On November 25, 2014, the Federal Court of Appeal (the Court) rendered a unanimous decision in Coldwater Indian Band et al v. The Minister of Indian Affairs and Northern Development et al 2014 FCA 277, upholding the principle that, absent exceptional circumstances, courts must not interfere with ongoing administrative processes until after they are completed.
In June 2012, Kinder Morgan Canada Inc. (Kinder Morgan) initiated an administrative process before the Minister of Indian Affairs and Northern Development Canada (the Minister), seeking his consent to assign two easements that allowed Kinder Morgan to construct, operate and maintain the Trans Mountain Pipeline (the Pipeline) through Coldwater Indian Reserve No. 1 (the Coldwater Reserve). The assignment, which was from one Kinder Morgan affiliate to another, arose as a result of a corporate restructuring in 2007 related to the sale of Kinder Morgan’s natural gas and propane distribution assets to a third party.
Before the Minister could take the decision, the Coldwater Indian Band (Coldwater) commenced a judicial review application seeking to prohibit the Minister from taking the decision, or to direct the Minister to refuse consent to the assignments.
Lower Court Decision
The Federal Court of Canada denied the primary relief sought, but granted Coldwater declaratory relief expressly (but not conclusively) considering whether the Minister’s consent should be granted, and how the Minister ought to exercise his discretion. The lower court judge (Judge) concluded that Coldwater’s motivation for bringing its application was that Coldwater does not want the Minister to give his consent, “sensing that there is a much better deal to be made if Kinder Morgan was required to bargain under some duress.”
Coldwater appealed, arguing that the Judge erred in, among other things, concluding that the Minister was not required to follow the informed consent of Coldwater in respect of the easements. Kinder Morgan cross-appealed, arguing that the Judge erred and exceeded his jurisdiction by prematurely commenting on a pending Ministerial decision.
Relying on its decision in Canada (Border Services Agency) v. CB Powell Limited, the Court held that, absent exceptional circumstances, courts must not interfere with ongoing administrative processes until after they are completed. Calling the application a “pre-emptive strike,” the Court found that the Appellants’ application has resulted in the very harm that the Court warned against in CB Powell:
- The administrative process was fragmented pending a resolution of the proceeding;
- There was a real risk of further litigation arising from the Minister’s decision;
- All parties incurred unnecessary costs; and
- The Minister’s decision was unjustifiably delayed.
Coldwater’s appeal was dismissed, with costs, and Kinder Morgan’s cross-appeal was granted, with costs.
This decision sends a strong message that courts will allow an administrative proceeding to run its course, and will not tolerate pre-emptive applications intended to delay or influence the outcome of those proceedings.