Background

On June 13, 2008, the Federal Court of Appeal, in Canada (Public Works and Government Services) v. Musqueam First Nation, 2008 FCA 214 (the “Sinclair Centre” case), set aside an order granting an injunction to restrain Canada from selling two downtown office properties in Vancouver (one of which is Sinclair Centre). On September 28, 2007, the Motions Judge had granted an interlocutory injunction restraining Canada from transferring, selling, or otherwise disposing of the properties pending the hearing of the application with respect to the alleged failure of the Crown to consult the Musqueam. As a result of this case, Canada is now free to transfer the properties, subject to the ongoing petition challenging the lack of consultation.

The Court of Appeal focused its decision on the “irreparable harm” portion of the three-part test for granting an injunction. The Court held that the Musqueam had not shown that they would suffer irreparable harm from the sale of the properties. The Court also commented that the balance of convenience, especially given the shown that they would suffer irreparable harm from the sale of the properties. The Court also commented that the balance of convenience, especially given the inadequate undertaking for damages ordered by the Motions Judge, favoured Canada. As for whether the Musqueam had shown that there was a serious issue to be tried, the Court commented that the Motions Judge had misapplied the test in finding that a serious issue was “fairly arguable” and that further scrutiny of the facts was required.

Without explicitly citing the case, the Court essentially applied a principle from Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010: due to the “inescapably economic aspect” of aboriginal title, infringement can be justified by fair compensation. The Court of Appeal found that, absent proof of a special connection or unique attachment to the land by the Musqueam, irreparable harm could not be made out, and if there was an infringement of aboriginal title it was compensable in damages.

The Sinclair Centre Case

In its decision, the Court of Appeal set aside an order granting an injunction that would restrain the PWGSC from selling two downtown Vancouver office buildings on land to which the Musqueam claimed ownership. In granting the injunction, the Motions Judge found that the Musqueam would suffer irreparable harm not compensable in damages, and that they were owed full and meaningful consultation by PWGSC, if Canada were to sell, transfer or otherwise dispose of the properties.

The Court of Appeal centered its analysis on the question of whether the Musqueam had proven irreparable harm if the injunction was not granted. The Court split this analysis into three issues: 1. the need for an enhanced land base, 2. the loss of opportunity for the properties to be the subject of treaty-negotiations, and 3. the loss of an opportunity for the Musqueam to consult and be accommodated.

The Need for an Enhanced Land Base

Under its analysis of the need for an enhanced land base, the Court of Appeal found that the Motions Judge failed to consider “the nature of the properties and how they were of specific relevance to the Musqueam” (para. 42). The Musqueam’s claim to the properties was related to a shortage of land required to house their people. The Court of Appeal held that this use of the properties was unlikely, given the commercial nature of the buildings on the land. The Musqueam’s evidence regarding their interest in the land did not indicate a “special interest” or “unique attachment” to the land. The Court cited Soowahlie Indian Band v. Canada (Attorney General), 2001 FCA 387, at paragraph 7, where Justice Rothstein (as he then was) found that compensation would be an appropriate remedy for infringement on aboriginal title:

The appellants have demonstrated no special circumstances relating to the land. They say they require the land to sustain themselves. The historical connection which the appellants claim is unrelated to their anticipated use of the land and there is no evidence as to why this particular land is required having regard to their anticipated use. The appellants have not established a case of irreparable harm. It is sufficient to conclude that if, as the appellants allege, the disposition of the land constitutes a breach of a fiduciary duty by the respondent, the Court will be in a position to order damages or to fashion such other remedy as may be suitable based on the evidence before it.

[Emphasis added.]

Furthermore, the Court found that the Motions Judge did not substantiate his decision that a monetary settlement could not appropriately compensate the Musqueam. Instead, the Court of Appeal found that the Musqueam could easily be compensated for the two acres of land in question with a view to purchasing land in a location that would accommodate housing for their people.

The Court distinguished this case from Garden City, where the land in question constituted 136 acres in which the Musqueam had proven a unique importance and where the use of the land could have changed upon disposition.

Furthermore, the Musqueam led evidence in Garden City that the payment of monetary compensation would not compensate for the loss of the Garden City land.

