Date:
20080613
Docket: A-454-07
Citation: 2008 FCA 214
CORAM: DESJARDINS
J.A.
SEXTON J.A.
EVANS
J.A.
BETWEEN:
MINISTER OF PUBLIC WORKS AND
GOVERNMENT SERVICES
Appellant
and
MUSQUEAM INDIAN BAND
and SQUAMISH NATION
Respondents
REASONS FOR JUDGMENT
SEXTON J.A.
[1]
This is an
appeal by the Minister of Public Works and Government Services (the
“appellant”) of the Order of the Motions Judge dated September 28, 2007
granting an interlocutory injunction as requested by the respondent Musqueam
Indian Band (“Musqueam”) to restrain the appellant from selling two downtown
office buildings in Vancouver, subject to an undertaking by Musqueam in favour
of the appellant in the limited amount of two million dollars. The underlying
proceeding is an application for judicial review requesting an order
restraining the sale or other disposition of the properties, as well as a
declaration that Her Majesty the Queen in Right of Canada had a legal duty to
consult with Musqueam in good faith concerning any disposition of the
properties, prior to any disposition of the properties, and to endeavour to seek
workable accommodations of Musqueam’s Aboriginal and treaty interests in the
properties.
[2]
Musqueam
cross-appeals and asks that it not be required to provide any undertaking to
abide by an order concerning damages caused by the granting or extension of the
injunction.
[3]
The case
of RJR-MacDonald v. Canada (Attorney General) [1994] 1 S.C.R. 311 (“RJR-MacDonald”)
confirmed the three criteria an applicant must satisfy in order to obtain an
injunction: (1) there must be a serious issue to be tried in the underlying
proceeding, (2) the applicant must face irreparable harm not compensable in
damages if an interlocutory injunction is denied, and (3) the balance of
convenience, taking into account the public interest, must favour the
applicant. The three factors are conjunctive: failure to satisfy any one factor
will lead to the denial of the interlocutory injunction. The onus is upon the
applicant to satisfy each factor.
[4]
The effect
of the Motions Judge’s approach to the test laid out in RJR-MacDonald is
to provide aboriginal groups (who complain that the federal government has
failed to consult them) with what amounts to a veto over the federal government
transferring title to property located in any area claimed as traditional
territory of that group, despite the fact that the Aboriginal group has made no
claim that (1) possible degradation to the property affecting its aboriginal
rights might occur in the event the property is transferred; and (2) it
requires that specific property for its own use. Such a result eliminates the
need for the aboriginal group to show irreparable harm and does not respect the
balance between societal interests and aboriginal interests that the Supreme
Court of Canada was attempting to achieve in developing the duty to consult grounded
in the honour of the Crown.
[5]
The
context of the proposed transaction and the nature of the two properties are
vital to a proper analysis of this case. The transaction dealt with two large
office complexes in the downtown core of Vancouver, the nature and use of which was not
going to change as a result of the transaction.
[6]
For the
reasons that follow, I conclude that the Motions Judge erred in fact and law in
deciding that Musqueam would face irreparable harm upon the disposition of the
properties in question. I would thus allow the appeal. As such, it is
unnecessary to address the cross-appeal.
Facts
The Parties
[7]
Musqueam
is an Indian Band within the meaning of the Indian Act, R.S. 1985, c.
I-5 (the “Act”). Musqueam is governed by an elected Chief and ten elected
councillors under the provisions of the Act. It has three reserves located in
the lower mainland of British
Columbia. Its
main reserve consists of 416.32 acres fronting the north arm of the Fraser River in Southwest Vancouver. The present
members of Musqueam claim to be descendants of Aboriginal people who lived in
an area in the lower mainland of British Columbia that includes downtown Vancouver.
[8]
Musqueam
claims all of Vancouver, and beyond, as its
traditional territory. Other First Nations also claim traditional territories
which include the downtown core of Vancouver,
and which overlap with the Musqueam claim. Included in this group are the
Squamish Nation, the Sto:lo Nation, and the Tsleil-Wauthuth Nation. The
Hul’qumi’num Treaty Group claims a marine traditional territory that includes
the area surrounding downtown Vancouver. In addition, the appellant
has suggested that the Kwiketlem First Nation, who is not presently involved in
treaty negotiations, has possible overlaps with the claims of Musqueam.
[9]
Canada
accepted Musqueam’s submission of ownership of Vancouver under the Comprehensive Land Claims
Policy process for negotiation in 1991, and since 1994, has from time to time
been engaged in treaty negotiations with Musqueam under the current British
Columbia Treaty Process (“BCTP”). The Government of Canada has not at any time
recognized that Musqueam has a legal entitlement to the Properties.
[10]
In the
six-stage process of the BCTP, Musqueam is currently in Stage 4 – “the
Negotiation of an Agreement-in-Principle” – the results of which ultimately
form the basis for a treaty. Since entering Stage 4 of the BCTP, negotiations
with the respondent have been essentially dormant. Apart from introductions of
new personnel representing the federal team, the federal Crown was involved in
only one bilateral meeting with Musqueam on September 28, 2005 to discuss Stage
4 Agreement-in-Principle negotiation work-planning.
[11]
Musqueam
is alleged to be unresponsive to several requests made in October and November
2005 to resume meetings. Efforts to contact Musqueam were discontinued in 2006
due to a lack of response to requests to suggest meeting dates or to confirm that
negotiations were proceeding in some way. There has been no progress in moving
through Stage 4 of the BCTP since then. Musqueam claims that its unresponsive
behaviour may have been due to pressing litigation matters that placed
significant demands on its attention and resources since 2004, reducing its
ability to participate fully in the BCTP.
