The BC Supreme Court dismissed an application by the respondents BC Hydro and the provincial Minister of Energy to strike out a petition as disclosing no reasonable claim. The petitioners Kleana Power Corporation and Da’naxda’xw/Awaetlala First Nation sought an order that the respondent Minister direct BC Hydro to enter into good faith negotiations with Kleana for the acquisition of power from Kleana on the same terms as a “clean power call” in 2008. The Court held that it was not “plain and obvious” that the petition was fatally flawed.

In an earlier proceeding, the petitioners had challenged a decision of the Minister of Environment regarding the amendment of boundaries to a conservancy area within the First Nation’s asserted traditional territory. The conservancy would prevent the development of a run-of-the-river hydro-electric project proposed by Kleana that was supported by the First Nation. Kleana had sought to participate in the 2008 process for the sale of clean power to BC Hydro. In 2011, the BC Supreme Court held that the Crown had not complied with its duty to consult in relation to the conservancy amendment decision: Da’naxda’xw/Awaetlala First Nation v. British Columbia, 2011 BCSC 620. In that decision, Madame Justice Fisher commented that the First Nation had lost a unique opportunity, and declared that the Minister of the Environment had a legal duty to consult about the proposed amendment to the conservancy boundary.

The consultation subsequently took place in 2012 and the conservancy boundary was amended. The petitioners allege that Minister of Energy had promised that if the conservancy boundary was amended, BC Hydro would be directed to “keep a place open” for Kleana and negotiate on the basis of the 2008 “clean power” process. In September 2012, the Minister directed BC Hydro to enter into negotiations, but not tied to the prices in the 2008 process. The petitioners allege that the project is not viable unless the 2008 prices are used.

The Court dismissed the respondents’ application to strike out the claim. Most of the Court’s analysis involves principles of judicial review and the scope of the Judicial Review Procedure Act. The Court reviewed the allegations in the petition and the proposed amended petition, and held that it was not plain and obvious that the allegations are not subject to judicial review.

In regards to Aboriginal law issues, the petitioners had alleged that they are entitled to the orders sought because of the “unique circumstances” of a First Nation dealing with the government over an economic development opportunity. They say that the Minister’s decision in September 2012 was inseparable from the earlier breach of the duty to consult found by Fisher J. in 2011, and perpetuates the earlier violation. They referred to cases like Rio Tinto and Haida about the flexibility of remedies for a breach of the duty to consult. The petitioners alleged that “it would be dishonourable for a Minister of the Crown to disregard a promise given by this predecessor on which a First Nation relied”.

The respondents took the position that the interest of the First Nation in seeing Kleana obtain an electricity purchase agreement on profitable terms is not the same interest considered by Fisher J. in the earlier proceeding. They argued that a landowner with unrestricted rights does not have the right to sell to an unwilling customer, so even proven Aboriginal title would not give the First Nation the right to require BC Hydro to buy power from Kleana. The Court held:

The respondents are right to point out that there is no duty to agree, and that even landowners with unrestricted rights do not have the right to sell a commodity to an unwilling buyer at a price the buyer is not prepared to pay. I doubt the petitioners dispute these points. However, it does not follow that it is plain and obvious the petitioners are bound to fail in advancing the “unique legal context” and breach of a duty to consult as a legal basis for the orders sought.

Fisher J. did not see the adverse impact of the Environment Minister’s decision concerning the conservancy boundary on the Da’naxda’xw’s claim as speculative. She concluded (at para. 136) that the effect of the Environment Minister’s decision “is a certainty that the Project will not be realized. The Da’naxda’xw have lost a unique opportunity, which is significant to them, especially considering the remote location of their traditional territories.” Later in her reasons, Fisher J. said:

[181] I have earlier found that the potential impact of the Minister’s decision was not speculative. . . . While the extent of the Da’naxda’xw’s lost economic opportunity is by no means certain, the effect of the decision definitively puts an end to the Project and this future use of the land is now foreclosed. …

The petitioners have pleaded that, in the current circumstances, and without the remedies they are seeking, the Project is not viable … Thus, the original adverse impact described by Fisher J. remains unresolved. The petitioners say that they are entitled to be put back in the same position they would have been in but for the breach of the duty to consult the Da’naxda’xw regarding the conservancy boundary, and that they were promised in May 2008 that the Project would not be prejudiced as a result of any delay.

The petitioners allege that the failure to direct negotiations on the basis of the 2008 process effectively puts an end to the project, and this has an adverse impact on the Aboriginal title interests of the petitioner First Nation. Adair J. held: “this is sufficient to support the legal basis asserted, and I am not persuaded that it is hopeless and bound to fail”.

The respondents’ application to strike out the petition was therefore dismissed
http://www.courts.gov.bc.ca/jdb-txt/SC/13/20/2013BCSC2074.htm

Scott Kerwin, Partner
Aboriginal Law
BLG, Vancouver
604-640-4029
SKerwin@blg.com

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law