COURT OF APPEAL FOR BRITISH COLUMBIA
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Citation: |
British Columbia (Attorney General) v. Trial Lawyers Association of British Columbia, |
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2022 BCCA 354 |
Date: 20221021
Dockets: CA47320; CA47332
Docket: CA47320
Between:
Attorney General of British Columbia
Appellant/
Respondent on Cross Appeal
(Defendant)
And
Trial Lawyers
Association of British Columbia, Philip Whealy,
Khadija Ramadhan, Sahra Leidtke and Melissa Rondpre
Respondents/
Appellants on Cross Appeal
(Plaintiffs)
And
Robert Dockrill,
Judith Dockrill, Sukhjinder Singh Bath, 0731534 B.C. Ltd., Wendy June Fraser,
Create Fun Event Company Ltd. and
Emmanuel Martin Blackburn
Respondents
(Defendants)
- and -
Docket: CA47332
Between:
Robert Dockrill,
Judith Dockrill, Sukhjinder Singh Bath, 0731534 B.C. Ltd., Wendy June Fraser,
Create Fun Event Company Ltd. and
Emmanuel Martin Blackburn
Appellants/
Respondents on Cross Appeal
(Defendants)
And
Trial Lawyers
Association of British Columbia, Philip Whealy,
Khadija Ramadhan, Sahra Leidtke and Melissa Rondpre
Respondents/
Appellants on Cross Appeal
(Plaintiffs)
And
Attorney General of British Columbia
Respondent
(Defendant)
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Before: |
The Honourable Chief Justice Bauman The Honourable Madam Justice Bennett The Honourable Mr. Justice Butler |
Supplementary Reasons
to Trial Lawyers Association of British Columbia v.
British Columbia (Attorney General), 2022 BCCA 163.
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Counsel for the Attorney General of |
S.A. Bevan M.A. Witten |
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Counsel for Trial Lawyers Association of British Columbia, Philip Whealy, Khadija Ramadhan, Sahra Leidtke and Melissa Rondpre: |
R.D.W. Dalziel, K.C. A.P. Calvert |
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Counsel for Robert Dockrill, Judith Dockrill, Sukhjinder
Singh Bath, 0731534 B.C. Ltd., Wendy June Fraser, Create Fun Event Company
Ltd. and |
A.M. Gunn, K.C. R.W. Parsons R.J.B. Gage |
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Place and Dates of Hearing: |
Vancouver, British Columbia January 20 and 21, 2022 |
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Place and Date of Judgment: |
Vancouver, British Columbia May 12, 2022 |
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Written Submissions Received: |
July 27, August 10
and |
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Date of Supplementary Judgment: |
Vancouver, British Columbia October 21, 2022 |
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Summary:
The Province of British Columbia passed a legislative scheme vesting an administrative body, the Civil Resolution Tribunal (CRT), with jurisdiction over certain motor vehicle accident claims in the Province. The Trial Lawyers Association of British Columbia (TLABC) and several plaintiffs in motor vehicle claims challenged the scheme, arguing in part that the grant of jurisdiction to the CRT offended s. 96 of the Constitution Act, 1867. The Chief Justice of the Supreme Court agreed and made an order striking down the relevant legislative provisions.
The Attorney General of British Columbia and individual defendants in motor vehicle claims successfully appealed the order. The Court of Appeal overturned the decision of the Supreme Court and upheld the constitutionality of the provisions. The Court held that the legislative scheme did not impermissibly invade the core jurisdiction of the superior courts and that the scheme is an experiment with a new form of access to justice directed at a social mischief identified by other branches of government.
These supplementary reasons of the Court deal with the submissions of the parties as to costs. Held: The parties should bear their own costs in this proceeding and in that of the Court below. Public interest litigation attracts special considerations that have led courts to develop factors to guide the exercise of their discretion to depart from the usual rule that costs follow the event. Insulating an unsuccessful public interest plaintiff from an adverse cost award by ordering that each party bear its own costs represents less of a derogation from the usual rule than an award of interim costs, an award of costs to an unsuccessful party, or an award of special costs to a successful litigant. These are truly exceptional orders for which the Supreme Court of Canada has raised the standard. In the present case, the factors relevant to an unsuccessful public interest plaintiff seeking relief from adverse costs support an order that the parties bear their own costs: the issues were of importance to British Columbians, any potential pecuniary interest of TLABC’s members do not justify the proceeding, and the Attorney General and motor vehicle defendants, who were backed by ICBC, have a superior capacity to bear the costs of the proceedings.