[12]
Public
Works and Government Services Canada (“PWGSC”) provides accommodation services
for federal government employees across Canada in leased and Crown-owned buildings.
PWGSC determined to look for options which would allow it to move out of the
business of real estate management and to focus on what it considered to be
“core” government activities, while at the same time, saving taxpayer money.
That is, PWGSC wished to lower its owned-to-lease ratio of its real estate to
transfer the risks of owning real estate to the private sector. To this end, on
June 16, 2006, PWGSC requested proposals for purchasers of a number of
properties, including the particular properties discussed below.
The Properties
[13]
This
appeal and the underlying judicial review application concern the properties of
401 Burrard
Street and the
Sinclair Centre at 757
West Hastings Street
in Vancouver, BC (the “Properties”). The Properties are
described by the appellant as follows:
The property
at 401
Burrard St.
was originally acquired by the Federal Crown from private parties in 1948. A
Customs house was constructed on the site in or about 1955 and later demolished
in or about 1995. At that point, the land, which had been transferred from the
Federal Crown to the Canadian National Railway Company in 1992, was transferred
to Canada Lands Company CLC Limited. Prior to the completion of the
construction of the current building, the property was transferred back to the
Federal Crown in 2002. 401 Burrard St. is used almost
exclusively as office space by federal government departments. There is a small
coffee shop, storage space used by the property manager and space used for
telecom services.
The land on
which Sinclair Centre is built is made up of a number of parcels. All of the
parcels were previously privately held. In 1904 a portion of the property was
acquired by the Federal Crown for the construction of Vancouver’s main post
office. Over the years, the Federal Crown continued to acquire portions of the
land on which the current Sinclair Centre is situated, with the final portion
being transferred to the Federal Crown in 1984. Sinclair Centre is made up of
the old post office building and adjoining buildings. It contains a number of
private retail outlets as well as office space which is used by federal
government departments.
The parties appeared to agree during oral argument that the
total area of the properties encompassed about two acres. The Properties are
situated within the territory described in the Musqueam Declaration of
Aboriginal Title released in June of 1976.
Events Leading to the Current Proceedings
[14]
On March
5, 2007, the appellant publicly announced that the federal government would
proceed with marketing nine federally owned properties, which included the
Properties, as part of a sale and leaseback scheme. The respondents, as well as
the Tseil-Waututh, Sto:Lo and New
Westminster
bands, were contacted.
[15]
Musqueam
raised a number of concerns regarding the proposed sale and requested a
consultation process with representatives of PWGSC, initially by letter dated
March 29, 2007 (this letter was not allegedly received until a second copy was
sent on April 19, 2007). Musqueam’s concerns included the Crown’s obligation to
accommodate aboriginal interests, the fact that the Properties could form a
part of a land claim settlement between Musqueam and the Crown, and Musqueam’s
need and entitlement for more land for housing.
[16]
During the
week of May 1, 2007, the federal government advertised the sale of the
Properties in national media advertisements and on the government’s online
tendering system. On May 4, 2007, PWGSC sent a letter requesting a meeting with
Musqueam representatives.
[17]
On May 22,
2007, Musqueam had an informational meeting with representatives of the PWGSC.
Musqueam was provided with a Confidential Information Memorandum that was being
made available to prospective purchasers. Minutes of the meeting prepared by a
senior official of PWGSC indicate that the meeting took place for approximately
one hour. The evidence indicates that no further meeting was scheduled.
According to the appellant, Musqueam’s representatives were told on more than
one occasion that the Crown would be able to repurchase the buildings.
[18]
On May 31,
2007, an official of PWGSC wrote to Musqueam, posing, inter alia, the
following questions:
…what
information can you provide to support an assertion of aboriginal title over
the above-mentioned properties? Do these properties in particular have a
special significance to the Musqueam First Nation? Is there any other information
that you feel would be important for us to consider?
Prior to
making any decisions on these properties, we will review all of the material
related to aboriginal interests that has been gathered or received to make our
assessment of strength of claim and of impact. The results of these assessments
will determine how we will proceed.
[19]
Musqueam
sent a letter to PWGSC dated June 29, 2007, in response to the May 31, 2007
letter. In Musqueam’s letter it indicated its view that the May 22, 2007
meeting was only a preliminary step to developing a consultation process. By
letter dated July 11, 2007, Musqueam delivered two expert reports purporting to
relate to the Properties, specifically the Report “Musqueam Occupation of
Downtown Vancouver’s Coal Peninsula” by Dr. Leonard C.
Ham and an opinion letter written by Dr. Michael Kew. The reports refer to
Musqueam’s occupation and general historical use of the downtown Vancouver area. They do not support
Musqueam’s arguments about serious land shortage, nor do they point to any
unique attachment to the Properties in particular.
