West Moberly First Nations v. British Columbia, 2013 BCSC 1260

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: West Moberly First Nations v. British Columbia, 2013 BCSC 1260 Date: 20130716 Docket: 05-3802 Registry: Victoria Between: The West Moberly First Nations, the Halfway River First Nation, the Saulteau First Nations, the Prophet River First Nation and the Doig River First Nation Plaintiffs And: Her Majesty the Queen in right of British Columbia, the Attorney General of Canada; the Kaska Dena Council and the McLeod Lake Indian Band Defendants Before: The Honourable Mr. Justice Johnston Reasons for Judgment (Notice to Amend) Counsel for the Plaintiffs: C.G.

Devlin Counsel for the Defendant: Attorney General of Canada P.J. Walker Counsel for the Defendant: Her Majesty the Queen in right of British Columbia P.E. Yearwood Counsel for the Defendant: the Kaska Dena Council S.L. Walsh Counsel for the Defendant: McLeod Lake Indian Band G.A. Nelson Place and Date of Written Submissions: Victoria, B.C. From April 2013 to May 2013 Place and Date of Judgment: Victoria, B.C.

July 16, 2013 [ 1 ] The plaintiffs apply to amend their Notice of Civil Claim. [ 2 ] If allowed, it will be the sixth or seventh amendment. [ 3 ] Some of the amendments are described as housekeeping, and that description is apt; previous amendments have left the pleading in a sorry state of disarray, and considerable tidying up is required to make the Notice of Civil Claim legible. [ 4 ] The so-called housekeeping amendments are largely not disputed. [ 5 ] The principal issue is whether the plaintiffs should be allowed to amend their Notice of Civil Claim, in order to plead estoppel by acquiescence against British Columbia. [ 6 ] The substantive proposed amendments are as follows: 26.

In the alternative, if the western boundary of Treaty No. 8 lies to the east of the height of land along the continental divide between the Arctic and Pacific watersheds, the Plaintiffs say that, with respect to the area lying between the said height of land and the location of the western boundary (the “Disputed Territory”), British Columbia is estopped from denying or preventing the exercise by the Plaintiffs of their existing Treaty rights in the Disputed Territory and their Treaty right to be consulted by British Columbia about potential adverse impacts on the exercise of their existing Treaty rights by potential activities or decisions contemplated by British Columbia due to the doctrine of proprietary estoppel by acquiescence, more particularly as follows: (

a) due to Canada’s ongoing public assertion since 1901 that the western boundary of Treaty No. 8 lay on the height of land along the continental divide between the Arctic and Pacific watershed, the Plaintiffs mistakenly believed that they could exercise their

existing Treaty rights in the Disputed Territory and were entitled to be consulted by British Columbia about potential adverse impacts on the exercise of their existing Treaty rights by potential activities or decisions contemplated by British Columbia; (

b) the Plaintiffs have relied on this mistaken belief, exercising their existing Treaty rights in the Disputed Territory and demanding consultation with British Columbia with respect to potential adverse impacts on the exercise of their existing Treaty rights by potential activities or decisions contemplated by British Columbia within the Disputed Territory; (

c) British Columbia’s legal right to regulate and to manage natural resources in the Disputed Territory without having to accommodate the exercise of existing Treaty rights by the Plaintiffs in the Disputed Territory or without having to consult the Plaintiffs about potential adverse effects to the exercise of existing Treaty rights is inconsistent with the right claimed by the Plaintiffs; (

d) given the formal notice it received in 1898, its participation in the McKenna-McBride Commission and its own representation to the Fort Nelson First Nation in 1978, British Columbia knew that Canada asserted the boundary to lay on the height of land along the continental divide between the Arctic and Pacific watershed and that the Plaintiffs mistakenly believed in that assertion with respect to where they could exercise their existing Treaty rights; (

e) yet British Columbia abstained from asserting its legal right as follows: (

i) British Columbia did not oppose the making of Treaty No. 8 nor the inclusion of land lying within the province to the extent indicated in Canada’s formal notice to British Columbia in 1898; (ii) British Columbia did not contest the issue of the location of the western boundary of the Treaty during the McKenna-McBride Royal Commission; and (iii) British Columbia did not advise the Fort Nelson First Nation that the province opposed Canada’s position on the location of the western boundary of Treaty No. 8 when it had opportunity to do so in or about October 10, 1978. 27.

