New grounds for litigating

Defence lawyers are grappling with how to wrap their minds around the implications of a recent ruling that could mean costly and drawn-out litigation for companies faced with environmental damage lawsuits brought by aboriginal communities.

After the Supreme Court refused to grant leave to appeal a British Columbia Court of Appeal decision, it is now possible for aboriginal people to directly sue private companies for environmental harm on a piece of land over which they don’t already have an established title.

In Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc., the respondents contested the applicant First Nation communities’ claim on the basis their interest in the land in question is asserted but not yet proven. But the appeal court said the actual proving of aboriginal title, an expensive and tedious process often involving the Crown, could be argued within the action against the private company.

 “That is a significant step,” says Vancouver-based environmental and aboriginal law lawyer David Bursey, a partner at Bennett Jones LLP. “The proving of titles is no small matter. It involves significant resources.
It could take a decade and many, many millions of dollars on both sides to prove it. That’s a tremendous burden that’s [now] put on private companies.”

An appeal court in Quebec decided in a similar fashion in a related case, Uashaunnuat (Innus de Uashat et de Mani-Utenam) v. Compagnie minière IOC inc. That ruling will also not be appealed at the top court.

The rulings have significant impact for industries, including the possibility of facing actions for activities that have been licenced by the Crown, Bursey says.

The applicants in Saik’uz First Nation “are not suing the Crown for the issuance of the licence to [Rio Tinto Alcan Inc.], they are suing the private company directly,” he adds.

In the case, Nechako Nations brought an action against Rio Tinto for nuisance and for breach of riparian rights as a result of the company’s diversion of water from the Kenney Dam, which they allege affected the flow and temperature of water, caused erosion of the banks, and brought unnatural sedimentation in the riverbed with consequences for fisheries resources.

Typically, when aboriginal people seek declaration of status, the Crown bears the brunt of that type of litigation, but these rulings could mean the industry getting caught up in that battle when First Nations communities feel their rights are being infringed by a natural resource project, says Jennifer Fairfax, a regulatory and environmental lawyer at Osler Hoskin & Harcourt LLP.

That means “the industry may not be able to get out of the litigation in a preliminary way,” Fairfax says.
“What you might find is the industry [getting] caught up in lengthy and costly litigation.”

When it comes to defending claims of aboriginal title, the Crown not only has the resources but also the appropriate information, Bursey adds.

Both the Quebec and B.C. rulings bring about the question of whether it is appropriate for defendant companies to try to rebut First Nations’ claim of title, says Wally Braul, aboriginal and environment lawyer at Gowling Lafleur Henderson LLP in Calgary.

“Isn’t that the proper role of the Crown?” Braul says, adding it wouldn’t be surprising if the Crown is brought in as a third party to these cases.

Beyond the question of appropriateness, of course, is the cost of a labour-intensive endeavour to disprove claims of title “hectare by hectare,” Braul adds.

“At least in theory, it’s the defendant industry group that’s going to have an enormous job on its hands to rebut arguments that there is, in fact, in that particular valley or area, aboriginal rights and title,” he notes. 

In Saik’uz First Nation, a lower court judge had initially found the claim had no reasonable chance of success, but that finding was reversed on appeal.

“The alleged impacts are not trivial and are arguably unreasonable. Accordingly, on the basis of the pleaded facts, it is not plain and obvious that the Nechako Nations do not have a reasonable cause of action in private nuisance,” wrote Justice David Tysoe on behalf of the unanimous appeal court.

Added Tysoe: “Based on the above analysis, the claims of private nuisance, public nuisance and interference with riparian rights, to the extent they are based on Aboriginal title and other Aboriginal rights, should not have been struck because it is not plain and obvious that, assuming the facts pleaded to be true, the notice of civil claim discloses no reasonable cause of action in respect of those claims. 

“However, the chambers judge did strike these claims because the assertions of Aboriginal title and other Aboriginal rights have not yet been proven (or accepted by the Crown). In my opinion, he was in error in doing so.”

In effect, the appeal court said it was reinforcing the already established idea that aboriginal rights exist prior to a court declaration. To find otherwise would constitute creating a “unique prerequisite” to the enforcement of aboriginal title and other aboriginal rights, Tysoe said.

“Under this approach, these rights could only be enforced by an action if, prior to the commencement of the action, they have been declared by a court of competent jurisdiction or are accepted by the Crown,” he continued. “In my view, that would be justifiable only if aboriginal title and other aboriginal rights do not exist until they are so declared or recognized. However, the law is clear that they do exist prior to declaration or recognition. All that a court declaration or Crown acceptance does is to identify the exact nature and extent of the title or other rights.”

The BCCA also said it could be argued that requiring aboriginal people to have declared rights prior to bringing an application is inconsistent with the principle of equality under the Charter of Rights and Freedoms.

