A-387-01
2003 FCA 111
The Council of the Saugeen First Nation No. 29 and Chief Randal Roote (Appellants)
v.
James Sebastian and 544282 Ontario Inc. c.o.b. as Hideaway Campground (Respondents)
Indexed as: Sebastian v. Saugeen First Nation No. 29 (Council of) (C.A.)
Court of Appeal, Desjardins, Isaac and Malone JJ.A.-- Toronto, October 7, 2002; Ottawa, January 22 and March 5, 2003.
Practice -- Costs -- Offers to settle -- After delivery of judgment, Court informed both parties had made offers to settle which had never been revoked -- No validity in appellants' offer -- As respondents' offer reasonably in line with reasons for judgment of majority, Federal Court Rules, 1998, rr. 400(3)(e), 420(2)(b) applied.
In this case ([2003] 3 F.C. 48), the Court was seized of an appeal from an order issued by Tremblay-Lamer J., which initiated a contempt hearing under rule 467 of the Federal Court Rules, 1998. The order was attacked on the basis that it failed to satisfy the notice and certainty requirements of rule 467. The appellants won their case in form but not in substance. After the delivery of the judgment in the Court of Appeal, the respondents informed the Court of the existence of an offer to settle that they had served on the appellants almost 11 months before the hearing of the appeal. The offer had never been revoked. They now claimed that they were entitled, under paragraphs 400(3)(e) and 420(2)(b) of the Federal Court Rules, 1998, to party-and-party costs to the date of service of the offer and double such costs from that date to the date of judgment. The appellants had also served on the respondents an offer to settle which had never been revoked. These were supplementary reasons respecting costs.
In the appeal from the interlocutory motion, the majority ruled that the order of Tremblay-Lamer J. failed in form since it did not contain the particulars that would have enabled the appellants to know the nature of the case against them. The order also failed by using the phrase "show cause", a term that is now obsolete on account of the new Rules. The majority was also of the view that rules 56 and 58 of the Federal Court Rules, 1998 did not apply. In addition, it held that no appeal process should be permitted and that the case should be returned to the Trial Division for the second stage of the contempt proceedings considering that the presiding judge would be well capable of remedying the deficiencies in the initiating order at the beginning of the hearing. Isaac J.A. would have disposed of the case under rules 56 to 60. The majority ordered no costs in view of the new rules concerning contempt. The appellants had won their case in form but not in substance. They did not obtain judgment since the majority concluded that the Court of Appeal was not the proper forum for obtaining a remedy in the face of an order which was deficient. Isaac J.A., dissenting on the issue of costs, would have awarded costs to the respondents.
Held, the respondents were entitled to the award of costs they sought under paragraphs 400(3)(e) and 420(2)(b).
Per Desjardins J.A. (Malone J.A. concurring): The offer to settle made by the respondents was reasonably in line with the reasons for judgment of the majority. Had that offer been accepted by the appellants, time and money would have been spared and the matter would have proceeded expeditiously. There was little validity in the appellants' reasons for refusing the respondents' offer to settle and there was no validity in the appellants' offer to settle.
Although the Rules do not contemplate a situation where offers are made by both parties, the respondents were entitled, under the terms of paragraph 420(2)(b), to party-and-party costs to the date of service of the appellants' offer to settle, and double such costs, excluding disbursements, from that date to the date of judgment.
Per Isaac J.A.: It is clear from a reading of rule 56 of the Federal Court Rules, 1998, that non-compliance with any rule does not render an order void, rather, such non-compliance constitutes an irregularity to be dealt with under rules 58 to 60. The appellants knew or should have known that they could not have obtained the grant of a stay or the quashing of the order of Tremblay-Lamer J. Furthermore, the appellants were seeking relief from this Court to which they were not entitled. In these circumstances, and having regard to the long lapse of time between the respective offers to settle, the respondents' offer to settle should be taken into account in awarding and allocating costs. The respondents should therefore be entitled to party-and-party costs of the appeal, pursuant to rule 420(2)(b), to the date of service of the respondents' offer to settle, and to double party-and-party costs from then to the date of judgment.
statutes and regulations judicially
considered
Federal Court Rules, 1998, SOR/98-106, rr. 3, 56, 57, 58, 59, 60, 400(3)(e), 419, 420, 421, 422, 467.
SUPPLEMENTARY REASONS RESPECTING COSTS. In view of the respondents' offer to settle, which was never revoked, the respondents were awarded, under the terms of Federal Court Rules, 1998, paragraph 420(2)(b), party-and-party costs to the date of the service of their offer to settle and double such costs, excluding disbursements, from then to the date of judgment.
appearances:
Derek T. Ground for the appellants.
James P. McReynolds for the respondents.
solicitors of record:
William B. Henderson, Toronto, for appellants.
