Darcis et al. v. Manitoba et al., 2012 MBCA 49

Source: Court of Appeal of Manitoba

Date: 2012-05-25

Jurisdiction: Manitoba

Docket: AI 11-30-07630

Citation: 2012 MBCA 49

Opinion

Citation: Darcis et al. v. Manitoba et al., 2012 MBCA 49 Date: 20120525 Docket: AI 11-30-07630 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 : MABEL LINDA DARCIS, AND THE ) D. R. Knight, Q.C., CLAIMANTS LISTED IN

SCHEDULE ) J. I. Jardine, “A” ATTACHED ) D. M. Bradley and ) J. R. N. Boudreau (Claimants) Appellants ) for the Appellants ) - and - ) K. J. Wright ) for the Respondent HER MAJESTY THE QUEEN IN RIGHT ) Her Majesty the Queen OF THE PROVINCE OF MANITOBA, ) in Right of the Province THE MANITOBA HYDRO-ELECTRIC ) of Manitoba BOARD, AND HER MAJESTY THE ) QUEEN IN RIGHT OF CANADA as ) J. B. Hirsch and represented by THE MINISTER OF ) L. K. Troup INDIAN AFFAIRS AND NORTHERN ) for the Respondent DEVELOPMENT ) The Manitoba Hydro- ) Electric Board (Respondents) Respondents ) ) J. B.

Echols - and - ) for the Respondent ) Her Majesty the Queen ALLAN RAY SPENCE AND THE ) in Right of Canada CLAIMANTS LISTED IN

SCHEDULE ) “B” ATTACHED ) Appeal heard: ) March 6, 2012 (Claimants) ) ) Judgment delivered: ) May 25, 2012 HAMILTON J.A. 1 This appeal is by way of stated case from the arbitrator appointed under the Northern Flood Agreement (the NFA).

It concerns what constitutes an “SIL Claim,” which is a specific type of claim that may be made under the NFA by individuals who have a defined connection to the Community of South Indian Lake or an area known as the SIL Trapline Zone. 2 An SIL Claim is an exception to the comprehensive settlement agreement signed in 1996 (the 1996 Agreement) by the Nelson House First Nation, now Nisichawayasihk Cree Nation (NCN), pertaining to its claims, and the claims of its members, under the NFA with respect to the effects of the Lake Winnipeg Regulation and Churchill River Diversion Project (the project).

This was explained in Anderson et al. v. Manitoba et al. , 2010 MBCA 113 , 262 Man.R. (2d) 96 (at paras. 2 , 4-6): 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.

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). 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).

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 . [emphasis added] 3 “SIL Claim” is defined in the 1996 Agreement.

The pertinent portion of the definition has three components, which I identify below as “the introductory paragraph,” “subpara. (a)” and “subpara. (b)”: 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: [the introductory paragraph] (

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

b) was ordinarily resident at or near the Community of South Indian Lake regardless of where the damage or loss arose. [subpara. (b)] . . . . . 4 The 1996 Agreement defines certain terms used in the SIL Claim definition: “the Date of this Agreement” is March 18, 1996; “Reserve” is the reserve lands set aside for NCN; “SIL Trapline Zone” means the specific land identified in the 1996 Agreement; and “Adverse Effect” means: … [T]he, 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 . 5 On its face, the SIL Claim definition creates two categories of claims, depending on the residency of a claimant as at one of two dates.

Residency of a claimant is determined in one of two ways: 1) those who were “not ordinarily resident on Reserve,” as set out in subpara. (a); and 2) those who were “ordinarily resident at or near the Community of South Indian Lake,” as set out in subpara. (b).

For ease of reference, when I refer to “ordinarily resident” from now on I mean “ordinarily resident at or near the Community of South Indian Lake.” 6 Such residency is determined as at either of the two dates set out in the introductory paragraph: “the Date of this Agreement” or “ the date the damage or loss arose.” 7 The two categories of claims are: 1) those that fall under subpara. (a), which are restricted to “damage or loss [that] arose within the SIL Trapline Zone” (the Trapline restriction); and 2) those that fall under subpara. (b), which uses the words “regardless of where the damage or loss arose.” 8 The Manitoba Hydro-Electric Board (Hydro) brought a motion before the arbitrator under the NFA seeking, among other things, an order declaring that the arbitrator was without jurisdiction to hear any portion of an SIL Claim based on an allegation of loss or damage which arose from the departure of a claimant from South Indian Lake where the loss or damage arose outside the SIL Trapline Zone because such claim does not constitute an SIL Claim. 9 At issue in this appeal, as stated by the arbitrator, is whether she erred in law or jurisdiction when she concluded that (at para. 10 of stated case):