[20]
By letter
dated July 27, 2007, PWGSC acknowledged receiving the materials sent by
Musqueam. They assured Musqueam that “no final decision has yet been made by
the Crown to dispose of the properties.” Musqueam alleges that it did not
receive this letter until August 28, 2007.
[21]
On August
20, 2007 the appellant announced the decision to sell the Properties (along
with the seven other properties) to Larco Investments Ltd. (“Larco”). Larco had
been the highest bidder in a request for bids for the Properties. The allocated
prices for the Properties were each in excess of $100,000,000. PWGSC also
communicated this news to Musqueam by letter, adding, “it is our view that the
Crown has fulfilled any legal obligation that it may have to consult with
respect to the proposed disposition of these properties”.
[22]
The
transaction included, inter alia, the following elements:
- The
Crown would lease back the Properties for 25 years, with the right to
renew for an unlimited number of 10 year terms.
- The
leases provide the federal Crown with a right to purchase the assets at
the end of the lease terms in the event of a decision of the appellant
which is of a political or policy nature and which has not principally
been made to benefit directly from financial gain. These provisions were,
according to the appellant, “specifically included to protect any possible
aboriginal claims to the properties that may later be proven.”
- The
leases also provide the Crown with a right of first refusal and a right of
first offer should Larco wish to sell the properties
- The leases permit the Crown to
sublease the Properties at the Crown’s discretion.
[23]
On August
22, 2007, Musqueam responded with a letter to PWGSC stating that they felt that
the Crown had not fulfilled its duty to consult. On August 28, 2007, PWGSC sent
a fax to Musqueam which stated that, in the Crown’s view, it had fulfilled any
duty to consult. It also sent to Musqueam a report commissioned by Public
History Inc., dated August 2007, with respect to an assessment of potential
Aboriginal use and occupation of the Properties. This report focused on the
competing aboriginal claims to the areas around the Properties.
[24]
On
September 19, 2007, the respondent applied for judicial review in respect of
the decision to sell the Properties. The request for relief includes, inter
alia:
- A
declaration that Her Majesty the Queen in Right of Canada has a legal duty
to consult with Musqueam in good faith concerning any disposition of the
Properties, prior to any disposition of the Properties, and to endeavour
to seek workable accommodations of the Musqueam Aboriginal and treaty
interests in the Properties;
- A
declaration that Her Majesty the Queen in Right of Canada has not
fulfilled her legal duty to consult with Musqueam concerning the
disposition of the Properties or made workable accommodations of
Musqueam’s Aboriginal and treaty interests in the Properties prior to any
such disposition; and
- An order restraining the sale or
other disposition of the Properties.
[25]
On
September 24, 2007, Musqueam filed a motion for an interlocutory injunction
restraining the Government of Canada from transferring, selling, or otherwise
disposing of the Properties pending the hearing of the underlying application
for judicial review. That interlocutory injunction was granted and is the
subject of this appeal.
[26]
The
financial benefits of the transactions were linked to the historically high
real estate values, and thus the timing of any transaction was arguably
crucial. PWGSC entered into a binding
contract to proceed with the transaction. While that contract allowed the
Properties to be removed from the transaction, the appellant argues that there
was a cost to doing so: the appellant lost the advantage of the favourable
market conditions. At the time of the injunction hearing the appellant
estimated that the delay caused by the injunction would result in an effective
reduction in the purchase price of $33 million. The estimate was based on major
banks’ predictions as to what interest rates would be in twelve months (the
assumption was that a judicial review would ultimately take twelve months).
[27]
The
Squamish Nation (“Squamish”) successfully moved to be added as a respondent to
this appeal by way of an order granted by Nadon J.A. on February 7, 2008
(A-454-07). The Properties also lie within territory to which Squamish claims
aboriginal rights and title.
Statutory Provisions
[28]
The
Federal Court’s power to award interim injunctions is outlined in Rule 373 of
the Federal Court Rules, 1998 which provides, in part:
|
(1) On motion, a judge
may grant an interlocutory injunction.
(2) Unless a judge
orders otherwise, a party bringing a motion for an interlocutory injunction
shall undertake to abide by any order concerning damages caused by the
granting or extension of the injunction.
…
|
(1) Un juge peut
accorder une injonction interlocutoire sur requête.
(2) Sauf ordonnance
contraire du juge, la partie qui présente une requête pour l’obtention d’une
injonction interlocutoire s’engage à se conformer à toute ordonnance
concernant les dommages-intérêts découlant de la délivrance ou de la
prolongation de l’injonction.
[…]
|
[29]
Section 35
of the Constitution Act, 1982 being Schedule B to the Canada Act 1982 (U.K.), 1982, c. 11 provides:
|
(1) The existing
aboriginal and treaty rights of the aboriginal peoples of Canada are hereby
recognized and affirmed.
(2) In this Act,
“aboriginal peoples of Canada” includes the Indian, Inuit and Métis peoples
of Canada.
(3) For greater certainty,
in subsection (1) “treaty rights” includes rights that now exist by way of
land claims agreements or may be so acquired.
(4) Notwithstanding
any other provision of this Act, the aboriginal and treaty rights referred to
in subsection (1) are guaranteed equally to male and female persons.
|
(1) Les droits
existants – ancestraux ou issus de traités – des peuples autochtones du
Canada sont reconnus et confirmés.