As a result of proprietary estoppel by acquiescence, the Plaintiffs claim, in the alternative, that they are entitled to continue to exercise their existing Treaty rights in the Disputed Territory. In

Part 2: Relief Sought, paragraph 1(ii): 1. (ii) in the alternative, a declaration that British Columbia is estopped from denying or preventing the exercise by the Plaintiffs of their existing Treaty rights in the area lying between the height of land along the continental divide between the Arctic and Pacific watersheds and the western boundary of Treaty No. 8 due to the doctrine of proprietary estoppel by acquiescence … And in

Part 3: Legal Basis: 5. In the alternative, if the western boundary of Treaty No. 8 lies to the east of the height of land along the continental divide between the Arctic and Pacific watersheds, British Columbia is estopped from denying or preventing the exercise by the Plaintiffs of their existing rights under Treaty No. 8 in the Disputed Territory due to the doctrine of proprietary estoppel by acquiescence. [ 7 ] British Columbia opposes these amendments on the ground that: 1. They are not properly pleaded; 2. Estoppel cannot release signatories from Treaty obligations; 3.

An estoppel cannot be based on representations made by Canada that were beyond Canada’s constitutional jurisdiction to make; 4. Estoppel cannot limit the exercise by B.C. of its constitutional jurisdiction; and, 5. The proposed amendments plead a right inconsistent with a right already pleaded by the plaintiffs and as such would abuse the process of the court if permitted. [ 8 ] The Kaska Dena Council oppose on the grounds that: 1. The proposed amendment is not properly pleaded; and 2. The alternative relief claimed is in rem; and, 3.

The plaintiffs’ rights to hunt, fish and trap outside the Treaty area were surrendered and extinguished. [ 9 ] The Kaska Dena Council argue in the alternative that if the amendment is permitted, the Kaska Dena Council should in turn be allowed to plead “surrender”, something it was denied in an earlier application leading to a decision Willson, et al v. British Columbia, et al, 2006 BCSC 1436 . [ 10 ] Canada takes no position, nor does the McLeod Lake Indian Band insofar as the proposed amendments raise a new cause of action against British Columbia.

McLeod Lake says, however, that it is premature to permit the plaintiffs to amend their Reply and Response to British Columbia’s Counterclaim which should wait until British Columbia has pleaded in response to any amended pleadings permitted to the plaintiffs. The pleadings

[ 11 ] The plaintiffs agree with British Columbia that before I can allow the proposed amendment introducing proprietary estoppel by acquiescence I must be satisfied that it discloses a reasonable cause of action. [ 12 ] Both British Columbia and the Kaska Dena Council argue that the proposed new claim is bound to fail because it is inadequately pleaded. The Kaska Dena Council focus on the failure to plead detrimental reliance, while British Columbia’s argument is somewhat broader. [ 13 ] British Columbia says that the elements of estoppel are: 1.

Right or interest in land is being claimed against the owner of that right or interest. 2. Requirement of a mistake by the claimant and conduct that implicates the owner in that mistake. 3. An intention by the owner through their conduct to encourage the claimant to rely on the mistaken assumption. 4. Reliance by the claimant arising from the owner’s conduct. 5. Detriment sustained by the claimant flowing from the reliance. [ 14 ] British Columbia says that these elements flow from a series of decisions in this province that began with minority reasons from Newbury J.A. in Trethewey-Edge Dyking District v.

