$25-million legal fee dispute rumbles on years after SCC’s landmark Tsilhqot’in ruling
Former lead lawyer’s duplicative claim against First Nations struck as abuse of process
Almost seven years on from a landmark decision establishing Aboriginal title for the first time in Canada, some of the lawyers and First Nations bands involved remain mired in a dispute over an outstanding $25-million legal bill for the proceedings.
The Supreme Court of Canada’s 2014 ruling in Tsilhqot’in Nation v. British Columbia – which granted Aboriginal title over an area of land in central B.C. to the Tsilhqot’in Nation, a semi-nomadic grouping of six bands – marked the culmination of a three-decade long dispute with B.C.’s provincial government.
But, as a recent decision by B.C. Supreme Court Justice Karen Horsman shows, that wasn’t the end of the story for the lawyers involved, who ended up duelling with each other over how best to pursue their clients for payment of $25 million in outstanding legal fees and disbursements.
Justice Horsman’s decision dealt with separate, but virtually identical, claims from both Jack Woodward – the lead lawyer on the Tsilhqot’in Nation file in its early days – and his former partners at Woodward & Company LLP.
The judge ultimately ordered Jack Woodward’s new firm to pay special costs to the Tsilhqot’in National Government (TNG) and Xeni Gwet’in First Nations Government, after striking his claim for payment as an abuse of the court’s process.
The Aboriginal title claim itself arose out of commercial logging licences granted by the Province in 1983 on land considered part of Tsilhqot’in traditional territory.
Jack Woodward was the lead lawyer for TNG during the mammoth 339-day trial, which took place over five years between 2002 and 2007 and ended with a judge finding that the band had established occupation for the purpose of proving title.
By the time the matter reached the nation’s top court, Jack Woodward had taken a backseat, and his new partners in the freshly formed Woodward & Company argued the case. After the Supreme Court of Canada victory, the law firm bought out Jack Woodward’s remaining interest in Woodward & Company, but maintained the name.
According to Justice Horsman’s ruling, a clause in the purchase agreement dealt with the TNG matter, providing that Jack Woodward’s company would receive 50 per cent of any recovery, but collection efforts would be undertaken exclusively by Woodward & Company.
“[Woodward & Company LLP] was concerned with maintaining good relations with the TNG and the Xeni Gwet’in, and protecting the firm’s goodwill and reputation,” Justice Horsman’s ruling explains. “[Woodward & Company LLP] says that Mr. Woodward, by contrast, had no economic interest in maintaining good relations with [Woodward & Company LLP]’s clients, and his relationship with the TNG and the Xeni Gwet’in appeared to have deteriorated by November 2014. [Woodward & Company LLP] was also concerned that Mr. Woodward might be motivated to reach a quick settlement of the fee dispute, and thereby compromise the firm’s interest in recovering fees under the retainer.”
The law firm delivered its final bill in May 2016 for fees and disbursement totalling $25,530,042.29, but ended up suing its former clients at the New Westminster courthouse on Dec. 27, 2018 after negotiations regarding payment broke down.
A day later, Jack Woodward’s company launched its own action in Vancouver seeking an identical amount, and later argued in court that it should take over as plaintiff in the New Westminster action because Woodward & Company had unreasonably delayed its prosecution of the claim.
The lawyers had not resolved the duplication issue between themselves by the time the defendants were served in both actions, prompting the TNG and the Xeni Gwet’in to apply for each action to be struck as an abuse of process.
In her decision, Justice Horsman found the two fee recovery actions were “plainly and obviously duplicative.”
“It is unnecessary and vexatious for the defendants to have to defend two separate lawsuits brought by plaintiffs who are common in interest and pursuing a single claim. Furthermore, this is not simply, as the plaintiffs have maintained, a case management issue. Abuse of process is a substantive doctrine that serves fundamental policy objectives such as protecting the principle of finality in litigation, ensuring that litigants are not vexed twice by the same cause, preserving the courts’ and litigants’ resources, and upholding the integrity of the legal system in order to avoid inconsistent results,” she wrote. “All of these policy objectives are implicated by the commencement of multiple claims by a plaintiff against the same defendants in relation to a single cause of action.”
Considering Jack Woodward’s company had failed to contest Woodward & Company’s exclusive right to advance a claim for fees, Justice Horsman concluded that his Vancouver action should be struck as an abuse of the court’s process, and allowed the law firm’s New Westminster action to proceed.
In addition, she granted an application for special costs brought by TNG and the Xeni Gwet’in against Jack Woodward’s company regarding the Vancouver action, concluding that its conduct “through the course of the litigation was reprehensible and deserving of rebuke within the meaning of the relevant authorities.”
Despite their success resisting the application to strike the New Westminster action, Woodward & Company was also ordered to pay the ordinary costs of TNG and the Xeni Gwet’in.
Concluding that the law firm was not “entirely blameless” for the circumstances that led to the applications, Justice Horsman found a departure from the presumptive rule of costs in the cause was justified by its failure “to address the duplicative litigation earlier, which effectively forced the TNG and Xeni Gwet’in into bringing the applications to strike.”
Only Jack Woodward responded to a request for comment, telling Court Report Canada in a statement issued via his counsel that his only remark was: “After all these years I still haven’t been paid for all that work I did.”
Follow us on Twitter @CourtReportCA
Story tips or comments to CourtReportCanada@gmail.com