Understanding Legal Costs in Canadian Immigration Judicial Reviews

Many applicants believe that winning their case in Federal Court automatically means the government will pay their legal fees. However, the reality of awarding costs in Canadian immigration litigation is far more complex. It's a discretionary power of the Court, guided by specific rules, the conduct of both parties, and the unique circumstances of each case.

This article explores the principles behind legal costs through the lens of recent Federal Court decisions. We'll uncover why some successful applicants receive significant cost awards while others receive none, and what factors can even lead a winning party to pay the government's costs. Understanding these dynamics is crucial for anyone considering a Judicial Review of an immigration decision.

The General Rule: Costs in Immigration Cases are the Exception

In most civil litigation, the losing party pays a portion of the winner's legal fees. Immigration law, however, operates differently. The Federal Court will generally only consider awarding costs if there are “special reasons” to do so. This is a high bar to clear. An officer making a mistake or an unreasonable decision is typically not enough. The court is looking for something more-conduct that is unfair, improper, or an abuse of the legal process.

When Unreasonable Delays Create 'Special Reasons'

One area where the Court has found “special reasons” is in cases of extreme and unjustified processing delays. Applicants are expected to be patient, but that patience has limits, especially when IRCC fails to provide a coherent explanation for the inaction.

This was the situation in Mohammad Jahazi v. Minister of Citizenship and Immigration, 2024 FC 2072, where Mr. Jahazi’s citizenship application was stuck in limbo for a staggering ten years. The Court found this delay to be prima facie unreasonable, requiring a strong explanation from the Minister-one that was not provided. The ruling emphasized that such unjustified delays can justify an award of costs to maintain public confidence in the justice system. The Court noted, “In my view, the delay of approximately ten years that occurred before the Minister made a decision on Mr. Jahazi's citizenship application was unreasonable and unjustified. In the face of such a long delay, the decision was prima facie unreasonable and required a cogent explanation by the Minister.”

Similarly, in Habibi v. Canada (Citizenship and Immigration), 2025 FC 1675, a 36-month delay in a citizenship application due to an unexplained security check was deemed unreasonable. The delay had forced the applicant to take a job in the U.S., separating him from his family. The Court granted the mandamus order and awarded costs, stating pointedly that an applicant should not have to “bear the cost of any and all arbitrary and unexplained delays.”

Abuse of Process by the Minister

The Court also takes a dim view of conduct that constitutes an abuse of the legal process. In The Minister of Citizenship and Immigration v. Shiyuan Shen, 2025 FC 1175, the Minister's conduct caused significant delays and was found to be an abuse of process. This was enough to establish the “special reasons” needed for a cost award. While the Court awarded a lump sum of $5,500, it also exercised restraint, confirming that even with serious misconduct, full reimbursement of legal fees is rare in immigration proceedings.

Why Winning Isn't Always Enough for a Costs Award

Even with a successful Judicial Review, an applicant may walk away without a costs award if they cannot demonstrate the necessary “special reasons.” This principle was clearly articulated in two key cases.

The High Threshold for 'Special Reasons'

In Issa v. Canada (Citizenship and Immigration), 2025 FC 1971, the applicant successfully overturned an immigration decision but was denied costs. The Court was clear: winning the case is not, by itself, a special reason. The Minister is entitled to defend a decision in court, and an officer’s error does not automatically equate to the kind of bad faith or oppressive conduct required to justify awarding costs.

This was echoed in Contreras Monterroso v. Canada (Minister of Citizenship and Immigration), 2025 FC 170, where a mandamus application was dismissed. The judge acknowledged the applicant's frustrations but dismissed the application without costs, finding no “special reasons” were present. These cases underscore that the focus for costs is on the *conduct* of the parties, not just the outcome of the Judicial Review.

The Strategic Perils: How Your Own Actions Can Cost You

An applicant's litigation strategy and conduct can have a profound impact on the final determination of costs. Pursuing a meritless case or, more surprisingly, refusing a reasonable settlement offer can lead to significant financial consequences.

Rejecting a Good Settlement Offer Can Backfire

Perhaps the most counterintuitive lesson comes from cases where a winning applicant is ordered to pay the government's costs. In Alldowell v. Canada (Attorney General), 2025 CF 1850, the government admitted it had breached procedural fairness and offered the applicant the exact remedy he was seeking-a redetermination of his grievance. The applicant rejected this offer and insisted on a hearing. He won, but the Court ordered him to pay $500 in costs to the government, calling it a “symbolic amount” because pursuing the litigation after a reasonable offer was not in the public interest.

A similar principle was at play in Matta v. Canada (Attorney General), 2025 FC 807. The applicant was partially successful in her Judicial Review of a CERB decision, but because she had rejected a reasonable settlement offer that would have given her a similar outcome, the Court awarded costs to the government. The judge stated, “The Court's decisions on costs should serve to motivate litigants to accept reasonable settlement offers.”

The Price of a Meritless Appeal

On the flip side, pursuing a case with little to no chance of success can result in elevated costs. In STEELHEAD LNG (ASLNG) LTD. and STEELHEAD LNG LIMITED PARTNERSHIP v. ARC RESOURCES LTD., ROCKIES LNG LIMITED PARTNERSHIP, ROCKIES LNG GP CORP., and BIRCHCLIFF ENERGY LTD., 2025 FCA 5, the Federal Court of Appeal awarded elevated costs of $40,000 against the appellants, emphasizing the profound lack of merit in their appeal. The Court noted that while it’s sometimes reasonable to pursue a low-chance case, “this was less than a low-chance case.” This serves as a powerful warning: a careful assessment of a case's strength is crucial before proceeding with litigation.

Professional Misconduct Has Consequences

In a rare and serious move, the Court can even order a lawyer to personally pay costs for misconduct. In Maan v. Canada (Public Safety and Emergency Preparedness), 2025 FC 1804, the applicant's lawyer failed to appear at hearings and communicate properly with the Court. While dismissing the Judicial Review, the Court ordered the lawyer to personally pay $1,500 in costs, stating that showing up is the “sine qua non of effective legal representation.”

Key Lessons on Legal Costs

• Winning Doesn't Guarantee Costs: In immigration judicial reviews, success on the merits is not enough. You must demonstrate “special reasons,” such as unreasonable delays or abuse of process by the government, to be awarded costs.
• Evaluate Settlement Offers Seriously: Rejecting a reasonable settlement offer from the government can lead to an adverse cost award against you, even if you ultimately win your case.
• Your Conduct Matters: The Court scrutinizes the behaviour of all parties. Pursuing meritless claims, abandoning arguments, or failing to follow court procedures can result in financial penalties.
• Costs are Partial Indemnity: Even when awarded, costs are not meant to cover your entire legal bill. As clarified in EAST COAST HYDRAULICS & MACHINERY (2009) LIMITED v. INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, LOCAL 1976, 2025 FCA 208, costs are calculated based on a set tariff and are intended only as a partial contribution.
• Public Interest Can Increase Awards: In exceptional cases, particularly those involving public interest, access to justice, or a significant power imbalance, the Court may award elevated costs, as seen in Cully v. Canada (Attorney General), 2025 FC 1379.

Navigating the Federal Court system requires more than just a strong case; it demands a strategic understanding of the entire process, including the complex and often unpredictable nature of awarding costs. Have you ever wondered about the financial risks of challenging an immigration decision?