Date: 20071005
Docket: T-1691-07
Citation: 2007 FC 1027
BETWEEN:
MUSQUEAM
INDIAN BAND
Applicant
and
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA,
THE HONOURABLE MICHAEL M. FORTIER, P.C.
IN HIS CAPACITY AS MINISTER OF PUBLIC
WORKS AND GOVERNMENT SERVICES,
TREASURY BOARD OF CANADA AND
LARCO INVESTMENTS LTD.
Respondents
REASONS FOR
ORDER
GIBSON J.
INTRODUCTION
[1]
On
the 19th of September, 2007, the Musqueam Indian Band (the
“Applicant” or the “Musqueam”) filed an application for judicial review in
respect of a decision announced on the 20th of August, 2007 by the
Minister of Public Works and Government Services, (the “Minister”) that the
Government of Canada had sold nine (9) parcels of real property to the
Respondent Larco Investments Ltd. (“Larco”), including two (2) properties in
Vancouver, British Columbia namely 401 Burrard Street and the Sinclair Centre
at 757 West Hastings Street (the “Vancouver properties”). Shortly after the
announcement, the Applicant was advised that the sale of the nine (9) properties
was scheduled to close between the first and thirty-first of October, 2007.
The announcement indicated that the sale price for the nine (9) properties
would be 1.644 billion dollars and that each of the properties would be leased
back to the Government of Canada for a period of twenty-five (25) years. The
portion of the purchase price allocated to each of the Vancouver properties
is in excess of 100 million dollars.
[2]
On
the 24th of September, 2007, the Applicant filed a motion for an
interlocutory injunction restraining the Government of Canada from
transferring, selling, or otherwise disposing of the Vancouver properties
pending the hearing of the underlying application for judicial review. The
principle bases for the application for the interlocutory injunction arose from
the Applicant’s outstanding land claim in respect of an area that includes the
Vancouver properties, the imminent closing date for the real estate
transaction, the existence of a clause in the agreement of purchase and sale
that entitles the Government of Canada to withdraw any two (2) of the nine (9)
properties from the sale and the reality that the uncertainty arising from the
Applicant’s application for judicial review created, and thus severely impacts
on Larco’s negotiations to arrange financing for the transaction within a time
frame that would allow for the closing of the transaction by the 31st
of October.
[3]
Given
the urgency arising from the foregoing circumstances, a special sitting of the
Court at Vancouver was
scheduled for Thursday and Friday, the 27th and 28th of
September. At the close of the sitting, the Court granted an interlocutory
injunction in favour of the Applicant and indicated that reasons would follow.
These are those reasons.
BACKGROUND
[4]
The
Musqueam Indian Band is an Indian Band within the meaning of the Indian Act. The
present members of the Musqueam Indian Band are descendents of Aboriginal
people who lived in an area in the lower mainland of British Columbia that
includes downtown Vancouver, where the Vancouver properties
are situated. Musqueam has three (3) reserves located in the lower mainland.
There are currently approximately one thousand two hundred (1,200) members of
the Band, approximately 55% of whom live on reserve. An affiant on behalf of the
Musqueam attests that its land base under the reserve system is very small in
relation to its membership with the result that the Band suffers from a serious
land shortage.
[5]
The
Musquean Indian Band has been engaged in treaty negotiations with the Governments
of Canada and British
Columbia
since early 1994. It remains committed to protecting the remaining Crown
property within its traditional territory that remains in the hands of the
Government of Canada. This litigation represents at least the third time in
recent years that the Applicant has intervened by litigation in proposed sales
of Government lands alleged to be within their traditional territory.
[6]
Public
Works and Government Services Canada (“PWGSC”) provides accommodation services
for federal government employees across Canada in leased
and Crown owned buildings. The Government determined to look at alternatives
which would allow it to move out of the business of real estate management and
to focus on what it considered it to be “core” Government activities, while at
the same time, saving taxpayer money. To this end, on the 16th of
June, 2006, the
Government requested proposals in this
regard in relation to thirty-five (35) properties, later increased to forty
(40), within the portfolio of Government owned properties. The nine (9)
properties that are the subject of the underlying agreement of purchase and
sale, including the two (2) Vancouver properties, are within
the forty (40) property inventory.
