** Unedited **

                           Indexed as:
                        Vriend v. Alberta

    IN THE MATTER OF The Constitution Act, 1982 enacted by The
  Canada Act, 1982 (U.K.) and The Canadian Charter of Rights and
   Freedoms and the Individual's Rights Protection Act, R.S.A.
                     1980, c. I-2 as amended

                             Between
   Delwin Vriend and GALA - Gay and Lesbian Awareness Society of
    Edmonton, Gay and Lesbian Community Centre of Edmonton
     Society, and Dignity Canada Dignite for Gay Catholics and
            Supporters, respondents (applicants), and
   Her Majesty the Queen in Right of Alberta and Her Majesty's
       Attorney General in and for the Province of Alberta,
                     appellants (respondents)

                       [1996] A.J. No. 643
                           DRS 96-10372
                     Appeal No. 9403-0380-AC

                     Alberta Court of Appeal
                        Edmonton, Alberta
                 McClung, O'Leary and Hunt JJ.A.
                Judgment:  filed:  July 15, 1996.
                             (18 pp.)

     [Ed. note:  Original reasons for judgment were released
February 23, 1996.  See [1996] A.J. No. 182.]

     Appeal from the judgment of the Honourable Madam Justice
Russell of the Court of Queen's Bench of Alberta dated April
12, 1994.

  Practice -- Costs -- Appeals -- Costs of appeal -- Public
interest litigation.

  Determination of costs of an appeal.  Vriend was fired from
his teaching position on the basis of his homosexuality. Vriend
and three public interest groups commenced an action for a
declaration that Alberta violated the Canadian Charter of
Rights and Freedoms by failing to include sexual orientation as
a prohibited ground of discrimination in the Individual Rights
Protection Act.  Vriend was successful at trial but the
decision was overturned on appeal.  Alberta sought party and
party costs for the appeal.  Vriend argued that no costs should
be awarded as this was a test case involving issues of public
interest.

  HELD:  Alberta was entitled to party and party costs.
Substantial public funds were spent to defend the action and
only a fraction of these costs would be recovered.  The
litigation involved a challenge of a validly enacted public
statute and the circumstances did not justify deviating from
the customary costs rule.

Statutes, Regulations and Rules Cited:
  Alberta Rules of Court, Rules 518, 601(1).
  Canada Elections Act, R.S.C. 1985, c. E-2.
  Canadian Charter of Rights and Freedoms, 1982, s. 15.
  Individual Rights Protection Act, R.S.A. 1980, c. I-2.

Counsel:
     J.T. McCarthy, Q.C. for the appellants.
     S.J. Greckol for the respondents.
     D.K. Miller for the Alberta Federation of Women United
          for Families, Intervenor.
     Ms. S.P. Chotalia for Alberta Civil Liberties
          Association, Intervenor.
     D.J. Corry for Canadian Human Rights Commission,
          Intervenor.
     G.D. Chipeur for Focus on the Family (Canada)
          Association, Intervenor and for The Evangelical
          Fellowship of Canada, Intervenor.
     R.S. Abells for Canadian Jewish Congress, Intervenor.

              SUPPLEMENTARY REASONS FOR JUDGMENT

     Reasons for judgment were delivered by O'Leary J.A.,
concurred in by McClung J.A.  Separate reasons were delivered
by Hunt J.A.

[para1]     O'LEARY J.A.:-- The majority of the Court allowed
the appeal of the Province of Alberta ("the Crown") and set
aside the decision in Queen'S Bench in favour of the
respondents.  The costs of the appeal are now in issue.

[para2]     The unsuccessful respondents ask the Court to
depart from the accepted rule that costs follow the event and
order that each party pay its own costs.  The Crown submits
that the usual rule should apply and seeks party-and-party
costs on the scale provided by the Rules of Court, that is
Column 2 of schedule C, including a fee for second counsel.
It does not claim reimbursement for the travelling and
accommodation costs of counsel, nor does it seek costs of the
proceedings in Queen's Bench where the respondents were
successful.

[para3]     The respondents argue that the circumstances of
the case justify depriving the successful party of its costs.
They say that the issues raised were matters of public
interest and the proceedings were in the nature of a test
case.

