IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Musqueam v. Minister of Sustainable
Resource Management,

 

2004 BCSC 506

Date: 20040416
Docket: L030877
Registry: Vancouver

Between:

Musqueam Indian Band

Petitioner

And

The Minister of Sustainable Resource Management, Land and Water British Columbia Inc.,
UBC Properties Investments Ltd., in its own capacity and in its capacity as trustee
of UBC Properties Trust and the said UBC Properties Trust, University of British Columbia,
 The Attorney General of the Province of British Columbia

Respondents


Before: The Honourable Mr. Justice Warren

Reasons for Judgment

Counsel for Petitioner

M. Morellato
J. Spencer

Counsel for The Minister of Sustainable Resource Management, Land and Water British Columbia Inc.

L. Mrozinski
D. Leavitt
P. Yearwood

Counsel for the University of British Columbia and UBC Properties Investments Ltd.

J.P. Taylor, Q.C.
R. Sieg

Date and Place of Trial/Hearing:

November 3 - 4, 2003

December 8, 10, 11
and 12, 2003

 

Vancouver, B.C.

TABLE OF CONTENTS

 

Paragraphs

 

INTRODUCTION / OVERVIEW

1-7

 

 

FACTS

8-13

 

 

ISSUES

14-16

 

 

THE PARTIES’ SUBMISSIONS

 

 

A.  The alleged breach of the Province’s obligations

 

17-28

B.  The Province’s fiduciary and good faith obligations

 

i.  Duty arising from the petitioner’s prima facie case

29-32

 

ii. Duty arising from entering into treaty negotiations

33-34

 

ii. Nature and scope of the duties

35-44

 

C.  UBC’s obligations and their alleged breach

45-52

 

D.  Submissions on the appropriate remedy

53-65

 

E.  Submission of the respondents UBC Properties Investments Ltd. and UBC Properties Trust

66

 

 

 

 

CONCLUSION

 

A.  Should declaratory relief be granted?

67-79

 

B.  Should the sale agreement and Order in Council be quashed? 

80

C.  Should interim injunctive relief be granted?

81-89

 

D.  Should an order requiring good faith consultation be granted?

90

 

 

E.  Other orders

91-92

 

 

INTRODUCTION / OVERVIEW

[1]            The petitioner, Musqueam Indian Band (“Musqueam” or “the Band”), applies pursuant to the Judicial Review Procedure Act, R.S.B.C. 1996, c. 241, for an order quashing an agreement entered into by the respondent, Land and Water British Columbia Inc. (“LWBC” or “the Province”) and the University of British Columbia (“UBC”) for the sale of certain Crown lands known as the University Golf Course (“the Golf Course Lands”).  Musqueam’s objective is to prevent the sale of the golf course to UBC, and to set aside the provincial Order in Council authorizing the proposed sale, so that the Province’s obligations to Musqueam can be addressed.  Musqueam also seeks declaratory relief as to the nature of those obligations. 

[2]            In essence, Musqueam says that the interim sale agreement between UBC and LWBC and the Order in Council were made in violation of the Province’s fiduciary and Constitutional duties to consult and seek accommodation of Musqueam’s interests.  It also says that the Province is precluded from disposing of lands that are subject to treaty negotiations.  It extends these obligations to UBC as a party who is cooperating or dealing with the Province.   

[3]            Musqueam submits that these proceedings are fundamental to its continuing efforts to repatriate a portion of the Band’s traditional territory for the Band’s present and future needs.

[4]            The Golf Course Lands are situated in the heart of Musqueam territory and are referenced in Musqueam’s comprehensive land claim which was filed in 1984 and accepted by Canada for negotiation in 1991.  Musqueam says that if these traditional lands are sold, it will suffer irreparable harm incapable of economic compensation.  It says that the Crown has not agreed to “bank” in a land protection program existing Crown-held land which is subject to the land claim.  Accordingly, Musqueam says it may face a landless treaty if claimed lands are not protected from further alienation pending a final resolution of the claim. 

