Docket:
T-491-13
Citation: 2013 FC 1138
Vancouver, British Columbia, November 7, 2013
PRESENT: The Honourable Mr. Justice Hughes
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BETWEEN:
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COLDWATER INDIAN BAND AND CHIEF HAROLD ALJAM IN HIS CAPACITY
AS CHIEF OF THE COLDWATER BAND ON BEHALF OF ALL MEMBERS OF THE COLDWATER
BAND
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Applicants
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and
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THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT AND
KINDER MORGAN CANADA INC.
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Respondents
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REASONS FOR JUDGMENT
AND JUDGMENT
[1]
In the 1950’s, the Coldwater Indian Band passed
two resolutions empowering the Minister responsible for Indian Affairs to grant
two easements in favour of Trans Mountain Pipeline to permit two pipelines to
be built and carry oil through one of Coldwater’s Reserves. One pipeline was
built and is still operating; the other was never built. Over the years, Trans Mountain went through several corporate re-organizations and in 2007 was sold to
interests controlled by Kinder Morgan. The easements granted to Trans Mountain required the consent of the Minister to any assignments. It was not until
2012 that Kinder Morgan asked for that consent. Coldwater does not want the
Minister to give that consent, sensing that there is a much better deal to be
made if Kinder Morgan was required to bargain under some duress. Hence, the present
application.
[2]
In particular, this is an application brought
under the provisions of sections 18 and 18.1 of the Federal Courts Act,
R.S.C. 1985, c. F-7 respecting decisions pending by the Minister of Indian
Affairs and Northern Development pursuant to a request made by Kinder Morgan
Canada Inc. for retroactive consent to the assignment of two easements for the
purposes of oil pipelines over lands Reserved for the Coldwater Indian
Band. The Applicant Coldwater seeks declaratory relief, a prohibition or
injunction, and other relief.
[3]
For the reasons that follow, I find that the
Minister is not obligated to follow the instructions of Coldwater not to consent
to the requested assignments; however, the Minister is required to listen in
good faith to those concerns, particularly with respect to the unused easement,
balance those concerns with the public interest, and negotiate with Kinder
Morgan with a view to obtaining more favourable terms for Coldwater.
THE EVIDENCE
[4]
The evidence in the record before the Court
consists of:
•
The affidavit of Harold Aljam, member and
elected Chief of the Coldwater Indian Band, together with Exhibits A to Y,
filed by the Applicant;
•
The affidavit of Robert Love, Manager Lands and
Rights-of-Way, for the Respondent Kinder Morgan Canada Inc, together with
Exhibits A to EEE, filed by the Respondent Kinder Morgan;
•
Two affidavits of Kuldip Gill, Lands Management
and Leasing Officer, Department of Aboriginal Affairs and Northern Development
(AANDC), together with Exhibits A to W to the first affidavit, sworn May 21,
2013; and Exhibit A to the second affidavit, sworn October 24, 2013; both filed
by the Respondent Minister;
•
Affidavit of Gemma Sykes, a legal assistant in
the law firm acting for the Applicant, together with Exhibits A to D, filed by
the Applicant.
[5]
Only Gill was cross-examined. He was
cross-examined by Counsel for the Applicant, and a transcript of that
cross-examination was filed in the supplementary record of the Applicant.
THE FACTS
[6]
The relevant facts are largely not in dispute.
The Applicant Coldwater is an Indian Band recognized as such under the Indian
Act, R.S.C. 1985, c. I-5. It possesses certain reserves under that Act,
which are located near Merritt, British Columbia. This case is concerned with
one of those reserves, identified as Reserve No. 1.
[7]
In April 1952, a company called Trans Mountain (sometimes written as Trans-Mountain) Oil Pipeline Company wrote to the
Department of Indian Affairs stating that it was desirous of acquiring a
60-foot right of way through the reserves of various Indian Bands, including
Coldwater, for the purpose of building an oil pipeline. Coldwater passed a
resolution approving such a right of way. In March 1953, the Privy Council made
an Order-in-Council approving such a right of way.
[8]
On May 4, 1955, an agreement, by way of
indenture, was entered into between Her Majesty in right of Canada, represented
by the Minister of Citizenship and Immigration, of the first part; and Trans-Mountain
Oil Pipeline Company, of the second part. I will refer to this as the first
agreement or first easement. It provided for, among other things:
•
in consideration of the sum of $3,554.00, the
Minister granted to Trans Mountain, its successors and assigns, the right to
lay down, construct, operate and maintain a pipeline on, over, under and/or
through the Reserve No. 1;
•
TO HAVE AND TO HOLD…for such period as the said
lands are required for the purposes of a pipeline right of way;
•
Clause 2: That
the Grantee (Trans Mountain) shall not assign the right hereby granted without
the written consent of the Minister.
[9]
Since the time of this agreement and continuing
through the present time, a pipeline has been installed and is in use, carrying
in the order of 300,000 barrels per day of oil from Sherwood Park Alberta, through several Indian Band Reserves, including Coldwater Reserve No. 1, to
facilities in British Columbia and the United States.
[10]
In November 1957, Trans Mountain again wrote to
Indian Affairs saying that it was desirous of securing another easement to
place an additional pipeline within certain reserve lands, including
Coldwater’s Reserve No. 1. While there is no Band resolution that can presently
be located, Coldwater does not make an issue of the fact that it did make a
resolution in principle granting such a right of way. On May 1, 1958, the Privy
Council issued an Order-in-Council approving such a right of way.
[11]
On the third day of August, 1958, Her Majesty, as
represented by the Minister and Trans Mountain, entered into another agreement
by way of Indenture with terms which, for the purposes of these proceedings,
are the same as those which have been previously set out respecting the first
agreement; a difference being that the sum of $1,778.00 was paid another
difference being that no consent of the Minister was required in respect of a
mortgage. I will refer to this as the second easement or second agreement.
[12]
Unlike the pipeline contemplated by the first
agreement which was built and is operating, no second pipeline as contemplated
by the second agreement has ever been built.
[13]
It is contemplated that Kinder Morgan may shortly
make an application to the National Energy Board to build a second pipeline,
which would increase the capacity from 300,000 barrels per day to just under
900,000 barrels per day. However, no such application has yet been made
although its Counsel indicates that an application may be made before the end
of this year. At this time, it is simply speculation as to whether the right of
way that is the subject of the second agreement would be used for the purposes
of this second pipeline.
[14]
Since the two agreements were entered into by Trans Mountain, it has undergone a number of corporate name changes, corporate re-organizations,
and amalgamations, the result of which is that as of April 2007, a corporation
known as Terasen Inc. emerged as the successor to Trans Mountain in the
pipeline business. While the consent of the Minister to these various events
was neither sought nor given, Coldwater does not, for the purposes of the
present case, take issue with them, as they are apparently largely internal
corporate restructurings involving the same entity.