[para4]     Costs are in the discretion of the Court (Rule
601(1)).  The discretion may be exercised to deprive a
successful litigant of costs where the case is one of public
interest or is in the nature of a test case:  See Orkin, The
Law of Costs, (2nd ed., 1995) at pp. 2-37 - 2-38:

     An action or motion may be disposed of without costs when
     the question involved is a new one, not previously
     decided by the courts on the theory that there is a
     public benefit in having the court give a decision; or
     where it involves the interpretation of a new or
     ambiguous statute; or a new or uncertain or unsettled
     point of practice; or where there were no previous
     authoritative rulings by courts; or decided cases on
     point; or where the application concerned a matter of
     public interest and both parties acted in complete good
     faith ... or where the action was a test case; or where
     it was desirable to resolve a conflict in the case law.
                                              [emphasis added]

[para5]     The public interest character of litigation had
been advanced by unsuccessful parties as justifying a no-costs
order and by successful parties as meriting enhanced costs.
Both approaches were rejected by this Court in Reform Party of
Canada v. Canada (Attorney-General) (1995), 32 Alta. L.R. (3d)
430.  The Reform Party successfully challenged a provision of
the Canada Elections Act, R.S.C. 1985, c. E-2, on the basis of
the charter and the Canadian Bill of Rights.  The Trial Judge
applied the traditional rule and awarded costs to the Reform
Party on a party-and-party basis but on an enhanced scale.
The appeal of the Attorney-General of Canada was dismissed,
however the success of the Reform Party on appeal was based on
different grounds than at trial.  The Court made the following
general comment at p. 431:

     It is suggested that heavier costs should be awarded for
     public interest litigation, especially under the Charter.
     Some reported cases suggest lighter, or no, costs for the
     same type of case.  We are inclined to disagree with both
     suggestions, and approach such litigation from the usual
     principles of costs.

[para6]     The Court then upheld the award of costs at trial
and ordered that the parties share the costs of the appeal
equally, in effect a no-costs order.  The Court considered the
fact that the success of the Reform Party on appeal was based
on different grounds than at trial, and the issues on which it
lost on appeal had lengthened the appeal.  Success was divided
and the costs of the appeal were allocated without reference
to the public interest nature of the litigation.

[para7]     A similar approach was taken in Can. Newspapers
Co. v. Canada (AG) (1986), 12 C.P.C. (2d) 203 (Ont. S.C.).
Three media companies successfully challenged the
constitutional validity of federal criminal legislation.  They
sought costs on a solicitor/client basis.  They argued that,
although the issues directly affected their rights, the rights
of a large segment of the population were also affected and
the litigation was in the public interest.  The
Attorney-General of Canada asked that no costs be assessed
against it on the ground that the action was redundant in view
of a similar challenge pending in another province.  Osler, J.
rejected both positions and held that the successful
applicants should recover costs against the Attorney-General
of Canada on a party-and-party basis only.  At p. 305 he made
the following comment about the disposition of costs in public
interest cases:

     The line is sometimes a fine one but in the present case
     there can be no doubt that a serious challenge has been
     made and ably supported and that each of the challengers
     had a bona fide interest on behalf of itself and on
     behalf of the public in ascertaining the validity of the
     legislation.  On the other hand, the award of
     solicitor-and-client costs should not be made in such
     cases unless some form of misconduct on the part of the
     unsuccessful party can be found .... While it is
     desirable that bona fide challenge is not to be
     discouraged by the necessity for the applicant to bear
     the entire burden, it is equally desirable that the Crown
     should not be treated as an unlimited source of funds
     with the result that marginal applications would be
     encouraged.

[para8]     I respectfully adopt the views expressed in these
cases and find that the circumstances do not justify deviating
from the customary rule that the successful party is entitled
to costs.

[para9]     It must be remembered that this special interest
litigation was brought to challenge a validly enacted
statutory provision of the Legislative Assembly of the
Province of Alberta.  It failed.  The expenditure of
substantial public funds was necessary in the defence of what
is, after all, a public statute.  Only a fraction of that
amount will be recovered under the modest cost demands of the
Crown, if recovery is made at all.  The unrecoverable expense
of this litigation represents money diverted from needed and
under-funded government programs.

[para10]     The Crown is entitled to recover the costs of the
appeal from the respondents on a party-and-party basis with
the fees to be taxed on Column 2 of schedule C to the Rules of
Court, the costs to include all reasonable disbursements
except the travelling and accommodation expenses of counsel.
In addition, the Crown is entitled to tax a fee of $750.00 in
respect of its written submission on the issue of costs.

