The British Columbia Court of Appeal reversed an order of the chambers judge relating to a claim brought by two First Nations against Rio Tinto Alcan Inc. in relation to the storage and diversion of water at the Kenney Dam. The B.C. Supreme Court had held in December 2013 that the plaintiffs had no reasonable claim based upon the law of private nuisance, public nuisance, and interference with riparian rights, and therefore dismissed the action. The Court of Appeal set aside this order and held that it was not “plain and obvious” that such claims would fail. The Court of Appeal only agreed that the portion of the claim concerning interference with riparian rights, to the extent that such a claim was based upon the plaintiffs’ interest in their reserves, should be struck. The Court of Appeal also agreed with the chambers judge that Alcan’s application for summary judgment, based upon the defence of statutory authorization, should be dismissed. Finally, the Court of Appeal rejected Alcan’s argument that portions of the plaintiffs’ pleadings, in which they alleged that the statutory authority relied upon by Alcan for its defence of statutory authorization was constitutionally inapplicable to their Aboriginal rights, constituted a collateral attack on Alcan’s water licence and was therefore an abuse of process.

The underlying action was brought on behalf of the Saik’uz First Nation and the Stellat’en First Nation (the “Nechako Nations”). The Nechako Nations allege that the construction of the Kenney Dam in 1952 by the defendant Rio Tinto Alcan (“Alcan”) has diverted and altered the water flowing to the Nechako River, with significant adverse impacts on the waters and its fisheries resources. The Nechako Nations claim that they were neighbouring First Nations of Central Carrier ancestry, with ownership and use of territory along the Nechako at the time of British sovereignty in 1846. They allege that the diversion and alteration of water flow constituted an unreasonable interference with their proprietary rights, causing harm to such interests. They bring this action on the basis of the law of private nuisance or, in the alternative, public nuisance. They also relied upon riparian rights based upon Aboriginal title interests and reserve land interests.

Alcan defended the claim on the basis that the water diversion and storage activities were undertaken with the express authorization of the Province of British Columbia, and that the plaintiffs lacked standing because their claims of Aboriginal land rights are not proven. Alcan applied to strike the plaintiffs’ pleadings (Rule 9-5) and for an order of summary judgment (Rule 9-6) on the basis that the defence of statutory authorization constitutes a full defence to the claims. The Nechako Nations filed a Reply to the defences pleaded by Alcan alleging, among other things, that the statutory authority relied upon by Alcan was constitutionally inapplicable against their Aboriginal or proprietary rights to the extent that such statutes purport to take away, diminish or extinguish those rights.

The chambers judge agreed with Alcan that the foundation of the Nechako Nations’ claim is fatally flawed, as a plaintiff in an action based upon nuisance or interference with riparian rights must have a proprietary interest in the affected land to have standing. Cohen J. concluded that holders of asserted, but unproven, Aboriginal title and rights do not have standing. Claims based upon riparian rights also have no reasonable prospect of success because common law riparian rights in British Columbia had been extinguished by legislation prior to the creation of the plaintiffs’ reserves in 1938. Cohen J. also emphasized that the Crown is the appropriate defendant in claims relating to Aboriginal rights and title, not private parties like Alcan. He allowed Alcan’s application for an order striking out the claim, but dismissed its application for summary judgment based on the basis of the defence of statutory authorization.

The decision of Mr. Justice Cohen, issued in December 2013 and indexed at 2013 BCSC 2303, was summarized in our e-Newsletter of 17 February 2014.

The B.C. Court of Appeal allowed in part the appeal brought by the Nechako Nations, and set aside the order dismissing the action. The cross-appeal of Alcan, in regards to the defence of statutory authorization, was also dismissed.

Claims Based Upon Aboriginal Rights and Title

The Court of Appeal reviewed the nature of Aboriginal title, as described by the Supreme Court of Canada in Delgamuukw and Tsilhqot’in Nation. Aboriginal title is the type of Aboriginal right that creates an interest in land. It is a beneficial interest in the land, and gives the First Nation the right to possess it, manage it, use it, and profit from its economic development. It was noted that the plaintiffs also assert other forms of Aboriginal rights such as fishing rights.

This appeal raises the issue of the ability of Aboriginal groups to rely upon asserted Aboriginal rights and title in litigation against private parties. The chambers judge held that asserted, but unproven, Aboriginal title and rights did not provide the plaintiffs with standing in this case. The Court of Appeal disagreed. Tysoe J.A. commented that the effect of the chambers judge’s ruling was to effectively create “a unique pre-requisite to the enforcement of Aboriginal title or other Aboriginal rights”. He stated:

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. 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.

