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Before: |
The Honourable Madam Justice
Rowles |
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(In Chambers) |
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G. J. McDade, Q.C. and J. P. Tate |
Counsel for the Appellants |
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P. J. Pearlman, Q.C. |
Counsel for the Respondents, Minister of Forests and Attorney General of British Columbia |
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C. F. Willms |
Counsel for the Respondents, Skeena Cellulose Inc. and NWBC Timber & Pulp Ltd. |
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Place and Date of Hearing: |
Vancouver, British Columbia |
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June 7, 2002 |
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Place and Date of Judgment: |
Vancouver, British Columbia |
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June 26, 2002 |
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[1] This is an application for leave to appeal an order dated 30 April 2002, dismissing a motion for an interim relief restraining the Minister of Forests from exercising his consent under s. 54 of the Forest Act, R.S.B.C. 1996, c. 157 prior to the final determination of the applicant’s petition brought under the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241. The reasons of the chambers judge dismissing the motion may be found at [2002] B.C.J. No. 991 (Q.L.), 2002 BCSC 597 (sub. nom. Skeena Cellulose (Re)).
Background
[2] Motions for interim injunctions were brought before the chambers judge in two separate proceedings for judicial review. One motion was brought by the Lax Kw’alaams Indian Band and the Metlakatla Indian Band representing the nine tribes of the Allied Tsimshian Tribes Association, and the other by the Gitanyow First Nation. The application before me concerns the order dismissing the motion of the Lax Kw’alaams only.
[3] According to the petition, the aboriginal rights and title claims of the Lax Kw’alaams Indian Band, the Metlakatla Indian Band, and the Allied Tsimshian Tribes Association which the Bands represent, have been submitted to the B.C. Treaty Commission and have been accepted for negotiation by Canada and British Columbia. The applicants are at stage 4 of the treaty negotiation process and are negotiating an Agreement in Principle.
[4] In their petition, the applicants seek the following relief:
A. A declaration that the Minister of Forests and Skeena Cellulose Inc. have an enforceable legal and equitable duty to consult with and to seek an accommodation with the Petitioners prior to the Minister granting his consent pursuant to s. 54 of the Forest Act R.S.B.C. c. 157 in respect of the transfer of control of Skeena Cellulose Inc. in respect of Tree Farm Licence No. 1;
B. A declaration that the Minister of Forests and Skeena Cellulose Inc. have not properly consulted with the Petitioners; and
C. A final Order restraining the Minister of Forests from exercising his statutory power of decision to grant consent pursuant to s. 54 until the legal and fiduciary duty of the Crown has been met by proper consultation with the Petitioners;
D. An interim Order restraining the Minister of Forests from exercising his consent under Section 54 prior to the final determination of this application;
E. In the alternative, if the consent has been issued, an Order setting aside the determination of the Minister of Forests under s. 54; and an Interim order temporarily staying the determination of the Minister pending the final hearing of this application and an Order temporarily restraining Skeena Cellulose Inc. from exercising any powers or permits pursuant to the Tree Farm Licence pending final hearing of this application.
F. Costs; and
G. Such other Orders as this Honourable Court may deem fit.
[5] The petition and the motion for interim injunctive relief were prompted by proceedings under the Companies’ Creditors Arrangement Act (“CCAA”), R.S.C. 1985, c. C-36 in which Skeena Cellulose Inc. (“SCI”) sought approval of the sale of its shares to NWBC Timber & Pulp Limited (“NWBC”). SCI holds various timber licences, including a tree farm licence, use of which may trench on the aboriginal rights and title asserted by the applicants in the treaty process. Approval by the Minister of Forests was a precondition for the completion of the sale transaction transferring the shares of SCI from the Province to NWBC.
[6] The Province of British Columbia had been the principal shareholder in SCI. SCI had been granted protection under the CCAA on 5 September 2001 to provide time for it to complete a restructuring plan. On 20 February 2002, the Province of British Columbia signed a purchase agreement with NWBC for the sale of its shares in SCI.
