Anderson et al. v. Manitoba et al., 2010 MBCA 113

Citation: Anderson et al. v. Manitoba et al., 2010 MBCA 113 Date: 20101222 Docket: AI 08-30-07063 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Barbara M. Hamilton Mr. Justice Martin H. Freedman Mr. Justice Richard J. Chartier IN THE MATTER OF: An Agreement dated December 16, 1977 (known as The Northern Flood Agreement) BETWEEN: ) S. B. Malamud, ) D. R. Knight, Q.C., HER MAJESTY THE QUEEN IN RIGHT ) J. I. Jardine, OF THE PROVINCE OF MANITOBA ) D. M. Bradley and ) J. R. N. Boudreau OF THE FIRST PART ) for the Appellants ) - and - ) ) T. J. Björnson and THE MANITOBA HYDRO-ELECTRIC ) S.

Bahir BOARD ) for Her Majesty the Queen ) in Right of the Province of OF THE SECOND PART ) Manitoba ) - and - ) ) J. B. Echols and THE NORTHERN FLOOD COMMITTEE, ) S. Carriere INC. ) for Her Majesty the Queen ) in Right of Canada OF THE THIRD PART ) ) - and - ) J. B. Hirsch and ) L. K.

Troup HER MAJESTY THE QUEEN IN RIGHT ) for the Manitoba Hydro- OF CANADA, as represented by THE ) Electric Board MINISTER OF INDIAN AFFAIRS AND ) NORTHERN DEVELOPMENT ) ) Appeal heard: OF THE FOURTH PART ) June 2, 2010 ) ) Judgment delivered: ) December 22, 2010 AND BETWEEN: ) ) ANDERSON, ANDREA CRYSTAL ) MAUREEN (607) et al. ) ) (Claimants) Appellants ) ) - and - ) ) HER MAJESTY THE QUEEN IN RIGHT ) OF THE PROVINCE OF MANITOBA, ) HER MAJESTY THE QUEEN IN RIGHT ) OF CANADA, as represented by THE ) MINISTER OF INDIAN AFFAIRS AND )

NORTHERN DEVELOPMENT ) ) (Respondents) Respondents ) ) - and - ) ) ANDERSON, ALICE (197) et al. ) ) (Claimants) Respondents ) ) - and - ) ) THE MANITOBA HYDRO-ELECTRIC ) BOARD ) ) (Respondent) ) HAMILTON J.A. 1 This appeal is by way of stated case from an award of the arbitrator appointed under the Northern Flood Agreement (NFA). The stated issues concern how she interpreted the NFA. In addition, the appellants object to how the arbitrator stated the case and seek to have other issues addressed on appeal, including whether the principle of res judicata precluded the arbitrator from ruling as she did.

Introduction 2 The NFA was entered into in 1977 to address certain aspects and effects of the development of hydro-electric power through projects commonly known as the Lake Winnipeg Regulation and Churchill River Diversion Project (the project). It created a continuing arbitration regime through a single arbitrator. 3 Since 1977, three individuals have been appointed as the arbitrator under the NFA. Arbitrator Ruth Krindle, who was appointed in 2003, is the current arbitrator. She was preceded by Arbitrator G.

Campbell MacLean. 4 The four parties to the NFA are Her Majesty the Queen in Right of the Province of Manitoba (Manitoba), Her Majesty the Queen in Right of Canada, as represented by the Minister of Indian Affairs and Northern Development (Canada), the Manitoba Hydro- Electric Board (Hydro) and the Northern Flood Committee, Inc. (NFC). 5 NFC was incorporated by five Indian Bands to represent them as their agent under the NFA.

One of the Bands was Nelson House First Nation, now Nisichawayasihk Cree Nation (NCN). 6 On March 18, 1996, Canada, Manitoba, NCN, and Hydro entered into an agreement (the 1996 Agreement) for the purpose of implementing and settling the obligations of the parties under the NFA as they relate to NCN, subject to specific exceptions. 7 One of the exceptions is certain claims for loss or damage by those individuals who are, or are entitled to be, members of NCN and who are ordinarily resident at or near the community of South Indian Lake.

There are approximately 400 of these claims, which are defined in the 1996 Agreement as “SIL Claims.” They are also known as Displaced Residents of South Indian Lake (DRSIL) claims. 8 The appellants are those DRSIL/SIL claimants who are represented by counsel. They are not parties to the NFA. They bring their claims as “persons” under the NFA and seek redress for adverse effects of the project. 9 In June 2008, Canada and Manitoba sought an order declaring that:

a) the arbitrator is without jurisdiction to hear any portion of the claims that are not SIL Claims; and

b) an SIL Claim does not include any claim for loss or damage caused or alleged to be caused directly or indirectly by any failure of a party to the NFA to implement a provision of the NFA or any dispute about the responsibility of a party to implement a policy or a program of any kind. 10 In her November 8, 2008 award, the arbitrator ruled that (at para. 59): The only claims which can be advanced for adverse effects by those who claim under the NFA as members of NCN are those claims which meet the definition of an SIL claim as provided in the 1996 Agreement.

Under the terms of the NFA, however, Canada and Manitoba are not responsible to non-party persons for adverse effects of the Project. 11 The appellants acknowledge that they must fall within the SIL Claim exception to make a claim under the NFA. However,

they take issue with the denial of their right to seek recovery for adverse effects of the project against Canada and Manitoba. 12 In her award, the arbitrator did not accept the appellants’ preliminary argument that she was precluded from ruling as she did because her predecessor, Arbitrator MacLean, had conclusively ruled that the appellants could claim for adverse effects against Canada and Manitoba. More specifically, the arbitrator rejected the appellants’ arguments of res judicata and abuse of process. 13

Article 24.34 of the NFA provides that an appeal to this court is by way of stated case and can only be on questions of law or jurisdiction: There shall be no appeal from the order or award of the Arbitrator, except as to an issue of law or jurisdiction, in which case the issue shall be presented as a stated case to the Manitoba Court of Appeal for determination, and there shall be no further appeal therefrom. 14 In her stated case, the arbitrator submitted the following issues of law or jurisdiction for determination by this court (at para. 13): a. that under the terms of the NFA, Manitoba and Canada are not responsible to non-party persons for adverse effects of the project; b. that the 1996 Agreement can be considered when determining the NFA Arbitrator’s jurisdiction to hear certain portions of the claims filed under the NFA which claims have been brought by persons claiming membership or entitlement to membership in NCN; and c. that the only portion of the claims under the NFA which have been brought by persons claiming membership or entitlement to membership in NCN that survive the 1996 Agreement and therefore continue to fall within the jurisdiction of the NFA arbitrator are those portions which match the definition of an SIL claim in the 1996 Agreement. 15 The appellants assert that the arbitrator did not properly set out the issues of law and jurisdiction in the stated case.

They brought a motion to expand the stated case to have this court determine whether the arbitrator erred in law with respect to the issues of res judicata and abuse of process and whether Canada and Manitoba had attorned to the jurisdiction of the arbitrator under the NFA in regard to their claims. 16 While I would expand the stated case to include the issue of res judicata , I would dismiss the appeal. The NFA and the 1996 Agreement 17 The NFA and the 1996 Agreement are at the heart of this appeal.

