1. MOTION – POLICY ON SEEKING COST AWARDS

MOTION - politique sur l’attribution de dépens

Committee RecommendationS as amended

That Council confirm its policy on seeking cost awards after successfully defending its positions against community and resident public interest groups such that the City will not seek cost awards from community or resident groups before administrative tribunals and courts unless the case advanced by the community or resident group can reasonably be considered either frivolous, vexatious, in bad faith or an abuse of process under all of the circumstances of the case, subject to concurrence by CSEDC; and

That community or resident groups that challenge the City in court also be asked, as part of the litigation, to confirm that they will similarly not seek costs against the City unless the City has breached any of the above noted factors

RECOMMENDATIONS MODIFIÉES DU COMITÉ

Que le Conseil confirme sa politique sur l’attribution de dépens après avoir défendu avec succès ses positions contre des groupes communautaires et des groupes d’intérêt public de résidents, de sorte que la Ville ne cherchera pas à obtenir l’attribution de dépens à l’encontre d’un groupe communautaire ou de résidents devant des tribunaux administratifs et des cours à moins que la cause défendue par ce groupe communautaire ou de résidents puisse raisonnablement être considérée comme frivole, vexatoire, de mauvaise foi ou un abus de procédure à tous égards, sous réserve de l’acceptation par le CSODÉ; et

Que les groupes communautaires ou de résidents qui engagent une contestation en cour contre la Ville soient aussi invités, dans le cadre du litige, à confirmer qu’ils ne chercheront pas non plus à obtenir l’attribution de dépens à l’encontre la Ville, à moins que la cause de cette dernière puisse elle-même être considérée comme frivole, vexatoire, de mauvaise foi ou un abus de procédure à tous égards.

DOCUMENTATION

1. City Council’s report dated 9 February (ACS2008-CMR-CSE-0001).

2. Extract of Draft Minutes.

Report to / Rapport au:

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

9 February 2009 / le 9 février 2009

Submitted by / Soumis par: City Council / Conseil municipal

Contact / Personne-ressource : Diane Blais, Committee Coordinator /

Coordonnatrice de comité,

City Clerk’s Branch / Direction du greffe

580-2424, Ext. / poste : 28091, Diane.Blais@ottawa.ca

City Wide / À l'échelle de la Ville

Ref N°: ACS2009-CMR-CSE-0001

SUBJECT: MOTION – POLICY ON SEEKING COST AWARDS

OBJET: MOTION - politique sur l’attribution de dépens

REPORT RECOMMENDATION

That the Corporate Services and Economic Development Committee consider the following motion and forward its recommendation(s) to Council:

That Council clarify its policy on seeking cost awards after successfully defending its positions against community and resident public interest groups and that the clarification be structured such that, in such disputes in front of tribunals, the City will not seek cost awards from community or resident public interest groups unless the presiding judge or tribunal or Chair of proceedings indicates that the case advanced by the community or resident public interest group is either frivolous, vexatious or of oblique motive.

RECOMMANDATION DU RAPPORT

Que le Comité des services organisationnels et du développement économique examine la motion suivante et qu’il transmette ses recommandations au Conseil :

Que le Conseil clarifie sa politique sur l’attribution de dépens après avoir défendu avec succès ses positions contre les groupes d’intérêt communautaires et de résidents, et que la clarification soit structurée de façon que lors de tels litiges devant les tribunaux, la Ville ne cherche pas à obtenir l’attribution de dépens à l’encontre de groupes d’intérêt communautaires et de résidents à moins que le juge président, le tribunal ou la personne qui préside la procédure n’indique que la cause défendue par le groupe d’intérêt communautaire ou de résidents est frivole ou vexatoire ou qu’elle répond à des motifs détournés.

BACKGROUND

City Council, at its meeting held on 26 November 2008, referred the following motion (Motion 48/46) to the Corporate Services and Economic Development Committee for consideration:

WHEREAS community groups and resident organizations contribute significantly to public policy development at the City by offering advice and by putting aspects of Council decisions to the test;

AND WHEREAS community and resident public interest organizations contribute to the community agenda in a range of subject areas from the environment to accessibility to business issues to health protection to development issues;

AND WHEREAS this contribution is valuable to the community irrespective of whether the opinion advocated is ultimately shared by the majority of Council;

AND WHEREAS Council wishes to encourage participation in and by such community and resident public interest organizations and, in fact, gives out awards every year to members of the community for their participation in such activities;

AND WHEREAS occasionally, disputes and disagreements over matters of principle sometimes require decisions by third party tribunals, some of which are established specifically to deal with disagreements between public interest;

AND WHEREAS many such tribunals and boards exist to invite participation by individuals, residents and community public interest organizations;

AND WHEREAS it is important to guard City tax dollars against claims and legal proceedings that are frivolous, vexatious or of oblique motive;

AND WHEREAS in instances where the City's position is upheld in hearings, legal and/or other proceedings in front of tribunals, the City operates under a set of practices with respect to whether the City will apply to tribunals to have cost awards charged against the community and resident public interest groups to be paid over to the City;

AND WHEREAS a practice of seeking cost awards could serve as a deterrent to residents considering participating in such organizations or as individuals in the same democratic processes;

AND WHEREAS the City’s Public Consultation policy includes the following provision for periodically refreshing that policy:

§ Facilitating & Building Capacity for a Collaborative Community - Strengthening links between the City and the community on public participation initiatives and building capacity in the community for citizen engagement on issues that affect them through a corporate Public Participation Community of Practice.