… NCN claimants who no longer reside ordinarily at or near the community of South Indian Lake cannot make a claim to the NFA arbitrator for social, cultural, or economic loss and damage experienced by them in their new environment following their departure from the community of South Indian Lake as those are not losses or damages that arose within the SIL Trapline Zone and therefore do not constitute a SIL Claim as defined in the 1996 Agreement. …. 10 The appellants, who claim under the SIL Claim exception, assert that the arbitrator’s conclusion placed an unreasonable geographic restriction on what constitutes an SIL Claim. 11 I agree.

Given the wording in the introductory paragraph and the words “regardless of where the damage or loss arose” in subpara. (b), I am of the view that the arbitrator unreasonably limited what constitutes an SIL Claim when she concluded that the Trapline restriction set out in subpara. (

a) applies to certain claims by those claimants who qualify as ordinarily resident under subpara. (b). Background 12 The NFA is a complex agreement that sets out certain collective rights of the five Indian Bands represented by the Northern Flood Committee (NFC), as well as certain individual rights for members of those Bands, such as “the right to claim under the NFA for adverse effects of the project” (at para. 4 of the award). 13 The appellants, who identify themselves as (or as entitled to be) NCN members, claim under these individual rights.

They constitute the large part of the group known as “SIL Claimants” (sometimes known as “DRSIL Claimants” for displaced residents of South Indian Lake). Their claims, which have been outstanding for many years, number 246. “ The first six … were filed in 1994 …. [t]he remaining 240 … were filed after December 1997” (at para. 19).

SIL/DRSIL Claims and the CASIL Agreement 14 Not all NCN members lived on reserve at Nelson House; some lived in the Community of South Indian Lake (sometimes referred to as SIL), which did not have its own First Nation status. 15 Some time ago, the Community Association of South Indian Lake (CASIL) made an NFA claim for adverse effects of the project, which was allowed by the arbitrator’s predecessor, Arbitrator McLean. In 1992, while this award was under appeal, the CASIL claim was settled for monetary compensation of $18 million, compensation lands and transportation access.

The settlement is known as the “CASIL Agreement.” The arbitrator explained that the CASIL Agreement applied to “Permanent Residents” of the Community of South Indian Lake (at para. 11): CASIL claimed and settled on behalf of its members and all those persons entitled to be its members, described as being all the “Permanent Residents” of the Community of South Indian Lake.

The term “Permanent Resident” is defined in By-law No. 1 of CASIL in the following terms: “Permanent Resident” means a person with an historic connection to the Community of South Indian Lake, either by virtue of Membership in the Nelson House Band of Indians and full-time residence at South Indian Lake or a present full-time resident who is a direct lineal descendant of a resident of South Indian Lake there residing on or before the Churchill River Diversion Project and does not include any person who has received compensation by virtue of residence on the Nelson House Reserve or Settlement as defined in the Northern Flood Agreement.

The full-time residents of the community of South Indian Lake, broadly determined, participated in the claim and its settlement. 16 Residents who were not full-time residents of South Indian Lake or no longer living at or near South Indian Lake did not participate in the CASIL settlement. These residents are known as the DRSIL Claimants. 17 In 1992, the DRSIL Claimants made an NFA claim as an unincorporated association on behalf of people who had been displaced as a result of adverse effects of the project.

Arbitrator McLean denied the collective claim. 18 The DRSIL Claimants then made their individual claims under the NFA; these are the claims at issue on this appeal.

The 1996 Agreement 19 Pursuant to the 1996 Agreement, NCN released Her Majesty the Queen in Right of Canada (Canada), Her Majesty the Queen in Right of the Province of Manitoba (Manitoba) and Hydro from all collective and individual NFA claims in exchange for $40 million in trust, compensation lands and other benefits. The trust funds were intended to cover any individual claims for adverse effects of the project. Therefore, individual claims by NCN members fell under the 1996 Agreement and not the NFA, subject to several exceptions.

The excepted claims could still proceed under the NFA and would not be payable from the trust fund established by the 1996 Agreement. 20 As already explained, the SIL Claim is one of the exceptions to the 1996 Agreement.