Numerous provisions from these agreements were referred to by the parties in their factums and submissions and by the arbitrator in her award. A brief review of most of them is required to set the stage for the discussion and analysis that follows. The NFA 18 The

preamble of the NFA speaks to the desire of the four parties to create a continuing arbitration regime to address adverse effects of the project. It reads, in part, as follows: WHEREAS: . . . . . B. As a result of the Project, the water regime of certain waters, rivers, lakes and streams has been, or will be modified; C. As a result of the modification of the water regime, adverse effects have occurred, and may continue to occur, on the lands, pursuits, activities and lifestyles, of the residents, individually and collectively, of the Reserves of … Nelson House …; D.

The parties wish to ensure that all persons as defined herein, who may be, or have been, directly or indirectly, adversely affected by the Project shall be dealt with fairly and equitably; E.

Uncertainty as to the effects of the Project, with respect not only to the Project as it exists at the date of this Agreement but also as it may develop in the future, is such that it is not possible to foresee all the adverse results of the Project nor to determine all those persons who may be affected by it, and, therefore it is desirable to establish through the offices of a single arbitrator a continuing arbitration instrument , to which any person adversely affected may submit a claim, and as well as to fully empower such arbitrator to fashion a just and appropriate remedy; F.

Canada and Manitoba acknowledge the need to set forth the principles on which compensation will be based in respect of those matters set forth in this Agreement; . . . . . [emphasis added] 19 The NFA is a lengthy and complicated agreement. It includes provisions which set out the agreements among the parties to the NFA with respect to such matters as land exchange for lands affected by the project (Article 3), land use (Article 4), navigation (Article 5), quality of water (Article 6) and community infrastructure (Article 12).

Articles 14 to 18 concern matters of government policy related to wildlife resources, community planning and environmental impact. There are provisions addressing registered trapline and fishing programs (Article 19) and the establishment of a community liaison committee (Article 20) and an employment task force (Article 21).

Article 22 augments other provisions in the NFA dealing with remedial works and measures to address adverse effects of the project. 20

Article 23.2 speaks to an onus upon Hydro where there is a claim alleging an adverse effect of the project: The onus shall be on Hydro to establish that the Projects did not cause nor contribute to an adverse effect, where any claim arises by virtue of an actual or purported adverse effect of the Project. 21

Article 24 is entitled “Arbitration.” It contains extensive provisions that establish and govern the arbitration regime for the adjudication of claims, and other matters arising under the NFA, by a single arbitrator. 22 Many provisions set out the broad powers of the arbitrator, including the following: 24.6 It is the intention of the parties to this Agreement that the Arbitrator shall have broad authority and power to make awards capable of implementation and to fashion an appropriate and just remedy in respect of any and all adverse effects of the Project on any person and that such remedy shall at a minimum place that person in no worse position in that respect than he would have been in the absence of the adverse effect provided that any recommendation which involves a mitigatory and/or remedial measure to be implemented by any party shall be dealt with as provided in

Article 24.25 and

Article 24.26. 24.7 The Arbitrator shall have the power and authority to hear any claim or matter in dispute submitted by any person and he shall determine such claim or matter in dispute if the claim or matter in dispute arises directly or indirectly out of, or is attributable to the Project, or arises by reason of a failure to comply with or give effect to any provision contained in this Agreement. . . . . .

24.23 The Arbitrator in making an order shall inter alia: 24.23.1 Determine whether there is a liability under this Agreement; 24.23.2 Designate the party liable and, if more than one, apportion the liability; 24.23.3 Determine the appropriate remedy; … . . . . . 24.24 Without restricting the plenary power of the Arbitrator to fashion an appropriate and just remedy as provided in

Article 24.6, the Arbitrator may: 24.24.1 Direct that financial payments be made, including dislocation and/or relocation allowances where appropriate; . . . . . 24.31 The Arbitrator may direct that Hydro or Manitoba or Canada shall, within their respective areas of responsibility , monitor, record or report such information respecting the adverse effects of the Project or the effectiveness of any measure undertaken pursuant to this Agreement by any of the said parties, as may, in the opinion of the Arbitrator, be necessary or desirable to assist him in formulating decisions or any decision. [emphasis added] 23 “Person” is defined in

Article 1.12: “Person” means any individual who is a member of a Band, or any group, unincorporated association, or corporation whose membership or shareholding is wholly or substantially comprised of such individuals or any unincorporated association or corporation established by any Band Council, or any Band Council or any Band. 24 For the purpose of

Article 24,

Article 24.5 expands the definition of “person” to include the parties to the NFA: Except where otherwise provided, “person” … shall mean any person previously defined in

Article 1.12 as well as any of the parties hereto .

[emphasis added] 25

Article 24.8 speaks to the importance of mitigatory and/or remedial measures: Because mitigatory and/or remedial measures are more likely to have a lasting beneficial effect on the viability of a community and/or on individual residents than monetary compensation, such measures shall be preferred and only where mitigatory and/or remedial measures are not feasible or fail in effectiveness shall monetary compensation be ordered in lieu thereof in respect of any adverse effect. 26

Article 24.10, which is crucial to the position of Canada and Manitoba and the arbitrator’s award, states: In dealing with claims or matters in dispute which are submitted to the Arbitrator and in particular in assessing compensation or recommending remedial action or the like, the Arbitrator shall deal with such matters on the basis that the liability to compensate any person adversely affected by the Project is the sole and exclusive responsibility of Hydro and any recommendation for remedial action or the like is the responsibility of Hydro, Manitoba or Canada or any one or more of them. [emphasis added] 27

Article 24.11 provides that “Hydro shall have the right to settle individual claims with any person.” 28

Article 24.12 limits the time in which a claim may be submitted: … [A]ny specific issue for which compensation or redress or remedial measure or the like is claimed or requested must be submitted in writing to the Arbitrator within four years of the date of the alleged cause of claim becoming evident to the claimant or five years from the date of this Agreement, whichever is later, otherwise the right of claim shall expire. 29

Article 25.2 provides that the rights, powers or obligations of NFC, as a party, devolve on “the Bands or on any new entity designated by them as their representative.” Thus, NCN stood in the shoes of NFC pursuant to this provision at the time of entering into the 1996 Agreement. The 1996 Agreement 30 As stated in its

preamble, Canada, Manitoba, NCN and Hydro entered into the 1996 Agreement to resolve their respective obligations to each other under the NFA on “a comprehensive basis” and that “through the performance of the undertakings of this Agreement [they] are implementing and settling their respective obligations under the NFA .” 31 The 1996 Agreement modified the rights of how individual Band members and other “persons” associated with NCN could advance their claims. It created a “Claims Account” for the purpose of funding claims permitted under a mandated approval procedure. The arbitrator under the NFA continues to have jurisdiction in limited circumstances where disputes arise. 32

Article 12.1.2 sets out what claims may and may not be advanced against the Claims Account. Those that may not include the SIL Claims: Claims . A claim may be advanced against the Claims Account for compensation sufficient to compensate the Claimant for loss or damages suffered by that Claimant due to Adverse Effects but no claim may be advanced : (

a) by a person who was not a Member at the time the Adverse Effect occurred; (

b) by an insurer by way of subrogation; or (

c) which is an SIL Claim .

