Executive Summary: Key Legal and Evidentiary Issues

• The central issue on appeal was whether the chambers judge erred in applying the normal costs rule — that costs follow the event — following unsuccessful constitutional litigation challenging the Medicare Protection Act, R.S.B.C. 1996, c. 286.
   
• Appellants Cambie Surgeries Corporation and Specialist Referral Clinic (Vancouver) Inc. argued the judge misapprehended facts about their revenues and profits by relying on unproven statements made by counsel for the Attorney General of British Columbia.
   
• Financial evidence presented at the costs hearing showed Cambie's annual revenues from 2015 to 2017 ranged from approximately $9.8 million to $11.6 million, with profits between $251,089 and $442,286, while SRC's 2016 revenues were approximately $10.3 million with net income of $449,717.
   
• Whether the corporate appellants qualified as genuine public interest litigants was contested, as they held direct pecuniary interests in the outcome — both as private healthcare providers and as entities that had allegedly been operating in contravention of the MPA throughout the litigation.
   
• The appellants also challenged the chambers judge's consideration of the overall efficiency of the litigation as an additional factor when determining whether to depart from the normal costs rule.
   
• Receiving over $7 million from the Canadian Constitutional Foundation to cover a significant portion of their own legal fees and disbursements was found relevant to the appellants' demonstrated capacity to bear costs.

Facts of the case

Cambie Surgeries Corporation ("Cambie") and Specialist Referral Clinic (Vancouver) Inc. ("SRC"), collectively the appellants, appealed the order of Justice Whately granting trial costs to the Attorney General of British Columbia ("AGBC"). The costs hearing arose from earlier constitutional litigation in which the appellants challenged the validity of certain provisions of the Medicare Protection Act, R.S.B.C. 1996, c. 286 ("MPA"). That underlying case — heard by Justice Steeves over 194 days, spanning September 6, 2016 to February 28, 2020, across three and one-half years — resulted in the dismissal of the appellants' claims that the MPA prevented patients from accessing medically necessary health care and thereby violated their rights under ss. 7 and 15 of the Charter: 2020 BCSC 1310 ("Trial Reasons"). The dismissal was upheld on appeal to the Court of Appeal: 2022 BCCA 245 ("Appeal Reasons"). Leave to appeal to the Supreme Court of Canada was denied: [2022] S.C.C.A. No. 354.

The litigation had a lengthy procedural history. On December 4, 2008, a group of citizens filed a petition against the Medical Services Commission of British Columbia seeking a declaration that several private medical centers, including Cambie, were participating in billing practices which violated the MPA. On January 28, 2009, Cambie and a number of other plaintiffs separately filed a Statement of Claim alleging that sections of the MPA violated their Charter rights. The original three defendants — the Commission, the AGBC, and the Minister of Health Services of British Columbia — filed a statement of defence and counterclaim on February 20, 2009, naming SRC as a defendant by counterclaim. The trial, originally expected to last 24 weeks and initially set to begin on September 2, 2014, was delayed several times for various reasons, including the Ministry of Health's inadvertent failure on March 2, 2015 to disclose thousands of potentially relevant documents. The record ultimately included 590 exhibits totalling thousands of pages, oral testimony and affidavits from 75 lay witnesses, and 40 expert reports, with most of those experts being cross-examined during the trial. Justice Steeves made over 50 substantive evidentiary rulings over the course of the trial.

Following Justice Steeves' retirement before costs submissions could be made, the costs applications were heard by Justice Whately in chambers over two days in July 2024. The AGBC sought costs only against the corporate plaintiffs, Cambie and SRC. On January 27, 2025, Justice Whately issued the Costs Reasons (2025 BCSC 123), concluding that the normal costs rule should apply and that the AGBC was entitled to costs of the trial as the successful party.

Statutory provisions and legal framework at issue

The normal costs rule — that costs are awarded to the successful party unless otherwise ordered — is stated in Rule 14-1(9) of the Supreme Court Civil Rules, B.C. Reg. 168/2009. The court retains discretion to depart from the normal rule, with the burden resting on the party seeking deviation to prove the rule is unsuitable on the facts of the case. The applicable legal framework for assessing costs in public interest litigation derives from the five factors set out in Guide Outfitters Assoc. v. British Columbia (Information and Privacy Commissioner), 2005 BCCA 368, as addressed in British Columbia (Attorney General) v. Trial Lawyers Association of British Columbia, 2022 BCCA 354. Those factors require courts to consider: (a) whether the proceeding involves issues of importance extending beyond the immediate interests of the parties; (b) whether the litigant has no personal, proprietary, or pecuniary interest in the outcome, or if they do, whether that interest clearly does not justify the proceeding economically; (c) whether the issues have not been previously determined; (d) whether the defendant has a clearly superior capacity to bear costs; and (e) whether the plaintiff has not engaged in vexatious, frivolous, or abusive conduct. An unsuccessful public interest litigant is not automatically insulated from adverse costs; rather, the court must apply all five factors to determine whether the normal rule is unsuitable.

Reasoning and analysis

The Court of Appeal considered three alleged errors. The first was whether the chambers judge misapprehended facts by adopting statements made by AGBC counsel about the appellants' revenues and profits. The Court found no such misapprehension: the chambers judge accurately attributed those statements to counsel, noted she was "not in a position to precisely weigh the financial benefits and costs of pursuing the litigation," and based her finding on actual financial statements in evidence. Those statements showed Cambie's revenues from 2015 to 2017 ranged from approximately $9.8 million to $11.6 million, with profits between $251,089 and $442,286; SRC's revenues for 2016 were approximately $10.3 million with net income of $449,717, and in 2017 its revenue was $10.8 million with net income of $440,622.

The second alleged error concerned the chambers judge's application of the first, second, and fourth Guide Outfitters factors. The Court rejected the argument that the chambers judge improperly conflated the first and second factors or gave insufficient weight to the public importance of the litigation. The Court affirmed that the Guide Outfitters factors are not to be assessed in silos but as part of a holistic "exercise of principled discretion." The appellants were correctly found to have a direct and not insignificant pecuniary interest in the outcome, standing in contrast to true public interest litigants. On the fourth factor — capacity to bear costs — the Court noted that evidence showed the appellants received over $7 million from the Canadian Constitutional Foundation to cover a significant portion of their own legal fees and disbursements, and that they bore the onus of tendering evidence to show they could not afford to bear costs.

The third alleged error was whether the chambers judge erroneously considered the overall efficiency of the litigation as a factor in her analysis. The Court disagreed with the appellants' submission that litigation conduct is only relevant if it rises to the level of vexatious, frivolous, or abusive behaviour. The Court held that the awarding of costs in public interest litigation remains an exercise of principled discretion, and it would unduly constrain that discretion if a trial court could not consider the parties' conduct when deciding on the appropriate costs order. The appellants were found largely responsible for the inefficiencies that contributed to the excessive length of the trial, though the Ministry of Health's late disclosure of documents — which resulted in a lengthy delay to the trial start date — was a mitigating consideration.

Ruling and outcome

The Court of Appeal, with written reasons by Justice Butler concurred in by Justice DeWitt-Van Oosten and Justice Mayer, dismissed the appeal. The appellants failed to demonstrate any error in law or principle warranting appellate intervention in the chambers judge's highly discretionary costs decision. The AGBC, as the successful party, was entitled to trial costs under the normal costs rule. The exact quantum of the costs award was not specified in this decision.