Through section 35 of the Constitution Act, 1982, the Crown has already accepted “existing Aboriginal rights”, and “it is really just a matter of identifying what they are”. Section 35 did not create these rights. Tysoe J.A. continued:

As whatever Aboriginal rights the Nechako Nations may have are already in existence, it seems to me there is no reason in principle to require them to first obtain a court declaration in an action against the Province before they can maintain an action against another party seeking relief in reliance on their Aboriginal rights. As any other litigant, they should be permitted to prove in the action against another party the rights that are required to be proved in order to succeed in the claim against the other party.

As an example, assume that a lessee of land sued Alcan in private nuisance and that there was some issue with respect to the validity of the lessee’s lease. In order to prove that it had sufficient occupancy to found an action in private nuisance, the plaintiff/lessee would have to prove the validity of its lease.  The plaintiff/lessee would be entitled to prove the lease’s validity in the action against Alcan, and no one would suggest that the plaintiff had no cause of action until it first sued the lessor and obtained a court declaration as to the validity of the lease. Nor would the lessor be required to be a party to the action, although it may be in the interests of the plaintiff/lessee to make the lessor a party so that the findings with respect to the validity of the lease would be binding on the lessor.

Aboriginal people are part of Canada’s community, and they should not be treated disadvantageously in comparison to any other litigant asserting claims for nuisance and breach of riparian rights.  Setting a separate standard for Aboriginal people before they can sue other parties in order to enforce their rights is not only lacking in principle but could also be argued to be inconsistent with the principle of equality under the Charter of Rights and Freedoms.

The Court held that prior cases, such as Sparrow and Marshall / Bernard, involved Aboriginal parties advancing claims based upon “unrecognized” Aboriginal rights. Tysoe J.A. also held that the fact that the Crown is not a party to this action is not determinative. There are previous Aboriginal rights cases in which the Crown was not a party. It was also noted that the Quebec Superior Court, in Uashaunnuat (Innus de Uashat et de Mani-Utenam) c. Compagnie minière IOC inc., 2014 QCCS 4403, declined to follow the reasoning of Cohen J. in this case.

Alcan referred to the Haida Nation decision and asserted that third parties have no legal obligations to Aboriginal groups prior to the proof of the rights in question. Tysoe J.A. dismissed this argument:

In my view, the above passage does not stand for the broad proposition advanced by Alcan.  It simply stands for the proposition that the duty of consultation and accommodation that arises from the honour of the Crown pending proof of Aboriginal rights is not imposed on third parties. In Haida, Chief Justice McLachlin clarified (at para. 56) that while third parties cannot be held liable for failing to discharge the Crown’s duty to consult and accommodate, that does not mean they can never be held liable for infringement of Aboriginal rights.

The Court also held that allowing a First Nation to sue a private party, prior to recognition of Aboriginal rights, is not inconsistent with the goal of reconciliation. Consultation, accommodation and negotiation are preferred routes of reconciliation, but “parties cannot be forced to negotiate a settlement if one of them insists that the dispute be resolved by the court”.

Private Nuisance Claims

The Court of Appeal held that it was not “plain and obvious” that the plaintiffs’ claims based on the tort of private nuisance were bound to fail. This conclusion related to the claims based upon both Aboriginal rights and the plaintiffs’ reserve interests.

The Nechako Nations pleaded that they exclusively occupied portions of the Central Carrier territory including the Nechako River along its banks. Such pleaded facts, if true, would give rise to a finding of Aboriginal title and, therefore, give the Nechako Nations the right to possess the lands. Tysoe J.A. held that it is therefore not plain and obvious that the plaintiffs lack sufficient occupancy to found an action in private nuisance. The Court of Appeal also held that the plaintiffs’ asserted fishing rights are sufficient to ground a claim in private nuisance. The right to harvest fish and trap animals has been likened to a profit à prendre. The Nechako Nations assert in the pleadings that the diversion of water by Alcan has led to negative impacts on fisheries resources.

The Court of Appeal also held that the chambers judge erred in striking the claim for private nuisance based upon the plaintiffs’ right of possession to the reserve lands. Due to conflicting caselaw on private nuisance claims, it is not plain and obvious that the Nechako Nations do not qualify as claimants in such a claim. The definition of “reserve” in the Indian Act would seem to give an Indian band the right to exclusive possession of the reserve lands, which is sufficient to ground a claim in private nuisance.

Public Nuisance Claims

Whether an activity is a public nuisance is a question of fact. It is also necessary for the plaintiff to prove special damage. The Court of Appeal held that it is arguable that unreasonable interference with the public’s interest in harvesting fish from the Nechako River is a type of interference protected by the tort of public nuisance. The Nechako Nations’ asserted Aboriginal fishing rights may be sufficient to demonstrate special damage and, in consequence, it is not plain and obvious that they do not have a reasonable prospect of success.

Interference With Riparian Rights

The Court concluded that the chambers judge erred in regards to the riparian rights claim based upon Aboriginal title, but agreed with his findings about the claim based upon reserve interests.