[15]
In early 2007, there were a number of
transactions wherein the pipeline assets of Trans Mountain were ultimately sold
to interests controlled by Kinder Morgan. Counsel for Kinder Morgan has taken
up about three pages of their Memorandum of Fact and Law to explain the
transactions, even briefly. I will reproduce the summary of these transactions
as set out in a letter dated June 12, 2012 from the President of Kinder Morgan
and Vice President of Fortis BC Holdings Inc. to the Minister of Aboriginal
Affairs and Northern Development:
Pursuant to an
acquisition agreement dated February 26, 2007 (the “Acquisition
Agreement”), Fortis Inc. (“Fortis”) agreed to purchase Terasen Inc. and its’
subsidiaries from Kinder Morgan, Inc. (“Kinder Morgan”). Prior to closing of
the sale contemplated by the Acquisition Agreement, the following
corporate re-organization occurred: (i) Terasen Pipelines (Trans Mountain) Inc.
(the owner of the Trans Mountain pipeline assets) amalgamated with Terasen
Inc.; and (ii) the Trans Mountain pipeline assets were then transferred to
affiliated entity Trans Mountain Pipeline ULC and then contributed to a new
limited partnership called Trans Mountain Pipeline L.P. (“the “Re-organization”).
Subsequent to the Re-organization, Terasen Inc. (which in March of 2011 changed
its name to FortisBC Holdings Inc.), was sold to Fortis.
Pursuant to the
Re-organization, all of the assets related to the Trans Mountain pipeline,
including all agreements and related rights, interests and obligations, were
ultimately transferred to Trans Mountain Pipeline L.P., prior to contemplation
of the acquisition of Terasen Inc. by Fortis.
[16]
That letter of June 12, 2012 makes a request
that the Minister consent to these transfers. This consent is the basis
for Coldwater’s present application to this Court. The letter says:
Included in
the Trans Mountain pipeline assets are certain indentures and easements entered
into with Her Majesty Queen Elizabeth the Second, as listed in Schedule A
attached hereto (the “Indentures”). It has recently come to our attention that
consent of the Minister, as contemplated in the Indentures, was not obtained at
the time of the transfer of the Trans Mountain pipeline assets from Terasen
Inc. to its’ affiliate Trans Mountain Pipeline ULC, and therefore Fortis and
Kinder Morgan are requesting that the Minister provide the required consent at
this time.
[17]
Coldwater became aware that such a request may
be made. On April 25, 2012, Coldwater’s Counsel wrote a letter to the Minister
of Aboriginal Affairs and Northern Development saying, inter alia:
It has come to our
client’s attention that Kinder Morgan Canada Inc. (“Kinder Morgan”) has asked
or will be asking for the written consent of the Minister, pursuant to the
Indenture, to the assignment of Terasen Inc.’s rights in respect of the
Indenture to Kinder Morgan.
We write to advise
that the Coldwater Band does not presently agree to the assignment and to ask
that you not provide that consent without first discussing the proposed
assignment, and its potential implications, with our client. In this respect,
we note that the terms and conditions outlined in the Indenture put you, as
Minister, in the position of a fiduciary in respect of the Band’s interests in
this matter and you must act accordingly.
[18]
There followed a series of correspondence between
the Minister’s officials and the Department of Justice and Coldwater and its
Counsel.
[19]
In the meantime, Coldwater wrote directly to
Kinder Morgan. In a letter dated July 5, 2012, the Chief of the Coldwater Band
wrote:
We have received
notice of Kinder Morgan’s Application to the Minister dated June 12, 2012 (we
were not provide with a copy until two weeks later). This Application confirms
that Kinder Morgan is aware that the existing right-of-way does not authorize
its current use of the pipeline.
In the absence of
a current permit from the Band, we hereby demand that you cease operation of
the pipeline through our Reserve within 10 days. We further ask that you
make arrangements with us to remove the associated pipeline structure as soon
as reasonably possible, unless interim permits are obtained.
In the event that
you have not ceased operation of the pipeline, or otherwise reached an interim
agreement with the Band by July 15, 2012, we will take such actions as
necessary to stop such unauthorized operation. We wish to give you fair notice
that we will not be held liable for any consequential damage that may result.
[20]
Kinder Morgan’s President replied by a letter
dated July 12, 2012 saying, inter alia:
In your letter
you state that if we have not reached an interim agreement by July 15, 2012,
Coldwater “will take such actions as necessary to stop such unauthorized
operations.” You also state that Coldwater will “not be held liable for any
consequential damage that may result.” We take great issue with this threat,
and need to make our position clear on the record that if any damage is done to
the pipeline, it may result in serious damage to the environment and to the
safety of those in the vicinity of the damage. We will not tolerate anyone
intentionally damaging the pipeline, and anyone so damaging the pipeline will
be liable to the fullest extent of the law, including responsible for
consequential damages, which damages could be significant.
We propose a
meeting at your convenience next week between your legal counsel and ours, and
yourself and our Manager of Aboriginal Relations. We are prepared to be flexible
regarding the time and place of the meeting. We continue to be committed to
resolving all issues as between us in the most cooperative and expeditious
method possible, and hope you share that same resolve.
[21]
There is subsequent correspondence between these
parties; however, as is evident, the matter has not been resolved between them.
[22]
Coldwater’s Counsel wrote a letter dated January
9, 2013 to the Minister’s official, Mr. Gill (who gave evidence in these
proceedings), stating reasons for Coldwater’s request that consent to the
assignments not be given by the Minister. That letter said, inter alia:
…It is our
contention that the Indenture is void, and has been void for 5 years or more,
and cannot be revived. A new Indenture is required, which would require a new
process to be entered into with the Coldwater Indian Band.
Alternatively, it
is clear that the appropriate company did not apply for the necessary consent
for the assignment. Further, it is clear that there was no intent to do so over
the last 5 year or so. Any transfer of the Indenture, without a concurrent
lawful request for assignment, would have invalidated the Indenture at the
time. It is a fundamental breach of a serious nature.
E. The
nature of the new Applicant: Our
understanding is that the current Applicant, Kinder Morgan, is a significantly
different entity than the original holder of Trans-Mountain Oil Pipeline
Company. Kinder Morgan is a foreign-controlled company – without the same roots
in Canada that the original operator had. The original operator was, we
understand, a Canadian-owned company and was incorporated by a special act of
Parliament. The consent of the Coldwater Indian Band at the time of the
original Indenture would have factored in the nature of the Applicant, and the
public interest in Canada of the original project. Those factors do not apply
to Kinder Morgan.