BE IT RESOLVED THAT Council clarify its policy on seeking cost awards after successfully defending its positions against community and resident public interest groups;

AND THAT the clarification be structured such that, in such disputes in front of tribunals, the City will not seek cost awards from community or resident public interest groups unless the presiding judge or tribunal or Chair of proceedings indicates that the case advanced by the community or resident public interest group is either frivolous, vexatious or of oblique motive.

This motion was subsequently referred by Corporate Services and Economic Development Committee at its meeting of 20 January 2009 back to staff for a report.

COSTS OVERVIEW

Although the specific case that gave rise to this review of legal costs originally arose at a hearing before the Ontario Municipal Board (“OMB”) and, subsequently, the Divisional Court, the motion expressly refers to “tribunals” in a more generic manner. Therefore, a brief review of the statutory jurisdiction for costs at tribunals generally will precede a more detailed examination of costs at the OMB and the courts.

(a) Statutory Powers Procedure Act

Subsection 17.1(1) of the Statutory Powers Procedure Act (the “Act”) provides that a tribunal may, in the circumstances set out in its rules, “order a party to pay all or part of another party’s costs in a proceeding.” The Act goes on to state that a tribunal shall not make an order to pay costs under Section 17.1 unless the conduct of a party has been “unreasonable, frivolous or vexatious or a party has acted in bad faith.” Furthermore, Subsection 17.1(4) provides that a tribunal may make rules with respect to the “ordering of costs”, the “circumstances in which costs may be ordered” and the amount. Finally, Section 23 of the Act provides a tribunal with the statutory discretion to “make such orders or give directions in proceedings before it as it considers proper to prevent abuse of its processes.”

In summary, the Statutory Powers Procedure Act gives tribunals in Ontario (such as the City’s License Committee) a general power to determine their respective rules, including any with regard to cost awards. However, as will be seen below, both the Ontario Municipal Board and the courts have their own enabling statutes which specifically address rules of procedure and matters regarding costs.

(b) OMB Costs

On appeals before the OMB, one Member recently characterized an order for costs as being “very rare”. In fact, although the Board has the discretion under its enabling legislation to order “by whom and to whom any costs are to be paid”, it has expressly limited that authority in its Rules of Practice and Procedure. For example, in Section 103 of its Rules, the Board, “may only order costs against a party if the conduct or course of conduct of a party has been unreasonable, frivolous, vexatious or if the party has acted in bad faith” [emphasis added]. The provision goes on to state that “clearly unreasonable, frivolous, vexatious or bad faith conduct” may include the following:

Failing to attend at a hearing;
Failing to act in a timely manner;
A course of conduct necessitating unnecessary adjournments or delays;
Acting disrespectfully or maligning the character of another party; and
Knowingly presenting false or misleading evidence.

In a 2007 decision, Member M. G. Somers summarized the Board’s tranditional consideration of costs based on the “reasonable person” standard:

In determining if an award for costs is warranted, the Board must consider all of the circumstances of the case and the conduct of the party. It is only where the Board finds that a party wrongly brought the appeal or participated unacceptably in preparation of hearing events, that an award of costs will be made. The test for determining if a party’s conduct is clearly unreasonable is where a reasonable person, having looked at all of the circumstances of the case, such as the conduct or course of conduct of a party at the hearing and the extent of his or her familiarity with the Board’s procedure, exclaims that the action of the party is not right [emphasis added].

On January 30^th, 2009, the Ontario Municipal Board issued a significant ruling on costs wherein it concluded:

The decision in this matter is intended to reinforce and reiterate the Board’s practice that costs are not awarded lightly nor are they awarded routinely. Awards of costs are rare, especially proportionate to the number of cases decided by the Board.

In this recent case, Kimvar Enterprises Inc. (the “Developer”) brought an application seeking costs of approximately $3.2 million after being successful in a lengthy appeal. In rejecting this application, the Board summarized its caselaw on costs in the following fashion:

…unlike the courts, applications for costs are not routine, and cost awards are rare. In short, a successful party appearing before the Board should have no expectation that it will recover its costs. The Board “does not award costs lightly and it does not award costs automatically. In decision after decision, the Board has expressed a sensitivity to the right of appellants to bring matters before this Board”… . Nevertheless, the Board has also concluded that parties must be accountable for their conduct and if that conduct or course of conduct has been unreasonable, frivolous or vexatious, or if the party has acted in bad faith, then the Board may order costs.

Finally, the decision is also of importance for the fact that it addressed whether or not the Developer’s application for costs had been brought for “improper purposes”. In this regard, the Board noted that, “the suggestion was made that the cost claim was brought for the purpose of silencing public opposition and accordingly constitutes an improper purpose.” Although the Board rejected this suggestion, it went on to accept the submissions made by Clayton Ruby, acting for the Environmental Defence Canada as an intervenor, that, “the public-interest impact of a cost award is a relevant factor that the Board must consider in order to properly exercise its discretion” in such instances.

In its final analysis, the Board reiterated its uniform stance on costs in the following fashion:

The Board agrees with Mr. Ruby’s submission that the Board takes a cautious approach to cost awards against citizens and strives to accommodate public participation in land use planning decisions. In fact, in the very limited number of cases where awards of costs have been made against citizens, amounts have always been nominal. This is entirely consistent with how the Board has typically proceeded: costs cannot be used as a threat to deter public participation; and costs will only be awarded (whether the parties are commercial entities, ratepayers or citizens) where the conduct complained of is so improper that it cannot be ignored [emphasis added].

*****

Nonetheless, there is no question that the claim is unprecedented and the Board finds that an award of costs anywhere near the amount requested would create a chilling effect. In this regard, the Board adopts Mr. Ruby’s submission that the public interest impact of a cost award is a relevant factor for the Board to consider in exercising its discretion. It is for this reason that the Board has restricted awards of costs to the clearest of cases, where the conduct complained of is unreasonable and improper.

