Overview

On July 6, 2011, the B.C. Court of Appeal released Reasons on an appeal from a judgment in an application to strike pleadings, brought by the plaintiff, Moulton Contracting Ltd. ("Moulton"). Moulton claims damages from the Fort Nelson First Nation ("FNFN"), from all members of the FNFN (in a representative claim) and from members of a family who are also members of the FNFN (the "Family Defendants") for preventing Moulton from harvesting two Timber Sale Licenses ("TSLs") in Northeast British Columbia. In the application, Moulton sought to strike paragraphs from the Family Defendants' Statement of Defence. These paragraphs included allegations that the Family Defendants were not liable for preventing the harvesting because the Crown failed to consult them prior to granting the TSLs, and because the TSLs infringed on their treaty rights and were therefore invalid. Moulton succeeded in its application and the Court found that the Family Defendants could not rely on a failure to consult or an infringement of a treaty right in defence to the tort claim. The Chambers Judge also struck a Third Party claim against the Province brought by the FNFN for indemnity relating to allegations of failure to consult with them on the grant of the TSLs.

The Court of Appeal dismissed the appeal from the Order striking the defences of the Family Defendants but allowed the appeal of the FNFN from the Order, striking the third party notice. The Court of Appeal held that the Family Defendants did not have standing to challenge the validity of the TSLs and, in the alternative, advancing a challenge to the validity of the TSLs by way of defence in the action was an impermissible collateral attack on the validity of the TSLs. The Court of Appeal allowed the appeal of the FNFN on the ground that it was not clear beyond doubt that the alleged failure of the Province to consult on the grant of the TSLs would not lead to liability to indemnify the FNFN if its liability was vicarious.

Facts

Moulton is a logging company that applied for and was granted two TSLs and a road permit, within land to which Treaty 8 applies, from the provincial Crown. The FNFN is a signatory to Treaty 8 and the Family Defendants are all members of the FNFN. The underlying action includes a claim by Moulton for intentional interference with contractual relations and conspiracy to intentionally interfere with contractual relations. Moulton began the action after several members of the FNFN blocked Moulton from using the only access road to the TSLs and the road permit and prevented Moulton from harvesting the TSLs.

The Family Defendants alleged that the TSLs and road permit constituted an unjustifiable infringement of their Treaty 8 rights, and that the Crown failed to fulfill its duty to consult when it issued the TSLs and the road permit to Moulton. The Family Defendants further alleged that treaty rights fall within the jurisdiction of federal Parliament and that the Province could not infringe the treaty rights; therefore, the TSLs and the road permit were of no force or effect under the doctrine of interjurisdictional immunity. Moulton applied to strike these portions of the Family Defendants' defence.

Decision

On Appeal Moulton argued that the Family Defendants' defences were bound to fail for three reasons: (1) the doctrine of interjurisdictional immunity does not apply as Treaty 8 authorized the Crown to "take up" lands for logging purposes; (2) the defences advanced were a collateral attack on the TSLs and should have been addressed through judicial review of the Crown's decision that led to the issuance of the TSLs and the road permit; and (3) the Family Defendants did not have the standing to claim that their treaty rights were breached or that the duty to consult was not fulfilled because they were collective rights that could not be advanced by the Family Defendants.

A. The Treaty Rights Defence

With respect to the treaty rights defence, the Court of Appeal declined to address this argument because of its decision on the other arguments. The Court held that issues of interjurisdictional immunity should not be determined on a pleadings motion.

B. Collateral Attack and Abuse of Process

The Chambers Judge had held the Family Defendant defences were in violation of the doctrine of collateral attack, which prevents a party from undermining previously issued orders. As the Family Defendants were aware they could challenge the provincial authorizations by way of judicial review, but specifically chose not to pursue this avenue, their attempt to challenge those authorizations in these proceedings was, in effect, a collateral attack to the means intended to resolve those questions of validity.

The Court of Appeal agreed, noting that recent Supreme Court of Canada decisions including Canada (Attorney General) v. Telezone, 2010 SCC 62 drew a distinction between claims that government action was tortious but the government instruments were not being challenged and the situation in this case where the defences alleged that the government instruments were invalid. The Court of Appeal reasoned that legal avenues were available for the FNFN to challenge the government instruments and that those legal avenues should have been taken rather than self help remedies and the challenge to the validity of the instruments by way of defence. The Court of Appeal also noted the presumption of validity applies to government instruments until the instrument is found invalid on judicial review.

C. Standing

The Chambers Judge concluded the Family Defendants lacked standing to raise the treaty rights defences and the consultation defences because treaty rights are collective and must be dealt with on behalf of the community. The Judge noted that individual members of a First Nation may be appropriate representatives to raise these collective claims, but maintained that the Family Defendants were not charged with the authority of the FNFN to advance the defences on behalf of the FNFN and that the FNFN, as a defendant, was advancing its own position in the action.

The Court of Appeal agreed holding that it should be left to the "First Nation the decision as to when and how to engage in the consultation spoken of in the jurisprudence, when and how to settle issues in the collective's best interest, and when not to settle, making all of these decisions bearing in mind their history, the community's present and future needs, expectations and challenges, and the nature of the issue presented".

D. Third Party Claim

The Chambers Judge struck the FNFN third party claim against the Province for indemnity arising from the allegation of failure to consult for the same reasons as he struck the defences of the Family Defendants, primarily because there was no allegation by Moulton of vicarious liability against the FNFN. Subsequent pleadings by Moulton clarified that Moulton was advancing claims of vicarious liability against the FNFN.

In the circumstances, the Court of Appeal allowed the appeal from the decision striking the third party claim on the ground that the FNFN assertion that they should be indemnified by the Province if they were found liable for actions of others where there was inadequate consultation on the TSLs was not bound to fail.

Implications

The case confirms that self-help remedies have no place in the law of reconciliation of aboriginal rights and Crown sovereignty. If aboriginal people believe that government authorized conduct infringes aboriginal rights, available legal process should be resorted to rather than self-help. The case also confirms that collective rights should be asserted by those with authority to deal with those collective rights. In addition, the Courts will scrutinize the rights claimed to determine whether the person asserting the right has the standing to assert the collective or communal right.

Click here to read the Court of Appeal's decisions on Moulton Contracting Ltd. v. Behn, 2011 BCCA 311 and Moulton Contracting v. Fort Nelson First Nation, 2011 BCCA 312.