Blood Tribe v. Canada (Attorney General), 2010 ABQB 282

Court of Queen ’ s Bench of Alberta Citation: Blood Tribe v. Canada (Attorney General), 2010 ABQB 282 Date: 20100426 Docket: 0501 04277 Registry: Calgary Between: The Blood Tribe, and Randy Bottle on Behalf of the Trustees of the Blood Tribe/Kainaiwa Specific Claim Trust Agreement #1 Plaintiffs - and - Attorney General of Canada Defendant _______________________________________________________ Memorandum of Judgment of the Honourable Mr. Justice P.M.

Clark _______________________________________________________ [ 1 ] On November 24, 2007 a matter was brought before me, as Case Management Judge, with respect to a Notice of Motion dated February 28, 2007. This Notice of Motion, filed by the Defendant, was originally to have been heard contemporaneously with Notice of Motion dated February 21, 2007 which has been previously dealt with, ( Blood Tribe v. Canada (Attorney General of Canada, 2009 ABQB 572 ).

The Court did not have sufficient time at the initial hearing to deal with a second Motion and, while the Defendant brief had been received, the Applicants brief was not on file. The second Motion was adjourned to November 24, 2007 for the purpose of hearing arguments. [ 2 ] The Defendant’s Notice of Motion seeks the following relief:

(

a) compelling the Plaintiffs to provide the Defendant a further answer to certain questions, as referenced in Undertaking Request #43, 44 and 54 and the Examination for Discovery of Randy Joseph Bottle, the nominee for discovery on behalf of the Plaintiffs, within 30 days or such other reasonable time period as set by the Court, (

b) granting the Defendant cost of this application in any event of the cause pursuant to Rule 607 of the Alberta Rules of Court, and (

c) granting such further and other relief as this honourable court deems meet. [ 3 ] The grounds for the motion are that the Plaintiff’s nominee, Randy Joseph Bottle, has refused to provide proper answers to certain questions as referenced in Undertaking Requests #43, 44 and 54 and the Examination for Discovery and the Defendant is entitled to proper answers to those questions, and potentially examined further on those answers, as those questions are relevant and material and within the scope of Examination for Discovery. [ 4 ] The grounds for the Defendant’s Motion are that: (

i) the particulars of the content of a letter dated November 16, 1998 from the Blood Tribe to the Crown as referenced in Undertaking Request #43 and #44; and (ii) the particulars of the communications between the Blood Tribe and Parkland (the proposed Vendor of the Parkland Refinery) up to March 1, 1999 with respect to the question of the proposed addition of the Parkland Refinery to reserve land and the question of excise tax, and therein with respect to the dealings between the Blood Tribe and the Crown on that matter, as referenced in Undertaking Request #54. [ 5 ] By way of background, the matter originally came before in my capacity as a Case Management Judge.

It is my understanding of that the Blood Tribe was negotiating with Parkland to purchase the refinery which is located on the main highway approximately mid-point between the cities of Calgary and Edmonton. The negotiations between the parties had reached a point at which there appeared to be the opportunity to proceed with the purchase subject to two significant conditions precedent: 1. The land on which the refinery was situate had to be designated “Indian lands”, 2.

There had to be a binding judicial determination that the operation of the refinery by the Blood Tribe would be exempt from tax under the Federal Excise Tax Act . [ 6 ] The Blood Tribe sought funding from the Federal Government to assist them in the pursuit of the acquisition of the Parkland Refinery. Negotiations in this respect went on between the Federal Government and the Blood Tribe over a very extended period of time.

No Federal funds were advanced to the Blood Tribe. [ 7 ] The transaction did not proceed and the Blood Tribe initiated legal proceedings against the Federal Government seeking damages for “failing to assist” the Blood Tribe in its pursuit of its commercial endeavour. The Blood Tribe has sued the Federal Government for failing to perform its fiduciary obligations to the Blood Tribe. [ 8 ] The damages sought are “in the hundreds of millions”.

[ 9 ] The applications before me relate to Examinations for Discovery conducted with respect to that lawsuit. [ 10 ] In argument, counsel for the Defendant advised that in the course of examinations for discovery of the nominee of the Blood Tribe, the Blood Tribe refused to provide proper answers to undertaking requests dealing with: i. the content of a letter dated November 16, 1998 from the Blood Tribe to the Crown as referenced in Undertaking Requests #43 and 44; and ii the particulars of the communications between the Blood Tribe and Parkland (the proposed Vendor of the Parkland Refinery) up to March 1, 1999 with respect to the question of the proposed addition of the Parkland Refinery to reserve land and the question of excise tax, and therein with respect to the dealings between the Blood Tribe and the Crown on that matter, as referenced in Undertaking Request #54. [ 11 ] The Crown defines the issues for determination to be whether the information sought by the Crown in the questions directed to the Blood Tribe in Undertakings #43, 44 and 54 is relevant and material to the within action and, accordingly, the Blood Tribe’s nominee should be compelled to provide proper answers to those questions. [ 12 ] The Undertaking Request #43 and 44 arise out of a letter dated November 16, 1998 from Chief Chris Shade of the Blood Tribe to Mr.

Barrie Rob, Regional Director General of the Department of Indian and Northern Affairs Canada and is referenced as Exhibit ‘A’ to the Affidavit of Valerie Chessor. There are two areas with respect to the letter where the Blood Tribe has refused to provide answers. 1. There is a part of the second paragraph of the letter where Chief Shade states that “the concerns expressed was the viability of Parkland Refinery, in particular, with all the impending changes imposed on the refining industry”.