(c) Court Costs

In contrast to cost awards before most tribunals, the general standard for court costs is that “costs follow the event”. In other words, the successful party receives some of the costs that have been incurred. Not surprisingly, the expense of litigation can become a deterrent when parties must consider the likelihood of paying the opposing party’s costs, as well as their own. In this regard, the most common costs award is that of “partial indemnity”. As its name suggests, a partial indemnity award is intended to provide a partial reimbursement to a party for the costs it incurred, generally in the range of 50% to 65% of its actual total costs paid. This is generally subject to the proviso that the costs be proportional to the complexity and length of the court hearing. On the other hand, costs awarded on a “substantial indemnity” basis are intended to almost fully reimburse a party its actual costs incurred, usually 80%. Once again, this is subject to the same caveat concerning proportionality of cost to complexity and length of hearing.

In accordance with Subsection 131(1) of the Courts of Justice Act, “the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.” More specifically, Rule 57 of the Rules of Civil Procedure sets out a number of factors (in addition to the result in the proceeding and any offer to settle) that a court may consider when considering the allocation of costs, including:

The apportionment of liability;
The complexity of the hearing;
The importance of the issues; and
Whether any step in the proceeding was improper, vexatious or unnecessary.

As noted above, there are many factors that are to be considered in whether or not a court will award partial indemnity or substantial indemnity in a costs determination. However, one of the more common criteria applied is whether or not an offer to settle was made and the party making the offer was as successful as outlined in the offer. In this respect, parties are encouraged to make an offer to settle under the Rules of Civil Procedure as the cost consequences may be an incentive to compromise. For example, where a plaintiff rejects a defendant’s offer to settle and is awarded more at trial, the plaintiff will generally be granted partial indemnity costs up to the time of the offer and substantial indemnity costs thereafter. Alternatively, where a plaintiff is awarded an amount equal to or less than the defendant’s offer to settle, the plaintiff would receive partial indemnity costs up to the time of the offer, and then the defendant would be awarded partial indemnity costs for the remainder of the trial.

Having reviewed the general rules relating to awards of costs in civil litigation matters, as well as tribunals, generally, it may be helpful to see the application of these rules in the context of actual City cases.

GREENSPACE ALLIANCE v. OTTAWA ET AL.

On December 10, 2008, the City of Ottawa received the decision of the Ontario Divisional Court with respect to costs in the matter of The Greenspace Alliance of Canada’s Capital [the “Alliance”] v. City of Ottawa, 1374537 Ontario Ltd. and Findlay Creek Properties Limited [“Tartan”]. Briefly, costs were awarded to Tartan in the amount of $25,000 and to the City in the amount of $4,876.30 plus G.S.T. Set out below is a summary of the relevant facts that led to this judicial award of costs.

(a) OMB and Judicial Review Decisions

The Alliance had appealed to the Ontario Municipal Board two zoning by-laws which rezoned lands within Leitrim. The appeals were largely on the basis that the by-laws would permit development on what the Alliance alleged to be significant wetlands. Tartan brought a motion to the OMB in May 2007 to dismiss the appeals on the basis that the lands in question had been determined by Ministry of Natural Resources mapping not to be significant wetland. The City supported Tartan’s motion to dismiss. The motion was successful and the appeals were dismissed by the Board on June 18, 2007.

The Alliance then sought a rehearing of the motion pursuant to Section 43 of the Ontario Municipal Board Act. On September 12, 2007, this request was denied by the Board Chair, Marie Hubbard. In October 2007, the Alliance commenced an application in Divisional Court for a judicial review of the Board’s decision to dismiss the appeals.

On June 25, 2008 the City enacted a new Comprehensive Zoning By-law. The appeal period for this by-law ended on July 17, 2008. The Alliance did not appeal the subject lands in the new by-law. As such, Legal Services wrote to the solicitor for the Alliance stating that their appeal was rendered moot by virtue of the fact that the zoning for the lands was now governed by the new Comprehensive Zoning By-law and inviting the Alliance to discontinue the application for judicial review. Shortly thereafter, the City and Tartan jointly made an offer to settle the application on a “no cost” basis if it were discontinued. When the Alliance rejected this offer, the City brought a motion to have the judicial review application discontinued on the basis that it was moot. This motion was heard on October 2, 2008 and was unanimously approved by the Divisional Court.

In its decision, the Court invited the Parties to provide written submissions as to costs. The City sought its costs of $4,876.30 (actual costs incurred in the preparation and argument of the motion with respect to mootness), while Tartan (which had expended some $120,000 on all aspects of the judicial review) sought costs in the amount of $67,217.11

(b) Court Order on Costs

As stated above, the City was awarded $4,876.30, while Tartan was awarded $25,000. In its ruling on costs, the Divisional Court observed that, “Without tracing the history of this litigation, it had to be apparent to the applicant [Alliance] that it had little chance of success”. The Court went on to state that, “Every opportunity was given to the applicant to withdraw its application, including a joint offer to settle from the respondents whereby the applicant could have withdrawn without costs”.

In its submission on costs, the Alliance’s primary argument was that it was a “public interest litigant” and, as such, should not have costs awarded against it. A leading case with respect to costs and public interest litigation (Incredible Electronics Inc. v. Canada (Attorney General)) has held as follows:

One trait of a public interest litigant seems obvious. A public interest litigant, at a minimum, must, in a dispute under the adversary system, take a side the resolution of which is important to the public. There is much more to being a public interest litigant because a private-interest litigant may also take a side in dispute important to the public, but one necessary trait of a public interest litigant is that he or she be a partisan in a matter of public importance.