[7]
On
the 15th of September, 2006, the Government announced that a
contract had been awarded to private sector consultants to review the proposal.
[8]
On
the 14th of November, 2006, the consultants reported in an “interim”
report with respect to nine (9) of the forty (40) properties recommending that
Government proceed “immediately” to reduce its owned-to-lease ratio by selling
and leasing back conventional office assets which included the nine (9)
properties.
[9]
On
the 5th of March, 2007, the Minister announced that the Government
of Canada was proceeding to determine whether it would be advisable to sell and
lease-back the nine (9) properties.
[10]
On
the 7th of March, 2007, an official in PWGSC wrote to the Applicant
advising of the announcement, of the fact that bids were then being requested
for the nine (9) properties to assess the merits of proceeding with any sale
and lease-back and indicating no commitment had yet been made by the Government
to sell any of the nine (9) properties then under consideration. The official
wrote:
Before making any
decision in relation to the properties, Public Works and Government Services
Canada invites the Musqueam First Nation to provide us with comments concerning
the nature and extent of any interest the Musqueam First Nation may have with
respect to this proposal.
The official went on to indicate that PWGSC
would appreciate hearing from the Musqueam “…within thirty days of receipt of
this letter.”
[11]
The
Applicant responded by letter dated the 29th of March, 2007
although, for whatever reason, it would appear that that letter was not
received by PWGSC until mid to late April. The Applicant wrote, in part as
follows:
Musqueam notes this
proposal with concern regarding Canada’s ongoing attempts to dispose of crown
held land within Musqueam traditional territory. On behalf of the Musqueam
Indian Band I inform you Musqueam is not in favour of the proposal for these
two properties [the Vancouver properties] for a number of reasons.
As you may be aware,
Musqueam has voiced this concern with Canada’s policies for many
years. In particular Musqueam has had much discussion and correspondence with
the Canada Lands Company regarding 401 Burrard [one of the two Vancouver properties]
at least as far back as 1996.
If you are not already
aware, these two land parcels are in the city of Vancouver within the
heart of Musqueam traditional territory, in close proximity to designated
Musqueam archaeological sites of major significance, and a few kilometres from
our main reserve, Musqueam IR #2. …
On several occasions
over the past few years, Musqueam has indicated our lawful interest in the
crown held lands within our traditional territory. The properties you propose
for disposal could form part of our land claim settlement and are of special
importance to us as very, very little land remains within our traditional
territory that has not been alienated by the Crown to third parties.
Musqueam would like to
meet with you and senior representatives from your Ministry to discuss the
current status of the land and the possibility of acquiring the land for uses
beneficial to our community. In this regard we hope to deal directly and
bilaterally with the Ministry and Canada to work out an
accommodation amongst us.
Recent court cases such
as the Haida decision of the Supreme Court of Canada have confirmed that
the honour of the crown requires that First Nations aboriginal interests be
accommodated prior to proof of their aboriginal title where evidence of their
title is strong. In March of 2005, the Court of Appeal confirmed that the
strength of Musqueam’s aboriginal interests places a duty on the crown at “the
more expansive end of the spectrum” (at para 93 and 94 of Musqueam Indian
Band v. The Minister of Sustainable Resource Management). This would
include the accommodation of our people’s need and entitlement for more land.
We remind you that Musqueam has already proved an aboriginal entitlement in the
celebrated case of Regina v. Sparrow.
At present 45% of our
population lives off reserve and we do not have the land base to regain our
stature as the self-sustaining people we once were. This is a result of
Musqueam having one of the smallest per capita reserve allocations in Canada. It should
be noted that our people are in a unique situation in this Province since we
live adjacent to a large urban center and, consequently, the majority of land
within our traditional territory has already been alienated to third parties.
Our situation speaks
directly to the pronouncement of the Supreme Court in Haida when it
confirmed it is not in keeping with the duty and honour of the Crown towards
First Nations for the Crown to undermine the reconciliation of aboriginal title
by disposing of land and resources where doing so would effectively deprive the
First Nation of any benefit flowing from its aboriginal entitlement to such
lands and resources… This is precisely what Musqueam now faces. We wish to
address this problem proactively and positively.
