The Federal Court dismissed an application by a Saskatchewan First Nation for an order of "advance costs".
The Pasqua First Nation commenced the underlying proceeding in June 2014 alleging that Canada and Saskatchewan had failed to fulfill outstanding Treaty obligations, and had not properly implemented and fulfilled their obligations under the Pasqua Band Treaty Entitlement Settlement Agreement.
Saskatchewan applied to strike out the claim on the basis that the Federal Court did not have jurisdiction over the matters. This motion was dismissed by the Federal Court, but granted in part by the Federal Court of Appeal (2016 FCA 133). In December 2016, the Supreme Court of Canada dismissed applications for leave to appeal brought by both Saskatchewan and the Pasqua First Nation (summarized in our e-Newsletter of 2 March 2017).
At this stage, the Pasqua First Nation applied for an order for legal costs in advance to fund this action, and also for the Crown defendants to pay the legal costs that it has incurred to date. The Pasqua First Nation had incurred costs of $584,081.83 to date.
The Federal Court dismissed the motion. The applicable test for advance costs was set out in British Columbia (Minister of Forests) v. Okanagan Indian Band , 2003 SCC 71 and Little Sisters Book and Art Emporium v. Canada , 2007 SCC 2. The party must satisfy a three prong test: (1) the party genuinely cannot afford the litigation; (2) the claim is prima facie meritorious; and (3) the issues are of public importance. The Court decided this application on the first criterion, without needing to consider the other two.
An advance costs award is prospective, and not retrospective, in nature. There is no basis for the Court ordering that the Crown defendants pay the costs ($584,081.83) already incurred by the Pasqua First Nation.
In regards to the Little Sisters test, Boswell J. held that there was insufficient evidence to prove that the Pasqua First Nation genuinely cannot pay for this litigation in absence of an advance order. He noted that the Pasqua, unlike the Okanagan Indian Band in the case noted above, initiated this action, and was not thrust into a situation requiring litigation. Saskatchewan and Canada had referred to the plaintiff's ability to secure funding for the significant litigation costs to date, and the absence of evidence about their efforts to secure further funding. Boswell J. held:
I am not convinced that this litigation will be unable to proceed without an advance costs order, nor am I convinced that such an order is justified in the circumstances of this case. In view of the evidence and the parties' submissions, I am not convinced that PFN has fully exhausted all alternative sources of funding for this litigation. PFN has not established that advance costs are necessary as a "last resort." An order for advance costs must be in the interests of justice, and the fact that PFN has managed to fund and pay for its legal costs prior to this motion in an amount of some $580,000 undermines its claims of impecuniosity. Moreover, this case does not, in my view, rise to the level of "special" or "exceptional circumstances" required to allow the Court to make an order for interim or advance costs. ...
In short, for the reasons stated above, an award of advance costs is not required because PFN has not established that it is genuinely impecunious or that such an award is necessary in order for this litigation to continue. It is unnecessary to address whether PFN's Claim is prima facie meritorious or raises unresolved issues of public importance because PFN has failed to meet the first requirement for an award of advance costs.
The application was dismissed without costs.
https://www.canlii.org/en/ca/fct/doc/2017/2017fc655/2017fc655.pdf