Simon's Megalomaniacal Legal Resources

Federal Court - Costs

. Hull v. Canada [deference and offers]

In Hull v. Canada (Fed CA, 2023) the Federal Court of Appeal characterizes the deference accorded to cost orders on appeal, and considers the cost order effect of prior offers to settle the litigation:

[3] As noted by this Court in Marzen Artistic Aluminum Ltd. v. Canada, 2016 FCA 34:

[59] On the third issue regarding the granting of costs to the respondent, it is a well-established principle that orders granting costs are discretionary and command deference. Rule 147 of the Tax Court of Canada Rules (General Procedure) SOR/90-688a, specifies the factors that a judge must consider in awarding costs. An appellate Court should only intervene if the Judge considered irrelevant factors, failed to consider relevant factors, or reached an unreasonable conclusion (see Guibord v. Canada, 2011 FCA 346).

[4] This discretion in granting cost awards is maintained in Rule 147(3.1). Rule 147(3.1) provides for enhanced costs when an appellant makes an offer of settlement and obtains a judgment at least as favourable as the settlement offer. The discretion to not apply this Rule is confirmed by the opening words of Rule 147(3.1) – "“[u]nless otherwise ordered by the Court…”".

[5] In this case, the Tax Court Judge decided to not apply Rule 147(3.1) as he was entitled to do. There is no merit to the appellant’s argument that, as a result of obtaining a more favourable judgment than the settlement offer, he was automatically entitled to "“enhanced costs”". This argument overlooks the opening words of Rule 147(3.1) which clearly grant the Tax Court Judge the discretion to grant an order for costs that does not reflect the enhanced costs as set out in this Rule.

. Red Pheasant First Nation v. Whitford

In Red Pheasant First Nation v. Whitford (Fed CA, 2023) the Federal Court of Appeal considered the discretion allowed in trial cost awards, and on appeal of same:

[11] An award of costs is “quintessentially discretionary”: Nolan v. Kerry (Canada) Inc., 2009 SCC 39 at para. 126. Hospira Healthcare Corporation v. Kennedy Institute of Rheumatology, 2016 FCA 215, confirms that the standard of review applicable on appeals of discretionary decisions of the Federal Court is that articulated by the Supreme Court in Housen v. Nikolaisen, 2002 SCC 33. Questions of law are reviewed on the standard of correctness. Findings of fact or mixed fact and law are reviewed for palpable and overriding error unless an extricable legal error can be demonstrated.

[12] Put another way, appellate Courts should interfere with costs awards only if the Court below “made an error in principle or if the costs award is plainly wrong”: Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6 at para. 247, citing Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 at para. 27.

III. Costs in the Federal Courts: Federal Courts Rules

[13] Rule 400(1) of the Federal Courts Rules, S.O.R./98-106 (Rules) expressly grants the Court “full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.” Rule 400(3) sets out a non-exhaustive list of factors the Court may consider in making cost awards. Rule 400(3)(o) expressly permits the Court to consider any other matter it considers relevant. The Court is not required to state the weight afforded to any particular factor and not all factors may be relevant in a particular case.

[14] Rule 400(4) allows the Court to fix costs according to the Tariff or to award a lump sum. Rule 400(6) allows the Court to award all or part of the costs on a solicitor-and-client basis.

. Key First Nation v. Lavallee

In Key First Nation v. Lavallee (Fed CA, 2023) the Federal Court of Appeal's assessment officer issued an extensive cost ruling. I haven't seen one of these before and it may be interesting for anyone involved in such a costs proceeding.