In the present case, the Divisional Court did not accept the Alliance’s submissions that they were a public interest litigant. While there is no consensus on how best to define “public interest litigation”, it is generally viewed as using the legal system to instigate changes that affect the public. In contrast to the more common private interest litigation, a case found to be “public interest litigation” will usually have wider implications beyond the immediate case and will affect a greater section of the general public than just the named litigant. In this instance, the Divisional Court found that there was no overriding public interest at issue in the litigation and therefore the Alliance could not be a public interest litigant.

On December 19, 2008, legal counsel for the Alliance gave notice of their intent to appeal the Divisional Court’s ruling on costs to the Ontario Court of Appeal.

CANADIANS FOR LANGUAGE FAIRNESS v. OTTAWA

The above approach to costs is consistent with the Court ruling in Canadians For Language Fairness v. City of Ottawa. Briefly, this case constituted a challenge to the City’s Bilingualism Policy. The City expended approximately $243,230 in the defence of the Policy and sought to recover $149,349.46 in costs on a partial indemnity basis. In response, the Applicants argued that they were public interest litigants and that “the ordering of costs would have the chilling effect of discouraging citizens from bringing important public issues into a forum for proper determination.” The Court identified that the key issue in this matter was as follows:

The real question becomes should all of the citizens of the City of Ottawa pay for the litigation of concerns raised by a small group of citizens.

In rejecting the Applicants’ argument, the Court awarded the City $50,000 in costs based on the following rationale:

Having considered all of the circumstances herein including the interests being attacked and protected, I find it would be unjust to have the taxpayers of Ottawa absorb the entire cost of this litigation. Bringing a court action always involves a risk. Litigants must remain aware of that and proceed prudently and on meritorious grounds.

CONSULTATION

This item will be advertised in the local dailies as part of the Public Meeting Advertisement on Friday preceding the Committee meeting.

On January 20, 2009, the Rural Issues Advisory Committee considered this matter and moved the following motion:

Moved by A. Warda

WHEREAS civic participation is essential for a democratic process. Residents and community groups have been long recognized as an important component of policy development and decision-making.

AND WHEREAS a practice of seeking cost awards may significantly deter residents and community groups from participation in the available process and appearing before boards or courts.

BE IT RESOLVED that the Rural Issues Advisory Committee support and endorse the Chiarelli/Cullen motion and urge the City Council to clarify city’s policy on seeking cost awards from residents, community groups and other community based organizations unless the presiding judge or tribunal or Chair of the proceedings indicates that the case advanced by the community or resident public interest group is either frivolous, vexatious or of oblique motive.

CARRIED

LEGAL/RISK MANAGEMENT IMPLICATIONS

The decisions involved in the recommendation of this motion to Council do not have any significant Legal/Risk Management concerns.

FINANCIAL IMPLICATIONS

It is not often in Ottawa that a matter heard by the Ontario Municipal Board is subsequently brought before Divisional Court either by a motion for leave to appeal or a judicial review application. As a result, it is not anticipated that the costs involved for such policy matters will be significant. Further, as validation of the Board’s position on costs in general, costs have not been sought by the City in any planning matter before the Board over the last five years. In fact, prior to the Alliance case, the City had only been before the Divisional Court once on a planning matter in the past five years. In that case, the City was awarded $7,500.00 in costs when the Divisional Court dismissed an application by 156621 Canada Inc. for judicial review of an Ontario Municipal Board decision.

However, as noted above, cost awards before the courts are a routine part of the legal process, as well as a tool to encourage parties to settle disputes. In the case involving the City’s Bilingualism Policy, $243,230 was expended by the City in its defence. Thus, where policy decisions of Council are brought before the Courts by a person or group claiming to represent a larger or public interest, the expenditure of significant sums can be required to defend Council’s decisions.

In summary, the following three court awards of costs have been made to the City from various groups in non-planning matters over the past five years:

· Pub and Bar Coalition of Ontario - $17,797.32 (2002)

· Canadians for Language Fairness - $50,000.00 (2006)

· Adult Entertainment Assoc. of Canada - $121,543.00 (2007)

CONCLUSIONS

In the present instance, the Alliance had two opportunities to make its case before the Ontario Municipal Board (the motion to dismiss and the request for a rehearing) without the risk of incurring any costs. It is staff’s view that, when the Alliance made the third attempt by means of an application for judicial review and then refused to accept the offer to withdraw the application on a without costs basis, it was appropriate that the City seek its costs as they related to the court action only.

Finally, as discussed above, the general principles applied by Legal Services with respect to the question of seeking costs from community groups are set out below.

(a) Ontario Municipal Board

The OMB “rarely” awards costs and only where the actions of a party are clearly unreasonable, frivolous and vexatious or done in bad faith. Even so, the Board’s awarding of costs against citizens has generally been for nominal amounts. As such, the City rarely seeks cost before the OMB from any party and would do so only where this test is met. In addition, this would include consideration of the Board’s most recent pronouncement that “the public interest impact of a costs award is a relevant factor that the Board must consider in order to properly exercise its discretion.”

(b) Courts

The Courts will award costs more regularly than the Ontario Municipal Board or various other administrative tribunals. However, the Courts have developed caselaw which allows a community group to put forward the argument that they are a “public interest litigant” and should not have costs awarded against them if they are unsuccessful. In considering whether to seek costs, staff would review the particular circumstances of each case to come to determine whether the community group fell within the classification of a “public interest litigant” and, thus, whether it would be appropriate to seek costs against it. Ultimately, of course, even if the City sought costs, it would be for the Court to determine if the community group met the definition of a public interest litigant.