[7] On 27 March 2002, standard form letters were sent by the Minister of Forests to a number of aboriginal groups informing them that the Minster had received a request for his consent to the transfer of control of SCI to NWBC.
[8] On 2 April 2002 the creditors voted on the CCAA restructuring plan and on 4 April the chambers judge approved the plan. The implementation of the plan and closing of the sale transaction in which ownership of the shares would be transferred to NWBC was scheduled for 29 April 2002.
[9] Between 9 April and 22 April there were various consultation meetings held with aboriginal groups in the north west of British Columbia regarding the sale. In his reasons, the chambers judge noted that the “adequacy of those meetings and whether they constituted appropriate or adequate consultation is very much a live issue in the within proceeding.” He went on to state that it was clear that there was a duty to consult as held by this Court in Haida Nation v. British Columbia (Minister of Forests), [2002] B.C.J. No. 378 (Q.L.), 2002 BCCA 147.
[10] In determining whether an interim injunction should issue, the chambers judge considered the tests set out in RJR‑MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at 334:
First, a preliminary assessment must be made of the merits of the case to ensure that there is a serious question to be tried. Secondly, it must be determined whether the applicant would suffer irreparable harm if the application were refused. Finally, an assessment must be made as to which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits....
[11] Before the chambers judge, counsel for the Minister of Forests and counsel for the Attorney General of British Columbia acknowledged that there was a duty to consult with aboriginal groups whose aboriginal rights or title might be affected by the decision, based on Haida Nation v. British Columbia, supra. They conceded that the first test in RJR‑MacDonald Inc. v. Canada had been met, that is, the applicants had raised a serious question to be tried on the question of whether the Minister had met the constitutional and fiduciary obligation to consult and to seek accommodation with the petitioners prior to consent to the transfer of control of the forest licences from SCI to NWBC.
[12] The chambers judge focused primarily on whether the approval of the Minister of Forests to the change of control of SCI would cause prejudice or irreparable harm to the petitioners. Reference was made to the prejudice or harm asserted by the other petitioner in the following passage of the judge’s reasons:
[16] In the case at bar, the Crown and SCI take the position that the petitioners have not shown that the Minister’s approval of the change of control of SCI will cause them prejudice or irreparable harm. That irreparable harm has been described by counsel for the Gitanyow, in part, as follows. He submits that:
If this consent is given and the rights of the new ordinance of the forest tenures in question have vested, the petitioners will have lost a unique opportunity to engage in a consultation process that could lead to an effective accommodation of their aboriginal rights and title with the objectives of the Crown in granting forest tenures within their territory.
Counsel goes on to submit that such harm cannot be compensated by any amount of damages. He also says that once the Minister of Forests has exercised his consent there will be no opportunity for the Minister to add conditions to his consent that would allow for the accommodation of the interests of the petitioners or to take their concerns into account. If he attempts to add or change conditions after this consent has been granted as a result of subsequent consultation with the petitioners, counsel for the Gitanyow submits that the Minister will be prevented from doing so as the new company owners will be in a position to claim significant prejudice.
[13] Based on the agreement by SCI and NWBC to conditions respecting forest licences issued to SCI under the Forest Act, the chambers judge concluded that the irreparable harm had not been shown. In that regard he said:
[17] On April 24, 2002, the Minister wrote to counsel for NWBC and SCI and he advised of his approval in principle to the proposed change of control of SCI to NWBC. In that letter the Minister set out a number of conditions on the first page having to do with payment of costs and compliance with the timber harvesting contract and subcontract regulations. On page 2 the Minister went on to say this:
In addition, SCI and NWBC must:
1. acknowledge that SCI’s licences issued under the Forest Act and their ancillary permits may be affected by land use planning decisions, aboriginal interests and treaty negotiations with First Nations;
2. acknowledge that the change of control of SCI will be without prejudice to any aboriginal rights of title that may encumber the lands supporting the licences. For the purposes of clarity, this is not an acknowledgement that there are aboriginal rights or title in any of the affected land, rather this is an acknowledgement that the proposed change of control is neutral with respect to any aboriginal right or title that may exist or be established, either through treaty negotiations or through litigation, and;
3. agree in writing to provide within 60 days of the change in control of SCI becoming effective, copies of a business plan for SCI and NWBC to the Regional Manager, Prince Rupert Forest Region, and to a representative of each First Nation asserting aboriginal or treaty rights within the operating area of the SCI.
