2021 ABQB 242 , Hollins J noted that it would be unfair to award the same costs on a $2 million claim as a $150 million claim. I agree. [ 69 ] I conclude that some multiplier of Column 5 is justified simply on the basis of the amount of the claim.

I will also consider the other factors set out in r 10.33: • The degree of success (r 10.33(1)(a): Alberta was successful in its Applications to strike out or dismiss the TLE claims, claims about land in severalty, and various claims related to breaches of fiduciary and constitutional duties. • Importance of the issues (r 10.33(1)(c)): The issues were important to Alberta: allegations of breach of fiduciary or constitutional duties require response.

Had the Plaintiff been successful, a large damages award and awards of significant awards of land would have had significant fiscal and budgetary effects. • Complexity of the applications and the action (r 10.33(1)(d)): SLCN’s arguments were often a moving target, and the ultimate decision was lengthy and detailed in dismissing the many, many arguments raised by SLCN- ranging from abuse of process, effect of a release and indemnity, limitation periods, and duty to consult. • Conduct that unnecessarily lengthened the proceedings (r 10.33(2)(a)): The TLE claims were unnecessary in their entirety because they had been resolved in the previous, settled, action.

In terms of the claims against Alberta, the Court struck many of them as a collateral attack and abuse of process. • Unfounded allegations of misconduct (see Hill v Hill , 2013 ABCA 313 at para 50 and 52 ): Struck paragraphs included claims that Alberta breached fiduciary duties. • Unnecessary and improper steps and applications (r 10.33(2)(d)): The repeated Stay Applications will be dealt with below. To consider them here would be to double count. [ 70 ] These same factors will be applied to Canada’s applications, also under Column 5.

Is Alberta entitled to enhanced costs for the Stay Applications? [ 71 ] Alberta seeks enhanced costs based on two times Column 5 for SLCN’s repeated Stay Applications, a total of $25,301.06 in fees and disbursements. SLCN applied multiple times to stay the Undertakings Order. Their submissions summarize four related applications: • SLCN’s May 24, 2016 Stay Application (Stay Application 1); • SLCN’s September 29, 2016 Stay Application (Stay Application 2); • SLCN’s January 16, 2017 Stay Application (Stay Application 3); and • SLCN’s Stay Application to ABCA (Stay Application 4).

Stay Application 1 [ 72 ] SLCN first applied for a stay of the Undertakings Order on May 24, 2016. Alberta filed an affidavit and brief in response. At that time, the Application to Strike had been heard and the decision was reserved. SLCN asserted that it sought the stay so it would not be required to take any further steps while the decision was under reserve. The Court directed that the application not proceed since the Strike/dismiss Decision was forthcoming. Alberta does not seek costs for Stay Application 1.

Stay Application 2 [ 73 ] The Court issued the Strike/dismiss Decision, allowing Alberta’s application to strike the TLE claims, and SLCN filed an appeal of that decision. At this point, the Undertakings Order had been unsuccessfully appealed to the Alberta Court of Appeal and leave to appeal denied by the Supreme Court of Canada. Yet SLCN applied again for an order to stay the Undertakings Order. Alberta filed an affidavit and brief in response. The Application was heard and dismissed.

At that time this Court noted: It is entirely fallacious to attempt to piggyback the order forcing a compliance with undertakings on another order.

It is, in my view, outrageous to argue irreparable harm flows from the enforcement of the three-time adjudicated order of this Court. (Transcript, November 25, 2016, p 6, ll 41- p 7, ll1-2) [ 74 ] At the same time as SLCN’s Stay Application 3 was heard (discussed below), Alberta sought to modify the Stay order from September 2016 Stay Application 2 to include a date certain by which SLCN was required to provide the undertakings; the Court ordered that the undertakings be provided by February 24, 2017 and simultaneously dismissed Stay Application 3.

Stay Application 3 [ 75 ] SLCN filed a Notice of Appeal with the Alberta Court of Appeal of this Court’s dismissal of Stay Application 2, and then later filed a further application with this Court to stay Stay Decision 2 pending its appeal. This Court heard and dismissed Stay Application 3 in January. Among the comments I made at the time, I noted:

... were your clients, for instance, in the position of being self-represented, one would almost consider that they could be declared vexatious litigants. Transcript of January 16, 2017 Stay Hearing (p 10, ll 12-14) [ 76 ] I further noted that the application involved “the same faulty reasoning ... noted in [the] November decision” and that it was an attempt to “do indirectly what cannot be done and to reargue issues.” (Transcript of January 18, 2017 Oral Decision (p 2, ll 25, 29-30) [ 77 ] That order also stipulated that the costs of these applications remained to be determined. Alberta seeks costs for both Stay Applications 2 and 3 based on two times Column 5 of

Schedule C. Stay Application 4 [ 78 ] SLCN then applied to the Alberta Court of Appeal to stay the above order pending the appeal of this Court’s refusal to Stay Application 2.