Solmon Rothbart Goodman LLP, Toronto, for respondents.
The following are the supplementary reasons for judgment rendered in English by
[1]Desjardins J.A.: By letter dated January 24, 2003, after the delivery of our judgment dated January 22, 2003, the respondents informed the Court of the existence of an offer to settle which they served on the appellants on November 22, 2001, almost 11 months before the hearing of the appeal. The respondents' offer to settle, which was never revoked, read:
The Respondents, JAMES SEBASTIAN and 544282 ONTARIO INC., c.o.b. as HIDEAWAY CAMPGROUND, offers to settle this appeal on the following terms:
1. Paragraph 3 of the Order of the Honourable Madam Justice Lamer-Tremblay, dated May 18, 2001, shall be varied to read as follows:
3. THIS COURT ORDERS THAT THE COUNCIL OF THE SAUGEEN FIRST NATION #29 and CHIEF RANDAL ROOTE are to appear before this Court at 330 University Avenue, 7th Floor, Toronto, Ontario, on [date and time to be fixed within 45 days of date of order], to hear proof of the acts of contempt alleged and to give any grounds of defence they wish to put forward.
THE PARTICULARS of the alleged acts of contempt committed by Chief Roote are:
1. Breaching the Order of the Honourable Mr. Justice O'Keefe dated August 4, 2000, by attending at the Hideaway Campground on the evening of May 17, 2001, and advising James Sebastian that he would do whatever it took to shut down Hideaway Campground.
THE PARTICULARS of the alleged acts of contempt committed by Chief Roote and the Council of the Saugeen First Nation # 29 are:
1. Breaching the Order of the Honourable Mr. Justice O'Keefe, dated August 4, 2000, by issuing a Band Council Resolution titled "Motion No. 04", dated May 16, 2001, directing that all campgrounds on the Saugeen First Nation #29 be closed.
2. Breaching the Order of the Honourable Mr. Justice O'Keefe dated August 4, 2000, by placing, or directing to be placed, signs marked "Closed" around the entrance of Hideaway Campground.
3. Breaching the Order of the Honourable Mr. Justice O'Keefe dated August 4, 2000, by encouraging and participating in a blockade of the entrance of Hideaway Campground on May 18, 2001.
4. Breaching the Order of the Honourable Mr. Justice O'Keefe dated August 4, 2000, by closing down, hindering, preventing, or interfering in any way with the business operations of 544282 Ontario Inc. cob as Hideaway Campground.
2. The Order of the Honourable Madam Justice Lamer-Tremblay dated May 18, 2001, shall be varied to include a paragraph 7, which shall read as follows:
7. THIS COURT ORDERS THAT service of this Order, and any supporting documents, shall be effected by service of same upon William B. Henderson, Barrister & Solicitor, counsel for the Respondent and Chief Randal Roote.
This Offer to Settle remains in effect until one minute after the commencement of the hearing of this appeal, unless otherwise revoked.
[2]The respondents added in their letter that they were precluded, under rule 422 of the Federal Court Rules, 1998 [SOR/98-106] (the Rules), from disclosing to the Court the existence of the offer to settle prior to the release of our judgment. They then referred to rule 419 which, under the title "Offer to Settle", states that rules 420 and 421 apply, with such modifications as are necessary, to appellants and respondents in an appeal. They finally claimed that they are entitled, under paragraphs 400(3)(e) and 420(2)(b), to party-and-party costs to November 22, 2001, and to double party-and-party costs from November 22, 2001, to the date of judgment.
[3]On January 31, 2003, the appellants wrote to the Court stating that the Court's original order that no costs be granted was appropriate. They informed the Court that, on May 8, 2002, they served on the respondents an offer to settle which was never revoked. The offer read:
| 1. THIS COURT ORDERS THAT the Appeal is allowed, with leave to the Respondents to seek from the Federal Court Trial Division a further and better order that conforms to Rule 467 of the Federal Court Rules (1998). |
This Offer to Settle remains in effect until one minute after the commencement of the hearing of this appeal, unless otherwise revoked in writing.
[4]Paragraphs 400(3)(e) and 420(2)(b) provide:
400. . .
(3) In exercising its discretion under subsection (1), the Court may consider
. . .
(e) any written offer to settle;
. . .
420. . . .
(2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked,
. . .
(b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment.
[5]Although our rules do not contemplate a situation such as the present one, where offers are made by both parties, it is my view that the respondents are entitled to the award of costs they seek under paragraphs 400(3)(e) and 420(2)(b).
[6]My reasons are the following.
[7]The order of Madam Justice Tremblay-Lamer failed in form since it did not contain the particulars which would have enabled the appellants to know the nature of the case against them. Those particulars were however clearly set out in the motion record of the respondents which Tremblay-Lamer J. referred to in her order. The order also failed by using the phrase "show cause", a term which is now obsolete on account of the new Rules. The appellants conceded however that they had not been misled about the nature of the hearing.