SUPPORTING DOCUMENTATION

Document 1 – Memo from the Rural Issues Advisory Committee dated 30 January 2009

DISPOSITION

Legal Services to implement Council’s decision.

MOTION – POLICY ON SEEKING COST AWARDS

MOTION - politique sur l’attribution de dépens

(Deferred from CSEDC meeting of 3 February 2009 / Reporté de la réunion du CSODÉ du 3 février 2009)

ACS2009-CMR-CSE-0001 city wide / À l’Échelle de la ville

Mr. Rick O’Connor, City Solicitor / Clerk, provided a brief overview of the various rules, regulations and laws on the subject of cost awards, as outlined at pages three through six of the Agenda package. He advised that the City’s Legal Services staff adhered to the Ontario Municipal Board (OMB) rules with respect to costs, where conduct was clearly unreasonable, frivolous, vexatious, or in bad faith, and also considered whether there could be some chilling effect or impact to the public in that regard. He indicated he was not aware of any instance where the City had sought legal costs against any community group in front of the OMB or any other administrative tribunal. Conversely, he stated that the City did seek costs in matters brought before the courts as this was part of their process. Further, he suggested that if the intent of the motion was to include courts, then he believed Council would be removing a fairly serious tool from City litigators with regards to offers to settle.

Responding to a question from Councillor McRae with respect to legal precedent, Mr. O’Connor indicated he was not aware of any other municipality in Ontario having waived the right to seek cost awards. He advised that he had circulated this matter to his colleagues in the Municipal Law Departments Association of Ontario and none of them had ventured down this path. However, he noted that the City of Toronto was looking at a similar motion, which he believed was scheduled to be considered in April or May. He reported having discussed the matter with the City Solicitor in Toronto who, like himself, had no problem with the issues of the OMB.

Councillor McRae referenced the rules, regulations and laws that speak to the issue of cost awards and asked whether it would be ultra vires, as a municipality, to want to change this type of legislation. Mr. O’Connor suggested that, rather than contradicting the legislation, he would see Council merely directing him to no longer seek costs. However, he re-iterated that this may be problematic in those instances where litigators wanted to use costs as a tool to induce a settlement.

In response to a follow-up question from the Councillor, Mr. O’Connor explained what happens in a trial in terms of settlements and costs. He indicated where one party offers to settle and the second party rejects that offer, if the first party is successful in the proceedings, usually they will get some form of indemnity from the date they sought a settlement. He submitted these were the principles and philosophies of the courts, which want parties to settle, unless there are other reasons for going to trial such as the complexity of the hearing or the importance of the issues.

Councillor Cullen referenced the OMB policy and inquired as to the reasons for it. Mr. O’Connor indicated there were a number of reasons for it, including the fact that the OMB actively encouraged public participation and recognized that cost awards could have a chilling effect on public participation.

Responding to a follow-up question from Councillor Cullen, Mr. O’Connor confirmed that the City had a choice as to whether or not to pursue costs following a trial.

Councillor Cullen felt there was a disconnect between the two approaches, given that the City adhered to the OMB policy and did not seek costs following hearings before the Board in order to foster public participation yet it did pursue costs following a trial before the courts. He submitted that if the principle was good with respect to the OMB and the City had a choice with respect to the courts, then this should be something the City could contemplate. Mr. O’Connor stated that the City did contemplate this each and every time there was a case forced before the courts. He indicated in this instance, the group had two tries at the OMB and the City did not seek costs. However, when they sought a judicial review, the case had become moot for a number of reasons, including the City’s Comprehensive Zoning By-law, and therefore staff felt it would be best to get the group to agree to stop the proceedings.

Councillor Cullen reviewed the case with respect to the Greenspace Alliance, noting that the group had not had its evidence heard by a judge. Therefore, he wondered if pursing costs would have a chilling effect. Mr. O’Connor indicated he did not see it as such because, at the court level, cost awards were a tool used by the parties to either narrow the focus, narrow the issues, reduce the length of a hearing or settle the matter. Therefore, in this case, he felt it was reasonable, under all of those circumstances.

Mayor O’Brien believed the City Solicitor was not talking about the issue of a potential chilling effect but that he was concerned about having a useful legal tool taken out of his repertoire.

Councillor Cullen argued that the rules of the courts with respect to cost awards were developed in dealing with competing private interests. He maintained that the City was not dealing with competing private interests in this case.

In response to a request for clarification from Councillor Bloess with respect to the wording of the motion before Committee, Mr. O’Connor suggested removing the term “oblique motive” because he felt it was vague. However, he proposed adding the terms “clearly unreasonable”, “in bad faith” and “abuse of process”. Furthermore, he noted that in addition to administrative tribunals, the motion made referenced to the courts, which caused him some concern.

Replying to follow-up questions from the Councillor with respect to making determinations as to whether or not to seek cost awards, Mr. O’Connor indicated he did not remember bringing such matters forward to Committee and Council because it was within his delegated authority to make such decisions. However, he did recall speaking to individual members of Council with respect to the decision to seek costs following the challenge to the City’s Bilingualism Policy.

Councillor Hume noted that Committee was debating only one side of the equation and he asked if staff was aware of any cases where the City had lost and costs had been awarded to the plaintifs. Mr. O’Connor indicated these were fairly rare in terms of land use planning issue. He believed staff had identified one case in the last eight or nine years where costs were awarded against a corporation.