A single Court of Appeal Justice heard that Application, referred the issue to the panel hearing the appeal, and extended the time limit for production of the undertakings to the date of the appeal hearing. [ 79 ] The Court of Appeal ultimately dismissed SLCN’s appeals, further finding that SLCN should have produced the undertaking responses at the time of the initial order in 2014 ( Goodswimmer v Canada (Attorney General) , 2017 ABCA 326 at para 6 ). [ 80 ] Alberta does not seek costs in relation to Stay Application 4.

Conclusion on enhanced costs for Stay Applications 2 and 3 [ 81 ] Alberta notes that SLCN was entirely unsuccessful in its appeals and the Stay Applications and continued to bring applications after the Undertakings Order had been fully litigated up to the Supreme Court of Canada. In particular, Alberta notes that SLCN attempted to rely on its own non-compliance to argue that it need not comply because the Strike/dismiss Decision had issued.

As the Alberta Court of Appeal noted, the documents should have been produced no later than the date of the initial order. [ 82 ] The Stay Applications were not particularly complex, however, the damages sought (over $10 billion) in the Fourth Amended Statement of Claim were far in excess of the amount in Column 5, justifying in itself the multiplier of two times

Schedule C, Column 5. [ 83 ] Moreover, the repeated applications to stay the decision were unreasonable and required Alberta to file multiple affidavits and briefs in response.

As the Court of Appeal noted, the undertakings should have been provided no later than the initial order. [ 84 ] I conclude that two times Column 5 is the bare minimum of appropriate costs to be awarded based on the following factors: • The discretion to gross up Column 5 to reflect inflation (RVB Managements Ltd v Rocky Mountain House (Town), 2015 ABCA 304 at para 11 ); • The level of damages sought by the Plaintiff; and • The Plaintiff’s misconduct in repeatedly bringing unmeritorious Stay Applications, despite the fact that the decision for which the stay was sought had been fully litigated.

Is Alberta entitled to enhanced costs for the Strike/dismiss Application? [ 85 ] Alberta also seeks two times Column 5 in costs for its Application to Strike and SLCN’s Application to Amend.

It also seeks enhanced costs for the steps taken in the action related specifically to the struck TLE claims, including case management, questioning, and document discovery. [ 86 ] Alberta relies on a number of factors to demonstrate why enhanced costs are appropriate, including: • Amount claimed and amount recovered (r 10.33(1)(b)); • The degree of success (r 10.33(1)(a); • Importance of the issues (r 10.33(1)(c)); • Complexity of the applications and the Action (r 10.33(1)(d)); • Conduct that unnecessarily lengthened the proceedings (r 10.33(2)(a)); • Unfounded allegations of misconduct (see Hill at para 50 and 52 ); and, • Unnecessary and improper steps and applications (r 10.33(2)(d)). [ 87 ] I conclude that costs are due to Alberta for two times Column 5 of

Schedule C, as sought by Alberta under the pre-May 1, 2020 tariff. Canada’s application for costs [ 88 ] Canada notes that this litigation was commenced in 1997 and has been case managed since 2001. Throughout that time, the

Plaintiffs have amended the Statement of Claim four times, including increasing its damages claim to $11 billion; brought a multitude of unnecessary and unsuccessful applications; engaged in extensive litigation misconduct; failed to follow the Rules of Court ; repeatedly filed documents after deadlines; and otherwise attempted to delay the litigation. Canada based all four Bills of Cost on

Schedule C, Column 5, two with multipliers of five, and sought some costs against the Plaintiffs’ former lawyers personally. What Column of costs is Canada entitled to? [ 89 ] Canada sought Column 5 of

Schedule C for all its Bills of costs. I conclude that Column 5 is the appropriate column for costs. While Alberta did not seek costs on Column 5 for the Undertakings Application, or SLCN’s Application to strike Alberta’s Notice to Submit, that does not render Column 5 costs inappropriate or inapplicable as it relates to Canada’s Bills of Costs. [ 90 ] As Canada submitted, SLCN chose to advance serious claims against Canada for billions of dollars, and, as the successful party, Canada is presumptively entitled to party and party costs.

Despite repeated assertions that these claims were primarily declaratory, SLCN sought $11 billion in damages; Column 5 applies when damages over $2 million are sought.

As noted above, I reject the assertions that this action primarily sought declaratory relief, as did the Court of Appeal (at para 122). [ 91 ] Moreover, as noted in Lux at para 5 , “Schedule C has long been considered very modest relative to actual fees incurred and has certainly been eroded by inflation over time.” Canada based its costs on the older tariff, a savings of about 35%. [ 92 ] Canada also relies on the indemnity in the Release in the TLE Agreement among Canada, Alberta, and SLCN.