The letter goes on to say:
The rights and responsibilities described in this letter are for the sole benefit of and binding on SCI, NWBC and the Ministry of Forests and are subject to enforcement by them solely and may not be used or relied upon by third parties for any purpose.
[18] In response to that letter, both SCI and NWBC indicated their general agreement, subject to some changes. The changes were three. The first was:
(a) Revise condition two on page two of the AIP so that condition two reads as follows:
Acknowledge that the change of control of SCI will be without prejudice to any aboriginal rights or title that may exist in or over the land supported in the licenses. For the purposes of clarity, this is not an acknowledgement that there are aboriginal rights or title in or over any of the affected land, rather this is acknowledgement that the proposed change of control is neutral with respect to any aboriginal right or title.
(b) the deletion of the words “and NWBC” on the second line of condition number three on page two of the AIP...
which essentially restricted the provision of the business plan to the business plan of SCI itself, and not SCI and NWBC
… and;
(c) the deletion of the period after the word “purpose” in the paragraph after condition three on page two of the AIP and the addition of the following words:
except aboriginals in respect of their existing aboriginal rights or title.
[14] The chambers judge was of the view that the conditions referred to do “make it clear that the licences and permits held or obtained by SCI may be affected by aboriginal interests and that the change of control is without prejudice to any existing aboriginal rights or title in or to the lands in SCI’s operating areas.”
[15] As to the second test or factor set out in RJR-MacDonald, the chambers judge concluded that there would be little, if any, prejudice to the applicants because the conditions expressly acknowledge that the licences may be affected by aboriginal interests and that the change of control of SCI is without prejudice to any aboriginal rights or title that may encumber the land supporting the licences. He noted that, in addition, SCI was required to provide a business plan to a representative of any aboriginal group asserting rights within the SCI operating area. On the question of prejudice, the chambers judge said:
[21] In my view, the prejudice that will flow to the petitioners if an injunction is not issued is relatively small. These are existing forest tenure licenses and authorities; no new licenses or authorities are being created. The ones that are in place that are held by SCI will continue. What is taking place, in my view, is a very explicit recognition that the change of control that is to be approved by the Minister is being effected with full recognition, by both the Minister as well as NWBC and the other parties, of the existing assertions and claims of the involved First Nations people.
[16] On the question of the balance of convenience, the chambers judge said:
[22] However, to the extent that there is some prejudice, the final issue the Court must consider is the balance of convenience. This requires the Court to weigh the potential impact of granting the injunction against refusing to put an interim injunction in place.
[23] The potential prejudice to SCI, to NWBC, to the creditors, employees and contractors dependant upon SCI, and indeed to many members of the public of British Columbia should the sale not close, in my view, considerably outweighs any prejudice that the petitioners might suffer as a consequence of the Minister giving his final consent to the change in control.
[24] The obligation on the Minister to consider a wide range of interests was raised in the Haida Nation case. In that decision, the Court of Appeal held that both the Provincial Crown and the licensee in that case, Weyerhaeuser, had a legally enforceable duty to the Haida to consult with them and to endeavour to seek workable accommodations between the aboriginal interests of the Haida people on the one hand and the short-term and long-term objectives of the Crown and Weyerhaeuser to manage the particular tree farm license in accordance with the public interest. At paragraph 26 of that decision, the Court emphasized that the Crown Provincial retains the power and indeed has an obligation to balance these interests. I would observe that the balancing of interests in this fashion is not dissimilar to the necessary balancing of interests that a court must undertake during the course of a Companies’ Creditors Arrangement Act proceedings.