Hydro’s Motion and the Arbitrator’s Award 21 Hydro’s motion raised four issues concerning the arbitrator’s jurisdiction by seeking the following declarations: … [T]he Arbitrator is without jurisdiction to hear any portion of a claim based on an allegation of loss or damage which arose from the departure of a Claimant from South Indian Lake where the loss or damage arose outside the SIL Trapline Zone (the “Claims”) as such a claim does not constitute a SIL Claim as defined in [the 1996 Agreement] …. [Issue 1] … [T]he Arbitrator is without jurisdiction to hear any portion of a claim which alleges loss or damage arising from adverse effects of the Project on the collective rights and interests of [NCN] and its members. [Issue 2] … [T]he Arbitrator is without jurisdiction to hear any portion of the claims which is alleged to have arisen from adverse effects of the Project on, or sustained by, the community at South Indian Lake. [Issue 3] … [A]n SIL Claim by an individual Claimant is restricted to a claim for loss or damage to his or her personal assets, chattels or real property caused by or attributable to the Project where that loss or damage arose within the SIL Trapline Zone. [Issue 4] 22 In her award the arbitrator sets out historical, factual and legal context for these issues.

Her detailed background includes commentary with respect to the CASIL Agreement, the 1996 Agreement and the settlements under those agreements, as well as the history and current status of the 246 SIL Claims.

She explained that her jurisdiction over SIL Claims “is contingent on such a portion meeting the definition of an SIL Claim under the 1996 Agreement” (at para. 19). 23 Because this was a procedural motion and no specific SIL Claims were being adjudicated, she assumed, based on the submissions made by counsel, that the SIL Claims involved two periods of residency; when the claimants were ordinarily resident and when they were no longer resident at South Indian Lake (at para. 21): … [F]or many of the claimants, there will be two distinct periods of residency to be considered in any determination whether a portion of a claim is an SIL Claim – a period in which the claimant was allegedly an ordinary resident of the community of South Indian Lake and a period in which the claimant was not.

For others the claim will relate only to loss or damage incurred while the claimant was ordinarily resident at a place other than South Indian Lake. [emphasis added] 24 This appeal is primarily about her analysis and ruling with respect to Issue 1, and how she addressed these two periods of residency. More particularly, as I view it, it is about the distinction the arbitrator drew between the period a claimant was ordinarily resident at, and the period after such claimant moved away from, the Community of South Indian Lake.

For the latter period, the arbitrator concluded that those claims fell within the Trapline restriction set out in subpara. (a) (at paras. 34-36):

As it concerns individuals who may have been ordinarily resident at the community of South Indian Lake for a time and ceased being ordinarily resident at or near the community of South Indian Lake, that portion of the loss or damage which arose when they were ordinarily resident at the community of South Indian Lake would fall under subparagraph (b).

Where the loss or damage arose at a time when they were not ordinarily resident at the community of South Indian Lake, that portion of their claim would fall to be dealt with under subparagraph (a), presupposing always of course that they had not taken up residence on the Nelson House Reserve. A claim for loss or damage that arose while an individual claimant was ordinarily resident at or near the community of South Indian Lake would fall within the meaning of subparagraph (

b) of the SIL Claims definition ... and therefore would continue to fall within the jurisdiction of the NFA. Loss or damage that arises when a claimant is not ordinarily resident at or near the community of South Indian Lake would fall to be determined under subparagraph (

a) of the SIL Claim definition .... For a claim for such loss or damage to amount to an SIL Claim under subparagraph (

a) of the SIL Claims definition ... the loss or damage must arise within the SIL Trapline Zone .

A claim for loss or damage that arises while a claimant is not ordinarily resident at or near the community of South Indian Lake would fall within the jurisdiction of the NFA Arbitrator only to the extent that the loss or damage claimed arises in the SIL Trapline Zone . [emphasis added] 25 As for what is meant by “damage or loss [that] arose within the SIL Trapline Zone,” as set out in subpara. (a), she wrote (at paras. 37-40): That brings us to the issue of what is meant by the provision “loss or damage arises [ sic ] within the SIL Trapline Zone”. That territorial limitation included within subparagraph (

a) must have meaning. Loss or damage to the real or personal property of a non-resident claimant, which property is situated within the SIL Trapline Zone, or loss of income experienced by such a non-resident claimant within the SIL Trapline Zone, for example from hunting, fishing and trapping within the SIL Trapline Zone, would clearly fall within (