(2) Dans la présente
lois, « peuples autochtones du Canada » s’entend notamment des
Indiens, des Inuit et des Métis du Canada.
(3) Il est entendu que
sont compris parmi les droits issus de traités, dont il est fait mention au
paragraphe (1), les droits existants issus d’accords sur des revendications
territoriales ou ceux susceptibles d’être ainsi acquis.
(4) Indépendamment de
toute autre disposition de la présente loi, les droits – ancestraux ou issus
de traités – visés au paragraphe (1) sont garantis également aux personnes
des deux sexes.
|
Decision Below
[30]
On
September 28, 2007, the Motions Judge granted an interlocutory injunction
restraining Her Majesty the Queen in Right of Canada, the Treasury Board of
Canada and the Minister of Public Works and Government Services, as applicable,
from transferring, selling, or otherwise disposing of the Properties pending
the hearing of the application with respect to the alleged failure of the Crown
to consult Musqueam. He also ordered that Musqueam had to serve and file an
undertaking in damages in favour of the appellant in the limited amount of two
million dollars.
[31]
The
appellant and Musqueam agreed that the test for the granting of an
interlocutory injunction was the one set out in RJR-MacDonald. With
respect to the existence of a serious question to be argued, the Motions Judge
decided, at para. 23, that “because the relief requested here is in part
similar to the relief sought on the ultimate disposition of the underlying
judicial review, the threshold of ‘serious question’ requires somewhat greater
scrutiny as to the merits…” The Motions Judge concluded that the issue of the
duty to consult in good faith “is a serious issue… and is fairly arguable” (at
para. 26). In concluding so, he followed the reasons of Justice Phelan in Musqueam
Indian Band v. Canada (Governor in Council) 2004 FC 579 (the “Garden City” case), and
bolstered that holding by referring to the Supreme Court’s reasoning in Haida
Nation v. British Columbia (Minister of Forests) [2004] 3 S.C.R. 511 (“Haida
Nation”).
[32]
With
respect to the question of irreparable harm, the Motions Judge concluded that
the issues that concerned Musqueam might not be addressed in a monetary
settlement, as “An enhanced land base is critical to the Applicant and, as
earlier noted, the Vancouver properties are among a limited inventory of lands
remaining in the hands of the Government of Canada within [Musqueam’s] claim
area” (at paragraph 28).
[33]
With
respect to the balance of convenience stage of the RJR-MacDonald test,
the Motions Judge decided that the public interest in preserving the honour of
the Crown outweighed the public interest derived from the sale of the Properties.
He also noted, at paragraph 32:
The reality
that, on the evidence before the Court, the Crown might have a right to recover
title to the Vancouver properties some twenty-five (25) years into the future,
does not, of itself, constitute adequate compensation to the Musqueam for the
loss of full and meaningful consultation, and possibly accommodation.
[34]
Turning to
the question of an undertaking, the Motions Judge was concerned by the fact
that Musqueam had given no consideration to the position it would be in if it
were successful on its injunction application and were not granted relief from
the obligation to provide an undertaking. Counsel for Musqueam advised that, on
reconsideration, Musqueam was prepared to provide an undertaking but only with
an up-side limit of $2 million, whereas the appellant maintained that an
unlimited undertaking was necessary. The Motions Judge ordered the undertaking
because “no special reasons to the satisfaction of the Court exist in this
matter that would justify relieving [Musqueam] from the burden of providing an
undertaking in damages” (at para. 37). However, the Motions Judge also
recognized that the evidence regarding potential damages was “highly
speculative”.
Issues
[35]
The
appellant raised five issues in this appeal:
- Was
the correct standard on the first branch of the RJR-MacDonald test merely
a “fairly arguable” issue?
- Applying
the appropriate standard, did Musqueam meet the first stage of the RJR-MacDonald
test?
- Did
the Motions Judge err in finding irreparable harm?
- Was
the respondent’s unwillingness to provide a full undertaking in damages,
and the fact that the injunction effectively granted the respondent the
final relief sought, relevant considerations in the balance of convenience
test?
- Did
the Motions Judge err in allowing the respondent to provide a limited
undertaking as to damages after specifically finding that no special
reasons existed that would justify relieving the respondent from the
burden of providing an undertaking as to damages?
[36]
On
cross-appeal, the respondent raises the following issue: did the Motions Judge
err in not exercising his discretion to order that Musqueam not be required to
provide an undertaking to abide by any order concerning damages caused by the
granting or extension of the injunction?
Standard of Review
[37]
The
granting of an injunction is a discretionary decision. Discretionary decisions are not
completely insulated from review and an appellate court may and should intervene
where it finds that the trial judge has misdirected himself as to the
applicable law or made a palpable error in his assessment of the facts: British Columbia (Min. of Forests) v. Okanagan Indian
Band 2003 SCC 71 at
para. 42. See also Bellegarde v. Canada
(Attorney General) 2004
FCA 34 at para. 4.
Analysis
Introduction
[38]
As
indicated earlier, the test to grant an interlocutory injunction is three-fold:
·
Is there a
serious issue to be tried on the underlying proceeding?