Councillor Hume wondered, had the Greenspace Alliance been successful in the proceedings, whether they would have sought costs against the City. However, he wondered if staff was aware of any public interest cases where costs were awarded to the community group. Mr. O’Connor indicated he was aware of some unusual situations with respect to interim funding. However, he could not cite them off the top of his head.

Responding to a final question from Councillor Hume, Mr. O’Connor estimated that, on average, the City dealt with one public interest court case per year.

In reply to a follow-up question from Councillor Chiarelli, the City Solicitor / Clerk estimated that in the past eight or nine years, the City had sought costs from public interest groups about two or three times.

Councillor Chiarelli believed that in addition to chilling public participation, seeking cost awards could impact on residents’ participation in community groups and organizations because members could end up bearing such costs. Mr. O’Connor indicated he had heard this argument and he believed it was valid.

In response to questions from Councillor Desroches, Mr. O’Connor confirmed that there was an incredible amount of flexibility in terms of working out how payments were made to the City following cost awards and whether, at the end of the day, the City even collected them. He indicated this was within his delegated authority. He referenced the challenge to the City’s Bilingualism Policy. He advised that in that case, the City got a an award of $50,000, which bankrupt the organization. As a result the organization released the City from the Court of Appeal route they had been pursuing and so they never paid the award.

Responding to a question from Mayor O’Brien, Mr. O’Connor stated that settlements were reached, using the offer to settle approach, in approximately 95% of cases.

Councillor McRae wondered if one of the factors considered by litigants, before pursuing these kinds of issues, was the risk of having costs awarded against them. Mr. O’Connor confirmed that this was a traditional approach.

Councillor Cullen reviewed some of the questions and answers heard with respect to the frequency with which the City was involved in such cases and maintained that, regardless of the issue of court costs either for or against the City, it was very rarely in court with community groups.

Councillor Jellett wondered, if Committee and Council approved the current motion, whether staff believed there would be an increase in the number of times the City was in court with community groups. Mr. O’Connor could not answer the question, though he believed the frequency of court challenges could increase.

Mr. Sol Shuster referenced a number of letters submitted by community and environmental groups and noted their message was essentially the same; don’t chill us. He noted that these organizations were made up of volunteers wanting to make the City of Ottawa a better place to live. They valued the environment and community participation and applauded the City’s Public Participation Policy, however they asked that the City live up to that policy. He referenced the Divisional Court’s decision to allow costs against the Greenspace Alliance, which had precipitated this need to clarify the City’s policy on seeking cost awards. He indicated it was his understanding that the court never addressed the substantive issues raised by the Greenspace Alliance but decided the case on a technicality. He recognized that challenging decisions of tribunals and courts carried with it responsibilities by the challenger and should never be frivolous, vexatious or in bad faith. However, he submitted that the City’s decision to seek costs put not only the Greenspace Alliance at risk, but all other public interest groups as well. He noted that Council’s decision on this issue would have ramifications across Canada. In closing, Mr. Shuster quoted from the letters submitted by the Environmental Advisory Committee, the Ottawa Forests and Greenspace Advisory Committee, the Canadian Parks and Wilderness Society – Ottawa-Valley Chapter, the Ottawa-Carleton Wildlife Centre, Ecology Canada, the Federation of Urban Neighbourhoods of Ontario, the Ottawa Field Naturalists’ Club and the Sierra Club of Canada. A copy of Mr. Shuster’s speaking notes is held on file.

Mr. Erwin Dreessen submitted that the City should not try to punish individuals or community groups when they pursue legitimate means of review of Council decisions. He provided some highlights of what the Greenspace Alliance had done over the years with respect to municipal government. He noted that in its 11 years of existance, the Alliance had been the City’s ideal partner in consultation as it had been loyal, critical and constructive, and never driven by ideology or hidden motives. He advised that, to do their work, the group had attracted resources on a pro bono basis and that their strength derived not from money but from people. In closing, he maintained that none of the Alliance’s actions had ever been frivolous, vexatious or for oblique motive and he urged Committee to support the motion. A copy of Mr. Dreessen’s speaking notes is held on file.

Councillor McRae wondered, if costs were awarded to the Greenspace Alliance against the City, whether the organization would seek those costs. Mr. Dreessen indicated he would prefer to leave such a question to the organization’s legal counsel. However, his understanding was that the one-way costs rule was more or less accepted for public interest groups.

Responding to a question from Councillor Cullen, Mr. Dreessen confirmed that the organization’s participation in tribunals and environmental assessment studies (EAs) was evidence-based and that they drew expertise either from their members or from experts who testified on the group’s behalf on a pro bono basis.

Councillor Wilkinson was puzzled by the fact that, when the Comprehensive Zoning By-law was approved, the Greenspace Alliance did not appeal the lack of wetlands designation therein. Mr. Dreessen, indicated the organization had followed the various debates about the Comprehensive Zoning By-law closely and made various interventions. However, as far as the lands in dispute, the new By-law made not change to its zoning and the group was in the process of appealing and was waiting for a court date, so it seemed useless to re-appeal. He advised that the Alliance was surprised when the City brought forward a motion for mootness and even more surprised when the Divisional Court accepted the argument. He submitted that if this type of ruling could stand, it would be very easy for any municipality to always frustrate any appeal by simply scrapping the zoning by-law under dispute and repassing it with a new number. Then the matter would be moot.

Councillor Wilkinson wondered how the organization was handling the costs awarded to the other party in the dispute, the developer. Mr. Dreessen indicated they were seeking legal advice on their options but that they obviously could not pay because the organization had very little money.

