Compensation order for forestry company could be tip of the iceberg

The government of British Columbia has been ordered to pay a forestry company $1.7 million for damages suffered during a blockade in 2006 and experts say other provinces, especially Ontario, should sit up and take notice.


In Moulton Contracting Ltd. v. British Columbia, which was also heard by the Supreme Court of Canada as Behn v. Moulton Contracting Ltd. on other issues last May, members of the Fort Nelson First Nation Aboriginal community — the Behn family — had set up a camp blockade in October 2006 to interfere with a logging operation within Treaty 8 territory.

The blockade meant the logging company, Moulton Contracting, couldn’t get access to or cut the timber within the traditional territory of the FNFN where the company was authorized to do so. The Crown had granted licences to the logging company to harvest timber in two areas of the Fort Nelson territory.

The Behns argued under the Fort Nelson First Nation system of territorial management, hunting and trapping rights apply on tracts of land associated with different extended families. The SCC rejected the Behns’ argument the licences were invalid because they were awarded in breach of the duty to consult and infringed Treaty 8 rights. It found the defence to be an abuse of process.

While the Supreme Court of B.C. dismissed a claim made by the company against the Behn family, it sided with the forestry company’s claim that the province owed it a duty of care and should have warned it of the Behns’ intention to block access to the road and therefore be held liable for its financial loss during the period of the blockade.

The court assessed the loss to Moulton as a result of the province’s failure to warn it about the Behns’ intention to block the road access at $1.75 million.

“It’s an impressive amount,” says Pierre-Christian Labeau, a partner with Norton Rose Fulbright Canada LLP in Quebec City who deals with aboriginal and resource law. “It’s important especially in the context of a forestry company. You can imagine for a mining company that would be in a similar situation the damages could be higher.”

The case speaks to a larger issue of the obligation of the Crown not to forget private parties also have rights in such situations.

“The province signed a contract, general contractual principles were applied in terms of obligations, and the court said you’ve got to notify; it’s a material issue both in terms of contract and common law,” says Tom Isaac, head of the national aboriginal law practice at Osler Hoskin & Harcourt LLP in Calgary.

He notes in the 2010 case Beckman v. Little Salmon/Carmacks First Nation the Supreme Court said Beckman also had a right to timely government decision-making.

“I see this as just a continuation of that theme. It signals to government they can’t forget they are dealing with other folks because we do see a tendency for governments to get a big myopic about these issues. They ought to be focused on the honour of the Crown but they can’t do it to the detriment of non-Aboriginal people’s rights to be treated fairly also by government,” says Isaac.

Isaac says he thinks it’s “inevitable” there will be more claims against government. He has had to remind governments his non-aboriginal clients also have a right to transparent record.

“This should be a wake-up call for the government of Ontario,” says Isaac. “This is a decision the government of Ontario in particular should take a careful look at given the examples of blockades and threats of blockades in that province.”

Labeau agrees, pointing to several junior mining companies currently suing the province of Ontario because they didn’t have access to do exploration work because the First Nations living in the area opposed such activities.

“They say the Ontario government didn’t take action and didn’t make sure the duty to consult was respected and because of that they should award damages,” he says.

In October, junior gold mining company Northern Superior Resources Inc. filed a lawsuit against the Ontario government for $110 million on the grounds the government failed in its duty to consult aboriginal people, thereby depriving the companies involved of the ability to carry on exploration at its Thorne Lake, Meston Lake, and Rapson Lake gold properties located west of the Ring of Fire in Northern Ontario.

Solid Gold Resources Corp. also filed a $100-million lawsuit in the Ontario Superior Court of Justice last January claiming the province “encouraged and promoted” a conflict with a First Nation, slowing its gold mine project.

“I expect we will see more of that in the future,” says Labeau. “Every time you have a situation where members of First Nations have been counseled to take action against a private company, maybe the company will say we have done everything right — they will argue the province or federal government has a responsibility. The government can’t ignore its responsibility not only to First Nations but also to private companies.”

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