Most of the land within
our traditional territory has already been alienated and we face the very real prospect
of a landless settlement. This is not acceptable to us and, we believe, also
unacceptable to the Crown. We presume the land will not be offered for sale or
by any other disposition to third parties prior to completing a suitable
accommodation with Musqueam. Accordingly, we wish to discuss the accommodation
of our rights with regard to what little Crown held land remains within our territory.
We therefore kindly
request that we be accommodated with regard to the two properties and begin the
consultation process…immediately.
[citations
omitted]
[12]
The
three citations in the foregoing quotation are to Haida Nation v. British
Columbia (Minister of Forests),
Musqueam Indian Band v. British Columbia (Minister of
Sustainable Resource Management) and R. v. Sparrow. The
second of those decisions, Musqueam v. British Columbia, is a decision
of a three member panel of the British Columbia Court of Appeal with all three
members of the panel concurring in the result but writing separate reasons.
The pin-point reference to that decision is to the reasons of the Honourable
Mr. Justice Hall.
[13]
PWGSC
responded by letter dated the 4th of May, 2007 proposing a meeting
during the latter part of the week of the 21st of May, 2007. The
proposed meeting took place on the 22nd of May.
[14]
Minutes
of the meeting prepared by a senior official of PWGSC indicate that the meeting
commenced at 10:15 a.m. and continued for approximately one (1) hour. The
minutes record that a PWGSC official indicated that bids for the nine (9)
properties would be received by the 12th of June and that the bids
would be evaluated through the summer with recommendations going forward in
August. The minutes further indicate that the expected closing of the
transaction would be in September/October of 2007 and that there would be a
clause in the lease-back arrangements providing an option for the Crown to buy
back the properties after twenty-five (25) years for “government policy
reasons”.
[15]
A
representative of the Applicant inquired whether the meeting amounted to an
information sharing session. The response was that it was just that. It was
agreed that access for the Applicant to the “data room” established for the use
of potential bidders would be provided. The Musqueam did not avail themselves
of such access.
[16]
An
affidavit on behalf of the Applicant attested to by an individual who attended
the foregoing meeting on the Applicant’s behalf describes the meeting as “an
information meeting” and a “…preliminary meeting to setting up a consultation process”.
Hand written notes of the meeting made by the same person confirm that
impression. In any event, it is clear from the affidavits filed by both
parties before the Court and their respective notes or minutes of the meeting,
that no further meeting was scheduled.
[17]
On
the 31st of May, 2007, an official of PWGSC wrote to the Applicant,
thanking the Musqueam for the meeting held on the 22nd of May, and
posing questions and outlining further steps that would be taken as follows:
…what
information can you provide to support an assertion of aboriginal title over
the above-mentioned properties [the Vancouver 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 this assessment
will determine how we will proceed.
A response was requested. “…by the end of
June.”
[18]
The
Applicant responded by letter dated the 29th of June, 2007
indicating that it was gathering material and that it would provide a response
and related material within two (2) weeks. The Applicant again replied on the
11th of July, 2007 in a letter running to some six (6) pages and
responding to PWGSC’s letter under the headings: “Your Letter of May 31,
2007”, “Our Aboriginal Title to the Properties”, “Serious Impact of the Proposed
Sales on our Aboriginal Title”, “The absence of any Public Necessity for the Proposed
Sales”, “Reversing the Past Breach of the Duty to Consult”, and “Future Steps”.
The letter was accompanied by two (2) expert opinions, one from an individual
who had conducted ethnographic research among Musqueam peoples and whose
doctoral thesis in anthropology at the University of Washington in 1970 was
“…directly concerned with Musqueam social and cultural systems.” The second
report was prepared by an archaeologist and heritage consultant. Both speak
authoritatively to the long claims to settlement by the Musqueam of what is now
the heart of Vancouver.