a) of the SIL Claim definition and therefore would come within the jurisdiction of the NFA Arbitrator. Many of those claimants who no longer reside ordinarily at or near the community of South Indian Lake claim for loss and damage experienced by them in their new environment, losses that I will describe in the most general terms as being social, cultural, and economic. The issue here is whether those types of losses experienced by the claimants in their new environment following their departure from the community of South Indian Lake, fall within (

a) of the SIL Claim definition. Are they losses or damages that “arise within the SIL Trapline Zone?” The claimants argue that nothing in the wording of subparagraph (

a) states that the suffering of the loss must have occurred within South Indian Lake for it to amount to a loss or damage within the meaning of an SIL Claim. They argue that the flooding which led to the claimants’ displacement from and loss of enjoyment of the land irrefutably took place in the SIL Trapline Zone and therefore that all of their resulting long-term damages emanate directly from that initial loss and therefore arise within the SIL Trapline Zone. The

interpretation of the words “arise within the SIL Trapline Zone” advanced by claimants’ counsel in the preceding paragraph is not one that the words will reasonably bear.

Because those are not losses or damages that arise within the SIL Trapline Zone, the claim for those losses would not meet the definition of an SIL Claim and would not fall within the jurisdiction of the NFA Arbitrator. [emphasis added] 26 As for Issue 2 and Issue 3, the arbitrator concluded that any claims by the appellants involving collective rights and interests are within the arbitrator ’s jurisdiction, but are not arbitrable because they have been settled under the 1996 Agreement and the CASIL Agreement (see paras. 60, 69).

These conclusions are not at issue. 27 As for Issue 4, the arbitrator did not grant the order sought by Hydro. She noted that “[t]here is nothing in the general definition of adverse effects in the 1996 Agreement that would restrict the rights of individual claimants to the tangible losses set out by Hydro” (at para. 74). She also explained that there may be “limits to arbitrability of claims that arise from the settlements of collective rights” ( ibid. ).

Standard of Review 28 In their factum, the appellants took the position that the stated question should be reviewed on the standard of correctness, primarily because it involved applying principles of contractual

interpretation to the 1996 Agreement, and not the arbitrator’s “home statute,” the NFA. 29 At the appeal hearing, the panel advised counsel for the appellants to argue the appeal on the basis of the standard of review of reasonableness.

We did so given our ruling in Anderson and subsequent Supreme Court of Canada jurisprudence . 30 In Anderson , this court addressed the interrelationship between the NFA and the 1996 Agreement (at para. 119): …. … [T]he 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. … [T]he 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. …. 31 After conducting a standard of review analysis in accordance with Dunsmuir v.

New Brunswick , 2008 SCC 9 , [2008] 1 S.C.R. 190 , the court concluded that the three questions of law stated by the arbitrator called for the deferential standard of reasonableness (at paras. 66-67): 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.

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. [emphasis added] 32 Since Anderson , the Supreme Court has consistently emphasized that a decision of an expert tribunal is to be reviewed on the standard of reasonableness unless it falls within the following narrow parameters for which correctness is the standard: … [C]onstitutional questions, questions of law that are of central importance to the legal system as a whole and that are outside the adjudicator’s expertise … “[q]uestions regarding the jurisdictional lines between two or more competing specialized tribunals” … [and] true questions of jurisdiction or vires . …. [ Canada (Canadian Human Rights Commission) v.

Canada (Attorney General) , 2011 SCC 53 at para. 18 , [2011] 3 S.C.R. 471.] See also, for example, Newfoundland and Labrador Nurses’ Union v. Newfoundland and Labrador (Treasury Board) , 2011 SCC 62 , [2011] 3 S.C.R. 708 , Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 S.C.R. 654 , and Smith v.