F. The safety and operating record of the applicant:
Further, the safety record of Kinder Morgan and their Parent company is a very
different one from the original company, and in our view, much inferior. We
wish time to investigate that matter and to make submissions upon it. That will
take some time, and co-operation from federal regulatory authorities. Please
advise us of what investigations Canada has undertaken in this regard – clearly
before exercising its fiduciary or trustee powers of consent on these lands on
behalf of the Band, Canada must investigate that matter.
[23]
On February 20, 2013, the Chief of the Coldwater
Band wrote a letter to Mr. Gill on behalf of the Band stating:
As Chief and
Council, we have given this matter very serious consideration and, with the
benefit of full legal advice about the matter, the Coldwater Band Council has
determined that it is not in the interests of the Coldwater Band for the
Minister to consent to the requested assignment of the indentures respecting
the Coldwater Reserve.
This conclusion is
based on a wide range of factors, some of which include the following:
▪
Kinder Morgan proposes a major expansion of
oil transmission operations through our reserve and proposes to do so within
the existing (Trans Mountain) right-of-way.
▪
The 1957 Indenture, which was valid only for
so long as required for pipeline purposes, has expired in that the line that
was proposed to be built in 1957 was never built.
▪
We have serious reservations about the safety
and integrity of oil transmission through our reserve and do not consider it to
be in our best interests to maintain, let alone expand, these transmissions.
[24]
No reply is in the record. These proceedings
were instituted a month later. The Minister has not yet taken any action.
THE ISSUES
[25]
The Applicant has put the following matters in
issue:
1.
Does the Minister have a fiduciary duty to
refuse to consent to the Assignment upon being advised by Coldwater that it
does not agree that the Minister should consent?
2.
In the alternative, is the Minister obliged to
re-examine whether Coldwater’s consent is required, and whether consent in
respect of easement number 1 or number 2 is in Coldwater’s best interests
and/or in the public’s best interest?
[26]
A further issue was initially raised; that of
production of documents in the Minister’s possession. That issue has been
resolved, save as to the matter of costs, which will be addressed later in
these Reasons.
[27]
In resolving these issues, the Court must
consider the following:
•
Does the Minister and/or Crown owe a fiduciary
duty to the Applicant Coldwater?
•
If so, what is the nature and extent of that
duty?
•
In the facts of this case, how is that duty to
be exercised?
•
What relief, if any, should be given?
FIDUCIARY DUTY
[28]
Counsel for the Minister concedes that the
Minister/Crown owe a fiduciary duty to the Applicant. The nature and extent of
that duty must be considered.
RELEVANT LEGISLATION
[29]
The principal legislation respecting the matters
at issue is section 35 of the Indian Act as it stood in the 1950’s – the
period relevant to the signing of the easements at issue – SC 1951, c. 29. That
section read:
LANDS TAKEN FOR PUBLIC PURPOSES.
35. (1) Where
by an Act of the Parliament of Canada or a provincial legislature Her Majesty
in right of a province, a municipal or local authority or a corporation is
empowered to take or to use lands or any interest therein without the consent
of the owner, the power may, with the consent of the Governor in Council and
subject to any terms that may be prescribed by the Governor in Council, be
exercised in relation to lands in a reserve or any interest therein.
(2) Unless
the Governor in Council otherwise directs, all matters relating to compulsory
taking or using of lands in a reserve under subsection (1) shall be governed by
the statute by which the powers are conferred.
(3) Whenever
the Governor in Council has consented to the exercise by a province, authority
or corporation of the powers referred to in subsection (1), the Governor in
Council may, in lieu of he province, authority or corporation taking or
using the lands without the consent of the owner, authorize a transfer or grant
of such lands to the province, authority or corporation, subject to any terms
that may be prescribed by the Governor in Council.
(4) Any
amount that is agreed upon or awarded in respect of the compulsory taking or
using of land under this section or that is paid for a transfer or grant of
land pursuant to this section shall be paid to the Receiver General of Canada
for the use and benefit of the band or for the use and benefit of any Indian
who is entitled to compensation or payment as a result of the exercise of the
powers referred to in subsection (1). 1951, c. 29, s. 35.
[30]
As can be seen, this section of the Indian
Act, which has not been changed materially since then, specifically deals
with the taking of land. There is no part of that Act dealing with
easements or the like.
[31]
Section 35 of the Indian Act was
specifically commented upon by Justice McLachlin (as she then was) in
Opetchesaht Indian Band v Canada, [1997] 2 S.C.R. 119 at paragraph 86,
where she wrote (in dissent, but not as to this matter):
86 The only
other way Indian interests in reserve land can be permanently disposed of under
the Indian Act is by expropriation. Where the greater public good so requires,
interests in reserve land may be expropriated: s. 35. The procedure is strictly
regulated and subject to consent of the Governor in Council, exercised by
Cabinet, which owes the Indians a fiduciary duty to act in their best
interests. The process is politically sensitive and open to public scrutiny.
[32]
The Pipe Lines Act, SC 1949, c. 20,
provides for a Board of Transport Commissioner for Canada which, among other
things, may grant leave to construct a pipeline in Canada. Where a company
applies to the Board for such leave, subsections 12(3) and (5) of that Act
provide:
(3) Upon
the application, the Board shall have regard to all considerations that appear
to it to be relevant and in particular to the objection of any party
interested, to a public interest that in the Board’s opinion may be affected by
the granting or the refusing of the application, and to the financial
responsibility of the applicant.
. . .
(5) Where
the Board grants leave to construct a line, it may impose such terms and
conditions as it considers proper and may limit the time within which the
company shall construct and complete the line. 1949, c. 20, s. 12.
[33]
The Pipe Lines Act was the statute in
place in the 1950’s when the two easement agreements were signed. Currently,
the National Energy Board Act, RSC 1985, c. N-7 deals with such matters.
Section 52 of that Act deals with certificates that the Board may issue
when a pipe line is complete. Provision is made in that section for regard to
any public interest and environmental assessments.
[34]
Trans Mountain Oil Pipeline Company, the party
to whom the easements at issue were given, was incorporated under a special Act
of the Parliament of Canada, assented to the 21st March, 1951 with
objects as set out in section 6:
6. The Company, subject to the
provisions of any general legislation relating to pipe lines for the
transportation of oil or any liquid product or by-product thereof which is
enacted by Parliament, may
(a)
within or outside Canada construct,
purchase, lease, or otherwise acquire, and hold, develop, operate, maintain,
control, lease, mortgage, create liens upon, sell, convey, or otherwise dispose
of and turn to account any and all interprovincial and/or international pipe
lines, for the transportation of oil including
.