[19]
By
letter dated the 27th of July, 2007, the Applicant’s letter and attachments
was acknowledged. The Musqueam were assured that the letter and attachments
had been reviewed. They were assured that “no final decision has yet been made
by the Crown to dispose of [the Vancouver] properties”. The
Musqueam were further assured that they would be notified in writing of any
final decision.
[20]
No
further “consultation” or communication occurred until a letter from PWGSC to
the Applicant dated the 20th of August, 2007. On that date, by
letter, PWGSC notified the Applicant of a final decision by the Crown to sell
the nine (9) properties, including the Vancouver properties.
PWGSC wrote:
The
information provided by Musqueam First Nation on July 11, 2007 and the
information gathered independently by PWGSC was reviewed and 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.
The sale is
scheduled to close at the latest on October 31, 2007.
No details of relevant information
“gathered independently by PWGSC” would appear to have ever been communicated
to the Applicant and thus, no opportunity to review such information or to
respond to it was provided.
[21]
Institution
of this litigation followed.
THE ISSUES
[22]
The
issues on this application for an interlocutory injunction and related relief
are the following:
1) the
test for the granting of an interlocutory injunction in circumstances such as
those here before the Court;
2) whether
there is a serious issue to be tried on the underlying application for judicial
review;
3) whether
the Applicant will suffer irreparable harm not compensable in damages if an
interlocutory injunction is not granted;
4) the
balance of convenience or inconvenience as between the parties taking into
account the public interest;
5) if
an interlocutory injunction is to be granted, whether the Applicant should be
relieved of the usual requirement that an undertaking to abide by any order of
this Court concerning damages caused by the granting or extension of the injunction;
and
6) costs.
ANALYSIS
1) The test for granting
of an interlocutory injunction
[23]
The
parties before the Court were in agreement that the Applicant must satisfy the
tripartite test set forth in RJR-MacDonald Inc. v. Canada (Attorney
General). The elements
of that test are serious issue to be tried, irreparable harm and balance of
convenience or inconvenience. On the facts of this matter, 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
than might otherwise be the case. Further, as anticipated
by the enumeration of the issues above, in
considering the balance of convenience or inconvenience,
while this matter is not a constitutional
case, I am satisfied that the Court must consider the public
interest and the presumed legitimacy in the
public interest of the Crown decision at issue.
2) Serious issue
[24]
The
sole issue on the application for judicial review underlying this application
for an interlocutory injunction is whether Her Majesty the Queen in Right of
Canada and related Respondents (the “Crown respondents”), which is to say all
of the remaining Respondents except Larco, had a duty to consult with the
Applicant in good faith concerning any disposition of the Vancouver properties
prior to any such disposition, or not only to consult but also to accommodate, and
whether the Crown respondents, if such a duty existed on the facts of this
matter, fulfilled that duty to consult or to consult and accommodate prior to
the disposition at issue. My colleague Justice Phelan dealt with an identical
issue on and application for an interlocutory injunction in Musqueam Indian
Band v. Canada (Governor in Council) (the “Garden River” matter).
Justice Phelan wrote at paragraphs [24] to [31] of his reasons:
[24] The
essence of the Band’s [the Applicant’s] case is described in its Memorandum of
fact and law as follows:
9. What
Musqueam is pursuing in this proceeding is an opportunity for good faith
negotiations and a sincere effort on the part of the Crown to accommodate their
rights and interests relating to the Garden City property. They seek this
opportunity before any transfer of the lands, to CLC or otherwise occurs. This
is the basis for their request for interlocutory relief.
[25] The
plea is, as I understand it, analogous to a demand for “good faith” bargaining
in the labour context but complicated by principles of fiduciary duty owed the
natives generally and principles of public law and the jurisdiction of the Canada respondents.
[26]
Reviewing the facts established by the Applicant and as mentioned in paragraph
18, it is fairly arguable that the Government of Canada has not engaged in
either negotiation or accommodation of the type which the Applicant says it is
required to do.
[27] The
critical issue as per paragraph 23, is whether there is a sufficiently serious
issue as to whether such duty to negotiate and accommodate exists.