[8]It was the view of the majority of this Court that rules 56 and 58 did not apply. In addition, the majority held, assisted by earlier case law, that no appeal process should be permitted and that the case should be returned to the Trial Division for the second stage of the contempt proceedings considering that the presiding judge would be well capable of remedying the deficiencies in the initiating order at the beginning of the hearing.
[9]Isaac J.A. would have disposed of the case under rules 56 to 60. The matter would then have been returned to the Trial Division for remedy.
[10]The majority ordered no costs in view of the new rules at play. The appellants had won their case in form but not in substance; they knew or ought to have known the case against them from an early start. They did not obtain judgment however since the majority concluded that the Court of Appeal was not the proper forum for obtaining a remedy in the face of an order which was deficient. The appellants could not have known the inference the majority would draw from earlier case law.
[11]After judgment was rendered, we were informed, in conformity with rule 422, of the existence of two unrevoked offers to settle.
[12]The offer to settle made by the respondents is reasonably in line with the reasons for judgment of the majority. Had that offer been accepted by the appellants, time and money would have been spared and the matter would have proceeded expeditiously (rule 3).
[13]The appellants said in their letter of January 31, 2003, that their position throughout was that the respondents' offer was one only the Trial Division could grant, especially with respect to the case management aspect of the scheduling of the trial. They added that it was unreasonable to ask them to consent to the particulars of the charges against them and that it was and remains the burden of the respondents to make out a prima facie case and to comply with rule 467.
[14]It is not uncommon however for counsel to agree to a settlement which modifies a judgment or order of a court. It is true that the initiating order was not a final judgment but an interlocutory one. The appellants have not indicated any effort on their part to find out whether such settlement would have had a negative effect on the case management aspect of the scheduling of the trial. In addition, it was clear from the respondents' offer to settle, that the proposed draft modifying the order of Tremblay-Lame r J. did not constitute a consent to the particulars of the charges and could not have relieved the respondents of their burden to make out a prima facie case of contempt. Moreover, the respondents themselves could not have complied with rule 467 since the deficiency in the order originated with the Court through no fault of the respondents. It was for this reason that the majority held that rules 56 and 58 did not apply.
[15]There is, therefore, little validity in the appellants' reasons for refusing the respondents' offer to settle. The appellants were seeking clarification by their appeal. They were getting clarification from the responden ts' offer to settle. That was made clear in the respondents' covering letter accompanying their offer to settle. The first two paragraphs read:
Our review of your Appeal Book suggests that your client's ostensible objective is simply to clarify the wordin g of the Order and not necessarily to quash the ruling of Madam Justice Tremblay-Lamer that a Rule 467 hearing take place.
It is our client's posi tion that the Order granted by Her Honour is sufficient in all respects. However, should a simple re-wording of the Order be sufficient to resolve the appeal and permit our clients to proceed with the substantive issues in this matter, then our client is prepared to consider same, so that further time and cost need not be spent on the appeal.
[16]The appellants' offer to settle, on the other hand, was problematic. By agreeing to allow the appeal with leave to the respondent s to seek from the Trial Division a further and better order that would conform to rule 467, the respondents would have, in effect, accepted to start the process anew, from its very beginning. This was, in effect, a very costly offer to settle.
[17]I find that there was validity in the offer to settle proposed by the respondents and none in that proposed by the appellants. In these circumstances, I would apply paragraphs 400(3)(e) and 420(2)(b).
[18]I would therefore award to the respondents, under the terms of paragraph 420(2)(b), party-and-party costs to November 22, 2001, the date of service of the respondents' offer to settle and double such costs, excluding disbursements, from that date to January 22, 2003, the date of judg ment.
[19]The respondents are entitled to one set of costs only.
Malone J.A.: I agree.
* * *
The following are the supplementary reasons for judgment rendered in English by
[20]Isaac J.A.: On January 22, 2003 the Court delivered judgment awarding no costs of the appeal. I dissented on the issue of costs and would have awarded costs to the respondents.
[21]By letter dated January 24, 2003, counsel for the respondents informed the Court that on November 22, 2001 his client had made an offer to settle the appeal by varying the order of Tremblay-Lamer J. in the following respects:
(a) by substituting for the phrase "show cause" in paragraph 3 of the order, the words: "to hear proof of the acts of contempt alleged and to give any grounds of defence they wish to put forward"; and
(b) by particularizing the acts of contempt alleged against the appellants.
By its terms, the offer to settle remained in effect until one minute after the commencement of the hearing of the appeal, unless otherwise revoked in writing. No evidence was adduced that the offer was revoked.