. .
(b)
purchase, hold, lease, sell, improve,
exchange or otherwise deal in real property or any interest and rights therein
legal or equitable or otherwise howsoever and deal with any portion of the
lands and property so acquired
. . .
[35]
None of the Pipe Lines Act or the National
Energy Board Act, or the Trans Mountain Act make specific provisions
in respect of the Indian Act, or lands set aside as reserves for
aboriginal persons.
[36]
The First Nations Land Management Act, SC
1999, c. 24, enacted in 1999, provides a mechanism by which a Code may be
established under which direct control of matters affecting an Indian Band is
passed from the Minister directly to a particular Band. Section 16 of that Act
states:
16. (1) After the coming into force of
a land code, no interest or right in or licence in relation to First Nation
land may be acquired or granted except in accordance with the land code of
the First Nation.
Marginal note: Interests or rights of
third parties
(2) Subject to subsections (3) and
(4), interests or rights in and licences in relation to First Nation land
that exist on the coming into force of a land code continue in accordance
with their terms and conditions.
Marginal note: Transfer of rights of
Her Majesty
(3) On the coming into force of the
land code of a First Nation, the rights and obligations of Her Majesty as
grantor in respect of the interests or rights and the licences described in
the First Nation’s individual agreement are transferred to the First Nation
in accordance with that agreement.
Marginal note: Interests and rights of
First Nation members
(4) Interests or rights in First
Nation land held on the coming into force of a land code by First Nation
members pursuant to allotments under subsection 20(1) of the Indian Act or
pursuant to the custom of the First Nation are subject to the provisions of
the land code governing the transfer and lease of interests or rights in First
Nation land and sharing in natural resource revenues.
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16. (1) L’acquisition ou l’attribution
de droits ou intérêts ou de permis relatifs aux terres de la première nation
ne peuvent, à compter de l’entrée en vigueur du code foncier, être effectuées
qu’en conformité avec celui-ci.
Note marginale :Droits ou intérêts des
tiers
(2) Sous réserve des paragraphes (3)
et (4), les droits ou intérêts et les permis détenus, à la date d’entrée en
vigueur du code foncier, relativement aux terres de la première nation sont
maintenus, ainsi que les conditions dont ils sont assortis.
Note marginale :Transfert
(3) Les droits et obligations de Sa
Majesté à l’égard des droits ou intérêts et des permis précisés dans l’accord
spécifique sont, à la date d’entrée en vigueur du code foncier, transférés à
la première nation en conformité avec cet accord.
Note marginale :Droits ou intérêts des
membres de la première nation
(4) Sont
assujettis, à compter de la date d’entrée en vigueur du code foncier, aux
dispositions de celui-ci en matière de transfert, de bail et de participation
aux revenus tirés des ressources naturelles, les droits ou intérêts des
membres de la première nation sur ses terres qui découlent soit de la
possession accordée en conformité avec le paragraphe 20(1) de la Loi sur les
Indiens, soit de la coutume de la première nation.
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[37]
By way of example, a Matsqui First Nation Code
was set up October 17, 2007. Subsections 31.1, 36.1 and 36.2 of that Code read
as follows:
31. Limits
on Interests and Licences
All Dispositions
in Writing
31.1 An
interest in, or licence to use, First Nation Land may only be created, granted,
disposed of, assigned or transferred by an Instrument issued in accordance with
this Land Code.
36.
Transfer and Assignment of
Interests
Transfer of Interests
36.1 The
Governing Body may enact Laws providing that a Member holding a leasehold
interest in First Nation Land may transfer, devise or otherwise dispose of that
leasehold interest to another Member.
36.2 Except
for transfers that occur by operation of Law, including transfers of estates by
testamentary disposition or in accordance with a Law enacted under section 37:
(a) there
will be no transfer or assignment of an interest in First Nation Land without the written consent of the Governing Body; and
(b) the
grant of an interest is deemed to include section 36.2(a) as a condition of any
subsequent transfer or assignment.
[38]
No such Code has been established for Coldwater.
[39]
Lastly, there is a policy document issued by
Indian and Northern Affairs Canada entitled “Land Management Manual”. The
current version was marked as Exhibit 1 to the cross-examination of Gill held
July 31, 2013.
[40]
The policy in respect of assignments is set out
in section 4. I reproduce sections 4.1, 4.2 and 4.4:
4.
Policy – Assignments
4.1
Assignee’s Obligations: An assignment
cannot be used as a means to change the terms of an existing lease. Therefore,
before the Minister consents to an assignment, the assignee must agree in
writing to perform and observe all of the lessee’s covenants and obligations
under the lease.
4.2
Lessee’s Obligations: Despite a common
misconception to the contrary, although a lessee has, with the Minister’s
consent, assigned his or her interest in a lease to a third party, the lessee
is still legally bound by his or her commitments under the lease, unless the
lessee obtains an express release from the Crown. If the assignee fails to
perform his or her lease obligations, then the lessee will be held responsible
for those obligations.
. . .
4.4
First Nation Consent: As a matter of
policy, the department will seek the written consent of the First Nation and/or
locatee to the assignment. The Minister may only refuse consent to an
assignment without a valid reason if the lease makes provision for such an
action. Valid grounds for refusing the assignment should be submitted to the
Minister or the Minister’s delegate for consideration. The First Nation or
locatee should be asked to provide their concurrence or concerns within a
reasonable period.
[41]
The Policy deals with the taking or using of
lands under section 35 of the Indian Act, supra, in section 6. It is to
be noted that there are no specific Policies respecting easements. I reproduce
section 6.1:
6. Policy
6.1 The
expropriating authority must obtain First Nation Council’s consent before
seeking the Governor in Council’s consent to the taking or using of reserve
lands. The taking or using of reserve lands without First Nation consent must
only be sought in exceptional circumstances, with the support of departmental
headquarters and the Department of Justice (“DOJ”).
[42]
Policy documents such as this are the kind of
“soft law” discussed by Evans JA in Canada (Minister of Citizenship
and Immigration) v Thamotharem, 2007 FCA 198. Such documents serve as
useful guides for those who administer statutes and regulations, and for the
public; but are not in themselves law. They are not legally binding and it may
be an error of law to misinterpret or misapply them. I repeat what he wrote,
for the Court, at paragraphs 57 to 61:
57 Both
academic commentators and the courts have emphasized the importance of these
tools for good public administration, and have explored their legal
significance. See, for example, Hudson N. Janisch, "The Choice of
Decision-Making Method: Adjudication, Policies and Rule-Making" in Special
Lectures of the Law Society of Upper Canada 1992, Administrative Law:
Principles, Practice and Pluralism; David J. Mullan, Administrative Law
(Toronto: Irwin Law, 2001) at 374-79; P.P. Craig, Administrative Law, 5th edn.
