Divisional Court declines to award costs sought by hydroelectric dam operator and OPA

5 minute read
01 December 2015

Ogichidaakwe (Grand Chief), et al. v Ontario Minister of Energy, et al., 2015 ONSC 7582

The Grand Council Treaty 3 ("Grand Council") commenced a judicial review in which it alleged that the Ontario Crown had failed to consult and accommodate the Anishinaabe Nation in relation to the issuance of a Ministerial directive ordering the Ontario Power Authority ("OPA") to implement a program called the Hydroelectric Contract Initiative ("HCI"). The Grand Council's position in the matter was that the Minister's directive and other consequential decisions made by the Crown, including the award of a contract and consent to a change in control by the OPA in relation to five existing hydroelectric facilities in Treaty 3, triggered the Crown's duty to consult. The proceeding named both the Minister and OPA as respondents in the matter.

The central issue was whether the HCI program allowed for or would otherwise facilitate the extension of the life of the five hydroelectric facilities, and would in turn cause new adverse impacts to certain rights provided for under Treaty 3, such as the harvesting of wild rice and lake sturgeon. The five facilities in question were operated by H2O Power Limited Partnership ("H2O") and previously owned by Resolute FP Canada, Inc. ("Resolute"). H2O and Resolute applied to become parties to the proceeding, but were instead added as interveners with limited rights.

The merits of the matter were scheduled to be heard by a panel of the Divisional Court over a five-day period commencing on June 8, 2015. On June 5, the Grand Council and the Minister reached a negotiated settlement in the matter. The terms of settlement provided that the judicial review was to be abandoned by the Grand Council on a without costs basis, with no admission of liability or wrongdoing by either party.

H2O and OPA - who were not a party to the settlement - sought partial indemnity costs of $335,000 and $450,399.17, respectively, against the Grand Council in respect of the abandoned proceeding. The Grand Council and the Minister opposed an award of costs to either.

The Divisional Court denied both claims for costs.

In relation to H2O and Resolute, the Court held that it could find no reason to depart from the "usual rule" that interveners are not entitled to their costs. The Court further commented that the amount claimed by them was in any event "excessive". Commenting more generally on the issues raised by the judicial review, and the nature of H2O's interest in those issues, the Divisional Court held that settlement between the Grand Council and the Crown on the matter was to be "celebrated" rather than discouraged, and that an award of costs would therefore be inappropriate in the circumstances:

Most importantly the duty to consult is the pragmatic manifestation of our collective recognition of the constitutional position of First Nations within Canada. The concerns raised are understood to be between nations. Settlement of such issues is to be celebrated, not unnecessarily impeded by the threat that the First Nations involved may have to pay costs. Those whose commercial interests could be engaged may have to absorb the costs of becoming involved. In this case H20 will have to.

In relation to the OPA's claim for costs, although the Court acknowledged that it was presumptively entitled to its costs as a respondent pursuant to Rule 38.08(3), it held that its participation as a respondent and Crown agent in the matter was more properly regarded to be "secondary" and duplicative to that of the Minister. Furthermore, the Court found the Minister's opposition to costs being awarded to another Crown actor to be a "significant" factor in concluding that no costs should be awarded.

The Court's decision in this matter suggests that promoting the settlement of disputes between the Crown and Aboriginal peoples is an object that will, at least in some cases, be a factor strongly militating against an award of costs when a judicial proceeding is abandoned as a result of such a settlement. The decision further clarifies that third parties with pecuniary interests at stake in similar disputes may have to absorb their costs of participating in a proceeding.

Max Faille, Scott A. Smith, and Paul Seaman represented the Grand Council in the judicial review and settlement proceedings, with support from Sean Conway, Megan Strachan and John A. Wilson.

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