Daniels v. Canada, 2011 FC 230

Link:  http://www.canlii.org/en/ca/fct/doc/2011/2011fc230/2011fc230.html

The Congress of Aboriginal Peoples (“CAP”) and individual Plaintiff representatives brought a motion before the Federal Court for an advanced order for costs on the eve of trial.  In the main action, commenced in 1999, the Plaintiffs sought a declaration that the Métis and non-status Indians were “Indians” for the purposes of s. 91(24) of the Constitution Act, 1867.  The action had been previously funded under the Test Case Funding Program (“TCFP”) of Indian and Northern Affairs Canada since 2005.  The TCFP was created to fund important Indian-related test cases.  The ceiling for this funding was started at $1 million and was then raised to $1.5 million.  CAP had applied to extend the funding beyond $1.5 million to cover the trial costs.  While there was precedent for this application, the Government of Canada had not responded.  Applying the Supreme Court decision in British Columbia (Minister of Forest) v. Okanagan Indian Band (“Okanagan”), [2003] 3 S.C.R. 371 and R v. Caron (“Caron”), 2011 SCC 5, the Court granted the Order for Costs in the amount of $345,000 plus $30,000 for contingencies.

Summarizing the test from Caron, the Court held that the Plaintiffs must establish the following:   1) the parties seeking interim funding genuinely cannot afford to pay for the litigation and no other realistic option exists for bringing the issues to trial, 2) the claim is prima facie meritorious and it would be contrary to the interests of justice for the case to be forfeited because the litigant lacks financial means, and 3) the issues are novel and of public importance.

Even if these criteria were met, there is no “right” to a Funding Order. The Court indicated that Orders for advanced costs are highly unusual and are to be approached with caution.  The discretion enjoyed by the Court affords it an opportunity to consider all relevant factors that arise on the facts (Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue), [2007] 1 S.C.R. 38 as per Bastarache and LeBel J.J. for the majority).

On the issue of “public importance,” the Defendants challenged whether the matter was properly justiciable and whether there were other options available to bring the matter to trial.  The Defendants referred to the judgment of the Manitoba Court of Appeal in Manitoba Métis Federation Inc. v Canada (“MMF”), 2010 MBCA 71 which will soon be heard before the Supreme Court.  The Federal Court found that it was instructive that the Manitoba Court of Appeal in the MMF case dealt with CAP’s efforts to be an intervener by indicating that CAP’s position on S. 91(24) would enlarge that case. The Court further noted that the Appellants in MMF had specifically denied that they were asking for a determination that Métis were Indians under s. 91(24). Therefore, the MMF case had little to do with the present matter.  The Court concluded that the public interest condition had been met.

The Court next concluded that the prima facie merit condition had also been met.  Without determining the ultimate outcome of the trial, the Court followed the test set out in the Joseph decision (otherwise known as Hagwilget Indian Band v. Canada, 2008 FC 574) as to whether there was a serious and real possibility of success.  The Court was persuaded in this regard by earlier comments of the Court, as well as the fact that the matter had been publicly funded for 11 years.  It seemed unlikely that the Government of Canada would have expended the $1.5 million in supporting a case with no real chance of success.  A further aspect of the public interest was the loss to the public (in terms of money, time and effort) should the case not proceed.  Finally, the Court found the evidence overwhelming that CAP was in no position to fund the litigation.  CAP was in a deficit position and had been for some time.  CAP’s existence was completely dependent on Federal Government funding and a condition of that funding was that the money be used for programs and not for litigation.  The Court held that the individual representative Plaintiffs could not be expected to fund litigation expenses and costs for a matter that affected many.

Finally, as indicated in both the Okanagan and Joseph cases, even if an Applicant for an order for advanced costs meets the three conditions set out by the Supreme Court of Canada, a Court still has the discretion to refuse to grant such an Order.  However, to do so in this case would be to render a similar result to the Crown’s earlier motions to strike.  These requests to strike had been denied.  The Court held that the case was virtually ready for hearing and the amount of money requested for the next 6-8 weeks, in the scheme of this litigation, is not staggering or startling.  The Court held that the rates applicable under the TCFP should continue to apply and to be adequate for the purposes of ensuring a fair trial in the context of the history of this particular litigation.