[emphasis added] 33 “SIL Claim” is defined as follows: SIL Claim means a claim for loss or damage caused by an Adverse Effect advanced by a Claimant who , at the Date of this Agreement , or at the date the damage or loss arose: (

a) was not ordinarily resident on Reserve but only if the damage or loss arose within the SIL Trapline Zone ; or (

b) was ordinarily resident at or near the Community of South Indian Lake regardless of where the damage or loss arose. …. [emphasis added] 34 “Adverse Effects” is defined as follows: Adverse Effects means the, direct or indirect, negative consequences of the Project or the operation thereof by Hydro , which consequences impact or change the physical, chemical or biological characteristics of the environment and include, without limitation, risks or injuries to the health, safety, well-being, comfort or enjoyment of Nelson House or Members , and impacts on interests in and the exercise of rights in relation to lands, pursuits, activities, opportunities, lifestyles and assets of Nelson House or Members 35

Article 1.2.2 states that the

definitions in the 1996 Agreement: … [A]re intended only for purposes of this Agreement and may not be used for any other purposes. Except for use in this Agreement these

definitions are without prejudice to and are not binding upon any of the Parties . 36

Article 14 sets out extensive releases and indemnities agreed to by the parties, as well as various exceptions.

Article 14.4.5 states that SIL Claims are an exception: …. This Agreement does not settle or conclude SIL Claims , if any, against any of Canada , Manitoba or Hydro . 37

Article 14.4.6 provides the following indemnity in favour of NCN: …. If [ NCN ] becomes liable to pay compensation in respect of an SIL Claim for loss or damage for which, in the absence of this Agreement , Manitoba or Hydro would be liable, Manitoba or Hydro , as the case may be, shall indemnify [ NCN ] with respect to such compensation. …. 38

Article 14.5.1 sets out the terms of the mutual releases among Canada, Manitoba and Hydro. It states that, “[t]his release does not apply to actions, causes of action, suits, claims, demands, losses or damages of any nature or kind whatsoever arising from SIL Claims .” 39 In

Article 12.5.1, Canada and Manitoba agreed to enact legislation to implement the 1996 Agreement:

Canada and Manitoba shall recommend the enactment of legislation providing that a claim for compensation which may be made under both the NFA and this Agreement shall be exercised only in accordance with this Agreement . 40 In

Article 12.5.2, Hydro agrees to indemnify Canada and Manitoba if they “become liable to pay compensation arising from an Adverse Effect to any Claimant ,” “as a result of enacting and proclaiming the legislation contemplated in

Article 12.5.1.” 41 The implementing legislation was enacted by Canada and Manitoba. See Nelson House First Nation Flooded Land Act , S.C. 1997, c. 29, and The Nelson House First Nation Northern Flood Implementation Agreement Act , S.M. 1996, c. 57. 42 On October 18, 2005, the arbitrator signed a consent final order dismissing the claims filed under the NFA that now fall under the terms of the 1996 Agreement. Motion to Amend the Stated Case 43 The appellants moved before a judge in chambers for advice and direction regarding the form and content of the stated case.

They sought an order either returning the stated case to the arbitrator for restatement, or an order amending the stated case to include the following questions ( 2009 MBCA 129 , 251 Man.R. (2d) 82 at para. 8 ): (1) did the arbitrator err in law and apply the wrong legal test in finding that the issues raised in the application by Canada and Manitoba are not res judicata; (2) did the arbitrator err in law and apply the wrong legal test in finding that the motion brought by Canada and Manitoba did not amount to an abuse of process; . . . . . (4) did the arbitrator err in law in failing to find that Canada and Manitoba had attorned to her jurisdiction by participating in the claims under the NFA over the past many years? 44 Steel J.A. concluded that, as the chambers judge, she did not have the jurisdiction either to remit the stated case back to the arbitrator or amend it.

She was of the opinion that any decision in that regard would be a matter for the panel hearing the appeal. 45 At the appeal hearing the appellants pursued their motion and argued that the stated case ought to be amended to include the issue of res judicata or alternatively, abuse of process and attornment. 46 Canada and Manitoba argued that the issues of res judicata , attornment and abuse of process were not appealable because they raised questions of fact or mixed fact and law.

In any event, they said that deference is owed to how the arbitrator stated the case. 47 The panel was of the view that the appellants had raised several arguable issues related to the question of res judicata . The appellants, Canada and Manitoba had addressed those issues in their factums and all requested that the stated case be amended rather than returning it to the arbitrator for restatement in the event the court agreed with the appellants that the stated case was deficient.

Therefore, the panel heard argument on the preliminary points of whether the question of res judicata is one of law and whether the stated case should be amended, as well as the substantive issue of whether the adjudicator erred when she ruled that res judicata did not apply. 48 The appellants argue issue estoppel, a branch of res judicata . In Glenko Enterprises Ltd. v.

Keller , 2008 MBCA 24 , 225 Man.R. (2d) 207 , this court explained that (at para. 33): For issue estoppel to apply, three requirements must be satisfied: (1) the same question has been decided in both actions; (2) the judicial decision which is said to create the estoppel was final; and (3) the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel

is raised or their privies. …. 49 The appellants assert that the arbitrator was precluded from deciding the issues put before her by Canada and Manitoba because Arbitrator MacLean had decided the same issues in previous awards. Canada and Manitoba acknowledge that Arbitrator MacLean addressed some of these issues, but they say that he never made a final decision in regard to them. 50 In her award, the arbitrator did not refer specifically to the three requirements for issue estoppel outlined above. This does not demonstrate that she was in error, as argued by the appellants.

The arbitrator understood that the crucial question was whether Arbitrator MacLean had already conclusively decided that the appellants could claim against Canada and Manitoba for adverse effects of the project. That is the question of res judicata , which raises a question of law. 51 Donald J.

Lange, The Doctrine of Res Judicata in Canada , 3d ed. (Markham: LexisNexis Canada Inc., 2010), makes this point succinctly (at p. 17): “The burden is on the party proving res judicata and determining it is a question of law.” In EnerNorth Industries Inc., Re , 2009 ONCA 536 , 96 O.R. (3d) 1 , leave to appeal to S.C.C. refused ( sub nom. Fieldston Traders Ltd. v. Oakwell Engineering Ltd .), [2009] S.C.C.A. No. 383 (QL) Blair J.A. commented to the same effect (at para. 52): Whether res judicata applies is a question of law.

What is determined in a legal proceeding and whether res judicata applies in the circumstances are essentially legal decisions, attracting little, if any, deference. The standard of review on this issue is, therefore, correctness. [emphasis added] See also: Toronto (City) v. C.U.P.E., Local 79 , 2003 SCC 63 , [2003] 3 S.C.R. 77 ; Ernst & Young Inc. v. Central Guaranty Trust Co. , 2006 ABCA 337 , 24 B.L.R. (4th) 218 at para. 26 , leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 9 (QL); Saggers v. Alberta (Human Rights Commission) , 2000 ABCA 259 , 193 D.L.R. (4th) 120 at paras. 19-20 ; and Peters v.