The TLE Agreement provided: The Band hereby indemnifies Her Majesty and saves her Majesty harmless from any claim brought by the Band, its heirs or successors, or by any Band member, their heirs or successors against Her Majesty, her servants, agents and successors; ... (

c) Arising out of any claim for land entitlement by way of reserve or severalty in excess of that amount already provided for herein. [ 93 ] The TLE claims in this action, including for land in severalty, additional land based on a theory of entitlement under current population in perpetuity, and Sturgeon Lake and lakebed, all clearly fall within the terms of this indemnity and, by itself, could justify solicitor and own client costs which would be much greater than Column 5 of the tariff. [ 94 ] SLCN argues the indemnity should be interpreted strictly, as a matter of contractual

interpretation, and submits that the indemnity does not cover the actions by SLCN to set aside the TLE Agreement based on fraud and misrepresentation. As Canada notes, those claims were not made out. One cannot avoid liability under an indemnity simply by alleging fraud or the illegality of the agreement in every action, no matter the result. This would render the indemnity meaningless. [ 95 ] SLCN further argues the indemnity in the TLE Agreement is ambiguous and on the basis of contra proferentem argues that the clause should be construed against the party who drafted the agreement. It suggests that a possible

interpretation of the indemnity could be that SLCN agreed to indemnify Canada if: “a person with a vested interest in land in severalty made a claim, then SLCN would indemnify Canada for having to provide that excess land and not, as Canada suggests, indemnify Canada for legal costs.” [ 96 ] I do not find the indemnity clause to be ambiguous. It is a wide indemnity that saves Canada harmless from any claim arising out of any claim for land entitlement. The hypothetical proposed by SLCN is not an alternative

interpretation of the clause, but an additional situation that would require indemnification. Is Canada entitled to the costs it seeks for the Undertakings Application? [ 97 ] Canada seeks party and party costs on Column 5 with no multiplier for the application to compel SLCN to answer undertakings. Canada was successful in that application. As I have already noted, this is not an appropriate case for a no costs award. Further, I have held that Column 5 is the appropriate column. [ 98 ] I conclude Canada is entitled to costs of $5,630.36 to be paid by the Plaintiffs.

Is Canada entitled to the costs it seeks for the Stay Applications? [ 99 ] Canada is presumptively entitled to its costs for the two Stay Applications as the successful party in both applications. I have concluded that the appropriate column is Column 5. Any multiplier? [ 100 ] Like Alberta, Canada seeks costs for Stay Applications 2 and 3, heard on November 16, 2016, and January 25, 2017. Unlike Alberta, Canada seeks a multiplier of five. [ 101 ] SLCN argues that there are no previous cases awarding five times multiplier, citing Stewart Estate .

In Stewart Estate , the Court of Appeal noted (at para 25-26): ...Alberta courts have typically awarded a multiplier of the tariffs in Column 5 in three circumstances: when the complexity of the action warrants it, when the amount in dispute significantly exceeds the $1.5 million threshold for Column 5 or when the conduct of one of the parties warranted a multiplier. However, generally, courts also rely upon the other considerations set out in Rule 10.33 in determining whether a multiplier should be applied...

Since a costs award is ultimately at the discretion of the judge, there is little in the way of a uniform basis upon which a multiplier is awarded or declined . It is highly dependent on the unique facts and circumstances of each case. However, a general principle arising from the case law is that the discretion to grant costs must be exercised judicially, and in line with the factors in Rule 10.33. Additionally, in actions where the amount in dispute greatly exceeds Column 5, there is a general recognition that

Schedule C is deficient, and that a multiplier may be applied. However, courts are careful to avoid awarding a multiplier that would result in the over- indemnification of a successful party. (emphasis added) [ 102 ] In Stewart Estate , the Court awarded a multiplier of two, noting that the trial was long and complex and the quantum of damages, at $31.5 million, was significantly greater than the $1.5 million start of Column 5. The Court attached, as an appendix, a table of multiplier cases, none of which awarded five times Column 5. [ 103 ] The largest multiplier in that table was four in Hill .

In Hill , the damages sought were $17.5 million (plus disgorgement of profits) and the Court of Appeal upheld the trial judge’s award to the defendants of four times Column 5 to the close of the plaintiff’s case, but reversed the trial judge’s single Column 5 for the second part of trial, and awarded the defendants three times Column 5.

The trial judge had refused to award a multiplier on the second part of the trial because the plaintiff agreed to drop one of his claims. [ 104 ] The Court of Appeal, however, noted that the plaintiff continued to rely on allegations of breach of trust and other misconduct, and further that there was a huge sum of money involved.

The Court also noted that the defendants did not lead any unnecessary or irrelevant evidence, the defendants’ evidence was integral to their success, there was no divided success, there was “incessant” misconduct by plaintiff, and the issues at trial were complex and not rendered less so in the second part of the trial.