In answer to the question as to what the “concerns with the viability of the Parkland Refinery” were and what the “impending changes imposed on the refining industry” were that Chief Shade was referring to, the Blood Tribe has answered that the letter “speaks for itself” and has not provided any further particulars. [ 13 ] The Crown quite properly takes the position that in an action where the Blood Tribe was alleged the Crown has breached a fiduciary obligation to assist the Blood Tribe in providing for the addition of the Parkland Refinery to reserve land free of excise tax, and where in excess of $150M is claimed as damages for “lost economic opportunity”, the facts pertinent to and constituting the statement of “concerns with viability of the Parkland Refinery” and the “impending changes imposed on a refining industry”, are plainly relevant and material to those issues. [ 14 ] They argue that the Crown is entitled to know what facts and factors were considered to constitute “concerns with the viability of the Parkland Refinery” and “impending changes imposed on the refining industry” in establishing the factual circumstances in which the proposed plan was set and against which the Crown’s conduct is alleged to be measured and alleged to be in breach of a fiduciary obligation. [ 15 ] The Crown also takes the position that there is a part of the third paragraph of the letter where Chief Shade states “basing our decision on the taxation issue is not a very wise business decision, as a matter of fact the whole question of taxation is quite fragile given the present environment”.

In answer to the question as to what the “fragility” was and what the “present environment” was that Chief Shade was referring to, the Blood Tribe has answered that the letter “speaks for itself” and has not provided any further particulars. [ 16 ] In support of their position, the Crown argued Rule 186.1 which states: “for the purpose of this part, a question of record is relevant and material only of the answer to the question, or if the record, could be reasonably be expected: (

a) to significantly help determine one or more of the issues raised in the pleadings, or

(

b) to ascertain evidence that could reasonably be expected to significantly help to determine one or more of the issues raised in the pleadings. [ 17 ] Rule 187(1): Every party to proceedings must, in accordance with this Rule, file and serve on all other parties, an affidavit of records ... [ 18 ] Rule 187.1(2): The affidavit of records must disclose relevant and material records.... [ 19 ] Rule 200. (1): Before trial a party to a proceeding may orally examine under oath without an order of the Court, (

a) any other party of the proceeding who is adverse in interest ... (1.2) during the oral examination under sub-rule 1 a person is required to answer only relevant and material questions. [ 20 ] The Crown has quite properly argued that it is entitled to know what facts and factors were considered to constitute the “fragility” and “present environment” referred to in establishing the factual circumstances in which the proposed plan was set and against which the Crown’s conduct is alleged to be measured and alleged to be in breach of a fiduciary obligation.

The Undertaking Request #54 was to make enquiries and provide information with respect to any and all meetings and discussions that took place between the Blood Tribe and Parkland with respect to the proposed addition to reserve of the Parkland Refinery and the question of excise tax, up to March 1, 1999 and to advise as to the contents of those discussions and provide any notes or memoranda of those discussions.

The Blood Tribe has refused to provide proper answers to this request on the grounds of relevance. [ 21 ] As the matter in issue between the Blood Tribe and the Crown as pled is an alleged breach of fiduciary obligation by the Crown to assist the Blood Tribe in providing for the addition of the Parkland Refinery to reserve land free of excise tax, and as there is a claim for damages for lost economic opportunity, it is relevant and material for the Crown to know what information was being communicated between the Blood Tribe and the proposed vendor, Parkland, as to the question of the addition to reserve and the question of excise tax.

For example, information relating to the considerations of the economic prospects of the addition to reserve, the understandings of the impact of the excise tax issue, the requirements of the addition to reserve process, and the Blood Tribe’s explanation of its’ dealings with the Crown on the addition to reserve and excise tax issues, all pertains to the factual circumstances against which the Crown’s conduct is alleged to be measured and alleged to be in breach of a fiduciary obligation. [ 22 ] In argument, Counsel for the Plaintiff takes a curious position with respect to the application and advances arguments which I am not prepared to accept as either valid or appropriate.

It is argued that there have been hundreds of documents tendered during the course of the Examination for Discovery that took place over an extended period of eight days during which there were 192 Undertaking Requests of which 189 have been answered. Counsel for the Plaintiff characterized the process as an opportunity for the Defendant to “grind the Plaintiffs down”, the Federal Government having “all the money in the world and the Plaintiffs having none”.

The Plaintiff’s position is that the Court should not be looking to what the Blood Tribe or Parkland has done but should focus instead on the actions of the Crown in its dealings with the Plaintiffs during the negotiation process. They suggest that the Court should step into the discovery process and limit the Examination for Discovery by the Defendant. [ 23 ] I am of the opinion that the inquiries by counsel for the Defendant are relevant and material and must be answered. [ 24 ] In the result, the Crown has been successful and an Order is directed compelling the Blood Tribe through its representative to

[ 24 ] In the result, the Crown has been successful and an Order is directed compelling the Blood Tribe through its representative to provide the Crown with proper answers to the questions referenced in Undertaking Requests #43, 44 and 54. [ 25 ] It is not appropriate that this matter should continue under Case Management and it is recommended that this matter be set down for Trial at the earliest opportunity. [ 26 ] With respect to costs, the Crown is entitled to its costs under Rule 213(1) and Rule 607. Heard on the 24 th day of November, 2007. Dated at the City of Calgary, Alberta this 26th day of April, 2010.

P.M. Clark J.C.Q.B.A. Appearances: John R. Beckman, Q.C. McKercher McKercher & Whitmore for the Plaintiffs William L. Fotley Department of Justice Canada for the Defendant