ORDER AND REASONS
I.
Overview
[1]
The plaintiffs seek damages for the flooding of
their reserve lands in north-western Ontario and eastern Manitoba. They claim
loss of their land and the use of that land, as well as loss of hunting,
fishing and harvesting rights. The flooding was caused by the building of a dam
on Lac Seul for purposes of generating hydroelectric power.
[2]
Three government parties – Canada, Ontario and Manitoba - came to a cost-sharing agreement in 1928, the Lac Seul Storage
Agreement (LSSA). The LSSA was confirmed in a federal statute, the Lac Seul Conservation Act, 18-19 Geo V, c 32. Under the LSSA, Ontario was responsible for
two-fifths of the capital costs of building the dam and Canada was responsible for the remaining three-fifths. In 1929, Canada’s interests in Crown
lands in Manitoba were transferred to the province under the Manitoba
Natural Resources Transfer Act, CCSM c N30 (MNRTA). The MNRTA specifically
provides that Manitoba must pay Canada for its expenditures under the LSSA.
[3]
The government parties came to another agreement
in 1943 regarding the total cost of the dam, including compensation payable to
the Lac Seul Band for flooding, damage to homes and timber, and the cost of moving
graves. These costs were added to the capital cost of the dam. Manitoba paid out its share over a 50-year period, with a “final”
payment made in 1980. Thereafter, the three governments discussed terms of a
potential new agreement, but never arrived at one.
[4]
In response to the plaintiffs’ efforts to obtain
additional compensation, Canada seeks to add Ontario and Manitoba as third
parties, arguing that any additional compensation should be regarded as an
additional capital cost of the dam, and that the two provinces are obliged to
pay their corresponding shares as set out in the LSSA and MNRTA.
[5]
By way of this motion for summary judgment, Manitoba requests that it be removed as a third party to this action, arguing that there is
no genuine issue for trial, given that it has already met all of its
obligations under the LSSA and was released from any further liability when it
made its final payment to Canada in 1980. Manitoba also contends that the time
has run out for it to be added as a party.
[6]
In my view, there is a genuine issue requiring a
trial. It would be open to the trial judge to conclude that at least some of
the damages that may be owing to the plaintiffs fall within the capital costs
of building the dam, and that some portion of those damages are Manitoba’s
responsibility under the LSSA and the MNRTA, both of which remain in force.
Further, I am not satisfied that the third party claim against Manitoba is out of time. Accordingly, I must dismiss Manitoba’s motion.
[7]
There are two issues:
1. Is there a genuine issue requiring a trial?
2. Is the claim against Manitoba out of time?
II.
Issue One – Is there a genuine issue requiring a
trial?
(1)
The test
[8]
The Supreme Court of Canada recently revisited
the test for summary judgment: Hryniak v Mauldin, 2014 SCC 7.
Previously, the question to be answered on a motion for summary judgment was
whether there was a “genuine issue for trial”.
Now, the test is whether there is “a genuine issue requiring
a trial” (para 43 – my emphasis). A full trial is no longer the default
process (para 43).
[9]
There will be no genuine
issue requiring a trial where, on a pre-trial motion, the judge is able
to reach a fair and just determination on the merits. This will be the case
when the process (1) allows the judge to make the necessary findings of fact;
(2) allows the judge to apply the law to the facts; and (3) is a proportionate,
more expeditious, and less expensive means to achieve a just result (at para
49). On the other hand, a process that does not give a judge confidence in his
or her conclusions can never be the proportionate way to resolve a dispute (Hryniak,
at para 50).
[10]
Even if the judge finds that there appears to be
a genuine issue requiring a trial, the next step is to determine if a trial can
be avoided (at para 66). To decide that question, the judge should weigh the
evidence, evaluate credibility, and draw reasonable inferences (Hryniak,
at para 44).
(2)
The Evidence
[11]
The evidence before me shows that some persons
involved in the discussions surrounding the LSSA may have believed that they
had achieved a final agreement and, in particular, that Manitoba’s obligations
were discharged in 1980. However, in my view, those perceptions do not permit
me to conclude that Manitoba no longer has any financial obligations for
capital costs. This question requires a trial. If Canada is found to be liable
to the plaintiffs for additional damage caused by flooding, some of those costs
may be regarded as part of the capital costs of building the dam, and fall
partly on Manitoba, according to the LSSA and the MNRTA.
[12]
Some of the capital costs identified in the LSSA
relate to the actual construction of the dam. Others relate to the operation of
the dam and compensation for property taken or injuriously affected by its
construction. These provisions are broad enough to capture the kind of damage
for which the plaintiffs seek compensation in this action.