Without getting into the merits of the pursuit, Councillor Bloess wanted to be perfectly clear that the organization was seeking a blanket policy that would have the City never pursue any group that considered it was doing something in the public interest, even though there were criteria with respect to action that was “frivolous, vexatious, in bad faith” and so on. Mr. Dreessen agreed with the criteria outlined but stated that he did not see the logic in the City encouraging public participation and recognizing the issues of chilling, but only to a point. He maintained Canada’s democratic system made allowances for pursuing adjudication of a dispute, up to the Supreme Court.

Responding to follow-up questions from Councillor Bloess, Mr. Dreessen acknowledged that there were obligations and responsibilities that came with the right to challenge and pursue issues through the legal system. He re-iterated he had no problems with the criteria outlined in the motion but he hoped he had convinced Committee that the Greenspace Alliance had never engaged in that kind of action.

Mr. William Amos, Legal Counsel for Ecojustice, submitted that community groups wanting to engage in public interest litigation with the City were already deterred by high costs. He maintained that there was a big difference between normal civil litigation between private parties and public interest litigation and that this distinction impacted on the incentive to settle cases. Finally, he talked about City staff’s discretion to seek costs, suggesting that such decisions should be in the hands of elected representatives. Mr. Amos elaborated on each of the aforementioned points. A copy of his speaking notes is held on file.

Mayor O’Brien referenced Councillor Bloess’ earlier comments with respect to a blanket policy and he wondered what mechanisms the speaker could recommend for discerning between a public interest group and a group that had some other function but was disguised as a public interest group. Mr. Amos submitted that, under no circumstances would anyone in their right mind recommend the City never seek costs under any circumstances. However, he maintained that criteria ought to be applied, such as those already outlined in the motion. He felt this was a first layer and noted that the courts had provided greater guidance, which the City could apply. He referenced the case of Incredible Electronics v. Canada where the judgement spoke to the issue of ensuring that costs were not awarded where the proceeding involved were of importance that extended beyond the immediate interests of the parties involved, where there were no personal or pecuniary interests, where the issues had not been determined before, and where the defendant had a clearly superior capacity to bear the costs. He felt it would be appropriate for the City to have a series of further criteria and have Council discuss the case rather than leaving it to staff’s discretion.

Councillor Bloess wondered if the delegation would be satisfied with a motion that stated the City would not seek costs unless the case advanced by a community group or residents group could be reasonably considered to be either frivolous, vexatious, clearly unreasonable, in bad faith or abuse of process, and subject to concurrence by the Corporate Services and Economic Development Committee (CSEDC). He noted this would give an additional level of public scrutiny. Mr. Amos felt this would address his concerns, though he believed the default position should be no costs unless a matter was frivolous or vexatious.

Councillor Bloess maintained the default position was that the conditions outlined in the motion would have to be in place before the City would seek any costs and it would be subject to the concurrence of the CSEDC.

Responding to questions from Councillor McRae, Mr. Amos indicated he would provide a copy of his presentation. In terms of case law on the one-way approach, he advised that there was not much information available as to how often public interest groups might seek costs against a government institution. He believed this would be determined on a case-by-case basis. With respect to the three cases referenced in the report, Mr. Amos acknowlegdged that there was a huge difference between litigation by organizations such as the Adult Entertainment Association or the Pub and Bar Coalition versus the Greenspace Alliance. He noted that the first two organizations clearly involved private interests whereas the Greenspace Alliance did not. In terms of the challenge by Canadians for Language Fairness, he submitted that at the end of the day, it was probably a good debate to have had before the courts.

Councillor McRae expressed a concern, which she believed her colleagues shared, with respect to opening the flood gates, resulting in more litigation and more groups challenging decisions.

Councillor Desroches indicated he was a big believer in alternative dispute resolution (ADR). He wondered where the speaker saw ADR fitting into the work he did and whether it was something in his toolbox. Mr. Amos indicated mediation was very important and maintained that at the end of the day, Ecojustice was results-oriented and did not fight for the stake of fighting. He advised that when mediation or ADR processes were available they engaged in them to the greatest extent possible, always with a view to obtaining the right results.

Councillor Chiarelli suggested this was not really about the Greenspace Alliance, that it was about a greater issue but that everyone was talking about the Alliance because the case was fresh. However, he submitted the purpose of public interest litigation, in a common law jurisdiction, was to define the law. Mr. Amos responded affirmatively, noting that in all cases where Ecojustice got involved, there were important legal precedents being set.

Sensing that Committee members were reaching a consensus, Councillor Chiarelli suggested a 5-minute recess in order to confer with the City Solicitor to further refine the motion before moving forward. Mayor O’Brien recommended against a recess, noting that he still had a spearkers’ list.

Responding to a question from Councillor Brooks with respect to the presentation, Mr. O’Connor cited the court’s decision with respect to public interest litigants, noting the court had ruled “as to whether the applicant in this matter is a public interest litigant, we conclude that it is not. To qualify as a public interest litigant, one must be a party to public interest litigation”. Further, the court cited the cast of Incredible Electronics and concluded that this litigation, initiated and pursued by the applicant, did not meet the tests set out in Incredible and accordingly, was not a public interest litigant.

Councillor Brooks stated this was the other side of the coin he wanted to hear. He felt it was important to always hear both sides. He then expressed support for the motion referenced earlier by Councillor Bloess.

Councillor El-Chantiry asked what Mr. Amos thought of what the court had to say. Mr. Amos felt there was a lack of rationale to define what the courts thought was a public interest litigant. Further, he did not feel the court had adequately considered the merits of the Greenspace Alliance’s case. He recognized that the organization could have further costs imposed against it but maintained that they did not take the decision lightly to seek leave before the Court of Appeal.

At this juncture, Committee took a 5-minute recess to confer with the City Solicitor on the wording of a revised motion.

