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SUPREME COURT OF CANADA CONSIDERS ADVANCING AWARD COSTS

INTRODUCTION

The Supreme Court of Canada (SCC) issued guidance for First Nation tribes, ruling that the Beaver Lake Nation’s pressing needs include a lack of adequate litigation capital. The court’s decision also included a provision for Beaver Lake to be eligible for advance costs to finance necessary litigation fees.

Beaver Lake Cree Nation was granted leave to appeal the Alberta Court of Appeal’s decision to reverse a partial advanced costs award in January 2021 by the Supreme Court of Canada. This appeal is expected to clarify the standard for determining advanced costs in First Nations litigation against the Crown. Thus, the SCC decision paved the way for reconciliation between tribes and governments, who may face complicated, lengthy negotiations and millions of dollars in litigation investment.

ANDERSON V. ALBERTA

The Supreme Court ruled that an Alberta First Nation may be eligible to have its legal fees paid in advance by the government, even though it has its funds. In this case, the question is whether an Alberta First Nation is eligible for advance costs. Advance costs are legal fees paid in advance by the government to allow a case to continue when it is in the public interest.

The Supreme Court extensively considered this issue almost two decades ago, in British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71. There, the Court set out a three-part test that a First Nation must meet before it qualifies for advanced costs:

  • the First Nation must genuinely be unable to pay for the litigation
  • the claim must have prima facie merit
  • the case must raise issues that are of public importance and novel (the Okanagan test).

Even after a First Nation has established these elements, the decision to award advanced costs is left to the court’s discretion. The Beaver Lake Cree Nation (Beaver Lake) of north-eastern Alberta is involved in this case, and its members are Treaty No. 6 beneficiaries, which means they have the right to hunt and fish on their traditional lands. Beaver Lake sued the governments of Canada and Alberta for damages caused by industrial development on those lands, including oil and gas wells, more than a decade ago. There have been numerous preliminary court proceedings since then, and the case has yet to go to trial.

Beaver Lake Cree Nation sought advanced costs after being embroiled in a decade-long legal battle with the Alberta and federal governments. In 2008, Beaver Lake filed a Treaty infringement claim against the government. The claim sought various declarations of rights, injunctions, and damages for the cumulative effects of resource development permitted on their traditional territory under Treaty 6. The trial has been scheduled for January 2024, despite numerous setbacks and obstacles.

Beaver Lake Cree Nation announced in 2018 that it could no longer afford to pursue legal action. Beaver Lake had already spent more than $3 million on legal fees at that point. Beaver Lake applied for $5 million in advance costs to proceed with the claim.

Beaver Lake passed the Okanagan tests’ second and third parts. The only real question was whether it was genuinely unable to pay for the litigation. Beaver Lake contended that it was because it could not fund both its legitimate and pressing community infrastructure and social needs while also pursuing its legal claim. The governments of Alberta and Canada have been ordered to pay $300,000 per year toward Beaver Lake’s legal fees until the trial gets completed or the litigation is resolved. This was the same amount Beaver Lake would contribute each year.

Beaver Lake may be eligible for advance costs if it is unable to pay its legal fees, according to the Supreme Court. Justices Karakatsanis and Brown explained that advance costs are rarely awarded. However, if a party has its funds, it may still be eligible for advance costs if it meets the impecuniosity test. Impecuniosity refers to not having enough money to pay your bills. It is one of three advance cost requirements established by the Supreme Court in British Columbia (Minister of Forests) v. Okanagan Indian Band in 2003.

CONCLUSION

The case has been remanded to the Alberta Court of Queen’s Bench for a new hearing. The Supreme Court judges determined that there was insufficient evidence on the record before the Court of Queen’s Bench of Alberta to decide Beaver Lake’s application for advance costs. As a result, the judges decided to remand the case to that court for another hearing. The Court of Queen’s Bench will be able to consider all relevant evidence, including Beaver Lake’s current financial situation, as a result of this.

The Alberta Court of Appeal’s decision set an extremely high standard for First Nations to meet to be eligible for advanced costs. For many, advance costs may be a necessary stopgap measure to pursue legitimate claims against the government and enforce their inherent Aboriginal and Treaty rights. Beaver Lake’s appeal to the Supreme Court of Canada could go a long way toward expanding the eligibility for advanced costs, ensuring that First Nations who need it can get it.

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