The Court chose to drop the scale for the second part of the trial to respect the trial judge’s decision to give an incentive for withdrawing claims (at para 60). [ 105 ] SLCN also referred to a list of cases in Weatherford Canada Partnership v Addie , 2018 ABQB 571 (paras 36-43 ) ( Weatherford Canada ): RVB Managements $25 million in damages: multiplier of two KS (Litigation Representative of) v Willox , 2016 ABQB 654 More than $7 million: multiplier of two Klemke Mining Corp v Shell Canada Ltd , 2007 ABQB 427 $22 million: multiplier of two Marathon Canada Ltd v Enron Canada Corp , 2008 ABQB 770 $126 million: multiplier of three [ 106 ] SLCN also provided its own list of cases that had cited Stewart Estate .

The largest multiplier was four times Column 5 in Weatherford Canada , where the plaintiff sought damages of approximately $290 million. Shelley J noted that the litigation spanned more than 10 years, was contentious, and complex, involved the production of over 8,000 records, five contested chambers applications, 24 case management conferences and multiple amended pleadings. She noted (at para 65) that even if a party’s mistake or error arises in good faith, ... this does not excuse the party of its liability for the opposing party’s costs ( Chernetz at paras 7, 12).

A mistake made in good faith, however, may be considered as a factor that limits the extent to which a court will enhance costs ( Stagg at para 63; Brown at para 44).” [ 107 ] Shelley J also found misconduct. To the point that the misconduct was discovered and rectified, she ordered costs at four times Column 5 and for the remainder of the action, she applied a multiplier of 2.5. [ 108 ] In Murphy Oil Canada Ltd v Predator Corp , 2005 ABQB 134 , the plaintiffs were awarded costs in a

summary judgment application at six times Column 5. The plaintiffs claimed $30 million, the defendants counterclaimed for $3.605 billion; $3.242 billion of the counterclaims were dismissed. The Court awarded party and party costs, finding that misconduct was not sufficient to warrant solicitor-client costs. The results of the

summary judgment were mixed: there were surviving claims and counterclaims, while others were dismissed. This required some allocation of costs, with the successful plaintiffs suggesting that a 50% allocation would be reasonable. McMahon J commented (at paras 17, 24, 26-28): The difficulty that arises on this application is sorting out the costs that attach to the counterclaim and those that relate to the main action, as well as those costs that were incurred in relation to the dismissed as opposed to the surviving claims in the counterclaim.

The apportionment between the various claims cannot be precise as the work done and disbursements incurred cannot be neatly compartmentalized into the various categories.... ... I accept that 50% is an accurate approximation of the apportionment between the dismissed portions of the counterclaim and the surviving claims in the main claim and in the counterclaim.... ... I find that an award reflecting a multiple of party and party costs is appropriate here.

Party and party costs are awarded on the basis of a reasonable apportioning of the litigation expenses incurred by the successful party, having regard to a number of factors, including the conduct of the parties, the length of the trial and the complexity of the issues...

The claims in the counterclaim were for an unprecedented amount, initially $6 billion later amended down to $3.6 billion. Additionally,although most of these claims were dismissed in a

summary fashion rather than following a long trial, it was in the course of lengthyand complex case management. To date case management has been proceeding for almost 4 years and the bulk of the discoveriesand other preparation for trial has been completed.

As was determined in LSI Logic, at para 9: “[t]he time of the actual hearing is nota proper gauge of the complexity of the issues.” Having regard to the circumstances enumerated above, I conclude that a lump sum award guided by 50% of 6 times column 5, isappropriate... (emphasis added) [109] SLCN suggests that Murphy Oil is an outlier case and was unusual “because of the magnitude of risk created by the multi-billion dollar counterclaim”. [110] That same rationale is applicable here. None of the other cases cited or enumerated in tables sought anywhere near $11 billionin damages.

Further this matter had been proceeding for 20 years, had 11 general case management meeting from 2001-2012, and eightcase management meetings dealing specifically with the Strike/dismiss Application.

The Stay Applications were in relation toundertakings that SLCN was required to provide Canada and Alberta for the Strike/dismiss Application, and that evidence was notprovided until after the Stay/Strike Application was decided and appealed. [111] SLCN submits that an award of costs with such a multiplier would have a chilling effect on future First Nations litigants whowish to advance meritorious claims in the public interest and would threaten reconciliation between the Crown and First Nations.

In myview, any chilling effect is not on meritorious claims, but on claims, like this one, that seek to undermine modern treaty agreements bylitigating claims that have been resolved through negotiation, settlement, and releases. As the Court of Appeal noted (2017 ABCA 365 atpara 48): Important objectives of any settlement, and particularly any settlement aimed at reconciliation with respect to outstanding aboriginalclaims, are certainty and finality.

When Canada agreed to open negotiations in 1985, the Minister specifically noted that any settlementwould have to include "a formal release in favour of Canada": reasons at para 200. During the negotiations, it was agreed that releaseswere a necessary component of any settlement: reasons at paras 215, 216-7, 219, 222. As counsel pointed out, the only thing that Canadagot from the Settlement Agreement was the release, and repose from further claims. [112] Further, spurious claims like the TLE claims in this action, are what threaten the reconciliation process, not the costs awards.