[25] In this case, the petitioners have brought these proceedings on the eve of closing. I’m not critical when I say that, the matters in this case proceeded on a relatively tight timeline, but the fact of the matter is that the petitions were filed only last week.
[26] The Minister’s consent is a clear condition precedent to the closing. In my view, the petitioners have failed to demonstrate any significant prejudice or irreparable harm. It is clear that the Minister has made at least some efforts to identify the concerns of the First Nations. He has had reported back to him the consultations that were held and at least some conditions have been incorporated which were intended to address the First Nations concerns. I say that, of course, without making any comment as to whether those consultations were or were not in fact adequate, which will be the subject of the hearing of the petition itself.
[27] The Minister is clearly making a decision which engages the public interest in the broadest sense. There is in this case a very real prejudice to a wide range of individuals if the approval is not allowed to go forward. Finally, there has at this early stage been no assessment of the strength of the petitioners’ claims. Under Haida, until that occurs, there can be no precise determination of the extent of the Minister’s obligation to consult and to seek accommodations.
Arguments on the leave
application
[17] The factors this Court generally takes into account on an application for leave to appeal from an interlocutory order are whether (a) the points the applicant wishes to appeal are of significance not only to the parties but generally; (b) the points to be raised are of significance to the action itself; (c) the appeal is of sufficient merit to warrant scrutiny by a division of the court; and (d) an appeal will unduly hinder the progress of the action.
[18] The issue the applicants wish to go forward on appeal is whether the chambers judge erred in law in failing to grant an interim order to prevent the breach of the Crown’s legal and constitutional duty to consult with them prior to the transfer of control of the forest licences, including the tree farm licence, from SCI to NWBC. The specific points the applicants wish to argue are that the chambers judge: (a) erred in law in his application of the decision in Haida Nation, supra; (b) erred in law and in fact in finding that the transfer of control of a Tree Farm Licence in an area where the applicants claim to have aboriginal title does not cause significant irreparable harm or prejudice to the applicants; and (c) erred in law in the application of the test in RJR-Macdonald Inc., supra, in the context of a clear case of impending breach of fiduciary duty to aboriginal peoples.
[19] The applicants argue that the case is one of general significance or importance because it is the first application of this Court’s decision in Haida Nation, supra, which held that:
[58] ...the Crown Provincial and Weyerhaeuser were in breach of an enforceable, legal and equitable duty to consult with the Haida people and to seek an accommodation with them at the time when the processes were under way for a replacement of T.F.L. 39 and Block 6 and for a transfer of T.F.L. 39 from MacMillan Bloedel to Weyerhaeuser in the year 2000. That enforceable legal and equitable duty has continued from then until the present time and will continue until the Haida title and rights are determined by treaty or by a Court of competent jurisdiction....
[60] ... I would grant a declaration to the petitioners that the Crown Provincial and Weyerhaeuser have now, and had in 1999 and 2000, and earlier, a legally enforceable duty to the Haida people to consult with them in good faith and to endeavour to seek workable accommodations between the aboriginal interests of the Haida people, on the one hand, and the short term and long term objectives of the Crown and Weyerhaeuser to manage T.F.L. 39 and Block 6 in accordance with the public interest, both aboriginal and non-aboriginal, on the other hand.
[20] In the applicants’ submission, the chambers judge erred in principle by failing to give effect to this Court’s recognition that the Crown has “a legally enforceable duty” to consult prior to proof of aboriginal title. The applicants point out that the duty of consultation and the failure of proper consultation were not at issue before the chambers judge, for those were conceded by the respondents, in relation to the first branch of the RJR-MacDonald analysis, to raise a serious question.
