The Alberta Court of Queen’s Bench rejected an application by an oil exploration and production company to strike out the Lubicon Lake Nation’s action on the basis that it was duplicative of a parallel Aboriginal title claim. The Court held that the plaintiff can continue its claim in relation to trespass and Aboriginal rights and title. However, portions of the plaintiff’s claim which amounted to a collateral attack on the validity of the licences and permits issued to the defendant were struck. Although the plaintiff’s claim was framed in trespass, at the heart of the action was the claim that the permits and licences should never have been granted. This was an abuse of process and a collateral attack on the approvals.

The Lubicon Lake Cree is a group of First Nations people asserting Aboriginal rights and title to lands near Sawn Lake and Haig Lake, Alberta. Two groups claim to represent the Lubicon: the plaintiff Lubicon Lake Nation (LLN) and the Lubicon Lake Band. Since February 2013, Alberta has advised industry parties to consult only with the Band.

The defendant Penn West Petroleum Ltd. and Penn West Exploration (“Penn West”) carries on operations in lands near Sawn Lake, and obtained a number of approvals between 2011 and 2013 (the “Approvals”) in relation to that work. During this time, Penn West consulted with the Lubicon Lake Band. In addition, Chief Ominayak of the plaintiff LLN spoke with a Penn West official in 2011 and indicated that he had no concerns with the Sawn Lake operations.

In 2012, the LLN filed letters of objection with the Alberta Energy Resources Conservation Board in regards to the issuance of licences to Penn West. The Board considered and rejected the objections. The LLN took no further steps and did not seek judicial review of the Board’s decision.

In June 2013, the LLN commenced an action (the “Crown Action”) seeking a declaration of Aboriginal title to its traditional lands, including an area of land east of Peace River, and a declaration that all oil and gas leases, and permits granted by Alberta, were illegal and of no effect. The federal Crown and Alberta were named as defendants.  Penn West was not named as a defendant in the Crown Action, but its Approvals fall within the lands claimed by the LLN.

In November 2013, the LLN commenced the underlying action against Penn West. The LLN asserts Aboriginal rights and title to the lands at Haig Lake, and claims that the Approvals granted to Penn West were illegal, null, void and have no effect. The plaintiffs further allege trespass and interference with their rights in two small parcels of land near Haig Lake and Bison Lake.

The Band was not named as a party to either the Crown Action or this action.

Penn West applied for an order that this action be struck as an abuse of process on the grounds that it virtually duplicates the Crown Action and attempts a collateral attack on the Approvals.

Tort Action Not Duplicative of Aboriginal Title Claim

The Court held that this action was not duplicative of the Crown Action. Simpson J. agreed that certain elements of this action were indeed identical to the Crown Action in many respects, as the essence of both claims relates to the Lubicon’s control of the lands and resources. However, the causes of action are different. There are different defendants in the actions. The Crown Action names the federal and provincial Crowns as defendants, and involves public law matters. Referring to the recent decision of the B.C. Court of Appeal in Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc., 2015 BCCA 154 (summarized in this e-Newsletter), Simpson J. held that the LLN’s cause of action in the Penn West case may exist before a declaration of title (the remedy sought in the Crown Action). He stated:

I conclude that the duplication in the Penn West action is not an abuse of process. In fact the Plaintiffs must plead their right to possession in order to support their cause of action in trespass. The following analogy explains this.

If the Plaintiffs purportedly leased 25 quarters of farmland and became involved in a dispute with the lessor as to their right to be in possession of the land, the Plaintiffs would plead in one action all of the facts supporting their right of possession as against the lessor. If, as well, an oil company, spilled a toxic substance thereby creating a nuisance or trespassed on one quarter section of the land, the Plaintiffs would have to again plead all of the same facts supporting their right to possession of the land as against the lessor in order to claim in negligence, nuisance or trespass against the third party in another action. The issue of the Plaintiffs’ right of possession in the second action raises the same issues as the first action, but in no way renders it an abuse of process.