IfCanada cannot rely on releases in modern treaty agreements, the result is more litigation rather than settlement. The Supreme Court ofCanada in Delgamuukw v British Columbia, (SCC), [1997] 3 SCR 1010 stressed the importance of negotiatingagreements in good faith in order to facilitate reconciliation, saying (at para 186): Finally, this litigation has been both long and expensive, not only in economic but in human terms as well. By ordering a new trial, I donot necessarily encourage the parties to proceed to litigation and to settle their dispute through the courts.

As was said in Sparrow, at p1105, s. 35(1) "provides a solid constitutional base upon which subsequent negotiations can take place". Those negotiations should alsoinclude other aboriginal nations which have a stake in the territory claimed. Moreover, the Crown is under a moral, if not a legal, duty toenter into and conduct those negotiations in good faith.

Ultimately, it is through negotiated settlements, with good faith and give and takeon all sides, reinforced by the judgments of this Court, that we will achieve what I stated in Van der Peet, supra, at para 31, to be a basicpurpose of s. 35(1) -- "the reconciliation of the pre-existence of aboriginal societies with the sovereignty of the Crown". Let us face it, weare all here to stay. [113] In my view, a multiplier of five is a reasonable multiplier to be applied given the following factors: • The claims were for $11 billion. • Canada based its Bill of Costs on the old

Schedule C tariff and a multiplier will take into account the effect of inflation on thetariff. • Canada was successful in its opposition to the Stay Applications (see r 10.33(1)(a)). • The rule of law requires that court orders be complied with and unless a stay is sought and granted pending appeal, because theyare presumptively valid.

This issue is important not just for this litigation, but for the entire judicial system (see r 10.33(1)(c)). • The repeated applications were unnecessary and added to the complexity of the multiple applications and appeals underway (see r10.33(2)(a)). • These Stay Applications were unnecessary and were improper (see r 10.33(2)(d)).

The basis of the argument in support of the stay- that producing the documents would cause irreparable harm by breaching privilege - was precisely the argument made and rejected bythe Undertaking Order itself and had already been litigated up to the Supreme Court of Canada. [114] I also note that the indemnity provision in the TLE Agreement provides for solicitor and own client costs, which Canada has notsought, but which also justifies a multiplier. Any portion to be paid by former counsel themselves? [115] Canada asks that 75% of the costs awarded for the Stay Applications be awarded against Mr. Rath and Mr.

Freeman personally. Costs against lawyers generally

[116] The Rules of Court permit an order for costs against a lawyer personally.

Rule 10.50 provides: If a lawyer for a party engages in serious misconduct, the Court may order the lawyer to pay a costs award with respect to a personnamed in the order. (emphasis added) [117] The Court also has inherent authority to control the proceedings before it and to maintain respect for the authority of the courts,including discretion to award costs against counsel: Quebec (Director of Criminal and Penal Prosecutions) v Jodoin, 2017 SCC 26 atparas 16, 18 (Jodoin). [118] Costs against counsel will only be awarded if counsel’s conduct seriously undermines the authority of the courts or seriouslyinterferes with the administration of justice (Jodoin at para 29; 1985 Sawridge Trust v Alberta (Public Trustee), 2019 ABCA 243 atpara 37).

Unfounded, frivolous, dilatory, or vexatious proceedings that represent a serious abuse of the judicial system or deliberatemalicious or dishonest misconduct by counsel constitute such conduct (Jodoin at para 29). [119] Importantly, a mere mistake or error in judgment is not sufficient for an order of costs against counsel: there must be at leastgross negligence (Sawridge Trust at para 41; Jodoin at para 27). As well, the conduct must be a marked and unacceptable departurefrom the reasonable standard of conduct expected from a lawyer.

In each case, whether the standard is met will depend on the specificfacts of the lawyer’s conduct (Sawridge Trust at para 42). [120] Awarding costs against counsel is an exceptional remedy that should be used with restraint and caution, and it is onlyappropriate in the clearest of cases (Sawridge Trust at para 40). In general, the courts should be cautious about awarding costs againstlawyers, given their duty to guard client instructions, as well as their duty to bring forward unpopular causes (Young v Young, (SCC), [1993] 4 SCR 3 at para 263).

There was serious misconduct [121] In my view, Stay Application 2 and Stay Application 3 fall directly into the category of serious misconduct. The applicationswere unfounded, frivolous, and vexatious. As I noted when I dismissed Stay Application 3: ... were your clients, for instance, in the position of being self-represented, one would almost consider that they could be declaredvexatious litigants. Transcript of January 16, 2017 Stay Hearing (p 10, ll 12-14) [122] Further, former counsels’ conduct was a marked and unacceptable departure from reasonable conduct.