[28] In Taku
River Tlingit First Nation v. Tulsequah Chief Mine Project…the British
Columbia Court of Appeal set out the existence and nature of the duty owed:
To accept the
Crown’s proposition that the obligation to consult is only triggered when an
aboriginal right has been established in court proceedings would ignore the
substance of what the Supreme Court has said, not only in Sparrow but in
earlier decisions which have emphasized the responsibility of government to
protect the rights of Indians arising from the special trust relationship
created by history, treaties and legislation. …Indeed, if the Crown’s
proposition was accepted, it would have the effect of robbing s. 35(1) of much
of its constitutional significance.
…
In my
opinion, the jurisprudence supports the view taken by the chambers judge that,
prior to the issuance of the Project Approval Certificate, the Minister of the
Crown had to be “mindful of the possibility that their decision might infringe
aboriginal rights” and, accordingly, to be careful to ensure that the substance
of Tlingit’s concerns had been addressed.
[29] The
Canada Respondents, therefore, have a responsibility to safeguard the interests
of natives, which the Band says it is not doing.
[30] The
Canada Respondents also have a competing obligation to act in the best
interests of the public at large which may entail engaging in tough
negotiations. The balancing of these competing obligations is no easy matter
and will be an issue for determination on the judicial review hearing.
[31] In
2002, the British Columbia Court of Appeal, gave further guidance on the nature
of the obligations owed. In Haida Nation v. British Columbia (Minister of
Forests),
… that Court defined the issue it was considering as …:
The principle
issue in this appeal is about whether there is an obligation on the Crown and
on third parties to consult with an aboriginal people who have specifically
claimed aboriginal title or aboriginal rights, about potential infringements,
before the aboriginal title or rights have been determined by a Court of
competent jurisdiction.
[32] The
B.C. Court of Appeal held that this was an important issue because the Crown
could otherwise ignore or override aboriginal title or aboriginal rights until
those had been established by treaty or judgment.
[33]
Likewise in this case, the Canada Respondents could while ignoring the
obligation to consult and accommodate (to the extent that it exists), sell or
alienate the very subject-matter of the consultation and accommodation.
[citations
omitted]
[25]
At
the time the “Garden River”
matter was before my colleague Justice Phelan, an appeal from the British
Columbia Court of Appeal in the Haida Nation matter referred to in the
foregoing quotation had been heard by the Supreme Court of Canada. Judgment
had not been delivered. Judgment for the Court was delivered by the Chief
Justice on the 18th of November, 2004 providing further guidance on
the duty to consult and to accommodate. The following passages are extracted from
that judgment:
At paragraph 14:
…Aboriginal claims
litigation can be very complex and require years and even decades to resolve in
the courts. An interlocutory injunction over such a long period of time might
work unnecessary prejudice and may diminish incentives on the part of the
successful party to compromise. While Aboriginal claims can be and are pursued
through litigation, negotiation is a preferable way of reconciling state and
Aboriginal interests. For all these reasons, interlocutory injunctions may
fail to adequately take account of Aboriginal interests prior to their final
determination.
At paragraphs 16 and 17:
The
government’s duty to consult with Aboriginal peoples and accommodate their
interests is grounded in the honour of the Crown. The honour of the Crown is
always at stake in its dealings with Aboriginal peoples: see for example R.
v. Badger, …; R. v. Marshall,… . It is not a mere incantation, but
rather a core precept that finds its application in concrete practices.
The historical
roots of the principle of the honour of the Crown suggest that it must be
understood generously in order to reflect the underlying realities from which
it stems. In all its dealings with Aboriginals peoples, from the assertion of
sovereignty to the resolution of claims and the implementation of treaties, the
Crown must act honourably. Nothing less is required if we are to achieve “the
reconciliation of the pre-existence of aboriginal societies with the
sovereignty of the Crown”: Delgamuukw, … .
At paragraphs 25 to 27:
Put simply, Canada’s Aboriginal
peoples were here when Europeans came, and were never conquered. Many bands
reconciled their claims with the sovereignty of the Crown through negotiated
treaties. Others, notably in British Columbia, have yet to do so.