[21] The applicants argue that this case raises issues of fact and law that are substantially similar to Haida Nation with the significant difference that the injunction application preceded the exercise of the Crown power without consultation. They submit that the decision of the chambers judge fails to accord with the reasoning in Haida Nation, supra, and that it was within the court’s power to make the duty of consultation and accommodation meaningful.
[22] The applicants further submit that the ruling of the chambers judge effectively precludes any realistic possibility of interim orders being issued in respect of the failure of the Crown to consult on a proposed transfer of control (s. 54 of the Forest Act) or a renewal of a major Forest Licence or Tree Farm Licence (s. 35 of the Forest Act), even when the consultation has been either inadequate or non-existent.
[23] In dismissing the application, the chambers judge observed that an assessment of the strength of the petitioners’ claims had not been made and that “under Haida, until that occurs, there can be no precise determination of the extent of the Minister’s obligation to consult and to seek accommodations” [para. 27]. However, the applicants are well along in the treaty process which presumably would have permitted the Provincial Crown to assess the nature and strength of their claims to aboriginal rights and title.
[24] The applicants point out that the duty of consultation and failure of proper consultation were not at issue before the chambers judge as those matters were conceded, as part of the RJR-MacDonald analysis, to raise a serious question. In their submission, this case raises the question: If the clear failure to consult in a case where the duty exists cannot be enforced before the decision, how can it be enforced at all?
[25] The applicants submit that the application of the Haida Nation case also raises important constitutional issues concerning the extent of rights protected by s. 35 of the Constitution Act, 1982 and the remedy for non-compliance.
[26] In opposing the leave application, the respondents argue that leave ought not to be granted, for the order made by the chambers judge was a discretionary one and leave to appeal such an order will only be granted where the order was exercised on a wrong principle or a serious injustice will occur. The respondents contend that the chambers judge made no error in principle and because of the conditions the Minister of Forests imposed with respect to the transfer of control of the licences from SCI to NWBC, little if any prejudice could result to the applicants. As well, the respondents argue that leave to appeal should not be granted when an appeal of the order would be academic.
Should leave to appeal be
granted?
[27] I am satisfied that the points the applicants wish to argue on appeal are of general importance and are of sufficient merit to warrant scrutiny by a division of this Court.
[28] I am also of the view that while the applicants are seeking leave to appeal from an order that may now be moot in the sense that the Minister of Forests’ consent to the transfer of the forest licences has now been given and the sale of shares to NWBC completed, the issues the applicants wish to argue are not necessarily academic. In that regard, I note what was said in paragraphs 55 through 61 of Haida Nation, set out below:
[55] The discharge of the obligation to consult, as expressed in Sparrow, Gladstone, and Delgamuukw, has been framed as an element among the circumstances which would justify a prima facie infringement of the aboriginal title or aboriginal rights. As I have said, the consultation must take place before the infringement. But where there are fiduciary duties of the Crown to Indian peoples it is my opinion that the obligation to consult is a free standing enforceable legal and equitable duty. It is not enough to say that the contemplated infringement is justified by economic forces and will be certain to be justified even if there is no consultation. The duty to consult and seek an accommodation does not arise simply from a Sparrow analysis of s. 35. It stands on the broader fiduciary footing of the Crown's relationship with the Indian peoples who are under its protection.
[56] All those decisions will underlie the final orders that will be made declaring the respective rights of the parties in relation to the continuation, modification, or replacement, of T.F.L. 39 and in relation to compensatory damages, if any, for unjustified or only partly justified infringement of the aboriginal title and aboriginal rights of the Haida people.
[57] Of course, as both this Court and the Supreme Court of Canada have said many times, a negotiated settlement, by treaty or otherwise, complete or partial, is always better than a judgment after litigation pursued to the end.
