In its recent decision in Thomas v. Rio Tinto Alcan Inc., the Supreme Court of British Columbia (Court) struck an action brought by the Saik’uz and Stellat’en First Nations (First Nations) against Rio Tinto Alcan (RTA). The First Nations’ allegations of nuisance and breach of riparian rights, based on either their reserve interests or their asserted but unproven aboriginal title and rights, were held to disclose no reasonable claim. For its part, RTA’s defence of statutory authorization was deemed insufficient to ground a motion for summary judgment.

The Court’s decision is notable but it likely will not be the last word on this subject, as both sides have appealed to the Court of Appeal. No date has been set for the hearing of the appeal.

BACKGROUND

RTA’s Kenney Dam (Dam) is a hydroelectric dam located on the Nechako River (River) in northwestern British Columbia. The Dam was constructed in the early 1950s to provide electricity to RTA’s aluminum smelter in Kitimat, and continues to operate. A number of First Nations claim aboriginal title to the Nechako Valley as their ancestral homeland and assert an aboriginal right to fish in the River. The impacts from the construction and operation of the Dam have been the basis of numerous proceedings involving RTA and various First Nations, including Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council. See our previous Blakes Bulletin: Historical Infringements Do Not Trigger Current Consultation Duty.

In the Thomas case, the First Nations alleged that the Dam diverted and altered the water flowing to the River, causing significant adverse impacts on the River’s waters and, in turn, the First Nations’ fisheries resources. The First Nations claimed that these impacts unreasonably interfered with their aboriginal rights and their proprietary interests in their reserves, and therefore justified an action in nuisance and for breach of riparian rights.

The First Nations sought interim and permanent injunctions restraining RTA from operating the Dam in such a manner as to cause the current or similar impacts. RTA sought summary dismissal of the action and an order striking the First Nations’ pleadings on the basis that they disclosed no reasonable claim.

THE B.C. SUPREME COURT DECISION

Statutory authorization

In support of its application for summary judgment, RTA raised the defence of statutory authorization, arguing that its licence to operate the Dam forms a complete defence to all of the First Nations’ claims.

As noted by the Court, the defence of statutory authorization is only established where the act causing a nuisance is expressly or implicitly authorized by statute, and the nuisance is the “inevitable result” of the authorized action. It is a narrow defence.

The Court held that summary judgment could not be granted on this basis because RTA had not established that the adverse impacts to the River inevitably resulted from actions RTA was authorized to take under its water licence. Although it was clear that the licence authorizes RTA to store and divert water generally, the Court found that it was unclear whether RTA was authorized to store and divert water in a manner that caused the particular harms alleged by the First Nations. The Court held that it would need to examine the various options available to RTA in operating the Dam in order to determine whether the alleged harms were inevitable. If there were “practically feasible” alternative options that would avoid the alleged harms, then the harms could not be said to be the inevitable result of the licence. As such, the defence could not be applied without further consideration of evidence.

Nuisance and riparian rights

The second aspect of RTA’s application was successful; the Court agreed that the First Nations’ action in nuisance and breach of riparian rights disclosed no reasonable claim.

The First Nations grounded their claims on two distinct types of rights: first, their asserted but unproven aboriginal rights and title; and second, their rights as beneficial holders of reserves set aside under the Indian Act.

On the first point, the First Nations argued that an application to strike must assume that the pleaded facts are true. Thus, the fact that they had not proven their aboriginal title and rights could not be held against them. The Court held that claims of nuisance and riparian rights had to be founded on previously proven or acknowledged legal or equitable interests in land. In other cases where First Nations have successfully asserted such claims based on aboriginal rights, the Court noted that the rights in question were “registered” or otherwise acknowledged by the Crown before the action was brought. In this case, the Court held, until the First Nations proved their aboriginal title and/or rights, they had neither a legal nor equitable interest in the land on which to found their claims. Moreover, the “key problem” with the First Nations’ claim, the Court held, was that it was advanced in a proceeding against a private party (RTA); such claims should be brought against the Crown.

On the second point, the First Nations argued that their interest in their reserves was sufficient to ground a claim in nuisance and afforded them riparian rights, including the right to the natural flow of water undiminished in quality and quantity. The Court rejected this claim, holding that the First Nations’ interest in reserve land is a right of use and occupation as opposed to the proprietary interest required to ground a nuisance claim. With regard to riparian rights, the Court held that all riparian rights were vested in the province prior to the creation of the First Nations’ reserves. When the federal Crown created the First Nations’ reserves, the federal Crown held no riparian rights and therefore neither could the First Nations.

CONCLUSION

Aboriginal rights and title cases often involve novel claims, and this area of the law evolves quickly. As such, and given that this case is likely to be considered by the Court of Appeal, it would be premature to place undue weight on the B.C. Supreme Court decision. Nevertheless, the decision does provide food for thought. On the statutory authority defence, a defendant would have to file sufficient evidence to demonstrate that it had no practically feasible alternative to the action alleged to cause a nuisance. Based on the case law to date, this appears more likely available to public bodies than private parties. The Court of Appeal has previously addressed this issue, so it will be interesting to see if it provides a new gloss on the defence.

On the aboriginal rights and title issues, the Court of Appeal will have to grapple with the extent to which First Nations can make claims against private parties that are predicated on proving their asserted rights during the proceedings, without joining the Crown to defend such assertions. Finally, the Court of Appeal will have to determine the nature of the rights associated with reserves. Assuming the Court of Appeal hearing proceeds, we will issue an update when it renders its decision.