All lawyers know, orought to know, that a court order is in effect, even pending appeal, unless a stay is sought pending an appeal of that order (see forexample Point on the Bow Development Ltd v William Kelly & Sons Plumbing Contractors Ltd, 2006 ABQB 775 at para 87).

See alsoMichel v LaFrentz, 1998 ABCA 231, where failure to comply with an order to answer questions constituted contempt (at para 21): ...Where someone is ordered by the court to do something, he or she must use a sufficient degree of diligence to perform, or to have theact performed... [123] It bears repeating one further time that, at the time these two Stay Applications were commenced, the Undertakings Order hadbeen unsuccessfully appealed up to the Supreme Court of Canada and upheld. [124] Changing circumstances, like the fact that the Strike/dismiss Application had been heard without the Defendants receiving theundertakings as ordered, or that the Strike/dismiss Decision was now under appeal (and again the Defendants did not have access to theundertakings for the purposes of the appeal), did not change the nature of the Order.

It was a fully appealed and adjudicated order thatwas extant and operative. As the Court of Appeal noted (2017 ABCA 326) at para 6: ...It is now known that the appellants should have produced those documents in the litigation, at least no later than the initial order ofDecember 4, 2014 requiring that they answer the undertakings. As such, the respondents were entitled to have the use of thosedocuments to the extent that they might support their applications to summarily dismiss or strike the claims.

Likewise, they are entitledto have those documents to assist in resisting the present appeal. [125] This is an issue of the rule of law. Counsel cannot simply choose to refuse to comply with an order and delay and obfuscate toavoid compliance, until such time has passed that they then argue that the matter is now moot or irrelevant simply by virtue of their owndelay.

In order for the Strike/dismiss Application to move ahead as scheduled (and later the appeal), Canada was forced to mount its casewithout the disclosure that this Court, the Court of Appeal, and by inference, the Supreme Court of Canada, said they were entitled to. Sufficient notice was provided [126] Counsel for Mr. Rath and Mr. Freeman suggest that they had insufficient notice that costs would be sought from thempersonally.

Lawyers should get notice of an application for costs against them (Jodoin at para 36), as well as notice of the allegations andevidence against them and have an opportunity to bring evidence and make submissions: Jodoin at para 36: ...The notice should be sent far enough in advance to enable the lawyer to prepare adequately. The lawyer should, of course, have anopportunity to make separate submissions on costs and to adduce any relevant evidence in this regard.

Ideally, the issue of awarding costsagainst the lawyer personally should be argued only after the proceeding has been resolved on its merits. [127] Canada’s Bill of Costs was delivered to former counsel in the fall of 2020 and Canada indicated at that time that it intended to

seek costs against the law firm (Nouch Affidavit, Exhibit Z, Vol 1, p 347). Moreover, in January 2021, Canada filed and served its Written Brief in support of its application for costs, and it was clear from the Brief that Canada was seeking costs against the former lawyers personally. The Brief itemized the allegations of misconduct against “Plaintiffs’ counsel”. Canada notes Mr. Rath was counsel of record in this action, and that Mr. Rath and Mr. Freeman made virtually all the court appearances on behalf of SLCN in this action.

Each action complained of as misconduct in the Brief would have been identifiable to the two of them as their actions. [ 128 ] The notice was given in more than enough time for Mr. Rath and Mr. Freeman to retain their own counsel to represent them in this Application, who were then able to file a brief and reply, and to appear at the Application. There is no requirement for anything more formal in either the R ules or in the case law. I conclude this was sufficient to constitute notice to Mr. Rath and Mr. Freeman.

Limitations Act does not apply to costs applications [ 129 ] Former counsel also assert that the Limitations Act , RSA 2000, c L-12 applies to bar the claim for costs. [ 130 ]

Section 1 of the Limitations Act provides: In this Act, (a) “claim” means a matter giving rise to a civil proceeding in which a claimant seeks a remedial order; ... (i) “remedial order” means a judgment or an order made by a court in a civil proceeding requiring a defendant to comply with a duty or to pay damages for the violation of a right ... [ 131 ] Costs are not awarded to require a defendant to “comply with a duty” or for “the violation of a right.” Costs are a partial indemnification and reimbursement awarded to a successful party, not necessarily a defendant, and not for the violation of a right, but to offset the costs of either pursuing a successful action or defending against an unsuccessful action ( Stewart Estate at para 23 ; McAllister at para 41, Weatherford ABCA at para 12; Dechant v Law Society of Alberta, 2001 ABCA 81 at para 20 ).

Costs applications are not themselves a cause of action within the meaning of limitations law; they are motions within an action or proceeding. See para 23 of Giglio v Peters , 2009 ONCA 681 . [ 132 ] This was also the finding in Denhamer v RBC Dominion Securities Inc, 2003 ABQB 320 . The plaintiff argued that a judgment for costs arose when judgment was entered, and that the application for costs, more than two years after judgment, was statute barred.