[58] As I have said, the Crown Provincial and Weyerhaeuser were in breach of an enforceable, legal and equitable duty to consult with the Haida people and to seek an accommodation with them at the time when the processes were under way for a replacement of T.F.L. 39 and Block 6 and for a transfer of T.F.L. 39 from MacMillan Bloedel to Weyerhaeuser in the year 2000. That enforceable legal and equitable duty has continued from then until the present time and will continue until the Haida title and rights are determined by treaty or by a Court of competent jurisdiction. But it does not necessarily follow that the replacement of T.F.L. 39 in 2000 and the transfer to Weyerhaeuser are either invalid or void. That question was not, in my opinion, sufficiently fully argued on this appeal. And it could much more readily be argued after the extent of any infringement of aboriginal title and rights by T.F.L. 39 has been determined by a Court of competent jurisdiction.
[59] For those reasons I would not now make an order about the validity, invalidity, or partial validity of T.F.L. 39 and Block 6. That does not mean that, if circumstances change, there cannot be consideration of that question as an interim matter in these proceedings on the basis of proper argument and full facts. But it seems to me that the proper time to determine that question would be at the same time as the determination of aboriginal title, aboriginal rights, prima facie infringement, and justification, by a Court of competent jurisdiction. At that time also the question of whether the Provincial Crown title is encumbered by aboriginal title and rights is likely to be determined and argument could be directed to the effect of any such encumbrance on T.F.L. 39.
[60] However, I would grant a declaration to the petitioners that the Crown Provincial and Weyerhaeuser have now, and had in 1999 and 2000, and earlier, a legally enforceable duty to the Haida people to consult with them in good faith and to endeavour to seek workable accommodations between the aboriginal interests of the Haida people, on the one hand, and the short term and long term objectives of the Crown and Weyerhaeuser to manage T.F.L. 39 and Block 6 in accordance with the public interest, both aboriginal and non-aboriginal, on the other hand.
[61] In the end, the manner in which the duty to consult and reach accommodations is discharged in the immediate and the long-term future will have a very significant impact on the final determinations by a court of competent jurisdiction which is considering the aboriginal title and aboriginal rights of the Haida people, about whether that title or those rights have been infringed, or continue to be infringed, and, particularly, about whether any infringement was justified.
[62] The extent to which any further remedies may be required or may properly be claimed at a later but still interim stage in these proceedings cannot now be predicted. Much may depend on the quality of the consultation and accommodation processes. So, to the extent it may be thought necessary, I would order that the parties have liberty to apply to a judge of the Supreme Court of British Columbia for whatever orders they may be instructed to seek, pending the conclusion of the proceedings with respect to the determination of aboriginal title and aboriginal rights, infringement and justification.
[29] While the applicants were unsuccessful in their application for interim relief in the trial court, I understand that they intend to proceed with their petition. During oral argument, I raised with counsel the timing of the hearing of the appeal, should leave be granted, and suggested that the appeal might be stayed until after the petition had been heard and determined. In this case, while the precise nature of the aboriginal title or aboriginal rights of the applicants has not been determined and will not be determined in the proceedings in the court below, the applicants are at stage 4 of the treaty process and, for that reason, the Crown provincial was presumably in a position to have made some assessment of the nature and strength of the applicants’ claims in determining the extent of the consultation and accommodation that was required.
[30] In my view, it would be appropriate to make an order staying the appeal of the order dismissing the application for an interim injunction until such time as the petition is heard. If the applicants are successful in obtaining a declaratory order such as the one granted in Haida Nation, they may decide not to pursue the appeal. If they are unsuccessful and an appeal is brought, the appeals may conveniently be heard together because the underlying issues in respect of the claim for interim relief and for a declaratory order would be similar.
[31] I should add that staying the appeal of the order dated 30 April 2002 would not preclude other interim applications being made in this case if, for example, the conditions imposed by the Minister of Forests on the transfer of control from SCI to NWBC are not adhered to.
[32] In summary, I would grant leave to appeal but stay the appeal until the applicants’ petition has been heard and determined in the court below.
"THE HONOURABLE MADAM JUSTICE ROWLES"