Unproven Aboriginal Rights Enough For Lawsuit Against Private Industry in Saik'uz First Nation and Stellat'en First Nation v. Rio Tinto Alcan Inc.

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Unproven Aboriginal Rights Enough For Lawsuit Against Private Industry in Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc.

July 10, 2015

By Carole Chan, Associate at McInnes Cooper,
Jeffery Callaghan, Associate at McInnes Cooper

On April 15, 2015, British Columbia’s Court of Appeal confirmed that First Nations can make certain legal claims grounded in Aboriginal rights against the government – or against any other party, like private industry – even if those rights haven’t yet been recognized by any court or formal agreement with the Crown. The decision could embolden and support Canadian First Nations in asserting the full scope of their Aboriginal and treaty rights against both existing and new industrial activity they perceive to infringe on those rights. Natural resource project proponents, energy infrastructure operators, and owners of resource-based rights should ensure their engagement strategies are up-to-date, and prepare to assess and respond to First Nations’ complaints and or claims respecting their work.

THE LAWSUIT

Rio Tinto, Alcan’s predecessor, built the Kenny Dam on BC’s Nechako River in 1950 to provide electrical power for its Kitimat aluminum smelter. Water flows from the River into a reservoir the Dam creates and is released back into the River primarily through a spillway. Provincial water licences regulate the water storage, diversion and release. A settlement agreement provides for some provincial and federal engagement for establishing water allocation.

In 2011, the Saik’uz and Stellat’en First Nations (the Nechako Nations), both “bands” under the Indian Act, sued Alcan. They asserted Aboriginal title and rights to a certain territory that included the River’s bed and banks, proprietary rights to the fisheries in the River and its tributaries, and common law riparian rights based on the location of their reserves on the River’s bank. The Nechako Nations claimed the Dam adversely impacted the River and its fisheries resources resulting in the loss of use, enjoyment and value of their fisheries and lands and has had negative cultural impacts. The lawsuits were based on public and private nuisance, and breach of riparian rights (water rights). The Nechako Nations asked the Court to order Rio Tinto to stop those activities that caused the nuisance and interfered with their water rights, or, alternatively, to order Rio Tinto to pay financial compensation to the Nechako Nations for their losses.

THE PRELIMINARY SKIRMISH

Rio Tinto applied to the Court to immediately dismiss the Nechako Nations’ lawsuit, relying on the defence of statutory authority: its water license authorized its actions. It also asked the Court to strike out the portions of the Nechako Nations’ civil claim and reply that it said amounted to a “collateral attack” on the defence of statutory authority. Alternatively, it asked the court to strike out the entire lawsuit on the basis it didn’t disclose a reasonable cause of action. The Court of Appeal said no to Rio Tinto – on just about everything:

No Automatic Statutory Shield. The Court confirmed that if a statute authorizes someone (in this case, Rio Tinto) to do something in a particular place, and nuisance is the inevitable result of doing what’s authorized, then the authorized person can’t be sued for that resulting nuisance – but underscored that when a court’s applying this test, the specificity of both the approved activity and of the alleged interference is critical. The Court decided that Rio Tinto’s water licence doesn’t automatically shield it from the Nechako Nations’ claims even if it authorizes the acts of which the Nechako Nations complain: Rio Tinto can’t demonstrate whether the alleged impacts on the Nechako Nations’ rights are the inevitable result of the authorized acts without a factual inquiry into feasible alternative measures through a discovery process at trial.

No Collateral Attack. Rio Tinto said the Nechako Nations’ claim was a collateral attack on the applicable legislation, agreements and license and this isn’t permissible. The Court, however, decided these elements of statutory authority are constitutionally inapplicable to Aboriginal or proprietary rights insofar as they may take away or diminish those rights. It distinguished this case from recent Supreme Court of Canada decisions that found collateral attack or abuse of process by Aboriginal groups challenging the validity of wood-cutting permits: instead of viewing this case as challenging the validity of the Final Water Licence (and related instruments), the Court framed the Nations’ civil claims as a question of whether the constitutional protection of Aboriginal rights extends to those statutory authorizations. Furthermore, the Court decided the claims in this case are more analogous to cases that the Supreme Court of Canada decided in favour of plaintiffs who sought private law remedies for the impact of regulatory decisions – and in which it found there was no collateral attack.

Asserted Rights Are Enough. The Court refused to strike out the Nechako Nations’ lawsuit on the basis it didn’t disclose a reasonable cause of action. The Court underscored that,“[i]t is not determinative that the law has not yet recognized a particular claim; the court must err on the side of permitting a novel but arguable claim”. The Court suggested that preventing Aboriginal people from suing others – like private industry – in a civil court to enforce Aboriginal rights and title until those rights are “recognized” by a court or in a treaty results in a different standard for Aboriginal people, and could breach the principle of equality under the Charter of Rights and Freedoms. The fact there hasn’t yet been a successful case of a claim for a civil wrong founded in Aboriginal rights doesn’t preclude claims from being advanced solely because the Aboriginal right (or title) hasn’t been “recognized” by a court or treaty. The Court also rejected Rio Tinto’s proposition that the Supreme Court of Canada has excluded the possibility of third parties having legal obligations to Aboriginal groups prior to proof of Aboriginal rights and title. Highlighting several decisions where First Nations have been granted injunctions against private parties based on Aboriginal title and rights claims, the Court of Appeal noted that “while third parties cannot be held liable for failing to discharge the Crown’s duty to consult and accommodate, that does not mean they can never be held liable for infringement of Aboriginal rights”. Since asserted Aboriginal rights can ground civil claims, the Court considered whether the Nechako Nations’ claims against Rio Tinto disclosed a reasonable cause of action with a reasonable prospect of success:

Private Nuisance. The private nuisance test is whether an owner’s use or enjoyment of the land has been substantially (i.e., non-trivial) and unreasonably interfered with. But the extent to which other parties with interests in land – such as Aboriginal rights holders – have the right to sue for private nuisance isn’t settled in Canada. The Court noted that Aboriginal title isn’t identical to fee simple ownership (the highest land ownership right in the Canadian legal system), but it would give the Nechako Nations the right to possess the lands along the River’s banks – and might give them sufficient occupancy for the private nuisance lawsuit. The nuisance claim could also be based on the Nechako Nations’ right to exclusive possession of reserve land under the Indian Act’s definition of “reserve”.

Public Nuisance. A court should view the public nuisance test viewed through the lens of ‘unreasonable interference’ with the public interest (e.g., public health, morality, comfort or convenience) considering factors such as the inconvenience caused, and the challenges to mitigate the impacts of the activity. The Court concluded the Nechako Nations’ claim to an Aboriginal right to harvest fish could be enough to demonstrate that it suffered a particular loss as a result of the diversion of the River, which may give rise to a legal claims based on public nuisance.

Riparian rights. These are typically the rights of the owners of land that border a body of water; it includes rights to access, drainage, flow, water quality, use, and accretion. The Nechako Nations’ riparian rights claim is based on both their ownership of reserve lands on the River, and on Aboriginal title to the general area. However, common law riparian rights in BC were extinguished and vested in the Crown before reserves were established so the Nechako Nations’ riparian rights claim grounded on their reserve rights could not proceed and the Court struck it out; however, its riparian rights claims based on Aboriginal title could continue.

Read the BC Court of Appeal’s decision in Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Alcan Inc., 2015 BCCA 154 here.

THE IMPACT

This was a preliminary – though critical – phase of the Nechako Nations’ lawsuit. The lawsuit can continue; now a court must deal with the substance of their actual claims. But in the meantime, private industry is left to deal with the impact of the BC Court of Appeals’ decision:

Persuasive Authority. It’s worth noting that courts in other Canadian Provinces and Territories don’t have to follow the BC Court of Appeal’s decision, though BC courts do. But there’s no doubt that if there’s a lawsuit with the same or similar issues elsewhere in Canada, the parties will refer to it. It remains to be seen how other courts will respond, though since this is an Appeal Court decision, it will likely carry some persuasive weight. And since it’s the latest word on the topic, private industry is well-advised to take it seriously – and take action.

Scrutinize Regulatory Approvals. The Court’s analysis of the statutory authority defence indicates that holding a regulatory permit or approval in and of itself might not be enough to protect a private entity from a civil lawsuit rooted in Aboriginal rights or title infringements. Project proponents and operators of major works should internally scrutinize regulatory approvals and permits, including ‘phased’ assessments, to determine whether such statutory authority – and the processes leading up to them – do in fact lead to the ‘inevitable result’ of an infringement of Aboriginal rights and Aboriginal title.

Revisit Risk Management. The Court’s confirmation that civil claims can be based on asserted, but not yet affirmed, Aboriginal rights and title , and those claims can be made against private parties sends an important message to the natural resource and energy sectors (natural resource project proponents, operators of energy infrastructure, and managers of resource-based rights): ensure that any First Nations engagement strategies and regulatory risk management assessments are up-to-date with the latest developments in Aboriginal law. In particular, they should be prepared to devote the necessary resources to assess and respond to First Nations complaints and or claims respecting their industrial work to effectively manage potential litigation risks based on asserted, not just recognized, Aboriginal rights and title claims.

For more on the impact of this decision, read McInnes Cooper’s: The Changing Face of Aboriginal Law – 1 Short Year, 2 Big Court Decisions, 3 Key Implications for the Energy & Natural Resources Sector.

Please contact your McInnes Cooper lawyer or any member of our McInnes Cooper Aboriginal Law Team to discuss this topic or any other legal issue.

McInnes Cooper has prepared this document for information only; it is not intended to be legal advice. You should consult McInnes Cooper about your unique circumstances before acting on this information. McInnes Cooper excludes all liability for anything contained in this document and any use you make of it.

© McInnes Cooper, 2015. All rights reserved. McInnes Cooper owns the copyright in this document. You may reproduce and distribute this document in its entirety as long as you do not alter the form or the content and you give McInnes Cooper credit for it. You must obtain McInnes Cooper’s consent for any other form of reproduction or distribution. Email us at publications@mcinnescooper.com to request our consent.

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