Remington , 2004 ABCA 5 , [2004] 3 W.W.R. 614 at para. 12 , leave to appeal to S.C.C. refused, [2004] S.C.C.A. No. 86 (QL). 52 Notwithstanding that the issue of res judicata raises a question of law, the question remains whether it is open to this court to interfere with how the arbitrator stated the case. In my view, the answer is yes. In her chambers decision, Steel J.A. wrote, appropriately in my view, that (at para. 27): …. It is [the arbitrator’s] right to state the case, after hearing argument from all the parties.

However, in turn, upon receiving the stated case, the Court of Appeal has the discretion to deal with errors it perceives to be present in that stated case. 53 Steel J.A. provided examples of how Courts of Appeal have remitted stated cases back for restatement where there are defective factual foundations or when they are not responsive to the evidence or are hypothetical. As well, she noted that Courts of Appeal have declined to answer questions, disagreed that a question submitted is a question of law or answered questions not exactly as posed. See paras. 28-31.

After providing these examples, Steel J.A. observed that (at para. 32): … [I]t would seem to me that if the court has the power to decline to answer questions put to it, to resubmit stated cases for restatement and to answer questions not exactly in response to the questions as posed, the court has the power to determine whether the arbitrator erred in law when formulating the questions posed in the stated case . [emphasis added] 54 I agree. 55 Because decisions of Arbitrator MacLean were made in the “continuing arbitration” under the NFA, they are decisions of the arbitrator under the NFA, and as such are binding on his successors.

Therefore, the issue of res judicata was an important question of law for the appellants. The commentary of Arbitrator MacLean in previous awards required the arbitrator to address this issue in some detail in her award. Given that, I am persuaded that the arbitrator was wrong to exclude this question of law from the stated case. 56 I agree with the parties that this court should not return the stated case to the arbitrator for restatement just so that it can be resubmitted. Nothing would be gained by that. This is not a situation where more factual foundation is required.

This is a matter of analyzing prior written decisions of the arbitrator’s predecessor. I would amend the stated case to include the question: Did the

arbitrator err in finding that the issues raised by Canada and Manitoba are not res judicata? Standard of Review 57 To summarize, the four questions of law to be addressed are: 1. Did the arbitrator err in deciding that, under the terms of the NFA, Canada and Manitoba are not responsible to non-party personsfor adverse effects of the project? 2.

Did the arbitrator err in deciding that the 1996 Agreement can be considered when determining the NFA arbitrator’s jurisdiction tohear certain portions of the claims filed under the NFA, which claims have been brought by persons claiming membership or entitlementto membership in NCN? 3.

Did the arbitrator err in deciding that the only portion of the claims filed under the NFA which have been brought by personsclaiming membership or entitlement to membership in NCN that survive the 1996 Agreement and therefore continue to fall within thejurisdiction of the NFA arbitrator are those portions which match the definition of an SIL Claim in the 1996 Agreement? 4.

Did the arbitrator err in finding that the issues raised by Canada and Manitoba are not res judicata? 58 The appellants argue that the standard of review for each of the four questions is correctness, given that they are questions oflaw and jurisdiction. Canada and Manitoba say that the standard of review for all the questions is reasonableness. They say that thequestions concerning jurisdiction are not “true questions of jurisdiction or vires” (Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1S.C.R. 190 at para. 59) demanding the standard of correctness.

Rather, they say that they are questions of the arbitrability of theappellants’ claims and as such they are questions of law that fall within the expertise of the arbitrator. 59 In Nolan v. Kerry (Canada) Inc., 2009 SCC 39, [2009] 2 S.C.R. 678, Rothstein J. explained the two-step process fordetermining the applicable standard of review established in Dunsmuir (at paras. 23-25): … Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 … established a two-step process for determining the applicablestandard of review (para. 62).

Under the first step of the process, the court must “ascertain whether the jurisprudence has already determined in a satisfactory mannerthe degree of deference to be accorded with regard to a particular category of question” (para. 62). In Monsanto Canada Inc. v. Ontario(Superintendent of Financial Services), 2004 SCC 54, [2004] 3 S.C.R. 152, this Court applied a standard of correctness to the Tribunal’sruling involving the

interpretation of the PBA [Pension Benefits Act, R.S.O. 1990, c. P.8]. This case does not involve the

interpretation ofthe PBA. It is, therefore, necessary to consider the second step of the Dunsmuir process. The second step involves applying the “standard of review analysis” …. [emphasis added] See also, Northrop Grumman Overseas Services Corp. v. Canada (Attorney General), 2009 SCC 50, [2009] 3 S.C.R. 309 at para. 10. 60 Canada and Manitoba argue that it is not necessary to go beyond the first step of the Dunsmuir analysis because this courthas already determined that deference is owed to the arbitrator when called upon to interpret the NFA. They point to the followingwords of Scott C.J.M. in Manitoba et al. v.

Cross Lake First Nation et al. (1999), (MB CA), 134 Man.R. (2d) 226(C.A.) (at paras. 17-18): …. … [W]hether this court might have been persuaded to arrive at a different conclusion to that of the arbitrator is beside the point.

The arbitrator directed his mind to the proper question and was well within his jurisdiction to answer it as he did. 61 While these words certainly explain that deference was given to the arbitrator in that decision, I do not view them to be whatRothstein J. was contemplating when he referred to jurisprudence that already determined the issue “in a satisfactory manner.” A morefulsome analysis of the various criteria under the pre-Dunsmuir pragmatic and functional test would certainly suffice in most instances,but that type of analysis has not been done to date.

Therefore, I am of the view that a standard of review analysis is required.

62 The four standard of review factors are well known: 1) the presence or absence of a privative clause or a statutory right of appeal; 2) the relevant expertise of the decision-maker on the question at issue; 3) the purpose of the underlying legislation or agreement; and 4) the nature of the question at issue (question of law, fact or mixed fact and law). All of these factors need not always be considered, “as some of them may be determinative in the application of the reasonableness standard in a specific case” ( Dunsmuir at para. 64 ). 63 The purpose of the NFA is clear.

The four parties to the NFA agreed to enter into a specific regime to adjudicate claims permitted by the NFA. They agreed that one arbitrator with broad powers and discretion would hear, manage and decide all claims and matters in dispute, including claims by “persons” as well as the parties. The appellants are not parties to the NFA. However, they derive their rights through NCN as a successor to NFC, a party to the NFA.

I do not agree that the appellants’ non-party status changes the fact that the NFA established a consensual arbitration process, which, by its very nature, calls for deference in most circumstances. 64 As for the arbitrator’s expertise, there can be no doubt that she is viewed by all to have the necessary expertise to make the decisions contemplated under the NFA. Given the broad powers of the arbitrator under the NFA, this expertise must, by definition, include the expertise to interpret the provisions of the NFA and related agreements and legislation.

This is in keeping with the purpose of the NFA. 65 While the NFA does not include a privative clause, appeals may only proceed by stated case. Aggrieved parties to the NFA, or aggrieved claimants under the NFA, do not have a right of appeal directly to the Court of Appeal on a question of law or jurisdiction. They must apply to the arbitrator for her to state the case. To a large extent, she controls how the case is stated and what is stated. This is another indicator that deference is owed to the arbitrator. 66 Deference is usually called for when a tribunal is interpreting its home statute.

