This judgmentFootnote 1 discusses tests to be used in awarding costs to a party who has initiated acourt action to compel compliance with the rights conferred by section 23 of the Canadian Charter of Rights and Freedoms (The Charter), where an out-of-court settlement is reached before the case is heard.
The Francophone Board of Region No. 3 offers homogeneous education in French at the primary and secondary levels in three Alberta communities. In May 2002, the Board had made a financing request to the Alberta Minister of Infrastructure for its schools at St. Paul and Bonnyville, but this was not provided for the 2003—2004 fiscal year. In 2003, the Board renewed its request three times for the 2004—2005 fiscal year, but the financing was also denied. Nonetheless, in its releases the Board stated that the conditions in these two schools were not comparable to those of the neighbouring Anglophone schools. It also noted the problems associated with assimilation that confronted Francophones in Alberta and the obligations of the government under section 23 of the Charter.
In February 2004, counsel for the Board asked the Minister of Infrastructure to review his decision. Receiving no reply, on March 2, 2004, the Board filed an application for judicial review of the Minister’s decision. On the eve of the deadline for disclosure of the file of the Minister of Infrastructure and the Minister of Education, the latter submitted an initial offer to settle out of court. Following considerable negotiation, the Board and the two Ministers agreed by a mutual settlement reached on April 1, 2004, that the financing requests would be sent back to the Minister of Infrastructure to be reconsidered in light of the provisions of section 23 of the Charter.
This case was settled by mutual agreement before the hearing, however, the Board claimed costs for the application for judicial review on a solicitor-client basisFootnote 2 as of February 17, 2004, the date of the Minister of Infrastructure’s decision to deny the financing. The argument submitted was that the constitutional rights in question were significant: the application for judicial review would not have been necessary if the Minister had not refused to take the provisions of section 23 of the Charter into account in making his decision. According to the Board, by agreeing to settle the case by mutual agreement, the Minister had acknowledged that he had not performed all the duties incumbent on him under section 23. The Minister challenged this claim, arguing that ordinarily costs are not awarded in cases of a mutual settlement, and in any case the settlement reached was not a recognition that the appellant’s claims were valid.
In its decision, the Alberta Court of Queen’s Bench first noted that the awarding of costs was at the Court’s discretion and an award on a solicitor-client basis was exceptional. It recalled the rules laid down by the Court of Appeal, that [translation] "
it is misconduct during the case, not the conduct which made it necessary, which justifies the awarding of such costs" and those laid down by the Supreme Court of Canada in Young that costs "
are generally awarded only where there has been reprehensible, scandalous or outrageous conduct on the part of one of the parties."Footnote 1 Analysing the facts of the case at bar, the Court held that there had been no misconduct during the case.
The Court further indicated that raising questions relating to the Charter did not necessarily lead to the awarding of costs on a solicitor-client basis. Relying on certain cases cited by the Board, however, the Court noted that the persistent denial of rights guaranteed by section 23 of the Charter could justify the awarding of such costs. The intransigence of one of the parties was an issue in particular in Arsenault-CameronFootnote 3 and Doucet-Boudreau,Footnote 4 as the case had to be appealed all the way up to the Supreme Court of Canada.
Analysing the facts in the case at bar, however, the Court held that the settlement in the case—which was reached one month after the application for judicial review was served—could be seen as proof of a speedy recognition by the Minister of the rights claimed. Finally, the Court pointed out that it clearly could not award costs on a solicitor-client basis as the Court could not assess the merits of the Board’s argument and, in any event, the argument had to be again considered by the Minister.
Judge Marceau, however, agreed to award increased costs to the Board. In his view, the background of the case showed that the government undoubtedly would not have seriously considered the Board’s application by such time as would have allowed a decision to be made on the financing allocations for 2004–2005 if the Board had not initiated court proceedings. The judge also indicated that one clearly could not [translation] "
underestimate the importance for the Francophone minority of the questions raised by the Board in this action, since they were questions of fundamental rights guaranteed by the Charter".Footnote 5
- Footnote 1
East Central Francophone Education Region No. 3 v Alberta (Minister of Infrastructure),  A.J. No. 630, (2004), ABQB 428.
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- Footnote 2
We note that the costs serve, in principle, to indemnify and hold harmless a party who wins a case. They include legal fees and legal disbursements (stamps, costs of service, interpreter’s fees, etc.) calculated according to set rates based on the amount in dispute or the type of intervention in the judicial system. The costs on a solicitor and client basis are additional amounts awarded at the discretion of the Court when there has been, as stated in Young v Young  4 S.C.R. 3, p.134, " reprehensible, scandalous or outrageous conduct on the part of one of the parties."
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- Footnote 3
Arsenault-Cameron v Prince Edward Island,  1 S.C.R. 3.
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- Footnote 4
Doucet-Boudreau v Nova Scotia (Minister of Education),  3 S.C.R. 3.
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- Footnote 5
East Central Francophone Education Region No. v Alberta (Minister of Infrastructure),  A.J. No. 630, (2004), ABQB 428 at para. 44. The judge has finally awarded the Council the costs greater than the fixed amount of $10,000 and $1,000 for the adjournment, for a total of $11,000, plus $1,466.59 in disbursements.
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