(London: Thomson, 2003) at 398-405, 536-40; Capital Cities Communications Inc.
v. CRTC, [1978] 2 S.C.R. 141 at 171; Vidal v. Canada (Minister of Employment
and Immigration) (1991), 49 Admin. L.R. 118 (F.C.T.D.) at 131; Ainsley at
82-83.
58 Legal rules
and discretion do not inhabit different universes, but are arrayed along a
continuum. In our system of law and government, the exercise of even the
broadest grant of statutory discretion which may adversely affect individuals
is never absolute and beyond legal control: Roncarelli v. Duplessis, [1959]
S.C.R. 121 at 140. (per Rand J.). Conversely, few, if any, legal rules admit of
no element of discretion in their interpretation and application: Baker at
para. 54.
59 Although
not legally binding on a decision-maker in the sense that it may be be an error
of law to misinterpret or misapply them, guidelines may validly influence a
decision-maker's conduct. Indeed, in Maple Lodge Farms Ltd. v. Canada, [1982] 2 S.C.R. 2, McIntyre J., writing for the Court, said (at 6):
The fact that the
Minister in his policy guidelines issued in the Notice to Importers employed
the words: "If Canadian product is not offered at the market price, a
permit will normally be issued; ..." does not fetter the exercise of that
discretion. [Emphasis added]
The line between
law and guideline was further blurred by Baker at para. 72, where, writing for
a majority of the Court, L'Heureux-Dubé J. said that the fact that
administrative action is contrary to a guideline "is of great help" in
assessing whether it is unreasonable.
60 The use of
guidelines, and other "soft law" techniques, to achieve an acceptable
level of consistency in administrative decisions is particularly important for
tribunals exercising discretion, whether on procedural, evidential or
substantive issues, in the performance of adjudicative functions. This is
especially true for large tribunals, such as the Board, which sit in panels; in
the case of the RPD, as already noted, a panel typically comprises a single member.
61 It is
fundamental to the idea of justice that adjudicators, whether in administrative
tribunals or courts, strive to ensure that similar cases receive the same
treatment. This point was made eloquently by Gonthier J. when writing for the
majority in Consolidated-Bathurst Packaging Ltd. v. International Woodworkers
of America, Local 2-69, [1990] 1 S.C.R. 282 at 327
("Consolidated-Bathurst"):
It is obvious that
coherence in administrative decision-making must be fostered. The outcome of
disputes should not depend on the identity of the persons sitting on the panel
for this result would be "difficult to reconcile with the notion of
equality before the law, which is one of the main corollaries of the rule of
law, and perhaps also the most intelligible one". [Citation omitted]
FIDUCIARY DUTY OF THE CROWN – NATURE AND EXTENT
[43]
The Minister has conceded that a fiduciary duty
is owed to Coldwater; the question then becomes: What is the nature and extent
of that duty?
[44]
The nature and extent of the fiduciary duty owed
by the Crown and its Ministers to Canada’s First Nations is ever evolving under
our laws. It finds its roots in the honour owed by the Crown to the First
Nations of our country, and continues to find expression in our evolving
jurisprudence. The circumstances of a particular fact situation will have a
great effect as to how that duty is to be interpreted.
[45]
I will consider a number of decisions of the
Supreme Court of Canada beginning with Guerin v The Queen, [1984] 2 SCR
335. In that case, the Crown leased Indian Band reserve land on terms less
favourable than the Band had insisted. The Band sued the Crown; the Trial Judge
found in their favour; the Federal Court of Appeal reversed that decision. The
Supreme Court restored the Trial Judge’s decision. Justice Dickson, for the
majority, wrote at pages 383 – 384:
(c) The Crown’s Fiduciary Obligation
The concept of fiduciary obligation originated long ago in the
notion of breach of confidence, one of the original heads of jurisdiction in
Chancery. In the present appeal its relevance is based on the requirement of a
“surrender” before Indian land can be alienated.
The Royal Proclamation of 1763 provided that no private person could
purchase from the Indians any lands that the Proclamation had reserved to them,
and provided further that all purchases had to be by and in the name of the
Crown, in a public assembly of the Indians held by the governor or
commander-in-chief of the colony in which the lands in question lay. As Lord
Watson pointed out in St. Catherine’s Milling, supra, at p. 54, this policy
with respect to the sale or transfer of the Indians’ interest in land has been
continuously maintained by the British Crown, by the governments of the
colonies when they became responsible for the administration of Indian affairs,
and, after 1867, by the federal government of Canada. Successive federal
statutes, predecessors to the present Indian Act, have all provided for the
general inalienability of Indian reserve land except upon surrender to the
Crown, the relevant provisions is the present Act being ss. 37-41.
The purpose of this surrender requirement is clearly to interpose
the Crown between the Indians and prospective purchasers or lessees of their
land, so as to prevent the Indians from being exploited. This is made clear in
the Royal Proclamation itself, which prefaces the provision making the Crown an
intermediary with a declaration that “great Frauds and Abuses have been
committed in purchasing Lands of the Indians, to the great Prejudice of our Interests,
and to the great Dissatisfaction of the said Indians…” Through the confirmation
in the Indian Act of the historic responsibility which the Crown has
undertaken, to act on behalf of the Indians so as to protect their interests in
transactions with third parties, Parliament has conferred upon the Crown a
discretion to decide for itself where the Indians’ best interests really lie.
This is the effect of s. 18(1) of the Act.
This discretion on the part of the Crown, far from ousting, as the
Crown contends, the jurisdiction of the courts to regulate the relationship
between the Crown and the Indians, has the effect of transforming the Crown’s
obligation into a fiduciary one. Professor Ernest Weinrib maintains in his
article The Fiduciary Obligation (1975), 25 U.T.L.J. 1, at p. 7, that “the
hallmark of a fiduciary relation is that the relative legal positions are such
that one party is at the mercy of the other’s discretion.” Earlier, at p. 4, he
puts the point in the following way:
[Where there is a
fiduciary obligation] there is a relation in which the principal’s interests
can be affected by, and are therefore dependent on, the manner in which the
fiduciary uses the discretion which has been delegated to him. The fiduciary
obligation is the law’s blunt tool for the control of this discretion.
I make no comment
upon whether this description is broad enough to embrace all fiduciary
obligations. I do agree, however, that where by statute, agreement, or perhaps
by unilateral undertaking, one party has an obligation to act for the benefit
of another, and that obligation carries with it a discretionary power, the
party thus empowered becomes a fiduciary. Equity will then supervise the
relationship by holding him to the fiduciary’s strict standard of conduct.