Supplementary Reasons of the Court:
[1] In 2018, the Province of British Columbia passed legislation and regulations vesting an administrative tribunal, the Civil Resolution Tribunal (“CRT”), created by the executive branch, with jurisdiction over the resolution and disposition of certain motor vehicle accident (“MVA”) claims in the Province. Aspects of this jurisdiction are exclusive and others are shared with the Supreme Court of British Columbia. Under the scheme, the CRT has exclusive jurisdiction to classify “minor injury” claims, which are capped at the tribunal’s limit of $50,000.
[2] The Trial Lawyers Association of British Columbia (“TLABC”) and several plaintiffs in motor vehicle claims (collectively, the “Respondents”) challenged the scheme. They argued in part that the grant of jurisdiction to the CRT offended s. 96 of the Constitution Act, 1867, by impermissibly infringing on the jurisdiction of the superior courts.
[3] The Chief Justice of the Supreme Court concluded that the Province’s scheme offended s. 96. He struck down certain provisions in the legislative package. The defendant Attorney General of British Columbia (“Attorney General”) and individual defendants in motor vehicle claims (the “MVA Defendants”) appealed (collectively, the “Appellants”). TLABC cross-appealed, asking for an order that the provision of the regulation that sets the tribunal limit amount to $50,000 is unconstitutional and of no force and effect.
[4] This Court allowed the appeal and struck out the declarations below. In the Court’s reasons for judgment, indexed at 2022 BCCA 163, we found that the core jurisdiction of the Supreme Court of British Columbia remained in place even in the face of the new scheme, and that the grant of jurisdiction to the CRT did not offend s. 96. The constitutionality of the monetary limit was addressed as part of the entire implementing scheme, and the cross-appeal was dismissed.
[5] Following the release of this Court’s reasons, the parties made submissions on costs. For the reasons that follow, we order that the parties bear their own costs on appeal and in the Court below.
[6] Section 44(1) of the Court of Appeal Act, S.B.C. 2021, c. 6, provides that, in the absence of an order to the contrary, a party who succeeds on appeal is entitled to the costs of the appeal.
[7] The Respondents ask this Court to exercise its discretion to depart from the usual rule that costs follow the event. They seek an order that the parties should bear their own costs, both in this Court and the Court below, and, in the alternative, that the Appellants should share one bill of costs.
[8] The Attorney General and the MVA Defendants argue that this case is not one that warrants variation from the rule. They seek costs for both proceedings at the ordinary scale, and further assert that two sets of costs are appropriate.
[9] At the heart of the question before the Court is how to characterize the public importance of the proceedings and, relatedly, the respondent TLABC’s interest in them. TLABC would characterize itself as a public interest litigant bringing a matter of constitutional importance before the Court on behalf of thousands of MVA victims, having itself no pecuniary interest in the outcome. The Appellants, on the other hand, would characterize it as “a large group of lawyers pooling resources…to challenge a law perceived as a threat to their business”.
[10] The issue is whether, on the facts of this case, the usual costs rule would be unsuitable and whether the interests of justice are served by variation from the rule. In our view, in this case variation from the rule is warranted.
[11] While recognizing that departures from the usual rule are exceptional, all levels of court in Canada have observed that public interest litigation attracts special considerations beyond the rationale of indemnification. These considerations have led courts to adopt and develop factors to guide the exercise of their discretion to make exceptional costs orders. These factors have been articulated slightly differently for different circumstances.
[12] The respondents frame their arguments using the five factors affirmed by this Court in Guide Outfitters Assoc. v. British Columbia (Information and Privacy Commissioner), 2005 BCCA 368 at para. 8 [Guide Outfitters]. These factors were drawn from the decision of Bauman J. (as he then was) in McDonald v. University of British Columbia, 2004 BCSC 412 at para. 13, in turn adopting recommendations from the 1989 Ontario Law Reform Commission Report on the Law of Standing, meant to offer guidance as to whether an unsuccessful public interest litigant should be insulated from an adverse costs award. This is the situation before the Court here.
