On February 16, 2015, the BC Supreme Court dismissed an injunction application brought by Doubleview Capital Corporation against members of the Tahltan Nation with respect to exploratory drilling on mineral claims in northwestern British Columbia (Doubleview Capital Corp. v. Day, 2016 BCSC 231 [PDF]).

Backgound

Doubleview Capital Corporation (“Doubleview”) is a junior mining company with an option to explore and acquire mineral claims that comprise the Hat Property, a copper and gold prospect located in the Sheslay region of the Tahltan Nation’s traditional territory.  The Tahltan Nation comprises members of the Iskut Band and the Tahltan Band.  Its administrative governing body is the Tahltan Central Government (“TCG”). 

In 2011, Doubleview retained its associated company, Terracad Geoscience Services Ltd. (“Terracad”), to commence exploration activities on the Hat Property on its behalf.  The TCG opposed the exploration on the grounds that an archeological assessment was required to protect the Sheslay area given its historical and cultural importance to the Tahltan Nation.

In 2014, Terracad hired an archeological consultant to undertake a field study. The study found obsidian fragments under Doubleview’s camp and other locations with high to moderate archeological potential within the area of the mineral claims. However, the study also found that the areas where the drilling was to be located had low archeological potential.  To address these archeological concerns, the consultant made two key recommendations:

  1. an archaeologist should conduct a more intensive archaeological study, called an Archaeological Impact Assessment (AIA), of developments on the Hat property; and
  2. all future ground-altering developments should be reviewed by an archaeologist before Doubleview proceeded to drill.

These recommendations became conditions of the drilling permit the Ministry of Energy and Mines issued to Terracad.

Doubleview commenced drilling on June 30, 2015 despite continued opposition from the TCG.  Critically, an archeologist had not completed an AIA before Doubleview proceeded to drill.  The drilling was carried out by Tahltan Drilling Co. Ltd, a company employing mostly Tahltan members.

On July 7, 2015, Chad Day, the president of the TCG, Madelaine Hawkins, the Vice President of the TCG, and four Tahltan elders (“Defendants”) travelled to the Hat Property by helicopter.  The Defendants requested and were granted an opportunity to meet with Tahltan Drilling employees in the absence of Doubleview.  The Defendants’ uncontradicted evidence described what happened next: 

[43]         Mr. Day goes on to depose that he and Ms. Hawkins and the four Sheslay elders met with the Tahltan Drilling employees, including the company’s owner, Pat Carlick.  They maintain that they spoke at all times respectfully with this group.  They began with a prayer, thanked each of the workers for attending, and then each of the elders spoke in turn.  The elders explained the sacred nature of the Sheslay region, and pointed out that the Tahltan people did not support mining in that area of the Tahltan territory.  Mr. Day, as president, then spoke to say that the Tahltan people did not support mining exploration in the Sheslay, and wanted to see the area protected from industrial development.  He asked them to respect the wishes of the elders and the people, and stop drilling.  Mr. Carlick objected, stating that he thought that Doubleview was being “singled out” as there were other companies drilling in Tahltan territory.  Mr. Day explained that the Sheslay was of great importance, and reiterated the request.

Drilling ceased two days later when Tahltan Drilling employees refused to continue working and left the Hat Property.

As a result, Doubleview initiated legal proceedings against the Defendants.  Doubleview argued that the Defendants caused drilling to be shut down by threatening and intimating Tahltan Drilling employees, and that the Defendants’ conduct was unlawful and constituted a blockade.  Doubleview sought an injunction against the Defendants to prevent them from “physically preventing, impeding, restricting” Doubleview’s activities, or from “threatening or intimidating, or counselling others to threaten or intimidate” Doubleview while it undertook drilling.

Decision

The Court denied the injunction sought by Doubleview.  The Court also awarded court costs to the Tahltan defendants.

No serious issue to be tried, let alone a strong arguable case

Doubleview bore the burden to prove that: it had the right to drill at the Hat Property; the defendants wrongfully interfered with their right; and the injunction sought was appropriate to address the Defendants’ conduct.  The court found Doubleview’s evidence lacking on each of these points.

The Court was unable to conclude whether Doubleview had the right to drill because the evidence did not establish that Doubleview had satisfied the conditions of the permit.  While it was clear that Doubleview failed to hire an archaeologist to conduct an AIA before proceeding to drill, the Court held it was unclear whether the archeologist had intended to exempt the drilling sites at issue from the conditions of the permit.  In the absence of additional affidavit evidence, the court expressed doubt as to whether Doubleview had the exclusive right to occupy the property.

The Court also found that Doubleview failed to provide any meaningful evidence to support the allegation that the Defendants threatened to commit an unlawful act against the drillers, or that they intended to cause economic harm to Doubleview.  The Defendants’ conduct did not constitute a blockade because the defendants did not physically obstruct access to the work site or the drilling equipment.

However, the Court did find the Defendants acted unlawfully by relying “entirely on moral suasion” to convince Tahltan Drilling employees to stop working.  The Court found that the Defendants’ attendance at the drilling site and communications with Tahltan Drilling employees constituted two legal wrongs (or torts): indirect inducement of breach of contract and conspiracy.  But since the terms of Doubleview’s injunction sought to prevent physical interference or intimidation (both of which are not associated with these torts), the Court concluded that Doubleview failed to demonstrate a serious case to be tried, let alone a strong arguable case, that would entitle it to the injunction sought.

Irreparable Harm and Balance of Convenience

Although the Court’s conclusions on the “serious issue” test meant that no injunction would be ordered, the Court nonetheless analysed the “balance of convenience”.

Doubleview argued that without an injunction, it would lose the ability to finance future work, be unable to satisfy its option agreement and suffer reputational damage.  The Court found that the balance of convenience did not favour the granting of the injunction for two reasons.  First, the injunction sought by Doubleview was “wholly unreasonable” given that the Defendants had not physically stopped any work or threatened Tahltan Drilling employees.  Secondly, the Court found that the defendants and the Tahltan Nation would face a significant risk of harm if exploration continued without an archaeological assessment.

Conclusion

It is notable that the Court accepted that “moral suasion” could ground a claim in “indirect inducement of breach of contract”.  On the facts of this case the impact of the moral suasion of the TCG and Tahltan elders was very clear in terms of its impact on the willingness of the contractor to continue working. It will be interesting to see the extent the Court is willing to accept moral suasion in cases where causation is less clear. Additionally, whether any company is willing to rely solely on similar facts to ground an injunction or a Court is willing to find elders potentially liable for expressing their political views seems unlikely given the present state of the political climate regarding respect for Aboriginal rights.

This case also highlights that an injunction application is an important moment in any litigation and there are a number of technical requirements of which parties should be aware.  As noted by the Court:  “An applicant does not satisfy the first element of the test for injunctive relief merely by showing that it may be entitled to any injunction.  The plaintiff must demonstrate a case to the appropriate threshold that would entitle it to the injunction it seeks.”  This case is a reminder that individuals and businesses can face costly consequences – both financial and otherwise – when the Court believes that these technical requirements are not met.