ABORIGINAL LAW
ABORIGINAL STATUS AND
RIGHTS – Duties of the Crown – Fair
dealing and reconciliation – Consulta-
tion and accommodation.
Application by the First Nation for
judicial review of the Ministers’
approval of a gas and oil exploration
project on the basis of mitigation measures recommended by the Review Board
that had been substantially altered and
revised through the consult to modify
process. When the judicial review application was first heard, the application
judge found that the Crown had
breached its duty to consult with the
applicant before deciding to approve
the project. The judge determined that
the project would have a significant and
lasting impact on the lands over which
the applicant asserted Aboriginal title
and on the applicant’s broad harvesting
rights to hunt, trap and fish. The judge
found that the approval process was
satisfactory up to the consult to modify
phase of the process. He found that the
Crown breached its fiduciary duty
because it failed to provide to the applicant any meaningful opportunity to be
involved in the changes that were ultimately made to the recommendations of
the Review Board. Rather than quash
the Minister’s decision, the judge
ordered the parties to engage in a process of meaningful consultation with
the view of taking into account the
applicant’s concerns and to accommodate those concerns. The applicant now
alleged that the Crown failed to engage
in good faith consultations with the
applicant. After the ordered consultation process, the parties agreed on an
environmental monitoring and mitigation plan and on a traditional land use
compensation fund. The only stumbling
block was the applicant’s request for
resource revenue sharing based on the
applicant’s asserted title infringement.
Despite the parties agreeing to examine
this issue in the Consultation Protocol,
the applicant argued that the Crown
never had the intention to enter into
any meaningful discussion of that type
of accommodation.
HELD: Application dismissed. The
Crown had properly identified the
proper scope of the consultations
ordered, which were meant to address
the deficiencies of the consult to modify
stage. The consultations were not meant
to encompass mitigation measures
designed to take into consideration the
impact of the project on the applicant’s
asserted title. The applicant could not
use the re-opening of the consultation
process to re-open the whole decision-making process. The new consultation
process was meaningful and transparent. The Crown made a genuine effort to
address the applicant’s views about proposed accommodation measures. The
bona fides of the discussion did lead to
agreements on accommodating measures to address the applicant’s concerns
with the project’s impacts on the treaty
rights and asserted Aboriginal rights.
Despite the Crown’s view that the court-ordered consultation was to focus on the
impact arising from the modifications to
the mitigation measures, it showed a
willingness to consider possible means
of addressing the concerns about the
asserted title infringement. The fact
that the Crown and the applicant were
unable to agree on this particular aspect
of the applicant’s demands did not
amount to bad faith. There was no duty
to agree, only to consult through a
meaningful process. The reasons given
by the Crown to refuse to provide economic accommodation for the applicant’s asserted Aboriginal title were
cogent and defensible.
Ka’a’Gee Tu First Nation v. Canada
(Attorney General), [2012] F.C.J. No.
327, Federal Court, de Montigny J.,
March 8, 2012. Digest No. 3148-001
ALTERNATIVE DISPUTE
RESOLUTION
BINDING ARBITRATION – Appeals
and judicial review.
Appeal by VIH Aviation and Cougar
Helicopters from the dismissal of their
application for leave to appeal from an
arbitration decision. Cougar Helicopters
and CHC Helicopter International were
parties to a joint venture agreement. Following a restructuring of CHC International and related companies, Cougar
asserted a right to terminate the agreement and purported to do so. CHC Helicopters LLC, the corporate successor to
CHC International, referred the matter
to arbitration. A majority of the arbitration panel held that a purported termination of the joint venture agreement
was invalid, and that the joint venture
agreement remained in force. The chambers judge denied leave to appeal on
discretionary grounds, primarily on the
basis of his conclusion that the argument
the appellants intended to advance on
appeal was inconsistent with the
approach they had urged upon the arbitration panel.
HELD: Appeal dismissed. The chambers judge was correct in his characterization of the proposed argument as
being inconsistent with those made to
the arbitration panel. The chambers
judge was entitled to consider this
change in position to be a factor militating against the granting of leave.
Where parties had chosen arbitration
as the method for resolving disputes
under a contract, they were expected to
present their cases fully before the arbitration panel. Allowing a party to
change its position on appeal could be
subversive of the arbitration process.
Therefore, such a change of position
was a valid consideration for a chambers judge in deciding whether to grant
leave to appeal.
VIH Aviation Group Ltd. v. CHC
Helicopter LLC, [2012] B.C.J. No. 499,
British Columbia Court of Appeal,
L.S.G. Finch C.J.B.C., R.T.A. Low and
H. Groberman JJ.A., March 14, 2012.
Digest No. 3148-002
CIVIL LITIGATION
LIMITATION OF ACTIONS – Non-
statutory limitation periods – Laches
and acquiescence.