[13] The appellant Attorney General frames its argument using the condensed version of these factors in Victoria (City) v. Adams, 2009 BCCA 563 [Adams], articulated as four factors most relevant to whether special costs should be awarded to a successful public interest litigant. The Supreme Court of Canada refined these factors and raised the standard in Carter v. Canada (Attorney General), 2015 SCC 5, the rationale for which the Appellants invoke in their arguments.
[14] While the factors in Adams and Carter derive from those in Guide Outfitters and encompass similar considerations, they represent distinct analyses: one deals with a successful public interest litigant seeking special costs against the opposing party, often government, and the other deals with the opposing party, again often government, seeking costs against an unsuccessful public interest litigant. The Respondents say, and we agree, that there are good reasons to keep these approaches distinct.
[15] We note the observation of this Court in Adams that “[t]he justification necessary to grant an exceptional cost award is, in part, related to the magnitude of derogation from the usual cost structure of the award being considered” (at para. 190). Similarly, in Barclay (Guardian ad litem of) v. BC (AG), 2006 BCCA 434 [Barclay], the Court held that the discretion not to award costs to a successful party is broader than the discretion to award costs to an unsuccessful party (at para. 37).
[16] Insulating an unsuccessful public interest plaintiff from an adverse cost award by ordering that each party bear its own costs represents less of a derogation from the usual rule than an award of interim costs, an award of costs to an unsuccessful party, or even an award of special costs to a successful litigant. As the jurisprudence demonstrates, these are truly exceptional orders: Adams; Barclay; British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71; British Columbia (Attorney General) v. Council of Canadians with Disabilities, 2022 SCC 27.
[17] The Court in Carter was of the view that Adams set the threshold for special costs too low. It modified the test in Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2, as “a useful guide for the exercise of a judge’s discretion on a motion for special costs in a case involving public interest litigants” (at para. 140). The Court clarified that, first, it is not enough that the issues raised have not previously been resolved or that they transcend the individual interests of the successful litigant. Rather, the case must involve matters of public interest that are truly exceptional, with a significant and widespread social impact. Second, in addition to showing that they have no personal, proprietary or pecuniary interest in the litigation that would justify the proceedings on economic grounds, the plaintiffs must show that it would not have been possible to effectively pursue the litigation in question with private funding.
[18] In our view, it would be contrary to the interests of justice to apply such a high standard in a case such as this, in which an unsuccessful litigant with public interest standing seeks simply to bear its own costs. We are not convinced that it was the Court’s intention in Carter to apply this higher standard to all public interest litigation. Doing so would run contrary to the considerations that inform the court’s discretion with regard to such orders on the facts of each case.
[19] We also note the Respondents’ argument that such an approach may have a deterrent effect on meritorious public interest litigants. For such litigants, the disincentive to bring an action of public importance arising from the potential of an adverse costs award is stronger than the incentive effect of securing costs in the cause (Chris Tollefson, Darlene Gilliland & Jerry DeMarco, “Towards a Costs Jurisprudence in Public Interest Litigation” (2004) 78:2 Can Bar Rev 473.
[20] This is not to say that every unsuccessful public interest litigant will be insulated from adverse costs. The court must still assess each situation using the factors approved in Guide Outfitters. These do not constitute “a test fettering what is inherently an exercise of principled discretion”: Adams at para. 186. The overarching question remains whether the normal rule is unsuitable on the facts of the case (quoting Hall J.A. in Guide Outfitters).
[21] The Guide Outfitters factors are:
(a) The proceeding involves issues the importance of which extend beyond the immediate interests of the parties involved.
(b) The person has no personal, proprietary or pecuniary interest in the outcome of the proceeding, or, if they have an interest, it clearly does not justify the proceeding economically.
(c) The issues have not been previously determined by a court in a proceeding against the same defendant.
(d) The defendant has a clearly superior capacity to bear the costs of the proceeding.
(e) The plaintiff has not engaged in vexatious, frivolous or abusive conduct.