·
Will the
applicant suffer irreparable harm not compensable in damages if an
interlocutory injunction is not granted?
·
What is
the balance or convenience or inconvenience as between the parties, taking into
account the public interest?
The onus was on Musqueam to prove each element of the test: Friends
of the West Country Assn. v. Canada (Minister of Fisheries and Oceans) (1998), 234 N.R. 96, [1998]
F.C.J. No. 1690 (QL) (C.A.) at para. 4.
[39]
In my
opinion, this appeal centres around the question of irreparable harm. As such,
I will deal with that question first. I will subsequently briefly address the
remaining issues in this appeal.
Irreparable Harm
[40]
The
entirety of the Motions Judge’s analysis on this issue, at paragraphs 27-29 of
his decision, is reproduced below:
Will the imminent
closing of the sale of the Vancouver properties result in irreparable harm to
the Applicant not compensable in damages? The Court must consider not the
magnitude of the harm, but the "nature of the harm" which would be
caused. While money can be paid as compensation for anything, the mere fact
that compensation can be ordered does not resolve the issue. The Court must
consider the true nature of what may be lost. It would not appear to be in
dispute that the Vancouver properties are
situated within the territory described in The Musqueam Declaration of
Aboriginal Title made by the Musqueam Nation in June, 1976. Treaty negotiations
were entered into by the Applicant with Canada and British Columbia and that
negotiation process has been ongoing, albeit apparently sporadically, since
early 1994. In the affidavit filed on behalf of the Applicant on this
application, the affiant attests:
…
5. Musqueam
currently has approximately 1,200 band members, approximately 55% of whom live
on reserve. The land base of the Musqueam people under the reserve system is
very small and we are suffering from a serious land shortage. Our reserve
allotment on a per capita basis is the smallest of all British Colombia bands.
There are currently over 200 band members waiting on the band housing list. A
significant number of adult members of the Band are unemployed at this time,
and high unemployment has been a chronic problem for our members.
6. The
properties located at 401 Burrard Street and 757 West Hastings
Street
[the Vancouver properties] which
are in issue in this application are located within Musqueam traditional
territory.
Thus, the issues that
concern the Applicant might well not be amenable simply to a monetary
settlement. An enhanced land base is critical to the Applicant and, as earlier
noted, the Vancouver properties are
among a limited inventory of lands remaining in the hands of the Government of
Canada within the Applicant's claim area.
Against the foregoing
brief summary of considerations, I am satisfied that the Applicant will suffer
irreparable harm not compensable in damages if the Vancouver properties are
alienated by the Government of Canada without full and meaningful consultation
in good faith, and perhaps accommodation, in accordance with the honour of the
Crown.
[41]
The Motions
Judge seems to base his finding of irreparable harm on the assumption that, in terms
of the negotiations process, the only land available to Musqueam was land owned
by the federal government. This is a palpable and overriding error of fact.
[42]
In addition,
nowhere in the Motions Judge’s reasons did he consider the nature of the
properties and how they are of specific relevance to Musqueam. Such an omission
constitutes an error of law.
[43]
Finally,
the Motions Judge failed to substantiate precisely how an award of damages
could not compensate Musqueam in the event of the disposition of the Properties.
This, too, constituted an error of law.
[44]
Indeed, I
am not convinced that there has been a demonstration of irreparable harm by
either the Motions Judge or the respondents. Interpreting their arguments as
liberally as possible, there are three potential reasons to find irreparable
harm:
·
The need
for an “enhanced land base”;
·
The loss
of the opportunity for the Properties to be the subject of treaty-negotiations;
and
·
The loss
of an opportunity for Musqueam to consult and be accommodated.
Irreparable Harm #1: Enhanced Land Base
[45]
The need
for an “enhanced land base” does not, in and of itself, constitute a basis for
a finding of irreparable harm.
[46]
Musqueam
led no evidence that the Properties are of special interest or of unique
character to them. Rather, they simply argued that they need more land for
housing.
[47]
As
indicated earlier, the Properties are fully developed, urban properties
primarily suited for business. Musqueam has provided no indication of their
anticipated plans for this property. It could hardly be said that two acres on
which large office buildings are located would satisfy Musqueam’s need for more
land for housing.
[48]
It is
obvious that Musqueam could receive monetary compensation equal to the value of
the Properties and buy vacant land for housing far in excess of two acres.
Therefore they could adequately be compensated in damages and there is no
irreparable harm.
[49]
In this
light, the comments of Justice Rothstein (as he then was) in Soowahlie
Indian Band v. Canada (Attorney General), 2001 FCA 387 (“Soowahlie”)
are helpful. The case of Soowahlie concerned an application against Her Majesty the
Queen in Right of Canada (“Canada”) for an interlocutory injunction
enjoining Canada from transferring a 62-hectare portion of a former Canadian
Forces base at Chilliwack,
British Columbia to the Canada Lands Company. The
Band alleged that the land was reserve land or was subject to Aboriginal title,
and that in the past the land was a place for meeting and for travel routes,
that hunting and gathering took place on the land and that fishing took place
nearby. Accordingly, they argued that they had an historical connection to the
land and if it were disposed of, that connection would be lost. Justice Rothstein concluded
that the principles of expropriation with compensation would be sufficient to
compensate the Band if necessary, and noted at para. 7:
The appellants
have demonstrated no special circumstances relating to the land. They say they
require the land to sustain themselves. The historical connection which the
appellants claim is unrelated to their anticipated use of the land and there is
no evidence as to why this particular land is required having regard to their
anticipated use. The appellants have not established a case of irreparable
harm.