See Dunsmuir at para. 54 . I agree with Canada and Manitoba that the NFA is the equivalent to a tribunal’s own statute. Therefore, deference is owed to the arbitrator when she is interpreting the NFA and related agreements such as the 1996 Agreement. 67 I agree with Canada and Manitoba that there are no true questions of jurisdiction that would call for the standard of review of correctness.

Given that, and that there are so many indicators of deference, the standard of review for the three questions of law stated by the arbitrator is the standard of reasonableness. 68 I view the question of res judicata differently. It calls for the standard of correctness. 69 Res judicata is a common law doctrine that is not within the arbitrator’s specialized area of expertise under the NFA. In Dunsmuir , Bastarache J. wrote about when courts should substitute their own view of the correct answer.

In doing so he referred to questions of res judicata (at para. 60): … [C]ourts must also continue to substitute their own view of the correct answer where the question at issue is one of general law “that is both of central importance to the legal system as a whole and outside the adjudicator’s specialized area of expertise” ( Toronto (City) v. C.U.P.E. , at para. 62, per LeBel J.). Because of their impact on the administration of justice as a whole, such questions require uniform and consistent answers. Such was the case in Toronto (City) v.

C.U.P.E. , which dealt with complex common law rules and conflicting jurisprudence on the doctrines of res judicata and abuse of process – issues that are at the heart of the administration of justice …. 70 In Toronto (City) v. C.U.P.E. , Arbour J., for the majority, explained why res judicata is a question of law calling for the standard of correctness (at para. 15): …. The body of law dealing with the relitigation of issues finally decided in previous judicial proceedings is not only complex; it is also at the heart of the administration of justice.

Properly understood and applied, the doctrines of res judicata and abuse of process govern the interplay between different judicial decision makers. These rules and principles call for a judicial balance between finality, fairness, efficiency and authority of judicial decisions. The application of these rules, doctrines and principles is clearly outside the sphere of expertise of a labour arbitrator who may be called to have recourse to them. In such a case, he or she must correctly answer the question of law raised. …. Res Judicata 71 In 1994, Mr.

Kenneth Spence submitted Claim 174 to Arbitrator MacLean on the basis that, as a member of the NCN and former resident of the community of South Indian Lake, he was a “person” affected by the project. He alleged that the adverse effects of the project on the community of South Indian Lake led him to leave that community, which, in turn, caused other adverse effects to his lifestyle. He claimed against Canada, Manitoba and Hydro. Claim 174 was considered a “test” case for the approximately 400 DRSIL Claims. 72 In the mid to late 1990s, Mr. Spence made several successful applications for interim costs.

Manitoba and Canada had objected to these applications on several grounds, one of which was that Arbitrator MacLean did not have jurisdiction over Claim 174. 73 The appellants assert that, in two sets of awards concerning Claim 174, Arbitrator MacLean decided on a final basis the issues raised by Canada and Manitoba in their motions.

74 The first set of awards is Arbitrator MacLean’s award of December 21, 1994, and its reconsideration in his award of April25, 1995. The reconsideration award was upheld by this court in Spence v.

Manitoba et al. (1996), (MB CA), 110Man.R. (2d) 210. 75 The second set is Arbitrator MacLean’s award of April 21, 1997, and its reconsideration in his award of August 15, 1997. 76 The arbitrator reviewed these two sets of awards and determined that, although similar issues had been considered, ArbitratorMacLean had not come to any final decision (at para. 18): I am satisfied that no final decision has been made by the arbitrator on the issue of the right of the DRSIL claimants to claim againstCanada and Manitoba for adverse affects [sic] of the project and of the right of the DRSIL claimants to rely on Articles 2 to 23 of theNFA.

These determinations were put off by the arbitrator to a later time. I find accordingly that the doctrines of res judicata and issueestoppel do not preclude my hearing those issues at this time. Award Dated December 21, 1994, and its Reconsideration Dated April 25, 1995 77 In the context of Mr. Spence’s application for interim costs, Arbitrator MacLean considered the merit of Claim 174, hisapparent jurisdiction to hear the claim, and the argument that the claim was barred by the limitation period. Arbitrator MacLean did notmake a final decision about those issues.

The following excerpts from his December 21, 1994 award clearly demonstrate this: I am satisfied that the Claim is meritorious for the purposes of this preliminary matter. [at p. 5] …. … [T]he Project arguably has contributed to the changes to the community described by Mr. Spence …. [at p. 5]. I am also satisfied that the Claim is, on its face, apparently (not conclusively) within the terms of reference as outlined in the Agreement. [at p. 5] I am satisfied for the purposes of this preliminary matter that the Claimant is not barred by the limitation period set out in

Article 24.12,but I consider this matter to be unresolved and open to further submissions. [at p. 6] I am not prepared at this point in the process to remove any of the Respondents from this complex Claim.

I deem it appropriate toapportion the costs associated with this cost order as follows: 50% to Hydro, 25% to Manitoba and 25% to Canada. [at p. 6] I must make it clear here that any conclusions I have arrived at, or findings made with regard to the merits [of] the Claim, or as tojurisdiction, are not to be taken as final or conclusive, but are subject to any final determination and award that may be made afterhearing the matter on the merits.

As well any apportionment of responsibility for expenses of counsel made herein is subject to changeand final apportionment depending on the results of any such final award made on the merits. [at pp. 6-7] [emphasis added] 78 In his reconsideration award dated April 25, 1995, Arbitrator MacLean specifically rejected the argument of Canada andManitoba that he was required to determine conclusively that he had jurisdiction to hear the substantive issues raised in the claim prior toexercising his discretion to grant interim costs.

He reiterated that the limitation period arguments “cannot be properly dealt with at thispoint in time” (at p. 9) and repeated that the apportionment of costs in his December 21, 1994 award was subject to change (at pp. 10-11): In apportioning costs with 50% to Hydro and the remaining 50% divided between Canada and Manitoba, I took into account whatappears to be the primary responsibility of Hydro in this matter. I noted that any apportionment of responsibility for expenses of counselis subject to change and final apportionment depending on any final award made on the merits.

The Respondents are entitled to agree tosuch other apportionment as they deem appropriate. ….

[emphasis added] 79 Arbitrator MacLean did confirm conclusively that the test for awarding interim costs should continue to require proof only that the claim was meritorious, that the claim was apparently (not conclusively) within the terms of reference as outlined in the NFA, and that the claimant was impecunious.

However, he repeated that the arbitrator need not determine that he has jurisdiction to hear the substantive issues prior to awarding interim costs. 80 Arbitrator Krindle noted the significance of this in her award (at para. 11): It is significant that, to the time of Arbitrator’s MacLean award on reconsideration of April of 1995, the issue of the jurisdiction of the Arbitrator to deal with the substantive aspects of the claim had been raised only indirectly in the course of motions for interim costs rather than by a direct motion to strike.

It is also significant that the vagueness and lack of focus of the points of claim was criticized, not only by the responding parties but by the Arbitrator, as being an impediment to the parties being able to come to grips with the issues. …. 81 She also noted that this court confirmed the arbitrator’s decision in Spence . 82 The arbitrator correctly concluded that (at para. 12): … [N]either of the rulings on the motion for an order for interim costs was a final ruling on the preliminary issue of the Arbitrator’s jurisdiction to determine the claims against Canada and Manitoba, not even in an interlocutory sense.