[22] The parties focused their submissions on the first, second and fourth factors as the most relevant to this case. It is accepted by the parties that the plaintiff has not engaged in vexatious, frivolous or abusive conduct.
[23] The Respondents say that the constitutional issues of jurisdiction extend to the interests of thousands of vehicle accident claimants whose claims will be diverted to the CRT and away from the superior courts. They advocate for a “wider view” of the legal challenges between the parties, stating that the number of challenges (four, including the present case) to the Province’s changes to the motor vehicle liability and litigation system are a contextual factor pointing to the importance of the proceeding. They emphasize, and we agree, that it is not only Charter issues that should be considered of public importance.
[24] The Attorney General contests that this case does not involve “transcendent issues of public importance”, as it puts it, such as those in public interest cases relied upon by the Respondents (Carter; Barclay; Vancouver Area Network of Drug Users v. DVBIA, 2018 BCCA 228 [VANDU]) that would justify immunization from costs. It says that while the decision will have jurisprudential value and a small subset of the population is impacted, the immediate interests of TLABC and its members were not superseded by broader public interest considerations. It points out that, unlike other litigation of broad public importance, no group of concerned citizens or other public interest group intervened in support of the proceeding.
[25] In fact, the Attorney General argues that success for TLABC would have risked significant public harm through the dismantling of a policy intended to address untenably high insurance premiums and provide a more economical forum for low-value claims designed to maximize claimant awards.
[26] The MVA Defendants assert that while almost all constitutional litigation will extend beyond the immediate interests of the parties, a party cannot escape the cost consequences of bringing litigation simply by virtue of making such a claim.
[27] While the mere fact of bringing constitutional litigation does not immunize a party from costs, we disagree that this case did not have broad public importance. The issues extend well beyond the immediate interests of the parties: the judge found that they were of importance to British Columbians, had widespread social impact, and both sides conceded that the case was important and hard fought. In our view, judicial consideration of the issues at both levels of court was of benefit to the public. It clarified the constitutionality of a significant grant of superior court jurisdiction to the relatively new and innovative CRT, giving it the authority to classify the nature of injuries suffered by individuals who might otherwise have come before the court. It is generally of public benefit that expansions of administrative powers be subject to superior court review.
[28] Although not determinative, we also recognize that the Respondents’ claim was successful on first instance and the judge saw fit to award Scale C costs, in recognition of the level of difficulty of the issues.
[29] The parties accept that the four individual plaintiffs’ claims are each worth less than $50,000, the amount at which CRT jurisdiction is capped under the legislation, meaning that they have no pecuniary interest in the jurisdictional issue. It is the potential pecuniary interest of the plaintiff TLABC that is at issue.
[30] TLABC submits that as a non-profit entity separate from its members and with a mandate to which it is confined by law, it could not have a pecuniary interest. To this end, it invokes the doctrine of corporate legal personality and suggests this should be entirely conclusive of the issue. In our view, this argument is not realistic. It is proper to consider the pecuniary interest that members of a non-profit society may have, directly or indirectly, in their organization bringing litigation – to do otherwise would ignore the reality of the interests at stake, and would obscure the analysis of which claims are truly in the public interest. However, some pecuniary interest does not automatically bar a public interest plaintiff from costs consideration. The question is whether this interest justifies the proceeding economically.
[31] We accept, as the judge did, that some members of TLABC may have a monetary interest in preserving the jurisdiction of the superior courts over MVA claims. We cannot, however, conclude that this interest justified the cost of the proceeding. Nor do we agree, as the Attorney General suggests, that Hinkson C.J.S.C. concluded as much. On the contrary, the judge’s reasons reveal that he concluded TLABC itself did not have an immediate pecuniary interest. The judge recognized that TLABC obtained some private funding to dedicate to the litigation and concluded that TLABC was prepared to bring the proceedings whether or not it obtained an award of special costs (at para. 61). This is a different question than whether the pecuniary interest of members of TLABC justified the proceeding economically.
[32] TLABC is an organization with a demonstrated history of meritorious public interest litigation, not simply a group of lawyers seeking to preserve their own interests. A win for TLABC would not have resulted in all MVA claims remaining in the court, but in the choice of venue for certain claims being maintained. As the judge observed, personal injury lawyers could render similar charges in either forum.
