Knebush v. Maygard

The Federal Court released a decision on December 19, 2014 in Knebush v. Maygard, awarding an order of costs following the resolution of a First Nation's governance dispute through settlement as opposed to litigation.

The issue preceding that settlement concerned the Custom Electoral System of the Pheasant Rump Nakota First Nation in Saskatchewan. Following the resignation of the First Nation's chief, the Custom Electoral System required a by-election for a new chief within two months of the vacancy. In this case, no such by-election occurred and the applicant sought an order for mandamus compelling a by-election to be held by the respondent councillors. The parties reached an agreement that moved the general election for chief and council forward several months. The applicant retained legal counsel, as did the principal respondent councillors. A third respondent, at odds with the other respondents, retained her own legal counsel.

At issue before the Federal Court was whether costs could result from the settlement of a judicial review matter concerning a First Nation governance dispute and, if so, whether either party was entitled to costs in this case. In determining this issue the Court noted that Federal Court Rule 400 gave it full discretion to award costs and provided for the consideration of a wide variety of factors in exercising this discretion. The applicant argued for a cost award against the principal respondents on the grounds that this was a “public interest case” in which she did not directly benefit from the expedited election process she sought at settlement and because the First Nation would presumably cover the legal expenses amassed by the principal respondent councillors. The third respondent sought a full cost award against the First Nation on the basis of public interest, arguing that the application benefitted the whole community and failing to award costs would be tacit approval of the principal respondents’ inaction.

The Court found that, in settlements of First Nations governance judicial review applications, it is appropriate to consider costs and doing so should not be treated as a mere exception to the Court’s general custom of not awarding costs in settlements. In reviewing the law, the Court was of the opinion that where an applicant seeks judicial review of a question of a First Nation’s laws, and that question is then properly addressed, the applicant is entitled to costs from the First Nation on the basis of public interest. As a result, the Court held that Pheasant Rump Nakota First Nation was to be added as a party and the applicant was to be awarded costs payable by the First Nation in the amount that she requested. The third respondent was granted a cost award payable by the First Nation in an amount lower than what she requested because the Court found her involvement was minimal and the issues in this case were fully addressed by the applicant and the principal three respondents. The Court did not assess costs personally against any of the three respondent councillors. 

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