Coniagas Ranches Ltd., 2003 BCCA 197 at para. 64 , where this passage from Halsbury’s (4th ed. Vol. 16) was adopted: The more recent cases raise the question whether it is essential to find all the five tests literally applicable and satisfied in any particular case. The real test is said to be whether upon the facts of the particular case the situation has become such that it would be dishonest or unconscionable for the plaintiff, or the person having the right sought to be enforced, to continue to seek to enforce it.

The belief on which the person seeking protection from equity relies need not relate to an existing right nor to a particular property. It may be easier to establish acquiescence where the right in question is equitable only.

Where, on the hypothesis that liability has been established, the question is whether equitable relief should be withheld in the case of a continuing legal wrong, the true test is that the facts must be such that the owner of the legal right has done something beyond mere delay to encourage the wrongdoer to believe that he does not intend to rely on his strict rights, and the wrongdoer must have acted to his prejudice in that belief .

The modern approach is a broad one and the tendency is to reject any classification of equitable estoppel into exclusive and defined categories. [Emphasis in original.] [ 15 ] It is not at all clear at this stage that British Columbia’s first element is correctly stated. The thrust of the estoppel plea is to invoke equity to prevent someone, in this case British Columbia, from asserting a legal right. It does not appear necessary that the party invoking equity set up a right or interest in land to do so.

That would be more consistent with the portion of the passage quoted from Halsbury’s, “The belief on which the person seeking protection from equity relies need not relate to an existing right nor to a particular property.” [ 16 ] In any event, equity is sufficiently flexible to accommodate in this context, any differences between rights or interests in land on the one hand, and Treaty rights on the other. [ 17 ] British Columbia’s second element, the requirement of a mistake, seems also to be contrary to the approach in Trethewey-Edge at para. 67, where Newbury J.A. says: “The fact that Equity no longer insists on a ‘mistake’ induced by the defendant is important in this case …” [ 18 ] In the context of this case, the “mistake” would arise only if British Columbia’s version of the western boundary carries the day: whether or not it is required, it is sufficiently pleaded in proposed paragraph 26(a). [ 19 ] British Columbia next argues that the plaintiffs must prove, and therefore plead, that British Columbia intended to encourage the plaintiffs to rely on their mistaken assumption as to the location of the western boundary.

It relies on Halsbury’s Laws of Canada (HES-262) as authority for the requirement for an element of intention, even if acquiescence is alleged, and that mere silence will not satisfy the requirement for proof of intention unless there is a legal duty to speak.

British Columbia says this element is not pleaded, and therefore the proposed amendment is bound to fail. [ 20 ] It seems to me that, if they are required to do so, the plaintiffs have pleaded intention by pleading silence in proposed paragraph 26(e), and any legal duty is sufficiently pleaded in existing paragraph 22, where the plaintiffs plead the duty of the Crown to act honourably. [ 21 ] British Columbia and the Kaska Dena Council argue that the plaintiffs’ proposed amendments are bound to fail because they do not plead facts supporting detrimental reliance by the plaintiffs on the mistaken belief in the location of the western boundary. [ 22 ] They are correct that a party seeking to prove proprietary estoppel once had to show that he acted to his prejudice as a result of a belief that the other party would not insist on their legal right.

It is not so clear that this remains a necessary element of proprietary estoppel in British Columbia after the decision of the Court of Appeal in Sikes v. Rosebery Parklands Development Society, 2011 BCCA 15 , where the court said at paras. 47-49: [47] While detrimental reliance is sometimes identified as a necessary element, it is perhaps better to consider it as part of the question of unconscionability.