It is
sometimes said that the nature of fiduciary relationships is both established
and exhausted by the standard categories of agent, trustee, partner, director,
and the like. I do not agree. It is the nature of the relationship, not the
specific category of actor involved that gives rise to the fiduciary duty. The
categories of fiduciary, like those of negligence, should not be considered
closed.
[46]
The next case to be considered is the Supreme
Court’s decision in Blueberry River Indian Band v Canada, [1995] 4 S.C.R. 344. In that case, certain Indian Reserve lands were surrendered
to the Crown to sell or lease, particularly to returning veterans. Mineral
rights had not been reserved, and gas was discovered under the land. Justice
McLachlin (as she then was) wrote a dissenting opinion, but that part at
paragraphs 34 and 35 was not part of her dissent. She wrote that the duty of the
Crown was not to substitute its decision for that of the Band, but to prevent
exploitation:
34 The Bands
contend that the Indian Act imposed a duty on the Crown to refuse to allow the
Band to surrender its lands in light of its interest in the land and the
paternalistic scheme of the Indian Act. When a reserve is granted to a band, as
was done here in 1916, title does not pass to the band. Rather the Crown holds
the fee simple title. The Crown thus possesses power with respect to those
lands and must, it is argued, exercise that power as a fiduciary on behalf of
the band. This is reinforced by the paternalistic tone of the Indian Act, which
it is argued imposes a duty upon the Crown to protect the Indians from
themselves and prevent them from making foolish decisions with respect to their
land. This is why, it is submitted, title remains in the Crown. The Crown, on
the other hand, paints the Band as an independent agent with respect to the
surrender of its lands.
35 My view is
that the Indian Act's provisions for surrender of band reserves strikes a
balance between the two extremes of autonomy and protection. The band's consent
was required to surrender its reserve. Without that consent the reserve could
not be sold. But the Crown, through the Governor in Council, was also required
to consent to the surrender. The purpose of the requirement of Crown consent
was not to substitute the Crown's decision for that of the band, but to prevent
exploitation. As Dickson J. characterized it in Guerin (at p. 383):
The purpose
of this surrender requirement is clearly to interpose the Crown between the
Indians and prospective purchasers or lessees of their land, so as to prevent
the Indians from being exploited.
It follows that
under the Indian Act, the Band had the right to decide whether to surrender the
reserve, and its decision was to be respected. At the same time, if the Band's
decision was foolish or improvident -- a decision that constituted exploitation
-- the Crown could refuse to consent. In short, the Crown's obligation was
limited to preventing exploitative bargains.
[47]
The Supreme Court dealt directly with the
question of an easement in Opetchesaht Indian Band v Canada, [1997] 2 S.C.R. 119. An easement had been granted to the Hydro authority for a
right-of-way required for the purpose of a transmission line. No express clause
respecting termination was provided. No transmission line had been built, and
the Indian Band wanted to use the land for its purposes. Justice Major, for the
majority, wrote at paragraphs 28 and 29 that no grant of an easement is
perpetual; it endures only for so long as the stated purpose is required:
28 Nor can
the permit be characterized as perpetual because its duration is purely under
the control of the respondent Hydro. In Canada (Attorney General) v. Canadian
Pacific Ltd., [1986] 1 C.N.L.R. 1 (B.C.S.C.), aff'd [1986] B.C.J. No. 407
(C.A.), it was held that a grant of an interest in reserve land for so long as
required for railway purposes was not an interest determinable at the sole will
of the railroad. The Court of Appeal found that the reserve land was no longer
required for railway purposes, and that therefore, the transfer of the land
from CP to its subsidiary, Marathon Realty Corporation, was void.
29 The
duration of the easement in the instant case is similarly qualified. It endures
only so long as the right-of-way is required for the purpose of an electric
transmission line. The respondent Hydro has some discretion as to the decisions
it makes with respect to the placement and utility of transmission lines.
However, since the word "required" is used, it would be wrong to
conclude that the expiry of the permit is solely dependant upon the will of the
respondent Hydro. Whether the line is required is a justiciable issue: Canadian
Pacific Railway Co. v. Town of Estevan, [1957] S.C.R. 365; Canada (Attorney General) v. Canadian Pacific Ltd., supra. See also The Queen v. Bolton, [1975] F.C. 31 (T.D.), at p. 35.
[48]
This case is factually very similar to the
second agreement in the present case where no pipeline has ever been built.
[49]
The next case for consideration is the decision
of the Supreme Court of Canada in Osoyoos Indian Band v Oliver (Town),
[2001] 3 S.C.R. 746. In that case, the Governor-in-Council approved the taking of
a strip of land within an Indian Reserve for the purposes of building an
irrigation canal. The municipal authorities wanted to tax the Indian Band as
owners of the canal. The Band argued that the land had been taken from them.
Justice Iacobucci, writing for the majority, found that the Crown’s fiduciary
duty under section 35 of the Indian Act is not restricted to instances
of surrender; it extends to permitting others to use the land. Public interest
does not trump the interests of the Band; an attempt must be made to reconcile
the two interests. He wrote at paragraphs 51 and 52:
51 The
intervener the Attorney General of Canada submits that when Canada's public law
duty conflicts with its statutory obligation to hold reserve lands for the use
and benefit of the band for which they were set apart, then a fiduciary duty
does not arise. The Attorney General argues that the existence of a fiduciary
duty to impair minimally the Indian interest in reserve lands is inconsistent
with the legislative purpose of s. 35 which is to act in the greater public
interest and that the opening phrase of s. 18(1) of the Indian Act,
"Subject to the provisions of this Act ...", effectively releases the
Crown from its fiduciary duty in respect of s. 35 takings. In addition, the
Attorney General contends that a fiduciary [page772] obligation to impair
minimally the Indian interest in reserve lands is inconsistent with the
principles of fiduciary law which impose a duty of utmost loyalty on the
fiduciary to act only in the interests of the person to whom the duty is owed.
Thus, the Attorney General submits that the holding in Guerin, supra, that the
surrender of an Indian interest of land gives rise to a fiduciary duty on the
part of the Crown to act in the best interests of the Indians does not extend
to the context of expropriation, and that the duty of the Crown to the band in
the case of an expropriation of reserve land is similar to its duty to any
other land holder -- to compensate the band appropriately for the loss of the
lands.
52 In my view,
the fiduciary duty of the Crown is not restricted to instances of surrender.