Appeal by the defendants, Hunter and
Gnumedia Inc., from a trial judgment
finding that they had misappropriated a
business opportunity belonging to the
plaintiff, 681210 Alberta Ltd., operating
as Okotoks Cinemas. The finding of
breach of fiduciary duty resulted in an
award against the defendants in the
amount of $2,774,073, plus pre-judgment
interest in the amount of $538,814.
Hunter acquired the plaintiff corporation
in 1996 in order to start a movie theatre
business. In January 1996, the corporation had 11 shareholders, one of whom
was Hunter. Okotoks Cinemas opened for
business in April 1996. In December
1999, Hunter acquired Gnumedia. In
August 2001, Gnumedia entered into a
lease to operate Canyon Meadows Cinemas, a movie theatre in south Calgary.
The shareholders of Okotoks Cinemas
were not advised of Hunter and Gnumedia’s intention to acquire and operate
Canyon Meadows Cinemas until August
4, 2001. Okotoks Cinemas claimed that
Hunter breached his fiduciary duty to it
by acquiring Canyon Meadows Cinemas
on his own behalf instead of offering the
opportunity to Okotoks Cinemas. The
defendants claimed that the plaintiff corporation was incorporated for the limited
purpose of operating the Okotoks Cinemas and that Hunter was free to pursue
the Canyon Meadows opportunity
independent of the plaintiff corporation.
The trial judge held that at all relevant
times, Hunter was acting as the directing
mind of Okotoks Cinemas and owed it a
fiduciary duty to act in its best interests.
As the vision of Okotoks Cinemas
included future expansion to other locations, the Canyon Meadows opportunity
was squarely in line with the general business pursuits of Okotoks Cinemas. Hunter
therefore took an opportunity rightly
belonging to Okotoks Cinemas for his
own benefit. The substantial damages
awarded against the defendants were
based upon a disgorgement of the profits
and benefits accrued while Hunter owned
Canyon Meadows, along with the fair
market value amounts derived from Canyon Meadows when it was sold, less
Hunter’s initial contribution to get the
Calgary cinemas up and running. On
appeal, the defendants argued that the
trial judge erred by failing to address the
issue of laches. Counsel submitted that
this equitable defence was raised in
answer to a claim in equity, and had been
overlooked by the trial judge.
HELD: Appeal dismissed. The issue
of laches was never specifically pleaded,
nor argued in any obvious fashion at
trial. The matter not having been raised
at trial, the onus lay on the defendants
to show beyond a reasonable doubt that
if the matter had been raised at trial, no
further evidence would have been called,
and that to allow the new issue to be
raised would not result in procedural
prejudice or an injustice. The defend-
ants failed to do so. Laches applied to
the delay in either instituting or pros-
ecuting the claim, but there had to be
more than mere delay. The party relying
on laches had to show either acquies-
cence to the point of waiver, or prejudice
or other potential injustice caused by
the delay in prosecuting the lawsuit.
Neither was established.
CIVIL PROCEDURE – Service –
Deemed – Out of jurisdiction (ex juris) –
Appeals – From Masters’ decisions.
Appeal by Russian companies from the
Master’s decision validating service. The
respondents were corporations of the British Virgin Islands, Mongolia and Ontario.
The parties entered into a joint venture to
develop a uranium mining property in
Mongolia. The respondents commenced an
action against the appellants seeking damages in the amount of $300 million for
breach of fiduciary duty, unlawful interference with the respondents’ economic relations, breaches of good-faith duties, and
damage to the their rights, business reputation and property in Mongolia. The
respondents were informed that service of
the statement of claim had to comply with
the Service Convention, so they filed a
Request for Service with the Ministry in
Russia as required. The Ministry declined
service with no explanation. The respondents were advised that disputing the Ministry’s refusal would be fruitless, so they
moved in Ontario to dispense with or validate service. The Master validated service on
the basis that the Service Convention did
not oust the court’s jurisdiction and the
appellants had notice of the documents
through the respondents’ press release,
public disclosure and service attempts. The
appellants argued that the Master lacked
jurisdiction to make the order and could
not use the Rules of Civil Procedure to circumvent the Service Convention.
HELD: Appeal allowed. Reference to
the Service Convention in domestic law
was wholly contained in Rule 17.05. Most
of the Articles of the Convention were
not mentioned but Article 13 had been
implemented through Rule 17.05( 3)(a),
which stated that service had to be performed through a central authority. The
Articles relevant to this issue had to be
referenced to give the Rule substance.
There was no dispute that the respondents had to serve the appellants in Russia and their attempt to validate service
acknowledged that. This was clearly a
civil or commercial matter. The Service
Convention applied. Article 1 of the Convention used the word “shall”, suggesting
that, where the Convention applied, contracting states had to comply. The purposes of the Service Conventions were to
ensure that documents were served
abroad in sufficient time and to improve
the organization of mutual judicial
assistance. The first purpose could be
consistent with allowing domestic law to