Alliance Pipeline Ltd. , 2011 SCC 7 , [2011] 1 S.C.R. 160 . 33 Clearly, this appeal does not concern a constitutional question, a question of law that is of central importance to the legal system or a question concerning the competing jurisdictions of specialized tribunals. While Hydro sought orders limiting the arbitrator’s jurisdiction to hear certain claims, the stated question is not a true question of jurisdiction or vires given that the arbitrator had the authority to address the issues raised by Hydro ( Dunsmuir at para. 59 ). 34 What is at issue is the

interpretation of the SIL Claim definition in the 1996 Agreement, an agreement that is related to the NFA ( Anderson at para 66). 35 As explained by Fish J. in Smith (at para. 26 ):

Under Dunsmuir … reasonableness is normally the governing standard where the question: (1) relates to the

interpretation of the tribunal’s enabling (or “home”) statute or “statutes closely connected to its function, with which it will have particular familiarity” (para. 54); (2) raises issues of fact, discretion or policy; or (3) involves inextricably intertwined legal and factual issues (paras. 51 and 53-54). 36 Just as the NFA is the equivalent of a tribunal’s “home statute” ( Anderson at para. 66), the 1996 Agreement is the equivalent of a “closely connected” statute ( Smith at para. 26 ), for which reasonableness is the governing standard of review. 37 The standard of reasonableness involves asking: “… After a somewhat probing examination, can the reasons given, when taken as a whole, support the decision?” ( Law Society of New Brunswick v.

Ryan , 2003 SCC 20 at para. 47 , [2003] 1 S.C.R. 247 ). As stated in Dunsmuir , the review is concerned with both the decision-making process and the outcome (at para. 47): …. In judicial review, reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and the law. 38 In Canada (Citizenship and Immigration) v.

Khosa , 2009 SCC 12 , [2009] 1 S.C.R. 339 , Binnie J. summarized the role of the reviewing court when the standard of review is reasonableness (at para. 59): .… Reviewing courts cannot substitute their own appreciation of the appropriate solution, but must rather determine if the outcome falls within “a range of possible, acceptable outcomes which are defensible in respect of the facts and law” ( Dunsmuir , at para. 47 ). There might be more than one reasonable outcome.

However, as long as the process and the outcome fit comfortably with the principles of justification, transparency and intelligibility, it is not open to a reviewing court to substitute its own view of a preferable outcome. 39 In the result, the standard of review for the question stated by the arbitrator is reasonableness. Appellants’ Position 40 The appellants’ position is that the arbitrator’s

interpretation of the SIL Claim definition is unreasonable and the outcome is unjust. They say that it unfairly restricts the claims that may be made by claimants who were ordinarily resident and then moved away. They say that this restriction has the effect of punishing them for having left South Indian Lake to mitigate their damages. 41 The appellants assert two principal arguments. 42 First, they take issue with how the arbitrator interpreted the words “arose within” in subpara. (a).

They say that those words should be interpreted to include loss or damage that arose while SIL Claimants were still resident in the Community of South Indian Lake, but were not experienced by them until after their departure from the community.

They say that the arbitrator’s approach fails to give effect to the broad definition of “Adverse Effect” in the 1996 Agreement, which they say contemplates consequential damages such as social, cultural and economic losses in their new environments. 43 Second, they submit that the location of where the loss or damage arose should not matter for claimants who were ordinarily resident on “the Date of [the] Agreement” or “the date the damage or loss arose.” They say that the arbitrator unreasonably curtailed who qualifies as an SIL Claimant under subpara. (

b) by distinguishing between the loss or damage that can be claimed while a claimant was ordinarily resident and the loss or damage that may be claimed after such claimant moved from South Indian Lake. They assert that the arbitrator unreasonably extended the application of the Trapline restriction to claimants who qualify as ordinarily resident under subpara. (b). They also say that by doing so, not only did the arbitrator ignore the words “regardless of where the damage or loss arose,” as set out in subpara. (b), but she read into subpara. (

b) the words “while resident at South Indian Lake,” words which are not there. They assert that claimants who were ordinarily resident on the date of the 1996 Agreement or on the date the damage or loss arose can make an NFA claim “regardless of where the damage or loss arose,” as set out in subpara. (b). 44 The appellants argue that the arbitrator’s conclusion is inconsistent with the just and equitable purpose of the NFA set out in its

preamble, which reads in part as follows: . . . . . 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 of 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; . . . . . 45 Finally, they emphasize that this was a preliminary motion and not an award on a particular claim. Therefore, they say that care must be taken not to disentitle claimants with a broad brush. They make the analogy that this process was like a

summary judgment motion to determine if a triable issue exists. They say that Hydro can argue remoteness or other factors at a hearing of a specific claim, where there is a factual context. Hydro’s Position 46 Hydro’s position is that the appellants have not identified any reviewable error by the arbitrator and that her award meets the standard of review of reasonableness, both with respect to her reasons and the outcome.