[13]
I note that the documentary evidence before me
shows that:
•
The losses experienced by the Lac Seul Band were calculated in 1928 to be $120,200, which included loss of
timber, hay, rice, hunting, trapping, fishing, 52 houses and gardens, and 8,000
acres of land;
•
In 1932, the total capital cost of the project
was estimated to be $752,023.99, which included a figure of $50,000 for
compensation for flooding;
•
Ontario and Canada considered the figure of $120,200 as compensation to the Band to be excessive;
•
In 1932, Ontario was willing to pay 40% of the
compensation to the Band for actual damages (ie damage to buildings,
gardens, hay and rice) but not for loss of land, given that Ontario had also
suffered damage to land;
•
Compensation to the Band came within the overall
capital cost of the project;
•
A 1941 valuation of the damage to land belonging
to the Band recommended that additional losses should be recognized (eg,
$138,200 for muskrats, and $290.40 for cemeteries), which would bring the total
figure to $282,744.51;
•
The parties proposed in 1941 that the total figure
should be $100,000, which would include compensation on moral grounds for
muskrats and rice;
•
In 1943, Ontario and Manitoba wished to keep
compensation to a minimum and suggested that no compensation be granted for timber
and a nominal amount ($15,000) should be given for muskrats and rice, putting
the final settlement at $72,539.00;
•
This figure was carried forward into the overall
net settlement and Manitoba agreed with it;
•
The actual amount paid to the Band, however, was
about $50,000.00;
•
Manitoba regarded its
payment of $58,710.61 in December 1979 as the “final payment” under the 50-year
amortization arrangement and the project was then “fully paid off”;
•
Subsequent discussion among the parties was
aimed at arriving at an agreement regarding additional capital costs of the
project but none was achieved; the parties operated under an ongoing
“gentleman’s agreement”; and
•
When it received a Statement of Claim from the Lac Seul Band in 1991, Ontario wondered
whether the terms of the LSSA applied to the claim.
(3)
Conclusion
[14]
This evidence is insufficiently definitive to be
able to conclude that a trial is not required. While the parties came to an
agreement about the amount to be paid to be Band, I cannot conclude on the
evidence before me that there was a clear understanding that their obligations,
particularly those of Manitoba, had been fully discharged for all time. Indeed,
even in the 1980s, the parties appeared to understand that the LSSA remained in
effect and that they could be liable for additional capital costs as they
arose. The parties also regarded compensation to the Band as forming part of
the capital cost of the dam and were aware that there were some losses that
were not included in the settlement to which they agreed in1943. It is at least
possible that the additional compensation sought by Band could also be
considered a capital cost, for which Manitoba would be liable for a proportion.
Many of the provisions of the Statement of Claim make reference to losses
resulting from the flooding of the Band’s lands and would have been regarded as
capital costs under the broad definition of those costs in the LSSA (eg,
loss of land and use of land, gardens, timber, buildings, etc).
[15]
In my view, these issues require definitive
determination by the trial judge and cannot be decided on this motion.
III.
Issue Two – Is the claim against Manitoba out of time?
[16]
Manitoba argues that the plaintiffs’ claim is
barred by the six-year limitation period in the Crown Liability and
Proceedings Act, RSC 1985 c C-50, s 32, or similar provisions under
Manitoba laws (the Limitation of Actions Act, CCSM c L150, ss 2(1)(i),
2(1)(n)). That period began to run, according to Manitoba, in 1980, when
it made its final payment under the LSSA. Alternatively, the time period began
to run in 1985 when, the Lac Seul First Nation filed a Specific Claim for compensation. In the
further alternative, it began in 1991 when the Statement of Claim was filed.
[17]
Manitoba also argues
that the doctrines of laches and estoppel stand in the way of any liability on
its part. Regarding laches, Manitoba argues that Canada effectively abandoned
any claim by doing nothing to pursue any liability against it after 1943. On
estoppel, Manitoba relies on alleged representations made by Canada to the effect that Manitoba’s obligations were complete.
[18]
In my view, Manitoba’s arguments do not lead to
a conclusion that a trial is not required. The LSSA and the MNRTA are still in
force, so it is not clear that a limitation period has even started to run on Manitoba’s liability. As Justice Michael Phelan pointed out, the LSSA is not a simple
contract. It is “both a contractual and a political agreement enshrined in
legislation and ratified by the relevant political entities” (Southwind et
al v Canada, 2011 FC 351, at para 35). Arguably, the clock begins only when
there has been a finding that an obligation under the LSSA or the MNRTA has not
been met; that has not yet occurred. The fact that Canada could have moved
earlier does not mean that its opportunity to do so has expired.