[para11]     The Crown claims a fee for second counsel who
attended throughout the hearing.  The material filed by the
Crown and the respondents was voluminous and was supplemented
by an equally large amount of material from the Intervenors.
The complexity and importance of the issues and the amount of
material required to be considered and dealt with in oral
argument justified the attendance of second counsel.  A second
counsel fee may. be taxed on the same scale as the other fees.

O'LEARY J.A.
McCLUNG J.A.

[para12]     HUNT J.A.:-- The appellants were successful on
their appeal, in a 2-1 decision in which three separate
reasons for judgment were issued.  In my opinion, the case
involved an important and novel point of law, namely whether,
the provincial Legislature could be said to have breached s.
15 of the Charter, in refusing to include sexual orientation
as a prohibited ground of discrimination under the Individual
Rights Protection Act ("IRPA").  The case arose when the
individual respondent Vriend was fired from his job as a
teacher due to his homosexuality, and when the Alberta Human
Rights Commission refused to act upon his complaint because
the IRPA did not include sexual orientation as a prohibited
ground of discrimination.  Along with three organizations
(described in the respondents' written submission on costs as
"public interest groups"), he sought declaratory relief.  Six
other organizations were granted intervener status by this
Court; some supported the appellants' position and some
supported the respondents' point of view.  Argument took two
days.

[para13]     In written submissions, the appellants have
asserted that this is a case in which the normal rule (that
costs follow the event) should be applied.  They have sought
only the costs of the appeal pursuant to Column 2 of the
tariff, with no multiplier, as well as second counsel fee.
They have correctly pointed out that the case was very
complex; the participants to the appeal relied upon over 200
authorities.

[para14]     The respondents, on the other hand, have argued
that no costs should be awarded because this case involved a
matter of public importance; it crystallized a number of
Charter issues that may have an impact on individuals or
groups seeking to establish s. 15 violations; and it will
provide guidance to other courts and legislatures, given that
the dispute was about the interaction of those two
institutions.  Further, it was submitted that this was a test
case.

[para15]     Rule 518 provides that the Court may make such
order "as to it seems just".  According to Orkin (The Law of
Costs, 2nd ed. (1995) at 2-37-2-38)), there are a number of
circumstances in which this discretion may be exercised by
awarding no costs.  Although making no distinction between
cases at a first hearing and appeals, he lists as examples
novel cases and cases involving a matter of public interest,
where both parties have acted in good faith.  There is no
issue of bad faith in the conduct of this litigation.

[para16]     The respondents have cited several cases in which
trial courts and the Supreme Court of Canada have made no cost
award.  Dickason v. University of Alberta (1992), 95 D.L.R.
(4th) 439 (S.C.C.) involved the validity of a university's
mandatory retirement policies.  Dickason, a professor,
challenged this policy under the IRPA.  She succeeded before a
board of inquiry and in an appeal by the University to the
Court of Queen's Bench, but was unsuccessful before the
Alberta Court of Appeal and before the Supreme Court of
Canada.  The Supreme Court split 4-3, with the majority
accepting the argument that the age discrimination was
reasonable and justifiable under the circumstances.
Notwithstanding the University's ultimate success, no costs
were awarded on the appeal by the Supreme Court of Canada, on
the ground that the case was a test case.

[para17]     Similarly, in B.(R.) v. Children's Aid Society of
Metropolitan Toronto (1995), 122 D.L.R. (4th) 1 S.C.C.), affg.
(1992), 96 D.L.R. (4th) 45 (Ont. C.A.), the Supreme Court made
a no costs order on an appeal, even though the appellant
parents (Jehovah's witnesses who had refused a blood
transfusion for their child) were unsuccessful in arguing that
their Charter rights had been infringed when the child was
made a ward of the state and a blood transfusion was
administered to the child.  There, the lower court had awarded
the costs against the intervening provincial Attorney-General,
which award of costs was left undisturbed by the Supreme
Court.  La Forest, J. noted at 55 that such an award of costs
"appears highly unusual" and should be permitted "only in very
rare cases".  But he observed that the case had raised
"special and peculiar problems", so he was loathe to interfere
with the exercise of a discretion by the District Court, when
that exercise of discretion had been upheld by the Court of
Appeal.