It is sufficient to conclude that if, as the appellants allege, the disposition
of the land constitutes a breach of a fiduciary duty by the respondent, the
Court will be in a position to order damages or to fashion such other remedy as
may be suitable based on the evidence before it. [Emphasis added.]
Irreparable Harm #2: Opportunity for the
Properties to be the Subject of Treaty-Negotiations
[50]
This
argument in favour of an injunction can be dismissed briefly without
entertaining the appellant’s argument that impacts on the treaty process cannot
be considered here. Counsel for Musqueam in oral agreement conceded that if the
lands were sold, they could still make a claim for their value either in the
treaty negotiations or in a separate claim. At this point it is also helpful to
point out that, unlike its provincial counterparts, the federal government does
not limit the subject-matter of negotiations to Crown lands: land for treaties
may include fee simple land acquired by or for the aboriginal groups on a
willing seller/willing buyer basis.
[51]
Moreover,
if Musqueam were to establish in the future that it has an enforceable interest
in either of the Properties, the agreement of purchase and sale provided the
Crown with an ability to regain title to the Properties in order to pass that
title to Musqueam. The sale and leaseback transaction provided the Crown with a
first right of refusal should the purchaser wish to sell the properties during
the course of the Crown’s 25 year lease. In addition, the Crown would have had
the option to repurchase the properties from Larco at the end of that lease. In
the meantime, the Crown would have retained the right of use of the properties
through its lease, including the right to sublease, and thereby could have
provided Musqueam with use of the properties if such an interest was
established. Therefore, if a right to title were established prior to the
expiry of the 25 years, any delay in providing that title would not harm
Musqueam.
Irreparable Harm #3: Loss of an Opportunity for Musqueam to Consult and
be Accommodated
[52]
In this
case, the loss of an opportunity for Musqueam to consult and be accommodated is
insufficient to constitute irreparable harm. I agree with the appellant that if
an allegation of inadequate consultation always constituted irreparable
harm, that could constitute a veto over the government transferring any title
to property which is located in an area claimed as a traditional territory of
an Aboriginal group. That would explicitly contradict the comments of the
Supreme Court of Canada in Haida Nation at para. 48: “This process does not give
Aboriginal groups a veto over what can be done with land pending final proof of
the claim.”
Rather, it is necessary to look deeper in each case and discern whether the
failure to consult constitutes irreparable harm.
[53]
At this
point it is helpful to step back and briefly review the law governing the duty
to consult. The duty to consult, based on the honour of the crown, arises “when
the Crown has knowledge, real or constructive, of the potential existence of
the Aboriginal right or title and contemplates conduct that might adversely
affect it….” (Haida Nation at para. 35, emphasis added; see also Taku
River Tlingit First Nation v. British Columbia (Project Assessment Director)
2004 SCC 74 (“Taku River”)). That is, the duty to consult arises in the
context of the concern over Crown activity infringing on aboriginal rights
before the rights can be proven. The requirement for consultation assists in
the prevention of land and resources from being changed and denuded during the
process of proving rights: Haida Nation at para. 33. However, the facts
at bar suggest that no pending right would be violated by a disposition of the
Properties.
[54]
In Garden
City the Motions Judge in that case concluded that the loss of Musqueam’s
right to be consulted could not be compensated by damages. He elaborated at
paragraphs 44, 46 & 48:
The nature of the harm
which would be suffered if the Garden City property is transferred is the loss
of the right to negotiate and be accommodated in respect of that land. Once the
land is transferred, that right is effectively lost.
[…]
This situation is
analogous to those where there is requirement for an environment study be done
before a permit is issued or for proper notice to be given before a decision is
made. The relevant considerations are public law principles and remedies.
They are jurisdictional in nature, not monetary.
[…]
If the Band’s right is
to have meaning, it cannot be allowed to be lost on the assumption that
“sending a government cheque” would always suffice. It would be too tempting to
allow government authorities to ignore these types of conditions to the exercise
of power by merely permitting payment of some form of compensation as a
substitute for the proper exercise of powers. [Emphasis
added.]
[55]
If what
was meant by the Judge in Garden City was that the mere assertion of the
duty to consult itself is always sufficient to prove irreparable harm, then I
disagree. Rather, I think the decision can be explained by the fact that in Garden
City the lands comprised 136 acres and the Judge in that case had found
that Musqueam not only claimed an interest in the land, but that the land had
unique importance to Musqueam (Garden City, at paragraph 16).
[56]
In the
case before this Court the Properties are office buildings in downtown, Vancouver, encompassing two acres.
Their use upon disposition to Larco will not change. This is distinct from the Garden
City case, where the use and character of the properties could change as a
result of the transaction, and where Musqueam had submitted evidence of the
land’s unique importance beyond a proprietary interest.