Simpson J. held that any concern about inconsistent verdicts could be addressed by a consolidation of actions or perhaps an adjournment of one action.

Challenge to Validity of Approvals Barred by Doctrine of Collateral Attack

The Court agreed with Penn West that this action, insofar as it involves a claim that the Approvals are invalid, constitutes a collateral attack. There is a process for judicial review and appellate review that must be followed. To wait and launch a collateral attack is an abuse of process.

The Court reviewed the law on the rule against collateral attacks, such as British Columbia (Workers’ Compensation Board) v. Figliola, 2011 SCC 52. This doctrine was applied to aboriginal rights claims in Behn v. Moulton Contracting, 2013 SCC 26. In that case, the Supreme Court of Canada held that the issue of the duty to consult should have been raised when the Crown authorizations were granted, but there was no application for judicial review. Other Aboriginal law cases include Gwininitxw v. British Columbia, 2013 BCSC 1972 and Canadian Forest Products Ltd. v. Sam, 2013 BCCA 58. The Court disagreed with the plaintiff LLN that such cases were distinguishable, and that such an approach would have the effect of limiting their rights and remedies to administrative law in “flagrant breach” of the protection of section 35 of the Constitution Act, 1982.

Mr. Justice Simpson also discussed the recent decision of the B.C. Court of Appeal in Rio Tinto Alcan in which cases like Behn v. Moulton Contracting and Sam were distinguished on the issue of collateral attack. Simpson J. held that he was “unable to follow the Court’s reasoning”. He disagreed with the Rio Tinto Alcan court that the Supreme Court of Canada decision in Behn v. Moulton Contracting did not deal with collateral attack. The Court in that case used the same analytical language as the doctrine of collateral attack. Simpson J. rejected the LLN’s argument that Behn could be distinguished on the basis that it dealt with treaty rights. The Court stated:

While the Respondents’ claims in the Penn West action are founded in private law, the questions of whether the approvals were properly granted are questions of public law. 

In Rio Tinto the BCCA acknowledged that Sam was decided on the issue of collateral attack (at paragraph 113). At paragraph 114 both Behn and Sam are distinguished on the basis that the Nechako Nation was not challenging the validity of the license in question (a matter for judicial review), but are rather saying that the government had no constitutional authority to grant the license (constitutionally inapplicable). With respect, I am not convinced that this is a distinction with a difference for if the licence was granted without constitutional authority, is it not invalid?

Simpson J. noted that the LLN explicitly attacked the validity of the Approvals in the Penn West action. The LLN did not seek judicial review of the Board’s rejection of their objections in 2012, and to allow this action to proceed would permit a collateral attack. The Court also noted the evidence that Chief Ominayak of the LLN advised Penn West in 2011 that he had no problem with Penn West’s operations. Allowing this action to proceed in light of such evidence would be a repudiation of the duties of mutual good faith that animates the consultation process. Simpson J. further commented:

To allow a collateral attack on the open and transparent tribunal process with the additional protection of judicial review and appellate review, would give rise to a high degree of risk for corruption. If the process can be collaterally attacked, it would create great temptation for corporations to offer payoffs to claimants or provide contracts to them for little or no service so as to avoid collateral attacks.

Further, it creates legal and economic uncertainty if the tribunal process is not followed and the authorization process hijacked by later aboriginal rights claims. How can a corporation proceed with authorized development if some time later it might face legal action despite its best efforts to follow the law? (See for example Sam at paragraphs 24-27.)  The uncertainty would create an impasse, not legal and economic certainty.

Penn West may ultimately rely upon the validity of the Approvals as a defence, as did the defendant in the Rio Tinto Alcan case, but that is a matter for another day.

The Court therefore dismissed Penn West’s application to strike out the LLN’s statement of claim. The LLN can continue its clam in relation to Aboriginal rights and title and in relation to the trespass claim against Penn West. However, portions of the statement of claim which amount to a collateral attack on the validity of the Approvals must be struck.

http://www.canlii.org/en/ab/abqb/doc/2015/2015abqb342/2015abqb342.html

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law