Upon resuming the meeting, Mayor O’Brien read a revised motion into the record and asked the remaining public delegations to confirm whether or not they still wished to address Committee.

The following individuals had registered to speak but declined to do so in light of the revised motion:

Ÿ Don Stewart, Federation of Citizens’ Association of Ottawa-Carleton;

Ÿ David McNicoll;

Ÿ Barry George, Greenspace Alliance;

Ÿ Agnes Warda, Rural Issues Advisory Committee;

Ÿ Mik Svilans; and

Ÿ David Jeanes, Transport 2000.

Ms. Iola Price had also registered to speak and indicated that she did not need to address Committee. However, she asked that her written submission form part of the record. She provide a copy of her submission in support of the motion, which is held on file. In particular, Ms. Price submitted that in public interest litigation, forcing settlement before the issues and evidence were heard was disadvantageous to public policy and to the citizens involved.

Ms. Cheryl Doran, Chair of the Greenspace Alliance, had registered to speak on the original motion and provided a copy of her speaking notes on same. A copy of this document is held on file. However, speaking to the revised motion, she submitted that the City’s Public Participation Policy was a strong one and it invited people to participate in working groups and open houses. She referenced the reworded motion and noted that it did not talk about individuals. She wondered if there was a way of capturing this in the motion.

Responding to a question from Councillor Chiarelli on this issue, Mr. O’Connor suggested it was something he could reflect upon and bring back before Council.

Mr. Pierre Dufresne, Vice-President of Tartan Land Corporation and Tartan Land Consultants, said he wanted to provide details of the case so that Committee and Council would have the proper context in order to make their decision. First, he submitted that the public participation process was very well protected and invited through Provincial statute, through federal statute and through City procedures. He maintained no one was trying to take those rights away. However, in this case, he reminded Committee that decisions were made on the boundary of the Leitrim wetlands by all authorities, federal, provincial and municipal, about 18 years ago. Since then, there had been official plans, community development plans, subdivision approvals, zoning by-laws and that two recent zoning by-laws were the subject of an appeal before the OMB. The hearing took place in May 2007 and the appeal was dismissed after a 4-day hearing. Speaking to the merits of the dismissal, he referenced two points of the OMB decision: that the appellants showed-up empty handed in terms of evidence; and that when the OMB Chair discussed costs, he referenced the Board’s rules of practice with respect to costs and noted that “recovery of costs is not standard as in court proceedings”. Therefore, Mr. Dufresne submitted that the Greenspace Alliance and their solicitors were fully aware that costs could be awarded against them and were taking this risk by bringing the matter to Divisional Court. He summarized that the matter was dismissed at the OMB. The organization petitioned the OMB to review the decision and the decision was upheld. They brought the matter to Divisional Court, at which time both the City and the developer provided them with information suggesting that they did not have much of a chance of success and offering for them to abandon the matter at no costs. They discarded this offer, brought the matter to court, and it was dismissed. He noted that there had been mention of the developer’s costs being $25,000. He explained that their actual costs were about $128,000. They submitted approximately half of that to the courts and were awarded $25,000. In closing, Mr. Dufresne recognized the importance of protecting the public process. However, he submitted that there was a line where accountability had to set in and if Council passed a policy as put forth, matters such as the situation discussed today, where people behaved as though they did not need to be accountable, would continue and persist. He maintained that he only asked for reasonableness.

Mayor O’Brien submitted this was always the dilemma faced in public policy, trying to separate the conceptual issues from the detail. He believed most members of Committee were comfortable they were moving forward with this in a way that would protect the interests of the City as well as foster participation for the public interest groups.

Responding to a question from Councillor Cullen, Mr. Dufresne confirmed that there continued to be outstanding regulatory issues related to the Leitrim development.

In response to a question from Councillor El-Chantiry, Mr. Dufresne indicated he believed the current process was sufficient in terms of protecting the public interest. He believed the present situation had been manipulated to some extent. As an example of this, he referenced comments made by one of the previous speakers who suggested that municipalities could frustrate public processes by simply scrapping a zoning by-law under dispute and passing a replacement by-law. He noted that if the City did pass a new by-law, it would have to do so with full public participation including with public notices, invitations to community groups and a right of appeal. He re-iterated his belief that the public process was very strong in this province and very well implemented by this Council.

The Committee received the following written submissions with respect to this item, copies of which are held on file:

Ÿ Letter from the Environmental Advisory Committee and the Ottaw Forests and Greenspace Advisory Committee dated 18 January 2009;

Ÿ Memo from the Rural Issues Advisory Committee dated 30 January 2009;

Ÿ Letter from the Canadian Parks and Wilderness Society – Ottawa Valley Chapter, dated 14 January 2009;

Ÿ Letter from the Conseil régional de l’environnement et du développement durable de l’Outaouais, undated;

Ÿ Letter from Ecology Ottawa dated 19 January 2009;

Ÿ Letter from the Federation of Citizens’ Associations of Ottawa-Carleton, undated;

Ÿ Letter from the Federation of Urban Neighbourhoods of Ontario, undated;

Ÿ Letter from the Ottawa-Carleton Wildlife Centre, undated;

Ÿ Letter from the Ottawa Field Naturalists’ Club, dated 18 January 2009;

Ÿ Letter from the Sierra Club of Canada dated 20 January 2009;

Ÿ E-mail from the Stittsville Village Association dateed 16 February 2009; and

Ÿ E-mail from Klaus Beltzner dated 16 February 2009.

At this juncture, Committee voted on the following motion, moved by Councillor Bloess.

Moved by Councillor R. Bloess