[57]
The
content of the duty to consult lies on a spectrum, depending on the strength of
the claim to title, the extent of the Aboriginal right claimed, and the
potential for infringement. As Chief Justice McLachlin stated in Haida
Nation, at paragraphs 43-4:
…I turn to the kind of
duties that may arise in different situations. In this respect, the concept of
a spectrum may be helpful, not to suggest watertight legal compartments but
rather to indicate what the honour of the Crown may require in particular
circumstances. At one end of the spectrum lie cases where the claim to title is
weak, the Aboriginal right limited, or the potential for infringement minor. In
such cases, the only duty on the Crown may be to give notice, disclose
information, and discuss any issues raised in response to the notice.
"'[C]onsultation' in its least technical definition is talking together
for mutual understanding": T. Isaac and A. Knox, "The Crown's Duty to
Consult Aboriginal People" (2003), 41 Alta. L. Rev. 49, at p. 61.
At the other end of the
spectrum lie cases where a strong prima facie case for the claim is
established, the right and potential infringement is of high significance to
the Aboriginal peoples, and the risk of non-compensable damage is high. In such
cases deep consultation, aimed at finding a satisfactory interim solution, may
be required. While precise requirements will vary with the circumstances, the
consultation required at this stage may entail the opportunity to make
submissions for consideration, formal participation in the decision-making
process, and provision of written reasons to show that Aboriginal concerns were
considered and to reveal the impact they had on the decision. This list is
neither exhaustive, nor mandatory for every case. The government may wish to
adopt dispute resolution procedures like mediation or administrative regimes
with impartial decision-makers in complex or difficult cases.
[58]
Without
commenting on the content of Musqueam’s right to be consulted and possibly
accommodated (since the merits of that case are to be heard after the current
issue concerning injunctive relief is concluded) it is helpful, for
illustrative purposes, to compare the facts in this case with the rights at
stake in the leading cases on the duty to consult. In Haida Nation the
decision to issue licences to cut trees on the Haida Gwaii could have deprived
the Haida Nation of forests vital to their economy and their culture. As Chief
Justice McLachlin stated at paragraph 7, “The stakes are huge. […] Forests take
generations to mature… and old-growth forests can never be replaced.” In Mikisew
Cree First Nation v. Canada (Minister of Canadian
Heritage),
2005 SCC 69, the building of a road through a reserve impacted a significant
number of trappers and hunters. In Taku
River, the
building of a road through Taku River Tlingit’s First Nation territory passed
through an area critical to their economy and could have had an impact on its
continued ability to exercise its Aboriginal
hunting, fishing, gathering, and other traditional land use activity rights. In our case, there has been
no allegation of an infringement of any aboriginal right that would or even may
result from the disposition of the Properties. If there is no harm alleged in
terms of an absolute rights analysis, how can the loss of a right to be
consulted with respect to that right constitute irreparable harm? Moreover, if
loss of the Properties can be adequately compensated in damages (see “Irreparable
Harm #1: Enhanced Land Base” above), then surely the loss of the right to
consult about disposing of the Properties can equally be compensated in damages
in this case.
[59]
It was
argued that refusing an injunction in this case would set a precedent in that
the Crown could always claim that there was no irreparable harm because damages
could always be an adequate remedy. I do not agree. Each case has its own
particular facts. Where an Aboriginal band leads evidence of unique need, special
connections to the land in question, or a potential change in the character of
the land in question, the result may well be different.
[60]
In light
of the conclusion on irreparable harm, I am of the view that the appeal must be
allowed and the injunction be set aside. Therefore it is not, strictly
speaking, necessary to consider the other issues. However, I shall make some
comments on the remaining issues in this appeal.
Balance of Convenience and Undertaking
[61]
There was
no basis for the Motions Judge to order a limited undertaking. The usual
unlimited undertaking would have been more appropriate given the circumstances
of this case. Moreover, the awarding of a limited undertaking should have been
a factor to be considered in the “balance of convenience” branch of the RJR-Macdonald
test.
[62]
Rule
373(2), as indicated earlier, provides:
|
(2) Unless a judge
orders otherwise, a party bringing a motion for an interlocutory injunction
shall undertake to abide by any order concerning damages caused by the
granting or extension of the injunction.
|
(2) Sauf ordonnance
contraire du juge, la partie qui présente une requête pour l’obtention d’une
injonction interlocutoire s’engage à se conformer à toute ordonnance
concernant les dommages-intérêts découlant de la délivrance ou de la
prolongation de l’injonction.
|
It seems to me that the default position under this
provision is that a limited undertaking should not be accepted unless the Court
is presented with some evidence with respect to compelling circumstances
that warrant a limited undertaking or no undertaking. In this case, Musqueam
filed no evidence, let alone any evidence with respect to its ability to
pay. Therefore the Motions Judge had no evidence on which to order that
the undertaking be limited.
[63]
Indeed,
the Motions Judge noted that “no special reasons to the satisfaction of the
Court exist in this matter that would justify relieving [Musqueam] from the
burden of providing an undertaking in damages” (at paragraph 37). Why, then,
did he only order a limited undertaking? The Motions Judge likely based his
decision on the plea of counsel that Musqueam could not afford a proper
undertaking. Counsel for Musqueam made the same argument before this Court. At
no time did Musqueam attempt to file evidence stating that they could not
afford to provide an unlimited undertaking. Given that they were the only party
in a position to explain their financial situation, I believe that an adverse
inference should have been drawn by the Motions Judge with respect to their
failure to provide any evidence in this regard. Certainly, there was no
evidence that the two million dollar undertaking would have been sufficient to
compensate the appellant for any loss it might suffer if it turned out that the
injunction should not have been granted.