Award Dated April 21, 1997, and its Reconsideration Dated August 15, 1997 83 In these awards, Arbitrator MacLean commented, at some length, on

Article 24.10 in the context of disputes arising from the earlier interim costs orders and the points of claim submitted by Mr. Spence in Claim 174. Canada, Manitoba and Hydro argued that the points of claim failed to articulate the issues clearly enough for them to determine what case they had to meet. Further, Canada and Manitoba argued that the points of claim as a whole ought to be struck out as against them, based on

Article 24.10 of the NFA. 84 The arbitrator explained the similarity of the issues raised before Arbitrator MacLean and the issues raised before her (at para. 13): In 1996, Manitoba, Canada, and Manitoba Hydro each filed applications seeking to strike the whole or parts of the points of claim in claim 174. Manitoba’s and Canada’s arguments were grounded in NFA

Article 24.10 which, they argued, identifies Manitoba Hydro as the party responsible to compensate persons for adverse effects of the project and in the inability of an individual claimant to rely on and enforce the contractual commitments between the parties to the NFA set forth in Articles 2 through 23 of the NFA. These are similar to the points which Canada and Manitoba seek to place in issue before me today, although the motion before me today is based in part also in the 1996 Agreement, an Agreement that was not referred to in the 1996 applications.

I will first turn to the question of whether Arbitrator MacLean finally answered the two clearly linked issues that were placed before him. 85 After considering the interrelationship between costs and the need to clarify the points of claim to understand the factual and evidentiary issues to proceed to hearing, Arbitrator MacLean directed the parties to engage in a pre-arbitration process “in an effort to reach agreement on these important matters” (at p. 7). He then stated that “[i]f it is not possible for the Parties to agree, I am prepared to make the necessary determinations” ( ibid. ).

I do not view this direction to be any sort of ruling or acknowledgment by Arbitrator MacLean that he had conclusively determined his jurisdiction to order that Canada and Manitoba compensate Mr. Spence for adverse effects, as argued by the appellants. 86 Arbitrator MacLean did turn his mind to the issue of whether there is potential liability on the part of Canada and Manitoba for “adverse effects” under

Article 24.10. He explained that he had considered this in the context of his 1989 award under Claim 47, in which he ruled that he had jurisdiction to hear claims submitted by a “person” who was not a party to the NFA with respect to adverse effects arising directly or indirectly out of or attributable to the project. He ruled that Mr. Spence was a “person” as defined in the NFA. 87 He also stated that “[i]t was firmly settled in Claim 47 that Articles 2 to 23 had little or no application to the persons in Claim 47 … and it follows that they have little or no application to Mr. Spence” (at p. 12).

He then wrote ( ibid. ): One cannot conclude from this there is no liability to a “person” such as … Mr. Spence, on the part of Manitoba and Canada. I refer the Parties once again to the decision in Claim 47 ….

Manitoba and Canada appear to be arguing, in effect, that their liability is limited to the Articles 2 to 23 and are thus presenting what seems to be a variation of the argument in Claim 47. I note that

Article 24.7 does not specify that liability for claims “arising directly or indirectly out of, or attributable to the Project” falls upon Hydro. 88 With respect to

Article 24.10, he noted that the word “compensation” was not defined in the NFA, and that it could mean either monetary compensation or remedial measures, depending on the context. He then wrote (at p. 13): Clearly a remedial measure is a form of compensation intended to remedy effects of the Project. To the extent that Manitoba, Canada, or Hydro or any one or more of them, are to be responsible for remedial measures “and the like”, it appears that Hydro’s “sole and exclusive liability to compensate” any person adversely affected by the Project is not as all encompassing as it would initially appear.

The Parties direct the Arbitrator to call upon Manitoba and Canada as well as Hydro to provide compensation by way of remedial action. 89 This passage must be read carefully as it is difficult to understand initially. At first blush, it seems that Arbitrator MacLean was interpreting

Article 24.10 to mean that although Hydro is solely and exclusively liable for monetary compensation, Canada, Manitoba and/or Hydro can still be called upon to provide remedial compensation. However, I am of the view that Arbitrator MacLean qualified his statements in this paragraph. To repeat, he stated ( ibid. ): ….

To the extent that Manitoba, Canada, or Hydro or any one or more of them, are to be responsible for remedial measures “and the like” , it appears that Hydro’s “sole and exclusive liability to compensate” any person adversely affected by the Project is not as all encompassing as it would initially appear. …. [emphasis added] 90 These words are qualifying in nature and demonstrate that Arbitrator MacLean had not yet determined if Canada or Manitoba can be held “liable” to provide remedial compensation respecting claims such as Claim 174. This is underscored by how he concluded his analysis with respect to

Article 24.10 (at p. 14): I do [not] put forward the above comments as determinative of the issue of liability. I am of the view that

Article 24.10 is not by itself sufficiently clear so as to establish that Manitoba and Canada are not properly Respondents here. The issue of the liability of either Manitoba or Canada is of a greater scope and requires a broader analysis of the NFA than has yet been presented. I am not prepared to remove Manitoba and Canada from the Claim at this time. [emphasis added] 91 As is evident, I inserted the word “not” in the first sentence of the above quote.

The appellants place great reliance on this quote in its unaltered form, for the obvious reason that, without the insertion of the word “not,” the sentence reads as if Arbitrator MacLean made a final determination on the issue. The arbitrator was of the view, as I am, that the sentence, as written, contained an error. She noted it by quoting the sentence as follows: “I do [ sic ] put forward the above comments as determinative” (at para. 15).

In my view, the error is clearly evident when the whole paragraph is read in context and in the context of Arbitrator MacLean’s final words (at p. 15): It may be that the Respondents are themselves clear on issues of liability, based on jurisdictional and other considerations outside of the NFA. I do not know. My task is to interpret the NFA.

Arguments raised to date have not convinced me that Manitoba and Canada should be removed as Respondents. [emphasis added] 92 Although Arbitrator MacLean did not remove Canada or Manitoba as respondents in Claim 174, it is clear, after reading his award in its entirety, that he did not make a final decision with respect to the issue of the potential liability of Canada and Manitoba to

“persons” adversely affected by the project. The arbitrator correctly concluded that Arbitrator MacLean “did not … intend to make a final determination on the applicability of

Article 24.10 and that he deferred doing so pending the presentation at some future date of a broader analysis of the NFA” (at para. 16). 93 Moreover, on reconsideration, Arbitrator MacLean confirmed his April 21, 1997 award. He acknowledged that his earlier decision in Claim 47 indicated that Articles 2 to 23 had little application to persons such as Mr. Spence, but he was not prepared to strike out any part of the points of claim in Claim 174 pertaining to Articles 2 to 23.

In doing so, he once again explained that his decision was not final (at pp. 2-3): .… It is not plain and obvious to me at this time that the aspects of the present Claim to which the Respondents are objecting ought to be removed from the Points of Claim. …. . . . . . There are apparently differing theories as to this Claim. The Respondents take the view that this is a simple Claim. It appears to me to involve a number of complex issues and the

interpretation of certain important provisions of the NFA.