The Loss of Opportunity for the Properties to be the Subject of Treaty-Negotiations

This argument was dismissed as the Musqueam’s counsel conceded in oral argument that, if the Musqueam could prove title to the property, they could make a claim for the value of the properties in the treaty negotiations, or in a separate claim, if the lands were sold.

The Loss of an Opportunity for the Musqueam to Consult and be Accommodated

In consideration of the Musqueam’s loss of opportunity to consult, the Court analyzed whether Canada had a duty to consult and what level of consultation was required. The Court considered the spectrum of duties related to consultation, as set out in Haida Nation v. British Columbia (Minister of Forests) [2004] 3 S.C.R. 511 and compared the impact that a failure to consult would have had in those cases to the case at bar. Because the Musqueam did not identify a special significance to the land in question, the Court had difficulty making out the right that would be infringed not only by the failure to consult, but by the very sale of the properties as well. It is important to note, as stated by the Court at paragraph 59, that “[w]here an Aboriginal band leads evidence of unique need, special connections to the land in question, or a potential change in the character of the land in question, the result may well be different.”

The Application of Delgamuukw

In Delgamuukw, the Supreme Court discussed the duty to consult in circumstances relating to aboriginal claims to land and addressed the possibility that an infringement on aboriginal title could be justified with compensation in its discussion of the economic nature of land, at paragraphs 168-69:

…. First, aboriginal title encompasses within it a right to choose to what ends a piece of land can be put. …

Second, aboriginal title, unlike the aboriginal right to fish for food, has an inescapably economic aspect, particularly when one takes into account the modern uses to which lands held pursuant to aboriginal title can be put. The economic aspect of aboriginal title suggests that compensation is relevant to the question of justification as well, a possibility suggested in Sparrow and which I repeated in Gladstone. Indeed, compensation for breaches of fiduciary duty are a well-established part of the landscape of aboriginal rights: Guerin. In keeping with the duty of honour and good faith on the Crown, fair compensation will ordinarily be required when aboriginal title is infringed. The amount of compensation payable will vary with the nature of the particular aboriginal title affected and with the nature and severity of the infringement and the extent to which aboriginal interests were accommodated.

[emphasis added]

In Sinclair Centre, the Court of Appeal withheld judgment on whether the Musqueam had the right to be consulted about the sale of the properties (as the merits of their case would be considered in the judicial review underlying the injunction), but compared the infringement to the leading cases on the duty to consult. The Court pointed out that the Musqueam had not made an allegation that their rights had been infringed. Without an initial infringement of a right, the Court found that the loss of the opportunity for the Musqueam to consult regarding a claim for aboriginal title could not constitute irreparable harm. Although the Court of Appeal did not cite Delgamuukw, it applied the principle from that decision regarding the “inescapable economic component” of land and found that a monetary settlement was, in fact, a legitimate remedy in this case.

Implications for the Duty to Consult

The concept of harm in relation to claims of aboriginal title without other special significance is relevant beyond the test on an application for an injunction. The concept of harm or infringement is also relevant to determining the degree of consultation required. In Haida, the Supreme Court describes the scale of consultation.

The low end is described at paragraph 43:

“At one end of the spectrum lie cases where the claim to title is weak, the Aboriginal right limited, or the potential for infringement minor. In such cases, the only duty on the Crown may be to give notice, disclose information, and discuss any issues raised in response to the notice. …”

The high end is described at paragraph 44:

“At the other end of the spectrum lie cases where a strong prima facie case for the claim is established, the right and potential infringement is of high significance to the Aboriginal peoples, and the risk of noncompensable damage is high. In such cases deep consultation, aimed at finding a satisfactory interim solution, may be required. …”[emphasis added]

Harm that is compensable in damages and insufficient to ground an application for an injunction will not meet the burden required to demonstrate that higher end consultation is required. As the Court of Appeal held, where title is claimed without special significance or unique characteristics (such as “significance to the Aboriginal peoples”), damages may be an appropriate remedy.

Conclusion

The Sinclair Centre case provides some guidance that, where aboriginal rights are not claimed and there is no special significance to lands over which aboriginal title is claimed, the economic component of aboriginal title is engaged. As a result, the required consultation in such cases would not be at the higher end of the spectrum described in Haida.