In the absence of detrimental reliance it would rarely, if ever, be unconscionable to insist on strict legal rights: see Harpum, Bridge and Dixon, Megarry & Wade: The Law of Real Property , 7th ed. (London: Sweet & Maxwell, 2008) at 711. [48] The defendant says the question should be framed in this way: Has the appellant, by words or conduct, affirmed the respondents’ right to establish a dock and have access across its property for

that purpose in circumstances making it unfair or unjust for it now to assert its strict legal rights (citing Litwin Construction

(1973) Ltd.v. Pan (1988), (BC CA), 52 D.L.R. (4th) 459, 29 B.C.L.R. (2d) 88 (C.A.)). [49] The question as posed by the defendant is very much in accord with the test referred to in the above authorities, adopting andapplying the broad, flexible approach to proprietary estoppel. [23] This decision seems to have weakened the force of the statement in paragraph 244 of Romfo v. 1216393 Ontario Inc., 2007BCSC 1375, relied on by the Kaska Dena Council: That said, one factor that has been consistently required by the courts for proprietary estoppel is a detrimental reliance by the partyseeking to set up the estoppel.

Whether that is seen as a stand-alone test or as part of the broader equitable or unconscionability inquirydoes not matter. [24] It seems to me that the proposed substantive amendments sufficiently frame this question.

It also seems to me that allegeddetriment would be known to all of the parties from the terms of Treaty 8 itself, where in the recitals surrender of all of the Indian“rights, titles, and privileges whatsoever” in the Treaty area is provided, as well as “said Indian rights, titles and privileges whatsoever toall other lands wherever situated in the Northwest Territories, British Columbia, or in any other portion of the Dominion of Canada.” Aswell, without attempting to evaluate whether a Treaty right is inferior to an aboriginal right, the plaintiffs have lived over a hundred yearsbelieving they have the former, whereas British Columbia’s position would mean they could have been asserting the latter.

With sometrepidation, I can say there must be some detriment in there somewhere. [25] In any event, I consider these to be part of the question of unconscionability, to be the subject of evidence and argument at trial,but sufficiently pleaded that I cannot say at this stage that the plea of proprietary estoppel discloses no reasonable cause of action, has noreasonable prospect of success, that it is plain and obvious that the proposed pleading discloses no cause of action, or is bound to fail –all variants of the test for striking or amending pleadings that flow from cases such as R. v.

Imperial Tobacco Canada Ltd., 2011 SCC 42,or Plumrose Inc. v. A & A. Foods Ltd., [1996] B.C.J. No. 1877. Estoppel cannot release signatories from Treaty obligations [26] Although British Columbia originally suggested that estoppel cannot release signatories from Treaty obligations, its argumentwas not pursued in these terms. Instead, British Columbia argued the solemn nature of a Treaty agreement, and, from that, argued that anestoppel could not operate so as to override the Treaty or preclude its proper

interpretation and implementation. [27] This argument fails because, in the context of this case, the estoppel pleaded will only arise if, on a proper

interpretation of theTreaty, its western boundary is found to lie where British Columbia says it lies; in which case, the plaintiffs plead that British Columbiaought to be estopped from asserting its regulatory and enforcement rights against them in the territory between the western boundary asfound by the court and where they were led to believe the western boundary was located. I am not persuaded that, if it were to succeed,this plea would effect a release of any of the signatories from Treaty obligations, override the Treaty, or preclude its proper

interpretationor implementation. I am unable to say at this time that the proposed claim of proprietary estoppel is bound to fail on the basis of thisargument. Estoppel cannot be based on representations made by Canada that were beyond Canada’s constitutional jurisdiction to make [28] British Columbia argues that estoppel cannot be founded on representations by Canada that were beyond its constitutionaljurisdiction to make. This objection, with respect, misconceives the basis of the alleged estoppel.

It is British Columbia’s acquiescence inthe representations made by Canada that the plaintiffs plead gives rise to the alleged estoppel, not the representations as such. Estoppel cannot limit the exercise by B.C. of its constitutional jurisdiction [29] British Columbia argues that estoppel cannot limit its constitutional jurisdiction. This argument is also phrased as stating thatestoppel cannot bind British Columbia’s legislative function. The answer is that the pleadings do not purport to restrict legislative action,or to limit constitutional jurisdiction.

The pleadings simply assert that, if they are sustained at trial, British Columbia should be estoppedfrom acting as if the western boundary of the Treaty were someplace other than the Arctic/Pacific watershed. As currently pleaded, anestoppel will act upon British Columbia’s administrative and enforcement rather than its legislative spheres.