[19]
I accept that limitation periods serve important
purposes, among them, avoiding the problems that can arise when witnesses are
no longer available, historical documents are missing, and new approaches to
liability can be unfairly applied to past conduct (Peepeekisis Band v Canada
(Minister of Indian Affairs and Northern Development) 2012 FC 915, at para
28). However, it is not at all clear that those problems arise here – the
evidentiary record appears to be fairly complete and the general terms of
potential liability have already been settled among the government parties. The
question remains whether the plaintiffs’ losses amount to additional capital
costs that should be apportioned according to those terms.
[20]
Regarding laches, I see no evidence that Canada acquiesced to any refusal on Manitoba’s part to accept liability for capital costs. There is
no evidence of such a refusal. Further, there is nothing inherently unreasonable
about permitting the claim against Manitoba to go to trial.
[21]
On estoppel, again, I cannot find any clear
representation on Canada’s part that Manitoba’s liability had been fully
discharged. The 1943 agreement, still in force, was drawn up based on the government
parties’ assumptions about how things stood at the time. No formal release from
further liability was executed at that point or, in fact, at any point. Indeed,
in more recent years, the parties seemed to recognize that the question of their
liability for additional capital costs was a live issue.
[22]
While Canada was primarily responsible for
calculating the damages owed to the Band, Manitoba was aware that the Band was
not consulted on this issue and, in my view, cannot reasonably assert that it
received a definitive representation that its obligations toward the Band had
been fully discharged in 1943. In fact, the evidence suggests that the government
parties, concerned about the overall costs involved, may have knowingly
discounted their obligations toward the Lac Seul Band.
[23]
Accordingly, I cannot conclude that the claim
against Manitoba is out of time, or is otherwise barred by estoppel or the
doctrine of laches.
IV.
Conclusion and Disposition
[24]
Manitoba’s motion for
summary judgment disallowing the third-party claim brought against it by Canada must be dismissed. There are genuine issues requiring a trial - namely, whether Manitoba continues to be liable for any additional capital costs arising out of the LSSA
and, if so, whether Canada’s claim is barred. The evidence before me does not
permit me to arrive at definitive conclusions on either of those issues.
[25]
Therefore, Manitoba’s motion for summary
judgment is dismissed, with costs.
ORDER
THIS COURT ORDERS that the motion is
dismissed, with costs.
“James W. O’Reilly”
Annex
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Crown Liability and Proceedings Act, RSC 1985 c C-50
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Loi sur la responsabilité civile de
l’État et le contentieux administratif, LRC
(1985), ch C-50
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Prescription and Limitation
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Prescription
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32. Except as otherwise provided in this Act or in any other Act of
Parliament, the laws relating to prescription and the limitation of actions
in force in a province between subject and subject apply to any proceedings
by or against the Crown in respect of any cause of action arising in that
province, and proceedings by or against the Crown in respect of a cause of
action arising otherwise than in a province shall be taken within six years
after the cause of action arose.
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32. Sauf disposition contraire de la présente loi ou de toute autre
loi fédérale, les règles de droit en matière de prescription qui, dans une
province, régissent les rapports entre particuliers s’appliquent lors des
poursuites auxquelles l’État est partie pour tout fait générateur survenu
dans la province. Lorsque ce dernier survient ailleurs que dans une province,
la procédure se prescrit par six ans.
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Limitation of Actions Act, CCSM c L150
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Loi sur la Prescription, CPLM c L150
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Limitation
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Délais de prescription
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2(1) The following actions shall be commenced within and not after
the times respectively hereinafter mentioned:
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2(1) Les actions suivantes se prescrivent par les délais respectifs
indiqués ci-dessous :
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(i)
actions for the recovery of money (except in respect of a debt charged upon
land), whether recoverable as a debt or damages or otherwise, and whether a
recognizance, bond, covenant, or other specialty, or on a simple contract,
express or implied, and actions for an account or not accounting, within six
years after the cause of action arose;
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i) une action en recouvrement d'une somme d'argent (sauf celle
relative à une créance grevant un bien-fonds), que cette somme d'argent soit
recouvrable à titre de dette, de dommages-intérêts ou à un autre titre, ou
que cette somme découle d'un engagement, d'un cautionnement, d'un contrat ou
d'un contrat scellé ou d'une convention verbale, expresse ou tacite, se
prescrit par six ans, à compter de la naissance de la cause d'action; il en
est de même d'une action en reddition de compte ou pour non-reddition de
compte;
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(n) any other action for
which provision is not specifically made in this Act, within six years after
the cause of action arose.
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n) une autre
action qui ne fait pas explicitement l'objet d'une disposition de la présente
loi, se prescrit par six ans, à compter de la naissance de la cause d'action.
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