It may be that the Respondents will clearly establish their view of the Claim but until such time as I can properly hear the matter, I am not prepared to make a ruling accepting the Respondents’ view thereby denying the Claimant the opportunity to present his case. [emphasis added] Conclusion 94 Arbitrator MacLean did not come to a final decision as to his jurisdiction to make an award which would hold Canada or Manitoba responsible for the adverse effects of the project with respect to non-party “persons.” The arbitrator was correct to conclude that the doctrine of res judicata did not preclude her from ruling on the issues raised by Canada and Manitoba in their motions.

Issues Stated by the Arbitrator Position of the Appellants 95 The appellants assert that the arbitrator erred when she concluded that Canada and Manitoba are not responsible to the appellants for adverse effects of the project, which they say can include adverse effects resulting from the failure of Canada and Manitoba to perform their obligations as parties under the NFA. They say that the arbitrator inappropriately used

definitions from the 1996 Agreement for the purpose of interpreting the NFA and determining her jurisdiction under the NFA. 96 The appellants contend that

Article 24.8 of the NFA is of particular importance because it provides for the remedy of monetary compensation when remedial measures are not feasible or effective. Because remedial measures can be the responsibility of Canada, Manitoba, Hydro or any one of them, the appellants say that compensation can flow to them when remediation is not effective.

In this regard, they point to the analysis of Arbitrator MacLean in his April 21, 1997 award with respect to Claim 174. 97 While the appellants acknowledge that they can only bring claims under the NFA if they match the definition of an SIL claim in the 1996 Agreement, they say that the arbitrator wrongly equated the words “adversely affected” used throughout the NFA to the words “Adverse Effects” in the 1996 Agreement. They argue that the NFA utilizes the words “adverse effect” and “adversely affected” in differing ways to describe the liability of Canada, Manitoba and/or Hydro. They assert that

Article 24.10 means that Hydro is responsible for the direct effects of the project and Canada, Manitoba and/or Hydro are responsible for the indirect effects resulting from the failure to implement or adequately implement the remedial actions. 98 In any event, the appellants say that the 1996 Agreement supports their position that they may claim against Canada and Manitoba for adverse effects.

They point in particular to Articles 12.5.2, 14.4.5-14.4.6, 14.5.1. 99 In the end, their position is that the arbitrator must determine for each claim what are the adverse effects, if any, and who is responsible for them because adverse effects can arise in different contexts, including directly from the project and indirectly from failing to remediate as required under the NFA. This is in keeping, they assert, with the requirement to interpret the NFA by reading it in its entirety. They say to interpret the NFA differently is unreasonable.

Position of Canada and Manitoba 100 Canada and Manitoba say that the appellants have not demonstrated any reviewable error that would permit this court to intervene, particularly given that deference is owed to the arbitrator. In any event, they say that she was correct. 101 The appellants say that the arbitrator correctly understood that the 1996 Agreement, along with its implementing legislation by Canada and Manitoba and the consent final order of the arbitrator, modifies the role of the NFA in respect of NCN and those claiming through it.

Thus, Canada and Manitoba say that the appellants’ position is flawed in three ways. First, they wrongly assert that the arbitrator is precluded from looking beyond the NFA, given the broad power provided to her under

Article 24.27 of the NFA. Second,

the 1996 Agreement directly pertains to the resolution of obligations under the NFA. Third, the appellants only have standing to advance claims in accordance with the 1996 Agreement exception for SIL Claims, which limits the claims to a specific kind of “Adverse Effect” caused by Hydro. Given that the appellants acknowledge their claims must be SIL Claims, they question how the appellants can then say that the definition of an SIL Claim does not limit the scope of the claims they may advance before the arbitrator. 102 As for

Article 24.10, Canada says that it is limited to claims for breach of contractual obligations and that the distinction between the parties to the NFA and claimants under the NFA is important. Canada acknowledged that it could have liability for adverse effects under

Article 24.8, but only to parties and not claimants like the appellants, who may only seek redress from Hydro. 103 In essence, Canada and Manitoba maintain that without the SIL Claim exception, the appellants would not have any right to advance a claim under the NFA. Therefore, the only claims they are entitled to make are for “Adverse Effects,” as defined in the 1996 Agreement. Position of Hydro 104 Hydro took no position with respect to the first issue stated by the arbitrator.

With respect to the second issue, it says that the arbitrator was obliged to consider the 1996 Agreement for the purpose of determining whether she has jurisdiction to consider NCN member claims. Hydro did not address the third issue given that it was not contentious. 105 Hydro says the question of whether the appellants are in fact SIL claimants is still to be arbitrated with respect to each claim. Analysis 106 The standard of reasonableness demands that deference be given to the decision-maker by the reviewing court.

It requires that a decision must be assessed on the basis of “justification, transparency and intelligibility within the decision-making process” ( Dunsmuir at para. 47 ). To be reasonable, a decision must fall within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law. As explained in Law Society of New Brunswick v. Ryan , 2003 SCC 20 , [2003] 1 S.C.R. 247 , the question for the reviewing court is, “After a somewhat probing examination, can the reasons given, when taken as a whole, support the decision?” (at para. 47).

See also, Canada (Citizenship and Immigration) v. Khosa , 2009 SCC 12 , [2009] 1 S.C.R. 339 at para. 59 . 107 The arbitrator understood the import of her decision to the SIL claimants and the process (at para. 30): …. The issue which Canada and Manitoba have brought before me at this time is an issue of general application. The overwhelming majority, if not all, of the named DRSIL claimants have brought their claims on the grounds that they are or are entitled to be members of the Nelson House First Nation/NCN.

This motion is capable of being dealt with readily as a preliminary matter in that it involves no disputed issues of fact. Its resolution at this time is likely to simplify the ultimate arbitration by reducing the issues to be determined and perhaps, depending on its outcome, by reducing the number of respondents. It makes procedural sense.

There is no abuse in having this matter dealt with at this time, quite the contrary. 108 She did not accept the appellants’ argument that she was “not permitted to look to the terms of the 1996 Agreement to determine the issue of [her] jurisdiction in respect of claims filed under the NFA” or “entitled to look to that Agreement to determine the standing of the claimants to bring actions under the NFA” (at para. 32). She explained why it was necessary for her to consider the 1996 Agreement (at paras. 33-35, 37): The claimants are not themselves parties to the NFA.

They gain whatever rights they may have to claim under the NFA by being members of or being entitled to be members of the Nisichawayasihk Cree Nation (NCN), the successor to Nelson House First Nation. Nelson House First Nation was an NFA signatory. I will from this point forward refer to the First Nation as NCN. The relationship between the 1996 Agreement and the NFA is clearly set out in the

Preamble to the 1996 Agreement: Whereas the Parties are parties to the NFA …; And Whereas pursuant to the NFA there are obligations of the Parties which the Parties wish to resolve on a comprehensive basis; And Whereas the Parties through the performance of the undertakings of this Agreement are implementing and settling their respective obligations under the NFA. Now Therefore ….

The claimants gain standing to claim under the NFA through their membership or their entitlement to be members of NCN. NCN has entered into a comprehensive settlement agreement with the government parties and Manitoba Hydro. It is not only permissible, it is imperative that I look to the 1996 Agreement to determine what if anything it, or the legislation which implements that Agreement, has to say about the claims of those who gained standing to claim under the NFA through NCN.