[64]
In
considering the “balance of convenience”, the considerations that the Motions
Judge balanced were the public interest in having the appellant carry out its
proposed transaction with the public interest in preserving the honour of the
Crown, the latter of which would be accomplished by not permitting the
transaction to proceed until the appellant’s consultation record had been
reviewed by the court in the judicial review. According to the Motions Judge, the
public interest in preserving the honour of the Crown trumped any interest in
carrying out the proposed transaction.
[65]
Similar to
the test for irreparable harm, this limited approach to the balance of
convenience test also results in an injunction against the disposition of land
being inevitable whenever an aboriginal group involved in the treaty process
alleges that the Crown has insufficiently consulted or accommodated.
[66]
In this
case, the undertaking provided was inadequate. As a result of the injunction,
it is possible that the appellant had lost $33 million dollars in what was a
time-sensitive transaction. In previous jurisprudence the absence of an undertaking has been
taken into account in assessing whether or not to grant an injunction: Soowahlie,
supra at para. 13 and Siska Indian Band v. British Columbia (Minister of Forests) (1998), 62 B.C.L.R. (3d) 133, [1998]
B.C.J. No. 1661 (QL) (B.C.S.C.) at para. 29. The same reasoning should also apply
with respect to the adequacy of a limited undertaking, in my opinion.
[67]
Given the
inadequacy of the limited undertaking, the balance of convenience weighs in
favour of the appellant.
[68]
The
Motions Judge erred in law and made a palpable and overriding error of fact in
failing to consider the impact of a limited undertaking in assessing the
balance of convenience in granting an injunction. The Motions Judge also made
an error of law and a palpable and overriding error of fact in not granting an
unlimited undertaking in the absence of any evidence to suggest that a limited
undertaking was warranted.
[69]
My
conclusions on the issue of balance of convenience and undertakings support the
conclusion that the appeal should be allowed.
Serious Issue
[70]
Following
the House of Lords decision of American Cyanamid Co. v. Ethicon Ltd.
[1975] A.C. 396, the Supreme Court of Canada confirmed in RJR-MacDonald
that the first branch of the test for an interlocutory injunction is simply
whether there is a serious question to be tried. The threshold has been
classified as a low one, and a judge must simply be satisfied that the
application is neither vexatious or frivolous, as “A prolonged examination of
the merits is generally neither necessary nor desirable” (RJR-MacDonald
at paragraph 50).
[71]
However,
when the result of the application for injunction will impose such hardship on
one party as to remove any potential benefit from proceeding to trial, a more
extensive review of the merits should be done by the judge (at paragraph 51 of RJR-MacDonald).
Indeed, the appellant, Musqueam and the Motions Judge all agreed that because
the relief requested was in part similar to the relief sought on the ultimate
disposition of the underlying judicial review, the threshold for “serious
question” requires greater scrutiny as to the merits than might otherwise be
the case.
[72]
Ultimately,
however, the Trial Judge concluded, at paragraph 26:
…I am
satisfied that what has been quoted from Haida and from other
authorities has more than established that the issue of the duty to consult in
good faith and perhaps to accommodate is a serious issue that is live and
current on the evidence that was here before the Court. I am further satisfied
that it is also sufficient for purposes of this injunction application, taking
into account the degree of scrutiny required on the facts of this matter with
regard to the “serious issue” element of the tripartite test, that the issue
was here raised and is fairly arguable. [Emphasis
added.]
[73]
The use of
the test “fairly arguable” causes one to wonder whether the Motions Judge
properly understood the correct test. This is especially of concern where the
Motions Judge himself, with the consent of the appellant and Musqueam, stated that
a more scrutinizing standard should be applied due to the nature of the relief
claimed (see the Motions Judge’s reasons at paragraph 23). The Motions Judge
also noted at paragraph 26:
Whether the
nature of the Vancouver properties, including their relatively small land-base
footprints and their location in the heart of the business center of downtown
Vancouver impact in a manner that would allow the underlying application for
judicial review to be distinguished from the equivalent application in the
“Garden City” matter, earlier referred to, is a matter for determination, if
indeed determination is necessary, on another day.
It seems to me that given the stark difference in facts
between this case and the Garden City case, and his reliance on Garden
City, it may not have been appropriate to leave the question of
distinguishing the Garden City case for “another day.” The consequence
is that this Court would have to examine the facts to see if there is a serious
issue to be tried.
[74]
Because of
the earlier reasons in which I concluded that the appeal should be allowed, it
is unnecessary to delve further into this issue.
Conclusion
[75]
For the
reasons above, I would allow the appeal with costs, set aside the decision of
the Motions Judge and dismiss the motion for an interlocutory injunction.
"J.
Edgar Sexton"
"I
concur
Alice Desjardins J.A."
"I
agree
John M. Evans J.A."
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