Candice S. Metallic

The First Nations moved to vary costs awards against the Estate of William Albin Herold, seeking to make Jeffrey S. Herold, the Estate Trustee, jointly and severally liable for over $190,000 in costs.

This motion was brought under Rule 59.06(2)(a) after the First Nations discovered that Mr. Herold had personally received a transfer of Lot 35, the property forming the basis of the Estate's claim to certain islands, a fact not disclosed during the original litigation.

The Court of Appeal dismissed the motion regarding Supreme Court of Canada costs, stating it lacked authority, but granted the variation for its own costs awards.

The court found that the non-disclosure was a material fact, not a mere irregularity, and that Mr. Herold was the true litigant, satisfying the "person of straw" test for imposing costs on a non-party.

This is a costs endorsement following a successful appeal by the Attorney General of Canada and several First Nations against the Estate of William Albin Herold.

The Court of Appeal had previously allowed the appeals and set aside the lower court orders.

In this endorsement, the court fixed the costs of the proceedings below at $154,530.76, awarded to the appellant First Nations, as the Attorney General of Canada did not seek costs below.

The court also varied its previous appeal costs award, granting the full $43,000 (inclusive of disbursements and taxes) to the appellant First Nations, with no costs awarded to the Attorney General of Canada on appeal, in accordance with a prior agreement between the parties.

The Estate of William Albin Herold claimed ownership of three islands in Lake Katchewanooka, arguing they were conveyed as part of Lot 35 by Letters Patent in 1868, despite having separated from the mainland due to rising water levels.

The application judge found in favour of the Estate, applying a "Flooding Principle" to fix the boundary and concluding that treaties with First Nations did not affect the Crown's right to sell.

The Court of Appeal allowed the appeals by the First Nations and the Attorney General of Canada, finding that the application judge made extricable errors of law by failing to objectively ascertain the parties' intentions in the Letters Patent, misapplying the Flooding Principle, and not properly considering the Crown's treaty obligations.

The appellate court concluded that the Letters Patent did not convey the islands, as they were physically separate, separately identified, and subject to specific Crown obligations under Treaty 78.