[22]In those circumstances, counsel for the respondents, invoking paragraph 400(3)(e) and subsection 420(2) of the Federal Court Rules, 1998, asked the Court to award party-and-party costs to November 22, 2001, and to double party-and-party costs from November 22, 2001 to the date of judgment, that is to January 22, 2003. Subsection 400(1) and paragraph 400(3)(e) read:
400. (1) The Court shall have full discretionary power over the amount and allocation of costs and the determination of by whom they are to be paid.
. . .
(3) In exercising its discretion under subsection (1) the Court may consider:
. . .
(e) any written offer to settle;
[23]Subsection 420(2) and rule 422 read:
420. . . .
(2) Unless otherwise ordered by the Court, where a defendant makes a written offer to settle that is not revoked,
(a) if the plaintiff obtains a judgment less favourable than the terms of the offer to settle, the plaintiff shall be entitled to party-and-party costs to the date of service of the offer and the defendant shall be entitled to double such costs, excluding disbursements, from that date to the date of judgment; or
(b) if the plaintiff fails to obtain judgment, the defendant shall be entitled to party-and-party costs to the date of the service of the offer and to double such costs, excluding disbursements, from that date to the date of judgment.
. . .
422. No communication respecting an offer to settle or offer to contribute shall be made to the Court, other than to a case management judge or prothonotary assigned under rule 383(c) or to a judge or prothonotary at a pre-trial conference, until all questions of liability and the relief to be granted, other than costs, have been determined.
By virtue of rule 419, these Rules are applicable to this appeal.
[24]In my respectful view, it is instructive to review here paragraph 2 of the covering letter which accompanied the respondents' offer to settle. It reads:
It is our client's position that the Order granted by Her Honour is sufficient in all respects. However, should a simple re-wording of the Order be sufficient to resolve the ap peal and permit our clients to proceed with the substantive issues in this matter, then our client is prepared to consider same, so that further time and cost need not be spent on the appeal.
[25]In this appeal the relief which the appellants sought, both in their memorandum of fact and law and in oral argument before us, was:
(1) an order granting a stay of, or in the alternative, quashing the order of Tremblay-Lamer J. with leave to the respondents to serve a further or better order if so advised; and
(2) costs of the appeal.
[26]By letter dated January 31, 2003, counsel for the appellants informed the Court (in response to the respondents' submissions to the Court regarding their November 22, 2001 offer to settle and the resultant cost consequences) that the order which the Court made as to costs of this appeal--that none be granted--was appropriate. Furthermore, counsel for the appellants submitted that the respondents had the burd en of showing in the first instance that the appellants were, prima facie, in contempt and therefore the respondents' offer was not one which the appellants could reasonably accept.
[27]He then referred to an offer to settle which the appellants had made in the following terms:
THE APPELLANTS, THE COUNCIL OF THE SAUGEEN FIRST NATIONS #29 and CHIEF RANDAL ROOTE, offer to settle this appeal on the following terms:
| 1. THIS COURT ORDERS THAT the Appeal is allowed, with leave to the Respondents to seek from the Federal Court Trial Division a further and better order that conforms to Rule 467 of the Federal Court Rules (1998). |
That offer, too, was open for acceptance up to one minute after the commencement of the appeal hearing unless otherwise revoked in writing. No evidence was adduced that this offer was revoked.
[28]It should be noticed first, that this offer is dated May 8, 2002, seven months after the respondents' offer was made, and second, that counsel fo r the respondents made no reference to it in his letter dated January, 24 2003.
[29]The Rules do not, of course, contemplate mutual offers to settle by the parties to a dispute. In a case such as this, where neither party accepted the offer made by the other, one would normally conclude that the Court should not apply paragraph 420(2)(b). However, it is my view that this case is unique and requires different treatment. For the reasons which follow, I have concluded that it is not improper to apply paragraph 420(2)(b) in favour of the respondent.
[30]In my respectful view, it is clear from a reading of rule 56 that non-compliance with any rule does not render an order void, rather, such non-compliance constitutes an irregularity to be dealt with under rules 58 to 60. With all due respect to those who take a different view, the appellants knew or ought to have known that they could not have obtained the grant of a stay or the quashing of the order of Tremblay-Lamer J.
[31]Furthermore, on my analysis of my colleagues' reasons for judgment in this appeal, the appellants were seeking r elief from this Court to which they were not entitled. In these circumstances, and having regard to the long lapse of time between the respective offers to settle, it is my view that the respondents' offer to settle should be taken into account in awardin g and allocating costs. I have, therefore, concluded that the respondents are entitled to party-and-party costs of the appeal, pursuant to paragraph 420(2)(b), to November 22, 2001, the date of service of the respondents' offer to settle, and to double par ty-and-party costs from that date to January 22, 2003, the date of judgment.
[32]Accordingly, I would award one set of costs to the respondents.