Rowbotham J concluded (at para 17): “I do not view this as a remedial order as contemplated by the Limitations Act .” Conclusion [ 133 ] Canada seeks an order requiring Mr. Rath and Mr. Freeman to pay 75% of the costs of the two Stay Applications. SLCN asks that they be required to pay 100% of the costs, in light of any misconduct findings. [ 134 ] Costs awards are between parties; if SLCN has a dispute with its former counsel, that matter is between them. [ 135 ] I agree that 75% is a reasonable figure for allocation of costs.

The lawyers pursued these applications when they knew, or should have known, that the Undertakings Order should have been complied with immediately or a stay sought pending appeal. There was no basis for a stay once the Court of Appeal and the Supreme Court of Canada had rejected their appeal. Is Canada entitled to the costs it seeks for the Strike/dismiss Application and the related Applications by the Plaintiffs? [ 136 ] As the successful party, Canada is entitled to costs. For the reasons given above, I conclude Column 5 is the appropriate column.

Any multiplier? [ 137 ] Canada seeks a multiplier of five for the Strike/dismiss Application. In granting a five times multiplier, three of the factors I considered in relation to the Stay Applications are also relevant to the Strike/dismiss Application: • The claims were for $11 billion. • Canada based its Bill of Costs on the old

Schedule C tariff, and a multiplier will take into account the effect of inflation on the tariff. • Canada was successful in its opposition to the Strike/dismiss Application. [ 138 ] The following subsections in r 10.33(1) and (2) are also relevant:

(1) In making a costs award, the Court may consider all or any of the following: ... ... (

c) the importance of the action;

(

d) the complexity of the action

(2) In deciding whether to impose, deny or vary an amount in a costs award, the Court may consider all or any of the following: (

a) the conduct of a party that was unnecessary or that unnecessarily lengthened or delayed the action or any stage or step of the action; ... ... (

f) a contravention of or non-compliance with these rules or an order; (

g) whether a party has engaged in misconduct Misconduct and non-compliance with R ules [ 139 ] Canada points to numerous examples of what it alleges to be litigation misconduct; some of those complaints relate to the Strike/dismiss Application, while others are more properly considered when assessing the partial Bill of Costs in the action. [ 140 ] Canada notes the following alleged misconduct related to the Strike/dismiss Application: • SLCN did not comply with the Undertakings Order related to legal advice, filed four Stay Applications on an issue that had already been fully litigated, and filed a further appeal on the same issue.

These actions lead to the filing of unnecessary applications and responses and the expenditure of time and resources. • An initial agreement that SLCN would file its affidavits by May 31, 2014, was subsequently revised to the end of August 2014; as I noted at the time, this extension made the process of filing reply affidavits and questioning on affidavits less workable. Even so, that new deadline was also not met, and most of the affidavits were filed late, without explanation.

Of SLCN’s 21 affidavits, 17 were filed after the deadline and 12 were filed during the hearing itself. • The parties agreed that the questioning on affidavits would be completed by the end of November 2014; instead most of the questioning did not occur until just before, during, and after the hearing.

In particular, the only member of SLCN put forward as a representative for the First Nation was not available for questioning until one week before the hearing began and three days before Canada’s Brief was due to be filed. • The case management process provided that all materials be filed one month before the Strike/dismiss Application hearing; instead SLCN filed 14 intervening applications shortly before and during the hearing.

Canada notes it was then forced to prepare its legal arguments on an evidentiary record that SLCN attempted to change after arguments had already been filed and served. • On the first day of the hearing, I ordered that the Strike/dismiss Application be heard first and SLCN’s application to amend the Statement of Claim be heard later.

Despite this ruling, SLCN’s counsel continued to re-argue their position about the order of the hearing. • In January 2015, before the Strike/dismissal Application was scheduled to resume, SLCN’s counsel filed a motion to strike portions of Canada and Alberta’s defences; the next day counsel wrote seeking an adjournment based on a conflict in counsel’s schedule; and, in the hearing of the adjournment application on February 6, counsel for SLCN argued the adjournment on the basis of the new applications and other issues, noting that there was a scheduling error but that “...pales in comparison” to the other matters.

Counsel for Alberta and Canada indicated they were prepared to

schedule further applications in the future but opposed SLCN’s efforts to interrupt the Strike/dismissal Application with these new applications. At 2017 ABQB 17 at paras 8-11 , I noted the following about this incident: The February 6 hearing started with everyone, but Mr. Rath and Mr. Freeman, under the impression that the Plaintiff’s application was to seek an adjournment because of a scheduling conflict and, perhaps, to deal with SLCN’s application to extend the time for responding to Alberta’s notice to admit facts. Mr.

Freeman then indicated that he wanted also to deal with the application to strike the defences. Both Canada and Alberta took the position that the matter of striking the defences should go over and not be dealt with until after the applications to strike/dismiss/amend were dealt with. I concluded that these applications to strike defences and to compel further affidavits of record were “hijacking” the major motion , and I would not deal with them.