[33] TLABC argues that it is the Attorney General and its agent ICBC that have a pecuniary interest in costs savings through the scheme. The Attorney General urges this Court to dismiss TLABC’s inversion of this factor, arguing that it ignores the public-interest purposes of the impugned reforms. On this point, we agree. In deciding the merits of the case, the majority found that the government’s policy objective of reducing costs and maintaining the viability of its insurer was legitimate: this cannot be characterized as “pecuniary interest”.
[34] The Attorney General acknowledges that it is a well-resourced litigant, but argues that, absence evidence to the contrary (as was available in cases the Respondents rely on, such as VANDU), the Court should infer that both parties have the capacity to bear a reasonable award of party-and-party costs.
[35] The Appellants together argue that the comparative exercise contemplated by this factor is impeded by the TLABC’s decision to withhold evidence of its financial situation. They argue that this omission diminishes the significance of this factor.
[36] The MVA Defendants further suggest that the inquiry should be into the lack of resources of the unsuccessful party rather than the resources of the successful party, since, as the Court in Carter warned, a weighing of relative resources will almost always favour an award against the government. Where, as here, the Respondents seek to bear their own costs rather than an award of costs, this concern is lessened.
[37] While TLABC acknowledges that the capacity of a party to bear the costs of the proceedings is a relevant factor for the Court to consider (Adams at para. 176), it submits that it should not have to reveal the state of its finances, as this would yield important tactical information to well-resourced opponents. Rather, it points to its status as a non-profit depending primarily on donations for its operations as evidence of the mismatch in resource capacity between the parties.
[38] We agree that the analysis suffers from an absence of pertinent information. Without the benefit of a final bill of costs from the Appellants on the one hand, or an understanding of the financial situation of TLABC on the other, it is difficult to assess the impact of the costs of the proceedings on TLABC.
[39] The Attorney General points to the fact that TLABC was in a position to retain counsel and was prepared to bring the proceedings regardless of the outcome, suggesting that this finding, which foreclosed a special costs award at first instance, should also militate against a costs deviation in the other direction. As stated, these are different situations attracting different analyses. Public interest litigants do not need to be impecunious or reliant on pro bono counsel to benefit from costs consideration.
[40] On this point, we note that TLABC bears important distinctions from other public interest litigants to which it analogizes itself. In VANDU, for example, the litigant was a grassroots non-profit organization representing the rights of individuals who face multiple and intersecting barriers. A costs award against it would likely have left it in more difficult financial circumstances than would be the case for TLABC.
[41] Despite the different circumstances of these two non-profit litigants, in our view, it is not primarily the financial situation of the unsuccessful party, but the relative capacity to bear costs as between the parties, that supports the equity-seeking function of this factor.
[42] TLABC argues that ICBC is the true costs claimant behind the nominally identified MVA Defendants. Between the Attorney General and the Crown corporation, it characterizes the Appellants as two of the best resourced litigants in the Province.
[43] We find it instructive that the judge concluded ICBC played a significant role in the proceedings. He found that individual MVA Defendants were used as a method for ICBC to advance arguments well beyond the interests of those individuals. Their counsel was instructed and paid by ICBC. The judge concluded that any costs awarded against these defendants would surely be paid by their insurer.
[44] This strengthens TLABC’s argument that its opposition in this case was not only the Attorney General but its agent ICBC. In light of this, we conclude that regardless of whatever private funding TLABC had to dedicate to the proceedings, the Appellants have a markedly superior capacity to bear the costs of them.
[45] The parties shall bear their own costs in this proceeding and in that of the Court below.
[46] Given this result, it is unnecessary to consider whether the Appellants should share one bill of costs.
Before leaving this matter, the Court acknowledges with much sadness that TLABC’s counsel Ryan Dalziel, K.C., recently and suddenly passed away. Mr. Dalziel was an extraordinary young advocate who argued many significant cases at all levels of court. He did a considerable amount of excellent work in his sadly abbreviated time at the bar. Ryan Dalziel will be missed and the Court expresses its sincere sympathies to his family and friends.
“The Honourable Chief Justice Bauman”
“The Honourable Madam Justice Bennett”
“The Honourable Mr. Justice Butler”