By way of an example, the court said had a lessee of land sued Rio Tinto in private nuisance and there was some issue with respect to the validity of the lessee’s lease, the lessee wouldn’t be required to prove the validity of its lease prior to bringing the application, Tysoe said. Instead, the lessee would be entitled to prove the validity of its lease within the action itself, the judge added.

The Quebec Court of Appeal similarly found that only “the clear and manifest absence of legal foundation allows an action to be dismissed” pursuant to the Code de procédure civile.

If aboriginal people meet the burden of proof to get declaration of title, the next interesting legal question becomes whether the company defendants can argue the infringement was justifiable, according to Braul.

In Tsilhqot’in Nation v. British Columbia, the SCC has found that provinces can justifiably infringe aboriginal rights, but it remains unclear if that defence would be available for industry defendants, Braul adds.

According to Fairfax, the B.C. appellate court’s decision not to strike out the case is not in fact surprising given courts must assess whether it’s “plain and obvious” that there is no cause of action in a case assuming the allegations in the pleadings are true.

“The court in B.C. had to assume the aboriginal title or rights claimed actually existed. Given that state of play, it’s not surprising the court then had to dismiss the motion to strike,” she says. “It’s not surprising, too, that the Supreme Court of Canada refuse to grant leave because that’s a very trite, common test.”

Plaintiff-side environmental lawyer David McRobert says it was “really a stretch” for the defendants in the Quebec case to claim the Innu First Nations community did not have established rights over the land.
They have, for decades, documented their interests in the land for the harvesting of caribou, berries, and fish, he says.

“It’s indisputable that they have recognized interests in those areas,” he says. “It seems to me what might have happened is, you know, Rio Tinto might have looked at the degree of the claim, and thought, ‘Boy, this is a huge amount of money, let’s see if we can knock it out.’”

The Supreme Court’s refusal to grant appeal in these cases comes in the context of a recent report from the Boreal Leadership Council on gaining consent from aboriginal communities prior to starting projects.
The report says obtaining consent is important even when aboriginal title has not been established.

“The SCC’s Tsilhqot’in decision underscored that without obtaining consent prior to aboriginal title being established, it might become necessary to cancel an approved extractive or other kind of project upon establishment of title if continuation of the project would unjustifiably infringe these rights,” the report says.

“It follows that consent is the mechanism that will offer the most certainty for proponents who wish to develop projects on aboriginal title lands,” the report adds.

Benjamin Lee, vice president, legal and general counsel for TimberWest Forest Corp., says as it becomes clear that companies will face lengthy litigation on claims such as the one in Saik’uz First Nation and Stellat’en First Nation, it’s even more important to engage stakeholders around the area of operation.

“You need to have a stakeholder map, you need to know where the touch points are with First Nations.
That’s your starting point,” Lee says. “If you’re not operating on that level, you are going to be subject to risk.

“I think this is relevant to a mining company, an energy company, an oil and gas company, or a forestry company,” he adds. “You’ve got to know that if you’re operating within an area and there is asserted aboriginal title or rights, you need to be careful about how you conduct your business.”

That engagement process with the aboriginal community must start very early, and industries need to make sure First Nations benefit from the project, Lee says.

McRobert says resource companies have a poor record of defeating First Nations communities in court.
Prior consent and dialogue with these communities, he adds, is increasingly becoming the favourable option.

“The companies need to sit down with First Nations and clarify exactly what kind of activities are going to be implemented, on what time frame, and how that will impact on land use,” McRobert continues. “It requires creativity and imagination on the part of lawyers, and I’m convinced we have a whole generation of younger lawyers who are coming up the system and see the potential.”

There’s already good recognition in the industry that dialogue between companies and aboriginal people needs to happen granted the duty is consultation rests on the Crown, Fairfax says.

“The Crown can delegate certain aspects of that duty to companies and there might be more of an onus perhaps on companies to ensure that steps are being taken and that duty is met,” she adds. 

In Saik’uz First Nation and Stellat’en First Nation, Rio Tinto argued the Supreme Court had previously dismissed any notions that third parties have legal obligations to aboriginal groups prior to proof of the rights in question.

Rio Tinto’s counsel cited Haida Nation v. British Columbia (Minister of Forests), in which the top court says: “It is suggested (per Lambert J.A.) that a third party’s obligation to consult aboriginal peoples may arise from the ability of the third party to rely on justification as a defence against infringement. However, the duty to consult and accommodate, as discussed above, flows from the Crown’s assumption of sovereignty over lands and resources formerly held by the aboriginal group. 

“This theory provides no support for an obligation on third parties to consult or accommodate. The Crown alone remains legally responsible for the consequences of its actions and interactions with third parties, that affect aboriginal interests.”

According to Bursey, the BCCA ruling contradicts this finding by the Supreme Court. “It seems to be an unwinding of that clear principle in paragraph 53 of the Haida case,” he says.

But in justifying its ruling, the BCCA said the same Supreme Court decision has clarified that while third parties are under no duty to consult, they’re not immune to liability to aboriginal peoples when “they act negligently in circumstances where they owe aboriginal peoples a duty of care.”