[para18]     L'Heureux-Dube, J. dissented as to the cost award
made by the trial judge.  In so doing, she thoroughly reviewed
the jurisprudence and underlying principles concerning when
there ought to be deviation from the "normal" rule that costs
follow the event.

[para19]     At 70 she stated that the resources available to
the parties should not generally be a factor in awarding
costs.  She observed that governments ought not to be treated
as a source of unlimited funds; otherwise, marginal
applications for constitutional challenges would be
encouraged.  But she also noted at 71 that there are some
cases where governments ought to bear the cost of litigation.
One such situation is:

     ... where it is in the government's interest or that of
     the public to have a matter decided by the courts, such
     as the interpretation of legislation, constitutional
     rulings of particular importance, etc.  However,
     generally in such cases there is a prior understanding
     that the costs will be borne by the government,
     independently of the result.

[para20]     At 78, however, she expressed the view that the
case at hand was not really a test case.  If it were, she
said, the proper rule would be a no costs order.  She rejected
any suggestion that an intervening Attorney-General should
have to pay the costs in all cases raising a matter of
national significance or in all cases involving the Charter
(except, as previously discussed, if it is the government's
intent to have a Charter issue decided in the public
interest.)  In the case before her, she was of the view that
the main issues at stake were those of the appellants rather
than the public.

[para21]     In Canadian Council of Churches v. Canada (1992),
88 D.L.R. (4th) 193 (S.C.C.) no costs were awarded by the
Supreme court on the appeal, although no reasons were given
for this decision.  There, the issue was the appellant's
standing to bring a declaratory application that involved the
Charter and the Canadian Bill of Rights.  The Federal Court of
Appeal had struck out portions of the appellant's statement of
claim, and both sides appealed.  No costs were awarded on the
appeal, even though the appeal was dismissed and the
cross-appeal by the Crown allowed, with the result that the
Crown was ultimately successful in having the entire statement
of claim struck.

[para22]     In Reform Party of Canada v. Attorney General of
Canada [1993] 3 W.W.R. 171 (Alta. Q.B.), affirmed (1995) 32
Alta. L.R. (3d) 430 (Alta. C.A.), a five-person panel of this
Court considered whether the trial judge's award of costs to
the Reform Party ought to be altered, in light of the fact
that the Reform Party had less success on the appeal than at
trial.  The panel concluded that there was no reason to alter
the cost order below, since it was unlikely that the trial
would have been much shorter had fewer issues been raised by
the Reform Party.  The decision contains the following brief
passage at 431:

     It is suggested that heavier costs should be awarded for
     public interest litigation, especially under the Charter.
     Some reported cases suggest lighter, or no, costs for the
     same type of case.  We are inclined to disagree with both
     suggestions, and approach such litigation from the usual
     principles of costs.  In any event, success here was
     mixed and neither party acted from wholly altruistic
     motives.
                                              [emphasis added]

[para23]     The above passage suggests a narrow approach to
"public interest" litigation, including Charter cases.  But I
do not think the passage is entirely categorical, especially
since there is virtually no discussion of the issues.  Nor
does the decision consider the test case argument.  It seems
to me that the Reform Party case leaves open at least the
possibility that there may exist cases where a no costs order
would be appropriate, notwithstanding the result of the
appeal.

[para24]     There is no information before the Court about
the financial circumstances of the respondents.  In any event,
relativity of resources is not the critical factor.  I agree
with L'Heureux-Dube, J.'s view that governments should not be
considered to have limitless resources, particularly given the
current financial constraints under which all governments in
this country operate.  Moreover, the respondents have not put
their submissions about costs on that basis.

[para25]     At the federal level, there is a funding program
that subsidizes the pursuit of important Charter litigation.
No such program exists in Alberta.

[para26]     In some cases, issues of costs are agreed in
advance between the parties.  There are cases (and, in my
view, this was one of them) where such arrangements are highly
desirable.  But that did not occur here.  The cases reviewed
above suggest that, before the Supreme Court, cost
arrangements are sometimes made a condition of leave to appeal
being granted.  But few cases before this Court require leave.
I am not sure whether this Court, in most cases, would have
the jurisdiction to make a costs order in advance of the case
(which, in this case, it was never asked to do).