Inasmuch as the legislation requires that claims of persons who are members of NCN that are capable of being resolved under both the NFA and the 1996 Agreement shall be resolved in accordance with the 1996 Agreement, I must look to the terms of the 1996 Agreement. [emphasis added] 109 The arbitrator then reviewed a number of provisions from the 1996 Agreement, including the exception for SIL Claims in

Article 12.1.2,

Article 14.4.5 and the

definitions of “SIL Claims” and “Adverse Effects.” 110 With respect to the release provisions in the 1996 Agreement, she addressed the exception for SIL Claims (at para. 42): Under

Article 14 of the [1996] Agreement, all other present or future NFA claims of NCN and its members are released against each of Canada, Manitoba and Manitoba Hydro are finally resolved, subject to certain exceptions. Those exceptions relate to the continuing potential liability of Manitoba Hydro alone for adverse effects and personal injuries as listed in

Article 14.14.1 and to the potential liability of Canada and Manitoba Hydro stemming from

Article 6 of the NFA.

Article 6 obligations relate to potable water supplies on Reserves and are not pertinent to the DRSIL claims.

Article 14.14.1 disputes are, pursuant to

Article 13.5 of the 1996 Agreement, to be resolved under the arbitration provisions of the 1996 Agreement. [emphasis added] 111 Understandably, she concluded that (at para. 43): The effect of the foregoing is that the only portions of the DRSIL claims (brought by persons claiming membership or entitlement to membership in NCN) that survive the 1996 Agreement which continue to fall within the jurisdiction of the NFA Arbitrator are those which match the definition of an SIL claim .

Any claim outside that definition is either released and discontinued or required to be arbitrated under the provisions of the 1996 Agreement. [emphasis added] 112 The arbitrator then turned her mind to the NFA and the crucial issue of whether the NFA would permit an award to be made against Canada or Manitoba in favour of those appellants whose claim falls within the definition of an SIL Claim.

She wrote that “[i]f claims do not fall within the definition of an SIL claim under the 1996 Agreement, they cannot be dealt with under the NFA” (at para. 44). 113 She explained that “the DRSIL claimants claim, not as parties to the NFA, but rather as non-party ‘persons’” (at para. 45), and that the powers of the arbitrator to fashion remedies are broad, quoting Articles 24.6 and 24.7. Referring to the expanded definition of “person” in

Article 24.5, she stated that “[t]he Parties to the NFA would also have recourse to

article 24.6 and 24.7 to determine the scope of the Arbitrator’s powers. It is not only non-party ‘persons’ who would turn to

article 24.6 and 24.7” (at para. 47). 114 The arbitrator described

Article 24.10 as “a most significant

article on the issue of the liability of Canada and Manitoba to compensate persons for the adverse effects of the Project” (at para. 48). She agreed with Canada and Manitoba that its “clear import” was that their “liability is limited to their responsibilities in connection with ‘remedial action or the like’ and Hydro alone is responsible for compensation for adverse effects of the Project” (at para. 49). She found further support for this

interpretation in

Article 24.11, “which confers on Hydro the right to settle individual claims,” but “makes no mention of Canada or Manitoba having a similar right” (at para. 49). She wrote ( ibid. ): …. It would be bewildering indeed if Manitoba, Canada and Manitoba Hydro were each liable to individuals for adverse effects of the Project, but only Manitoba Hydro could settle a claim brought by an individual.

115 She recognized that other subsections of

Article 24 “speak to awards that can be made against Manitoba, Canada and Manitoba Hydro” (at para. 50), referencing the right of the arbitrator to make recommendations to take remedial action in

Article 24.10 itself, as well as

Article 24.24.9, which “provides that, financial payments may be ordered by the arbitrator for the failure of a party to ‘comply with or give effect to any provision of the [NFA] or any matter arising out of the [NFA] ’” (at para. 51). In regard to the latter, she agreed with Canada and Manitoba ( ibid. ): …. … [T]hat this potential liability does not convert into a free standing liability of Canada and Manitoba to non-party individuals for adverse effects.

Read contextually, the liability under the NFA to compensate non-party persons adversely affected by the Project is the sole and exclusive responsibility of Hydro. 116 She stated that “[t]he NFA distinguishes clearly between the position of the parties to the [NFA] and that of non-party ‘persons,’” and that “Articles 2 to 23 confer rights on the parties to the NFA, not on non-party persons” (at para. 52). 117 As to why there was different liability, she reasoned as follows (at paras. 55-57): That the liability should be different is not surprising.

It is, after all, Manitoba Hydro which operates the Project, not either of the two government parties. It is not surprising that Manitoba Hydro would be made primarily responsible for its adverse effects, direct or indirect, on individuals. The

Preamble to the NFA goes further to explain this difference in liability. It distinguishes between the responsibility of Manitoba and Manitoba Hydro on the one hand as developer of the Project and Canada on the other …. In that context, the very different liabilities of Canada and Manitoba on the one hand and Manitoba Hydro on the other make sense.

A reading of the whole of the NFA supports the position that Manitoba Hydro alone is responsible to non-party “persons” for adverse effects of the Projects, direct and indirect. [emphasis added] 118 In my view, the foregoing review of the arbitrator’s reasons demonstrates that her decision, at a minimum, meets the standard of reasonableness. She understood the issues before her and she justifies her conclusion in a transparent and intelligible way. She reasonably (and also correctly, in my view) considered the 1996 Agreement and the implementing legislation.

She would have been unreasonable (and in error) if she had not done so. The 1996 Agreement, and in particular the definition of an SIL Claim, is crucial to the appellants’ right to claim under the NFA. Having said that, she also analyzed the provisions of the NFA to determine the issues before her. Understandably, she viewed

Article 24.10 to be significant and she explained why. The appellants have not persuaded me that the arbitrator’s award is unreasonable in any respect. Conclusion 119 I would answer the stated case, as amended, as follows: 1. The arbitrator did not err in deciding that, under the terms of the NFA, Canada and Manitoba are not responsible to non-party persons for adverse effects of the project. 2.

The arbitrator did not err in deciding that the 1996 Agreement can be considered when determining the NFA arbitrator’s jurisdiction to hear certain portions of the claims filed under the NFA, which claims have been brought by persons claiming membership or entitlement to membership in NCN. 3.

The arbitrator did not err in deciding that the only portion of the claims filed under the NFA which have been brought by persons claiming membership or entitlement to membership in NCN that survive the 1996 Agreement and therefore continue to fall within the jurisdiction of the NFA arbitrator are those portions which match the definition of an SIL Claim in the 1996 Agreement. 4. The arbitrator did not err in finding that the issues raised in the motions by Canada and Manitoba are not res judicata . 120 One final point.

I agree with Hydro that the arbitrator was not ruling that the appellants’ claims are in fact SIL Claims. That is a determination still to follow with respect to each claim. As stated by the arbitrator, “The factual issue whether any particular claim

has been brought on that basis is not addressed in these reasons” (at para. 2). 121 I would dismiss the appeal. Costs may be addressed by the parties in writing, if necessary. J.A. I agree: J.A. I agree: J.A.