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SCC Clarifies Advance Costs Test for Public Interest Litigation

Fasken
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Overview

Indigenous Law Bulletin

Introduction

In Anderson v Alberta, [1] the Supreme Court of Canada considered an order for advance costs in relation to Beaver Lake Cree Nation’s underlying claim against the Crown for improperly allowing its traditional lands to be taken up for industrial and resource development. With the trial scheduled expected to span 120 days, and estimated to cost $5 million, the First Nation applied for advance costs to fund the litigation, which it asserted it could not afford as its resources must be applied to address other priorities.

After clarifying the applicable legal test in considering applications for advance costs in public interest litigation, the Supreme Court remitted the matter back to the Alberta Court of Queen’s Bench to be reconsidered with the benefit of its decision and a more complete evidentiary record.

This case should be of interest to all legal practitioners involving public interest litigation with First Nations and other Indigenous groups.

Background

In 2008, former Chief Germaine Anderson brought at action against Alberta and Canada on her own behalf and as a representative of all Beaver Lake Cree Nation beneficiaries of Treaty 6 and of Beaver Lake Cree Nation (collectively, Beaver Lake). The claim alleges the Crown improperly allowed Beaver Lake’s traditional lands to be taken up for industrial and resource development, compromising its ability to pursue its traditional way of life. [2]

At first instance, [3] the case management judge set out the test for awarding advance costs in public interest litigation: an applicant must demonstrate impecuniosity, present a prima facie meritorious case and raise issues of public importance. [4]

Regarding impecuniosity, the judge found that, despite having more than $3 million and additional ongoing revenue that could be allocated to pay for the litigation, Beaver Lake was impecunious given its impoverished state and other funding priorities. The judge therefore ordered that each of Beaver Lake, Canada and Alberta contribute $300,000 annually to fund Beaver Lake’s legal expenses until the litigation concluded or was otherwise resolved. [5] Canada and Alberta appealed that decision.

The Alberta Court of Appeal allowed the appeals, [6] holding that the case management judge erred in concluding that Beaver Lake was impecunious when it had the resources (at least $6 to $7 million) it needed to fund the litigation but decided to instead allocate the funds to other priorities. [7]

Supreme Court of Canada Decision

Writing for the Supreme Court, Karakatsanis and Brown JJ. provided that, “[i]n assessing impecuniosity, a court must respectfully account for the broader context in which First Nations governments such as Beaver Lake make financial decisions.” [8] What constitutes a pressing need for the First Nation should be reviewed from the perspective of the First Nation’s government, which is best positioned to set those priorities. [9] The Court reiterated that, “an applicant is impecunious if it ‘genuinely cannot afford to pay for the litigation, and no other realistic option exists for bringing the issues to trial — in short, the litigation would be unable to proceed if the order were not made' .” [10] A First Nation may properly be considered impecunious when its pressing needs, understood through the First Nation’s perspective, leave it unable to fund public interest litigation. [11]

In order to make this assessment, “a court must have a sufficient record to (1) identify the applicant’s pressing needs; (2) determine what resources are required to meet those needs; (3) assess the applicant’s resources (both assets and income); and (4) identify the estimated cost of funding the litigation.” [12]

Applying that analytical framework, the Court held that, while the case management judge appropriately identified Beaver Lake’s pressing needs, [13] she did not determine what resources would be required to meet the pressing needs of the Nation; the record before her was insufficient to make that determination. [14]

In consideration of the third step, being the assessment of the First Nation’s resources, the Court found that the case management judge, “required a more particularized and comprehensive record in order to consider whether Beaver Lake had made sufficient efforts to obtain funding from alternate sources, and whether other sources of funds are available to be used for the litigation.” [15]

Finally, the Court noted that, while the case management judge accepted Beaver Lake’s estimate of the cost of the litigation at $5 million, she was also required to consider whether Beaver Lake had any resources to fund the costs of litigation as they arose. The Court suggested that a current litigation plan be filed for judicial reconsideration. [16]

The Court further awarded solicitor-client costs to Beaver Lake, given the case represents an “exceptional matter of public interest,” [17] because Beaver Lake did not initiate the proceeding on primarily private or economic grounds, and because of the costs-related nature of the application itself. [18]

Conclusion

This case should be of interest to all legal practitioners involved with public interest litigation with First Nations and other Indigenous groups. The Supreme Court of Canada’s clarification of the test for impecuniosity is almost certain to attract additional advance cost awards in the context of furthering public interest litigation. In order to address such applications, even where an Indigenous group has financial resources available to it, the Crown may have evidentiary difficulties rebutting First Nations’ evidence regarding the pressing needs of their Nations. While it remains to be seen, given this finding, the Crown may be more likely to agree to fund advance costs in similar circumstances.

 


 

[1] 2022 SCC 6. [Anderson]

[2] Anderson at para 9.

[3] 2019 ABQB 746.

[4] Anderson at para 11, with reference to British Columbia (Minister of Forests) v Okanagan Indian Band,  2003 SCC 71 [Okanagan] and Little Sisters Book and Art Emporium v Canada (Commissioner of Customs and Revenue), 2007 SCC 2.

[5] Anderson at paras 11-13.

[6] 2020 ABCA 238.

[7] Anderson at para 15.

[8] Anderson at para 27.

[9] Ibid.

[10] Anderson at para 30, citing Okanagan at para 40.

[11] Anderson at paras 38 and 40.

[12] Anderson at para 41.

[13] Anderson at para 56.

[14] Anderson at para 57-59.

[15] Anderson at para 67.

[16] Anderson at para 68.

[17] Anderson at para 73.

[18] Anderson at para 74.

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