It says that the arbitrator appropriately gave meaning to the Trapline restriction in the context of the 1996 Agreement as a whole. 47 Hydro relies on the arbitrator’s conclusions, with respect to Issue 2 and Issue 3, that collective rights are not arbitrable because the CASIL Agreement and the 1996 Agreement settled these claims.

It says that these rulings are a full answer to the appellants’ contention that social and cultural loss or damage should be able to be claimed regardless of where it occurs as long as it is causally connected to the project. 48 It also asserts that the award is just and reasonable because the claimants can still attempt to prove their claims under the 1996 Agreement. In any event, they say that the arbitrator’s ruling does not necessarily mean that a claim will not proceed; rather, it will just be narrowed. Position of Canada and Manitoba 49 Canada and Manitoba endorse Hydro’s position.

Analysis and Decision 50 This appeal is pursuant to

Article 24.34 of the NFA: 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. 51 The appellants take issue with how the arbitrator interpreted “arose within” in the context of the words “arose within the SIL Trapline Zone” in subpara. (a). In my view, that issue is beyond the scope of the stated question as it was not presented to this court for review.

While there is precedent for expanding a stated case (see for example, Anderson ), this is not a situation like Anderson , where the appellants objected to how the arbitrator stated the questions and this court expanded the issues on motion by the appellants to do so after hearing argument from the parties. 52 To repeat, the arbitrator’s stated question is as follows (at para. 10 of stated case): … NCN claimants who no longer reside ordinarily at or near the community of South Indian Lake cannot make a claim to the NFA arbitrator for social, cultural, or economic loss and damage experienced by them in their new environment following their departure from the community of South Indian Lake as those are not losses or damages that arose within the SIL Trapline Zone and therefore do not constitute a SIL Claim as defined in the 1996 Agreement. …. [emphasis added] 53 The underlined words demonstrate, in my view, that the question is quite narrow in scope.

As will become evident, it is about the application of the Trapline restriction to claims under subpara. (b), not its

interpretation. 54 The essence of what is at issue is the reasonableness of the arbitrator’s conclusion that the Trapline restriction from subpara. (

a) applies to certain claims for loss or damage by claimants who qualify as ordinarily resident under subpara. (b). More specifically, it is about her conclusion that the Trapline restriction applies to ordinarily resident claimants for any claims that arise in their new environment. Stated differently, it is about the reasonableness of the distinction that the arbitrator made between claims by ordinarily

resident claimants while they resided at South Indian Lake and after they moved away. 55 The stated question calls for an examination of the arbitrator’s analysis with respect to Issue 1, in the context of her award as a whole. 56 The arbitrator commenced her analysis by noting that the introductory paragraph set out elements common to both subpara. (

a) and subpara. (b). She explained that these common elements pertained to residency and the nature of the loss that could be claimed. She described these common elements as “qualifiers” that were “understood” even though she would not be repeating them throughout her analysis (at para. 28): The differences between subparagraphs (

a) and (

b) of SIL Claim become more clear if the elements common to both subparagraphs are identified and then set aside. Residency, for purpose of determining whether a claimant is an SIL claimant under both (

a) or (b), means residency at the date of the Agreement or at the date the damage or loss arose. A claim for loss or damage, under both (

a) and (b), means a claim for loss or damage caused by an adverse effect of the project. I will not repeat those qualifiers in the following analysis of the differences between the subparagraphs but they are understood. [emphasis added] 57 The arbitrator then explained the differences between subpara. (

a) and subpara. (b). She noted that the broad reference to claimants “not ordinarily resident on Reserve” (that is, Nelson House, now NCN) in subpara. (

a) could include a wide range of individuals, including those who ordinarily resided at or near South Indian Lake. She also noted that claims under subpara. (

a) were only viable if the loss or damage arose within the SIL Trapline Zone (at para. 30): Subparagraph (

a) of the definition opens by stating that an SIL Claim is a claim for loss or damage brought by any ... (NCN) member who does not live on the Nelson House Reserve. If one were to look no further, then the reference to off-Reserve ... (NCN) members in (

a) would seem to include those who ordinarily reside at or near the community of South Indian Lake. It would also apparently include the claims of those who had at one time resided at South Indian Lake and had left. Finally, it would also include ... (NCN) members who have never had anything to do with the community of South Indian Lake.