At common law, the owner of land adjoining water had riparian rights that include access rights, drainage rights, and rights relating to the quality of water. The Nechako Nations claim riparian rights based upon both Aboriginal title and their ownership of reserves.

British Columbia enacted the Water Privileges Act in 1892 vesting all unrecorded and unappropriated water in the provincial Crown. The effect of this statute was to take away riparian rights. The 1892 statute, and its 1925 successor, both preceded the establishment of the plaintiffs’ reserves in 1938.

The Court of Appeal held that Aboriginal title, although not equivalent to fee simple ownership, arguably provides that same kinds of riparian rights as fee simple title. It is also arguable that the 1892 legislation vesting all water in the provincial Crown, and abolishing riparian rights in British Columbia, is constitutionally inapplicable to the plaintiffs. Therefore, it is not plain and obvious that the Nechako Nations’ claims of interference with riparian rights, based upon Aboriginal title, are bound to fail.

In regards to the riparian rights claims based upon reserve interests, the Court of Appeal agreed with Mr. Justice Cohen that the Notice of Civil Claim disclosed no reasonable cause of action. The reserves were created in 1938 when the land was conveyed by British Columbia to the federal Crown. By that time, the Province had abolished riparian rights for land owners. Tysoe J.A. held: “It follows that when the reserve lands were transferred to the federal Crown, riparian rights did not accompany the transfer of the lands”.

There were no pleaded facts that would give the Nechako Nations an interest in the land supporting riparian rights prior to 1938. The Court rejected the plaintiffs’ argument that further evidence about the reserve creation process in British Columbia was necessary to assess the claim. The Court also rejected the plaintiffs’ arguments based upon the Privy Council decision in Burrard Power Co. v. The King, [1911] A.C. 87 (concerning the transfer of lands in the Railway Belt) and the wording of OIC 1036/1938. The provincial legislation vesting all water rights in the Province only made exceptions for those rights established by specials Acts or water licences. The 1938 OIC does not fall within these exceptions, and could not have conveyed any water rights to the federal Crown.

Defence of Statutory Authority

The Court of Appeal dismissed the cross-appeal by Alcan relating to the defence of statutory authority. Alcan argued that its licence authorized the time, place and amounts of water storage, and it is the same operations that are alleged to be a nuisance. The Court of Appeal agreed with the reasoning of the chambers judge in rejecting this argument. Alcan incorrectly focussed on the source of the nuisance, rather than the actual nuisance claimed. The harm alleged by the plaintiffs is not the mere storage and diversion of water, but the interference to their rights. The issue is whether Alcan is authorized to store and divert water in a manner that results in the particular harms. If there are alternative options that are practically feasible, and would avoid the alleged harms, then the harms cannot be said to be the inevitable result of Alcan’s operations.

In consequence, it could not be said that there was “no genuine issue” for trial. The chambers judge did not err in dismissing the application for summary judgment based upon the defence of statutory authorization.

Collateral Attack / Abuse of Process

Alcan argued that certain paragraphs of the plaintiffs’ pleadings ought to be struck as an abuse of process. In these paragraphs, the Nechako Nations alleged that the statutory authority relied upon by Alcan (for its defence of statutory authorization) was constitutionally inapplicable to their Aboriginal or proprietary rights. Alcan argued that such pleadings constitute an impermissible collateral attack on its water licence and is an abuse of process.

Tysoe J.A. reviewed the decisions in Moulton Contracting and Canadian Forest Products v. Sam on these issues, and found them both distinguishable. He stated:

In my opinion, both Moulton Contracting and Sam are distinguishable from the present situation.  The Nechako Nations are not challenging the validity of the Final Water Licence (and related instruments) in their pleadings.  Rather, the Nechako Nations are taking the position that the Final Water Licence and related instruments and legislation are constitutionally inapplicable to take away or diminish their Aboriginal or proprietary rights, with the result, they say, that Alcan cannot rely on the defence of statutory authority.  I do not regard this position as constituting a collateral attack on the Final Water Licence.

Nor is the position taken by the Nechako Nations the equivalent of taking a self-help remedy that would be an abuse of process because it would bring the administration of justice into disrepute.  In my view, it is not an abuse of process for the Nechako Nations to argue that the defence of statutory authority is inapplicable to defeat their claim as a result of the constitutional protection given to Aboriginal rights.  Whether such an argument is successful remains to be seen.

The Court held that this case was more analogous to the Supreme Court of Canada decisions in Garland and TeleZone in that it is primarily a private law matter. The plaintiffs’ pleadings do not assert that Alcan’s water licence is invalid, but concern whether the defence of statutory authority is applicable.

The Court of Appeal ordered that the plaintiffs be entitled to their costs of the appeal and the cross-appeal.

http://www.courts.gov.bc.ca/jdb-txt/CA/15/01/2015BCCA0154.htm

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law