The potential rights embedded in these claims are protected by s. 35 of the Constitution
Act, 1982. The honour of the Crown requires that these rights be
determined, recognized and respected. This, in turn, requires the Crown,
acting honourably, to participate in processes of negotiation. While this
process continues, the honour of the Crown may require it to consult and, where
indicated, accommodate Aboriginal interests.
…
Honourable negotiation
implies a duty to consult with Aboriginal claimants and conclude an honourable
agreement reflecting the claimants’ inherent rights. But proving rights may
take time, sometimes a very long time. In the meantime, how are the interests
under discussion to be treated? Underlying this question is the need to
reconcile prior Aboriginal occupation of the land with the reality of Crown
sovereignty. Is the Crown, under the aegis of its asserted sovereignty,
entitled to use the resources at issue as it chooses, pending proof and
resolution of the Aboriginal claim? Or must it adjust its conduct to reflect
the as yet unresolved rights claimed by the Aboriginal claimants?
The answer, once again,
lies in the honour of the Crown. The Crown, acting honourably, cannot
cavalierly run roughshod over Aboriginal interests where claims affecting those
interests are being seriously pursued in the process of treaty negotiation and
proof. It must respect these potential, but yet unproven interests. The Crown
is not rendered impotent. It may continue to manage the resource in question
pending claims resolution. But, depending on the circumstances, discussed more
fully below, the honour of the Crown may require it to consult with and
reasonably accommodate Aboriginal interests pending resolution of the claim. To
unilaterally exploit a claimed resource during the process of proving and
resolving the Aboriginal claim to that resource, may be to deprive the
Aboriginal claimants of some or all of the benefit of the resource. This is
not honourable.
And at paragraph 35:
But, when precisely does
a duty to consult arise? The foundation of the duty in the Crown’s
honour and the goal of reconciliation suggest that the duty 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: see Halfway River First Nation v. British Columbia (Ministry of
Forests), …
[citations omitted, emphasis
added]
[26]
Much
more that is relevant to the facts of this matter is said in the judgment of
the Supreme Court in Haida than what has just been quoted. That being
said, 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. 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.
3) Irreparable Harm
[27]
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.
[28]
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.
[29]
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.
4) Balance of
Convenience or Inconvenience
[30]
As
earlier noted, on the facts of this matter, in determining where the balance of
convenience or inconvenience lies as between the Applicant and the Crown respondents,
the public interest must be taken into account.
[31]
Counsel
for the Crown respondents urged that deference is owed by this Court to the
responsibility of the Crown respondents to make and to implement public policy
in the public interest and that the sale of the Vancouver properties, together
with the other seven (7) properties included in the sale and lease-back
arrangement at issue, amounts to just that, a partial implementation of a
government policy adopted in the public interest with substantial benefits
flowing from increased efficiency in government operations and substantial
short term and long term savings of public monies. In contrast, counsel for
the Musqueam urged that there is a strong interest, not only on the part of the
Musqueam, but of the public in general, in preserving the honour of the Crown
through the conduct of full and meaningful consultations in good faith, and, if
appropriate, accommodation of the Musqueam interests, before any transfer of
title to the Vancouver properties takes place.
[32]
I
am satisfied that, on balance, the public interest in preserving the honour of
the Crown outweighs the public interest, of a comparatively short to medium
term nature, deriving from the essentially immediate sale of the Vancouver
properties. 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.
5) An undertaking to
abide by any Order of this Court concerning damages caused by the granting or
extension of an interlocutory injunction
[33]
In
written materials filed on behalf of the Applicant on this application, the
Applicant submits that it should not be required to follow the usual practice
of providing an undertaking in damages if it is successful on the application.
It submitted that its case for an injunction is far stronger than that of the
Crown respondents to the contrary, both on the serious issue to be tried and
the balance of convenience tests, that special circumstances exist in this
matter in that the Applicant is seeking its injunction against the Crown and in
that its application is based on a fundamental constitutional right. Further,
the Applicant urges that the potential for damages, given the size of the total
real estate transaction at issue, is very high and uncertain. Counsel urged
that the burden of such an undertaking would be unsustainable, notwithstanding
that the Applicant acknowledges that it is not “impoverished”.