The claims of that vast group of non-residents would be SIL Claims, and thereby excluded from access to the Claims Procedure and Trust Funds under the 1996 Agreement, but only if the loss or damage for which their claim is brought arose within the SIL Trapline Zone . [emphasis added] 58 As for subpara. (b), she noted that it was not limited to claims for loss or damage that arose within the SIL Trapline Zone (at para. 31): Subparagraph (

b) of the definition applies only to ordinary residents of the community of South Indian Lake. It is not limited to claims for loss or damage that arise within the SIL Trapline Zone. A claim by an ordinary resident of the community of South Indian Lake falls within the definition of an SIL Claim. .... Subparagraph (

b) would not, on its face, appear to apply to individuals who may formerly have been residents of the community of South Indian Lake but were no longer ordinarily resident there. [emphasis added] 59 The arbitrator focussed on the import of the word “or” between subpara. (

a) and subpara. (

b) and concluded that subpara. (

b) was an exception to subpara. (a) (at paras. 32-33): …. ... [S]ubparagraphs (

a) and (b) ... are separated by the word “or”. I consider that the parties must have intended meaning to be attached to their use of the disjunctive “or”. Based upon that, in my opinion, the more reasonable reading of the SIL Claim exception is to read subparagraph (

a) as governing the claims of all ... (NCN) members who do not live on the Reserve, excepting from that group of off-Reserve members those who ordinarily reside at the community of South Indian Lake. That excepted group of non-residents is to be dealt with under subparagraph (b).

60 In the context of her analysis for Issue 4, the arbitrator again noted that claims under subpara. (

b) did not have the same limitation as those under subpara. (

a) because the definition of adverse effects is extremely broad. In other words, she was of the view that a claim under subpara. (

b) may be much broader than a claim under subpara. (a). She did note that these claims may be impacted by the settlement of collective rights under the CASIL Agreement and the 1996 Agreement. She wrote (at paras. 72-74): Subparagraph (

b) of the SIL Claims definition places no limitations on the claims of ordinary residents of the Community of South Indian Lake save only to say that the loss must be caused by an adverse effect of the project and that residency is to be determined either at the date of loss or damage or the date of the Agreement. The definition of adverse effect in the 1996 Agreement is not limited to loss or damage to personal assets, chattels or real property.

To the contrary, the definition of adverse effect in the 1996 Agreement is extremely broad .… There is nothing in the general definition of adverse effects in the 1996 Agreement that would restrict the rights of individual claimants to the tangible losses set out by Hydro in item numbered 4 of its request for declaratory relief. The only limits to the rights of ordinary residents of South Indian Lake, those named in subparagraph (

b) of the SIL Claims definition in the 1996 Agreement, to claim for loss or damage arising from the project are the limits to arbitrability of claims that arise from the settlements of collective rights and interests by CASIL and NCN, which limits are discussed more fully in my analysis of items numbered 2 and 3 of Hydro’s request for declaratory relief. …. [emphasis added] 61 To summarize, keeping in mind her “qualifiers” arising from the wording in the introductory paragraph, the arbitrator concluded as follows: 1. Subparagraph (

a) governs claims of all NCN members who did not live on the Nelson House Reserve at the “Date of this Agreement” or at the date the damage or loss arose, except for those who ordinarily resided at the Community of South Indian Lake at the “Date of this Agreement” or at the date the damage or loss arose. (See paras. 28, 33.) 2. Subparagraph (

b) governs the claims of those who were ordinarily resident for the period that a claimant resided at South Indian Lake. For the period after they moved from South Indian Lake, the claimant could only claim for loss or damage under subpara. (a); that is, the claim was subject to the Trapline restriction. (See para. 34.) 3. There is no limitation on the claims that may be made under subpara. (b), except that the loss or damage must be caused by an adverse effect of the project. (See para. 72.) 4.

The definition of “Adverse Effect” in the 1996 Agreement is extremely broad and is not limited to loss or damage to personal assets, chattels or real property. (See paras. 73-74.) 62 The difficulty that I have with the arbitrator’s analysis is that I cannot find any reasonable rationale for her conclusion (see para. 25 above) that those claimants who qualify as ordinarily resident under subpara. (

b) cannot claim under subpara. (

b) for loss or damage related to the time-period after they moved from South Indian Lake. 63 The arbitrator made no mention in her analysis of the words “regardless of where the damage or loss arose” in subpara. (b), which are clearly inconsistent with the Trapline restriction. While the arbitrator explained the “qualifiers” from the wording in the introductory paragraph early in her analysis, it seems to me that she lost sight of them. The effect of her conclusion was to create a new qualifier to be able to claim under subpara. (b).

