Awarding Costs in Public Interest Cases

The issue in Vancouver (City) v. Zhang, 2009 BCSC 614, was whether costs should be awarded against an unsuccessful party alleging a breach of the party’s rights under the Charter of Rights and Freedoms where that party’s interest coincides with the public interest.

In the underlying judgment, the petitioner, the City of Vancouver, sought an injunction from the Supreme Court of British Columbia ordering the respondents to remove a structure they had erected on a city street. The respondents were a group of Falun Gong members protesting, in front of the Chinese Consulate in Vancouver, against the persecution of Falun Gong adherents in China. As part of their protest, some of the respondents had erected structures on a grassy portion of the city street abutting the Consulate on one side and the city’s sidewalk on the other.

The City of Vancouver argued that such structures were in contravention of S. 71 of the Street and Traffic Bylaw. The respondents argued that the bylaw infringed their constitutionally protected right to freedom of expression, under S. 2(b) of the Canadian Charter of Rights and Freedoms.

The Court held that the erection of the structures violated the bylaw. The protesters’ method of expression was incompatible with the purpose of the street and therefore was not protected under S. 2(b) of the Charter. In addition, the City, in enforcing the bylaw, was not acting for an improper purpose.

On the matter of costs, the general rule is that the successful party should be awarded the costs of the case. The unsuccessful respondents argued that it would be unfair and inappropriate for the court to follow the general rule because of the public-interest nature of the respondents’ case. In their view, the case concerned a novel, unresolved issue of fundamental importance to society – freedom of expression under the Charter. The issue of government accountability, in examining whether Vancouver acted with improper purpose in enforcing its bylaw against the respondents, was also at issue. The respondents’ position was that the Court should use its discretion to order each of the parties to bear their own costs.

The Court referred to the leading cases on costs in public interest litigation cases, including Sierra Club of Western Canada v. British Columbia (Chief Forester), Barclay (Guardian ad litem of) v. British Columbia, British Columbia (Minister of Forests) v. Okanagan Indian Band, and Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue Agency). The totality of the case law sets out the criteria by which a public-interest litigant may be exempted from the rule with respect to costs and also establishes limitations to the application of the exemption.

The relevant factors in the Court’s analysis of the question of costs included whether the case involved issues of importance, which extended beyond the immediate interests of the parties involved. If it did, this was indicative of a case that merited special treatment. Likewise, if the respondents did not have a personal, pecuniary interest in the outcome of the case, this might further indicate that an exception could be warranted.

Whether the triable issue had been previously decided by the courts, whether Vancouver had a clearly superior capacity to bear the costs of the litigation, and the fact that the respondents had not engaged in vexatious, frivolous or abusive conduct in pursuing the case, were all matters to be weighed in deciding whether special treatment could be accorded to the respondents.

According to the Court, many of the above factors were similar to those in the governing case law. However, the Court decided that the general rule – that the successful party should be awarded the costs of the case – should not be departed from in this case, and awarded costs to Vancouver.

This case is noteworthy to local governments who are parties to public interest cases for the following reasons:

• The decision upholds the principle that while some litigation on public interest matters may warrant special treatment in regard to costs, not every case under those circumstances will shield a public interest proponent from having costs awarded against them if they are unsuccessful. In this case, the Judge echoed the Supreme Court of Canada’s judgment in Little Sisters that “an issue of public importance will not automatically entitle a litigant to preferential treatment with respect to costs”.

• The decision reaffirms the principle that each case must be determined on its own merits and that a totality of factors must be weighed seriously by the courts in the exercise of their discretion in respect of costs. According to the Honourable Madam Justice Stromberg-Stein, in this case, the essential question remains whether the general rule of costs is “unsuitable on the facts of the case”. That seems to indicate that even in the broad context of public interest litigation, preferential treatment regarding costs will only be given in highly exceptional circumstances.