The proposed amendments plead a right inconsistent with a right already pleaded by the plaintiffs and as such would abuse theprocess of the court if permitted [30] British Columbia argues that the proposed plea of estoppel claims a right inconsistent with a right already pleaded, and istherefore an abuse of process, if allowed. [31] I do not agree. [32] The pleadings as presently cast do not plead a right at all.

Rather, they simply ask the court to declare where the treaty applies.In a sense, it may be said that rights are involved, in that the plaintiffs want to know where they may exercise the rights they take underthe treaty, but the litigation in its current form does not seek to identify or clarify those rights, or in any way to define them as such. [33] As well, the proposed amendments are not about the rights enjoyed, but simply seek to prevent British Columbia frominterfering with the exercise of the rights – whatever they may be – enjoyed under Treaty 8 on the land between British Columbia’sversion of the western boundary and Canada’s version of the boundary. [34] As well, the proposed amendment does not seek to set up a “right” inconsistent with any pleaded.

Instead, it seeks a remedy in adeclaration of estoppel that, again, will, if granted, interfere with British Columbia’s activities in the disputed territory.

Do the proposed new amendments raise a remedy in rem ? [ 35 ] The Kaska Dena Council argue that if granted, the amendments would raise a cause of action which, if it succeeded, would lead to a remedy in rem . This is because the remedy would amount to confirmation of treaty rights protected by ss. 25 and 35 of the Constitution Act, 1982 , which by definition are in rem. [ 36 ] I do not agree with this submission, at least as a basis on which to refuse the proposed amendments.

The amendments, if granted, will not seek a remedy that confirms treaty rights; they will instead seek a remedy that impairs British Columbia’s regulatory and enforcement activities over a portion of the province that Canada and the plaintiffs thought had been covered by Treaty 8. [ 37 ] The proposed amendments are capable of creating some confusion.

If the trial results in a finding that the western boundary of Treaty 8 lies in the Rocky Mountains, but that the estoppel pleaded entitles the plaintiffs to exercise treaty rights in the area between the boundary as found and the place where the plaintiffs were led to believe the boundary was located, there will be potential for mischief as the plaintiffs will assert rights as if the Treaty applied, whereas First Nations using or occupying the area between the Rocky Mountain boundary as found and the Arctic/Pacific watershed asserted will have no such ability. [ 38 ] As well, I assume for the purposes of this application that a remedy based on estoppel would be a remedy in personam, and accept that this raises complicated issues of whether an estoppel, if found, is capable of benefitting future generations of the plaintiff Bands. [ 39 ] That the amendments are capable of raising difficult questions is not a reason to disallow them, in my view. “Surrender” and the Kaska Dena Council [ 40 ] In Willson, et al v.

British Columbia, et al , 2006 BCSC 1436 , portions of a counterclaim and third party notice filed and delivered by the Kaska Dena Council were struck because they purported to insert into this action issues of surrender. The Kaska Dena Council now wish to revive that debate on the basis that the estoppel amendments sought by the plaintiffs have opened the door shut by the 2006 decision. I do not agree. [ 41 ] This issue is not raised, nor is it revived, by the proposed amendments.

What if anything was surrendered by those signing or adhering to Treaty 8 is no part of this action, nor should it be. [ 42 ] The amendments as proposed are allowed, except as they purport to delete reference to the Fort Nelson First Nation in paragraph 7. In that, I agree with the McLeod Lake Indian Band that the allegation of adherence remains a relevant fact notwithstanding that the Fort Nelson First Nation is no longer a plaintiff. The reference to the Fort Nelson First Nation shall remain. [ 43 ] I accept that this will be a largely new pleading.

The defendants will have the right to respond as if it were a new pleading, and the plaintiffs will have the right to reply. “R.T.C. Johnston, J.” The Honourable Mr. Justice Johnston