I also dismissed the application to adjourn. (emphasis added) • During the Strike/dismissal Application hearing, SLCN’s former counsel had another counsel re-argue a matter that had already been argued and decided by this Court. [ 141 ] Canada also refers to several procedural irregularities including: • serving a Notice to Admit that did not comply with r 6.37 and which was irrelevant to the pleadings; • attempting to serve a non-compliant Supplemental Affidavit of Records (did not specify it was supplemental, and it included records that were already in the original Affidavit of Records); • attempting to adduce expert evidence by appending expert reports to an affidavit sworn by Counsel rather than in Form 25,

meaning the expert could not be cross-examined on the report; • failing to correct errors in an affidavit even after the error was brought to counsel’s attention; • unreasonably obstructing questioning on affidavits and breaching r 3.8, 3.14, and 5.25 (refusing to advise which affidavit related to which Plaintiff application; and objecting to plainly relevant questions); and • taking questions under advisement but never answering the questions. [ 142 ] Canada lists several other complaints about counsel’s conduct that raise questions of fact and credibility, such as “Repeatedly attempting to dictate to Canada what evidence Canada ought to adduce.

For example, Plaintiffs’ counsel asked counsel for Canada to personally swear an affidavit and, in doing so, threatened she would be held in contempt of court if she did not abide by Plaintiff’s counsel’s request.” I will not engage in that kind of back and forth debate about who said what. [ 143 ] I will note, however, that I found that the Plaintiffs, and Plaintiffs’ counsel, engaged in a pattern of obstruction, delay, and misdirection.

From filing affidavits that were not only late, but filed in the midst of the application, and which were replete with hearsay and inadmissible evidence appended as exhibits, to repeatedly re-arguing points that I had already made rulings on, to raising new applications and issues, Plaintiffs’ counsel extended the time needed for the Strike/dismissal Application to be heard.

Some errors and mistakes, in isolation, do not represent litigation misconduct for the purposes of r 10.33(2)(a), but in this case I find a pattern of this conduct, not just through this Application, but throughout the course of case management, and following the decision on the Strike/dismissal Application. The frequency and nature of the interventions caused a miscarriage of justice because it created an appearance of unfairness that drove the costs that ensued.

Complexity of the action [ 144 ] The matter was complex, at least in part because SLCN “pleaded, asserted, and argued a wide variety of things, using language developed over thirty years of jurisprudence dealing with aboriginal law and the relationship of Canada with its First Nations...” ( 2016 ABQB 384 at para 2 ). However, as I noted in my Reasons for Decision, these issues were raised without justification, requiring Canada and Alberta to mount a vigorous defence. I noted at para 3: ... SLCN has relied on these concepts without attention to the context in which they arise.

It is not enough to assert, for example, a free standing fiduciary duty and a breach of that duty without considering whether the dealings in question give rise to fiduciary obligations ( Manitoba Metis Federation Inc v Canada (Attorney General ), 2013 SCC 14 , at paras 49-50 ).

Similarly, it alleges breach of the duty to consult without considering the context under which the duty to consult arises -- when Crown action might adversely affect aboriginal interests; the content of that duty -- which varies with the context; and to whom that duty is owed -- the aboriginal group holding the s. 35 rights, not the individual ( Behn v Moulton Contracting Ltd , 2013 SCC 26 at paras 27-30 ). [ 145 ] Throughout the written submissions and oral argument SLCN suggested that Canada breached its duty to consult when entering into the TLE Agreement, but I found that Canada fulfilled any such duty (assuming one existed in negotiated agreement between the parties), noting that in the course of negotiations (at para 4): ...SLCN was represented by experienced lawyers, paid for by Canada; the Band expressly acknowledged it received independent legal advice in the 1990 TLE Agreement; the individual members could and did attend the negotiation meetings; Canada and Alberta participated in an information meeting about the settlement; and there were additional materials describing the settlement were (sic) provided to members. [ 146 ] SLCN also argued that the Court in this action was required to determine whether the compensation under the TLE Agreement satisfied Canada’s obligations under Treaty 8.

I concluded that this was an untenable argument that demonstrated the underlying problems of the action and the SLCN’s response to the Strike/dismiss Application because the parties reached an agreement to resolve the previous action over the First Nations entitlement. At para 5, I noted: ... These negotiated terms were more than Canada and Alberta asserted were required under Treaty 8 and less than what SLCN argued was its entitlement. In other words, the 1990 TLE Agreement represented a compromise of the parties’ positions.

If SLCN believed that the settlement was insufficient, it could have refused to execute the Agreement and continued its action in the courts, and the court would then have resolved what the SLCN was entitled to under Treaty 8. [ 147 ] SLCN also argued that the Release in the TLE Agreement constituted a breach of Canada’s and Alberta’s fiduciary and constitutional obligations. At para 7, I noted: ... Again this demonstrates a fundamental misunderstanding of the nature of modern treaty land entitlemen

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