Section 35 clearly permits the Governor in Council to allow the use of reserve
land for public purposes. However, once it has been determined that an
expropriation of Indian lands is in the public interest, a fiduciary duty
arises on the part of the Crown to expropriate or grant only the minimum
interest required in order to fulfill that public purpose, thus ensuring a
minimal impairment of the use and enjoyment of Indian lands by the band. This
is consistent with the provisions of s. 35 which give the Governor in Council
the absolute discretion to prescribe the terms to which the expropriation or
transfer is to be subject. In this way, instead of having the public interest
trump the Indian interests, the approach I advocate attempts to reconcile the
two interests involved.
[50]
In Wewaykum v Canada, [2002] 4 S.C.R. 245,
the Supreme Court stated that the Crown represents the interests of many
parties, some of which cannot help but be conflicting; the Crown should not
solely be concerned with Band interests. Binnie J, for the Court, wrote at paragraph
96:
96 When
exercising ordinary government powers in matters involving disputes between
Indians and non-Indians, the Crown was (and is) obliged to have regard to the
interest of all affected parties, not just the Indian interest. The Crown can be
no ordinary [page294] fiduciary; it wears many hats and represents many
interests, some of which cannot help but be conflicting: Samson Indian Nation
and Band v. Canada, [1995] 2 F.C. 762 (C.A.). As the Campbell River Band
acknowledged in its factum, "[t]he Crown's position as fiduciary is
necessarily unique" (para. 96). In resolving the dispute between Campbell River Band members and the non-Indian settlers named Nunns, for example, the
Crown was not solely concerned with the band interest, nor should it have been.
The Indians were "vulnerable" to the adverse exercise of the
government's discretion, but so too were the settlers, and each looked to the
Crown for a fair resolution of their dispute. At that stage, prior to reserve
creation, the Court cannot ignore the reality of the conflicting demands
confronting the government, asserted both by the competing bands themselves and
by non-Indians. As Dickson J. said in Guerin, supra, at p. 385
It should be
noted that fiduciary duties generally arise only with regard to obligations
originating in a private law context. Public law duties, the performance of
which requires the exercise of discretion, do not typically give rise to a
fiduciary relationship. [Emphasis added.]
[51]
The more flexible approach to fiduciary duty of
the Crown was again expressed by the Supreme Court in Haida Nation v British Columbia (Minister of Forests), [2004] 3 S.C.R. 511, where Chief Justice
McLachlin, for the Court, wrote at paragraph 18:
18 The
honour of the Crown gives rise to different duties in different circumstances.
Where the Crown has assumed discretionary control over specific Aboriginal
interests, the honour of the Crown gives rise to a fiduciary duty: Wewaykum
Indian Band v. Canada, [2002] 4 S.C.R. 245, 2002 SCC 79, at para. 79. The
content of the fiduciary duty may vary to take into account the Crown's other,
broader obligations. However, the duty's fulfilment requires that the Crown act
with reference to the Aboriginal group's best interest in exercising
discretionary control over the specific Aboriginal interest at stake. As
explained in Wewaykum, at para. 81, the term "fiduciary duty" does
not connote a universal trust relationship encompassing all aspects of the
relationship between the Crown and Aboriginal peoples:
...
"fiduciary duty" as a source of plenary Crown liability covering all
aspects of the Crown-Indian band relationship ... overshoots the mark. The
fiduciary duty imposed on the Crown does not exist at large but in relation to
specific Indian interests.
[52]
The several duties owed by the Crown was again
expressed by the Supreme Court in Ermineskin Indian Band & Nation v
Canada, [2009] 1 S.C.R. 222, where Rothstein J, for the Court, wrote at
paragraph 129:
129 The
Crown's position in the setting of the interest rate paid to the bands is also
unique. On the one hand, it has fiduciary duties that are owed to the bands,
including the duty of loyalty and the obligation to act in the bands' best
interests. On the other hand, the Crown must pay the interest owed to the bands
with funds from the public treasury financed by taxpayers. The Crown has
responsibilities to all Canadians, and some balancing inevitably must be
involved.
[53]
Most recently, the Supreme Court in Manitoba
Metis Federation Inc v Canada (Attorney General), 2013 SCC 14, the Chief
Justice McLachlin and Justice Karakatsanis, for the majority, summarized
several aspects of the fiduciary duty owed by the Crown, indicating that it
varies with the nature and importance of the interest sought to be protected. They
wrote at paragraph 49:
49 In the
Aboriginal context, a fiduciary duty may arise as a result of the
"Crown [assuming] discretionary control over specific Aboriginal
interests": Haida Nation v. British Columbia (Minister of Forests), 2004
SCC 73, [2004] 3 S.C.R. 511, at para. 18. The focus is on the particular
interest that is the subject matter of the dispute: Wewaykum Indian Band v.
Canada, 2002 SCC 79, [2002] 4 S.C.R. 245, at para. 83. The content of the
Crown's fiduciary duty towards Aboriginal peoples varies with the nature and
importance of the interest sought to be protected: Wewaykum, at para. 86.
[54]
I also refer to three cases in other Courts.
[55]
In Lower Kootenay Indian Band v Canada,
[1992] 2 CNLR 54, Justice Dubé of the Federal Court an Indian Band brought an
action against the Crown arguing that the Crown had leased reserve lands on
unfavourable terms. Reference was made to evidence consisting of correspondence
between Crown officials, in which those persons took the view that consent to a
transfer could be used as a lever to open negotiations. Justice Dubé wrote at
page 92:
The Justice
officials were also of the opinion that Creston could take no legal action
against the Crown for refusing to consent to any Creston transfer for there “is
no provision that such consent shall not be unreasonably withheld.”
Mr. Millin
reported back to Mr. Hett and recommended that the consent clause be used as “a
lever to open negotiations with the present lessee to update the rental and
enter into a new lease with the proper protective covenants for the Band.”
[56]
In setting this out, Justice Dubé was reciting
some of the evidence. He did not say that he agreed with or approved of what
was said.
[57]
In Chief Joe Hall v Canada (Attorney General), 2007 BCCA 133, the British Columbia Court of Appeal dealt
with a claim by an Indian Band respecting land formerly used by the Canadian
Armed Forces as a rifle range. Chief Justice Finch wrote the decision of the
Court and addressed an argument that the duty of the Crown to consult was a
constitutional issue. He held that such duty was not to be found in any
statute, but had a “constitutional character”. He wrote at paragraphs 47 and
48:
[47] The
learned chambers judge held that the duty to consult was a “constitutional
issue”. Counsel for the Attorney General vigorously contested the
constitutional nature of the duty to consult. He conceded that the duty is a
“legal duty” which has as its source “the honour of the Crown” but argued that
“…it is not a constitutional right or obligation.”