[para27]     Is there, then, anything so special about this
case that a deviation from the normal costs rules would be
justified?  As I have noted, it involved a novel point of law.
The only existing appellate authority on essentially the same
issue, Haig v. Canada (1992), 94 D.L.R. (4th) 1, supported the
legal view advocated by the respondents.  After the Haig
decision (which was not appealed by the Government of Canada),
the Supreme Court specifically invited consideration of the
issue that had arisen in Haig:  the Court invited the parties
in Canada (Attorney-General) v. Mossop (1993), 100 D.L.R.
(4th) 658 to submit arguments concerning the Charter.  As
Lamer, C.J.C. said at 671 of Mossop:  "This would have enabled
this court to address the fundamental questions argued in the
Ontario Court of Appeal in Haig.  It would then have been
possible to give a much more complete and lasting solution to
the present problem."  The parties in Mossop, however, declined
this invitation.

[para28]     But mere novelty is not enough.  Courts
(especially appeal courts) frequently decide cases that raise
novel issues.  If novelty alone were the test, there would be
a deluge of cases where a deviation from the normal rule would
be claimed.  This is especially so in the Charter era.

[para29]     This case, however, went beyond mere novelty as
to the legal issues.  It was a case that can truly be
described as a test case, that is, a case where the parties
seek primarily to settle a point of law, and where the impact
of that rule on those parties is of secondary importance to
the settlement of the rule itself.

[para30]     The appellants have argued that Vriend had a
direct economic interest in the outcome of the litigation
because he had been fired.  That is true.  But the legal issue
did not merely concern individuals who have been fired because
they are homosexual.  It concerned the rights of anyone who is
in a group that can claim s. 15 protection.  Vriend's economic
interest in the outcome of the litigation pales in contrast.
The argument that his personal interest in the case became
subsumed by the larger issues is buttressed by the fact that
this Court permitted six organizations to intervene on the
appeal.  Thus, in contrast to what L'Heureux-Dube, J.
concluded in Children's Aid Society, in my view this case
mostly concerned rights affecting the larger public interest;
Vriend's rights became of secondary importance.

[para31]     Clearly, there is a heavy public interest
component to the legal question dealt with on the appeal.  The
question posed is fundamental to the functioning and role of
the Legislature.  The appellants clearly thought so, for they
launched the appeal.  The respondents had initiated the action
and been successful at first instance.  They had no option but
to participate in the appeal or abandon the rights they had
won below.

[para32]     The respondents also argue that this is a special
case because the Supreme Court of Canada, in Egan v. Canada
[1995] 2 S.C.R. 513, described the group whose rights are at
issue here as having suffered from historical disadvantage and
as continuing to experience social, economic and political
disadvantage.  It is true that cases under s. 15 of the
Charter will often involve such groups and individuals,
perhaps to a greater extent than most cases under other
sections of the Charter.  If there is never any possibility of
a deviation from the normal costs rules for such groups and
individuals, it is hard to see how they will ever achieve the
equality that they have been promised.  The Charter provides
them with a procedure through the courts for seeking redress
from unfair treatment at the hands of governments.  Given the
high cost of litigation, however, that procedure may seldom be
available to the parties who most need it, unless in
appropriate s. 15 cases the courts adopt special rules about
costs.

[para33]     When these various facets of the case are taken
into consideration (the importance of the issue to the
appellants, as well as to Parliament and other legislatures;
the fact that, in another case, the Supreme Court had
specifically but unsuccessfully sought argument on the legal
question at issue; the relatively small scope of Vriend's
interest in the outcome, compared to the interest of the group
of which he is a member and other groups in Canada that may
claim s. 15 rights; the fact that s. 15 protects equality
before the law, but provides litigation as the only method
through which that promise may be pursued), I am satisfied
that this case was indeed a test case and that a deviation
from the normal rule as to costs ought to be permitted.

[para34]     Given all this, I would have been prepared to say
that this was a case when costs ought to have been awarded
against the appellants, notwithstanding their success on the
appeal.  The respondents have, however, merely sought a no
costs order.  Accordingly, that is the order I would make.

[para35]     I acknowledge that the cost claim of the
appellants is relatively modest.  Although mine is not the
prevailing view, I nevertheless hope that the appellants will
consider not pursuing from the respondents the costs to which
the majority has said they are entitled.

HUNT J.A.

QL Update:  960722
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