[34]
In
response, counsel for the Crown respondents urges that no special circumstances
exist that would justify relief in favour of the Applicant from provision of a
meaningful undertaking which undertaking would, in effect, amount to some
assurance of protection in favour of the interests of all Canadian taxpayers.
[35]
At
the opening of the hearing of the application, the Court inquired whether the
Applicant had put itself in a position to provide an undertaking in the event
that it was successful in achieving an interlocutory injunction and the Court
determined that it should not be relieved of the responsibility to provide an
undertaking. Counsel for the Applicant responded that the Applicant 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 provision of an
undertaking. The Court expressed concern with this response.
[36]
Before
the completion of the hearing, the Applicant had an opportunity, albeit a
limited opportunity, to reconsider its position with regard to an undertaking.
Counsel for the Applicant advised that, on reconsideration, the Applicant was
prepared to provide an undertaking but with an up-side limit of $2 million.
Counsel for the Crown respondents maintained her position that an unlimited
undertaking should be provided.
[37]
At
the close of hearing, the Court advised that an interlocutory injunction would
issue in favour of the Applicant and that an undertaking in damages in the
limited amount of $2 million would be required. The Court’s reasoning in accepting
the undertaking offered by the Applicant was the following: first, no special
reasons to the satisfaction of the Court exist in this matter that would
justify relieving the Applicant from the burden of providing an undertaking in
damages; that being said, the Court accepted submissions on behalf of the
Applicant that the only evidence before the Court on potential damages was
highly speculative resulting in an estimated amount of potential damages that
would have placed an unreasonable burden on the Applicant on all of the facts
of this matter. That being said, the Court expressed its concern that the
position adopted by the Applicant on this issue that left the Applicant with
essentially no opportunity to examine what options might be available to it to
support an assumption by it of a more substantial undertaking at an assumable
cost.
[38]
The
Court’s order herein, issued on the date of completion of the hearing, required
the Applicant to file and serve its limited undertaking that same day in order
to preserve the impact of the injunction issued. The Applicant fulfilled the
requirement.
6) Costs
[39]
The
Applicant sought its costs of this application. In light of what the Court
considered to be the unacceptable position adopted by the Applicant on the issue
of an undertaking in damages, the Court, in its discretion, declined to order
costs to follow the event. The Court’s Order issued the day of completion of
the hearing provided that there would be no order as to costs.
CONCLUSION
[40]
For
the foregoing reasons, an Order of the Court issued on the 28th of
September last in the following terms:
UPON motion
dated September 24, 2007, on behalf of the Applicant, pursuant to Rules 373 and
377 of the Federal Courts Rules, 1998, for:
1. an
interlocutory injunction restraining Her Majesty the Queen in Right of Canada,
Treasury Board of Canada and Minister of Public Works and Government Services,
as applicable, from transferring, selling, or otherwise disposing of the
following properties pending the hearing of the application filed herein:
(a) 401
Burrard Street, Vancouver, BC
Parcel
Identifier: 018-392-164
Lot 1 Block 1
District Lot 185 Plan Lmp11726; and
(b) Sinclair
Centre, 757
West Hastings Street, Vancouver, BC
Parcel
Identifier: 006-834-353
Lot 15
District Lot 541 Plan
20191
(the
"Properties") and
2. an order
that the Applicant is not required to undertake to abide by any order
concerning damages caused by the granting or extension of the injunction;
3. an order
that the Applicant is entitled to costs of this motion.
THIS
COURT ORDERS that, for reasons to follow,
1. The
interlocutory injunction as described in paragraph 1 above is, subject to
paragraph 2 below, granted.
2. The
Applicant shall serve and file this day an undertaking in damages in favour of
the Respondents, other than Larco Investments Ltd., in the limited amount of
two million dollars ($2,000,000.00). In the event of failure to so file and
serve an undertaking, the injunction granted by paragraph 1 of this Order is
dissolved.
3. There
is no Order as to costs.
“Frederick E. Gibson”
Ottawa, Ontario
October 5, 2007
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