[48] I do not
accept that as a sound proposition. The honour of the Crown speaks to the
Crown’s obligation to act honourably in all its dealings with aboriginal
peoples. It may not lawfully act in a dishonourable way. That is a limitation
on the powers of government not to be found in any statute, that has a
constitutional character because it helps to define the relationship between
government and the governed.
[58]
The last decision to which I will refer is that
of the Federal Court of Appeal in Semiahmoo Indian Band v Canada,
(1997), 148 DLR (4th) 523. That case dealt with reserve land taken
by the Crown for use as a customs facility. It was not used for that purpose
and, ultimately, the Crown sought to sell it for use as a resort. The Band
alleged that the Crown had breached its fiduciary duty. Chief Justice Isaac,
for the Court, addressed the Crown’s fiduciary duty at pages 538-9:
I should
emphasize that the Crown's fiduciary obligation is to withhold its own consent
to surrender where the transaction is exploitative. In order to fulfil this
obligation, the Crown itself is obliged to scrutinize the proposed transaction
to ensure that it is not an exploitative bargain. As a fiduciary, the Crown
must be held to a strict standard of conduct. Even if the land at issue is
required for a public purpose, the Crown cannot discharge its fiduciary
obligation simply by convincing the Band to accept the surrender, and then
using this consent to relieve itself of the responsibility to scrutinize the
transaction.
[59]
Chief Justice Isaac continued by considering the
Supreme Court of Canada decision in Apsassin v Canada, [1995] 4 S.C.R. 344,
Chief Justice Isaac found at page 543, among the principles to be derived from
that decision were:
(iv) Even
in the context of an absolute surrender for sale, the Crown has a
post-surrender fiduciary duty to advance the best interests of the Indian Band,
to the extent possible, having regard to the terms of the surrender agreement.
Therefore, so long as the Crown has the power, whether under the terms of the
surrender instrument or under the Indian Act, to exert control over the
surrendered land in a manner that serves the best interests of the Band, the
Crown is under a fiduciary duty to exercise that power (at 405).
And at page 544:
(v) More
particularly, the Crown has a post-surrender fiduciary duty to correct any
errors in surrender agreements which have a negative impact upon the Indian
Band (at 366).
. . .
In
Apsassin, the Crown’s mistake in the original surrender was in failing to
reserve the mineral rights for the benefit of the Indian Band contrary to a
longstanding government policy to do so. In my view, the Crown made a similar
mistake in this case as to the quality or scope of the surrender that was
required. The Crown obtained an absolute surrender from the Band when, having
regard to the uncertainty of the public need for the land, a conditional or
qualified surrender would have sufficed. In both cases, the result was that the
original surrender did not impair as little as possible the interests of the
affected Indian Band. Therefore, I am of the view that in this case, as in
Apsassin, the Crown was under a post-surrender fiduciary duty to correct the
error that it made in the original surrender for as long as it remained in
control of the land.
[60]
From the jurisprudence recited above, from the
Supreme Court of Canada and the three further cases that I have cited, I draw
the following conclusions as to the jurisprudence:
•
the Crown owes a fiduciary duty to First Nations
persons in respect of claims relating to title to and use of lands set aside as
a reserve;
•
the nature and extent of that fiduciary duty may
vary according to the circumstances and importance of the matter;
•
The Crown has a duty to prevent the First Nation
from being exploited; and
•
The Crown must listen in good faith to the
concerns of the First Nation, but has a duty to weigh those concerns
against other public interests that the Crown represents; it must endeavour to
reach a compromise between those interests, while endeavouring to obtain the
best possible result for the First Nation.
IN THE FACTS OF THIS CASE – HOW IS THE DUTY TO BE EXERCISED
[61]
In the present case, there are two easements
that were granted in the 1950’s by the Crown; originally to Trans Mountain. The purposes of the easements were for the construction and operation of a
pipeline. The first easement has been used, and continues to be used, for that
purpose. The second easement has never been used. No pipeline has been built
and obviously, none has been operated in respect of the second easement.
[62]
Trans Mountain had undergone several internal
corporate restructurings until about 2007, when its pipeline interests were
sold to Kinder Morgan or a company controlled by it. Coldwater says it does not
want the Minister to consent to an assignment of the easements to Kinder Morgan.
It raises essentially three grounds; one is that a spill occurred while
Kinder Morgan was operating the pipeline. That spill did not amount to a
reportable spill, and was quickly cleaned up by Kinder Morgan. The second ground
is that Kinder Morgan is not “Canadian”, whatever may be the meaning and result
of that. The third ground is the Kinder Morgan may wish to revive its interest
in the second easement so as to build another pipeline that would treble the
flow through the Reserve with consequent safety, environmental and restriction
on land use issues.
[63]
The Minister has to balance Coldwater’s position
against other public interests. One such interest is the maintenance of the
existing pipeline. The other is a future interest should Kinder Morgan apply
for a second pipeline, and should it wish to use the second easement for that
purpose.
[64]
From the material I have in the Record, there
seems to be little reason for the Minister to withhold consent in respect of
the first easement, that is, the easement that is presently in use as a
pipeline. However, with respect to the second easement, over fifty years have
gone by without any construction of, or use as, a pipeline. A reasonable
argument can be made that the easement has ceased to exist. If Kinder Morgan
wants to build a second pipeline, it is not clear whether the second easement
would be satisfactory for that purpose, in any event. The Minister would be
prudent in taking Coldwater’s concerns into account in respect of the second
easement; particularly if it would require some expansion of the restrictions
on the use of land on and near the easement or extended boundaries of the
easement and raise safety and environmental concerns, with a view to obtaining
a much better result for Coldwater.
IN ANSWER TO THE APPLICANT’S ISSUES
[65]
In answer to the issues presented by the
Applicant:
1. The Minister does not have an absolute duty to refuse to consent to
the assignments upon being advised that Coldwater does not agree to them.
2.
The Minister is required to re-examine whether
Coldwater’s consent is required; particularly in respect of the second
easement, and to determine if it is in Coldwater’s and the public’s interest
not to consent.
WHAT RELIEF SHOULD BE GIVEN
[66]
The Minister has not yet made a decision. I have
determined that, particularly with respect to the second easement, the Minister
should consider whether that easement has expired for non-use; and, therefore,
whether re-negotiation with Kinder Morgan for terms much more favourable to
Coldwater is required should Kinder Morgan wish to use that second easement or
a new easement for another pipeline.
COSTS
[67]
Counsel were not prepared to make any specific
submissions as to costs. I consider success to be divided, and that it would be
appropriate to make no order as to costs. I find no reason for awarding costs
in respect of the production of documents issue.
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