Not only does a claimant have to have been ordinarily resident on the “Date of this Agreement” or the date the loss or damage arose, but, according to the arbitrator, the claimant must continue to reside at South Indian Lake to be able to claim under subpara. (

b) for loss or damage not arising within the SIL Trapline Zone . 64 I agree with the appellants that the effect of the arbitrator’s conclusion is to impose a restriction that does not exist on claims that may be made by claimants who qualify as ordinarily resident under subpara. (b). 65 I do not accept Hydro’s argument that the CASIL Agreement provides the rationale for the arbitrator’s conclusion.

It seems to me that if the parties to the 1996 Agreement created the SIL Claim exception because of the CASIL Agreement they would have said so and not specifically provided for the ability to claim for adverse effects of the project under the NFA, which the arbitrator explained was broad in scope. At some future point, the CASIL Agreement may be relevant to whether a particular claimant qualifies as an SIL Claimant or what claims may be made by an SIL Claimant, but it provides no rationale for the arbitrator’s conclusion at issue in this

appeal. 66 To summarize, an analysis of the arbitrator’s reasoning demonstrates that she failed to give effect to all the words of the SIL Claim definition, particularly the words “regardless of where the damage or loss arose” in subpara. (b). She failed to consider the “qualifiers” that she identified early in her analysis and created a new qualifier for claims that may be made by those who qualify as ordinarily resident under subpara. (b). As a result, I cannot say that she provided the necessary justification for her conclusion.

Nor can I say that her analysis is transparent or intelligible in the sense that “ [t]ransparency requires a decision maker to clearly state the basis for the decision reached [and] [i]ntelligibility requires a decision maker to reach a result that clearly follows from the reasons provided” ( Jakutavicius v. Canada (Attorney General) , 2011 FC 311 at para. 31 , 30 Admin.

L.R. (5th) 30 ). 67 I would add, keeping in mind that the purpose of the SIL Claim exception is to permit individual claims under the NFA for adverse effects of the project and the just and equitable purpose of the NFA, that the outcome unduly restricted the nature of the claims that may be made by claimants under subpara. (b). This restriction is contrary to the SIL Claim definition. 68 I emphasize, as did the arbitrator, that this appeal concerns a preliminary procedural motion as to what claims may be asserted under subpara. (b).

This appeal has determined only that a claim for loss or damage by a claimant who qualifies as ordinarily resident under subpara. (

b) is not subject to the Trapline restriction under subpara. (a). In the context of adjudicating specific SIL Claims, future awards of the arbitrator will provide more guidance as to what claims may be made in light of what I expect may be a myriad of complex factors, including, perhaps, the existence of the CASIL Agreement.

Conclusion 69 The arbitrator asked this court to determine if she erred in law or jurisdiction by concluding as follows: … NCN claimants who no longer reside ordinarily at or near the community of South Indian Lake cannot make a claim to the NFA arbitrator for social, cultural, or economic loss and damage experienced by them in their new environment following their departure from the community of South Indian Lake as those are not losses or damages that arose within the SIL Trapline Zone and therefore do not constitute a SIL Claim as defined in the 1996 Agreement. …. 70 As explained above, her conclusion cannot be sustained and claimants who qualify as ordinarily resident under subpara. (

b) are not denied the right to make a claim for social, cultural or economic loss or damage experienced by them in their new environment following their departure from South Indian Lake for the reason that those are not losses or damages that arose within the SIL Trapline Zone. This means that claimants who qualify as ordinarily resident under subpara. (

b) are not limited to claiming for loss or damage that arose within the SIL Trapline Zone. 71 The appellants claim costs on a solicitor and client basis, whatever the outcome of the appeal. They rely on British Columbia (Minister of Forests) v. Okanagan Indian Band , 2003 SCC 71 , [2003] 3 S.C.R. 371 . However, that case concerns the principles to be addressed for awarding interim costs, in exceptional circumstances, to fund litigation.

I see no reason on this appeal to depart from the usual principle of awarding costs to the successful litigant according to the usual tariff. 72 I would allow the appeal, as explained, and award one set of costs in favour of the appellants. J.A. I agree: J.A. I agree: J.A.