[5]            The respondent LWBC acknowledges its duty to consult with the petitioner, but submits that it has fulfilled those obligations.  LWBC says that it did consult with Musqueam, albeit after the sale agreement was entered into and the Order in Council was issued.  After some consultation, LWBC put forward a proposal which it says was a reasonable effort to accommodate the interests of the petitioner, and which the petitioner has not accepted.  LWBC submits that its obligations amount to offering economic compensation to Musqueam, and that it is not obligated to undertake a “land freeze” pending the conclusion of a treaty or final determination of aboriginal title or rights by a Court.  Therefore, LWBC submits that an order quashing the sale agreement would be inappropriate.  It suggests that this Court should only consider whether the amount of economic compensation offered is sufficient or appropriate.  

[6]            The respondent UBC submits that it owes no duties to the petitioner but, in the alternative, that it engaged in good faith consultations with the petitioner, and that UBC has met its obligations in the circumstances.  UBC also submits that it would be inappropriate for the Court to order the Province to abrogate a lawful contract that confers rights on a third party.  

[7]            The respondents UBC Properties Investments Ltd. and UBC Properties Trust say there is no admissible evidence that they were parties to the sale agreement, and ask that the petition be dismissed against them with costs. 

FACTS

[8]            Counsel for the petitioner has categorized the relevant facts into three time periods.  The first period covers the time when Musqueam was negotiating a framework agreement with the Province and Canada under the B.C. Treaty Commission process.  At that time, LWBC (formerly British Columbia Assets and Land Corporation) performed a preliminary assessment of the Golf Course Lands, without consultation with Musqueam, and concluded in September 2000 that there was no potential infringement of aboriginal title in recommending the disposition of the Golf Course Lands.  Musqueam objected, asserting its claim to aboriginal title and rights in the lands.  On February 24, 2001, after repeated requests by Musqueam for information, Musqueam and LWBC met for the first time, and Musqueam again requested, but did not receive, interim protection of the lands.

[9]            During the second period, from December 2002 to March 2003, LWBC and UBC entered into a contract for the purchase and sale of the Golf Course Lands without disclosure to Musqueam or further consultation with Musqueam.  The interim sale agreement was completed on December 13, 2002, and the Province authorized the disposition of the lands to UBC by Order in Council 0131/03 on February 14, 2003.  When Musqueam learned of the pending sale, it commenced this proceeding for judicial review of that decision, and a consent order was filed postponing the sale pending the outcome of this hearing. 

[10]        During the third period, from April 2003 to the present, Musqueam and LWBC met several times in an attempt to explore mutually beneficial options.  On August 25, 2003, LWBC tabled a proposal on the following terms:

·         the Golf Course Lands would be sold to UBC;

·         Musqueam would receive $550,000;

·         Musqueam would receive 5% of any revenue received for modification or discharge of the public golf course covenant on the land;

·         there would be an agreement to defer the sale of 0.9 hectares of Crown land in the University Endowment Lands for a further period of five years; and

·         Musqueam would receive one logging truckload of timber per year for two years, for use as longhouse firewood. 

[11]        On September 22, 2003, Musqueam countered that proposal on the following terms:

·         Musqueam would buy the Golf Course Lands for $10,000,000 on the understanding that the golf course covenant would be maintained for a long-term period and payment would be made on the earlier of ten years or the conclusion of a treaty;

·         the sale of 0.9 hectares of Crown land in the University Endowment Lands would be deferred until a treaty was reached;

·         Musqueam would be provided yearly in perpetuity with a logging truckload of timber for longhouse firewood; and

·         LWBC would assist Musqueam in accessing a forest tenure licence. 

[12]        LWBC responded to this counter-proposal on October 30, 2003.  That response remained predicated on the sale of the Golf Course Lands to UBC, and differed from the August 25 proposal only as follows:

·         the sale of the subject 0.9 hectares of Crown land would be deferred for seven years; and

·         Musqueam would receive five truckloads of wood per year for two years. 

[13]        UBC did not accept or counter Musqueam’s proposal.    

ISSUES

[14]        Musqueam says that the present petition raises the following issues:

(a)            Whether the Province has Constitutional and fiduciary obligations to Musqueam, and in particular:

(i)            Whether the Province has a Constitutional and fiduciary obligation to consult in good faith with Musqueam and to endeavour to accommodate Musqueam’s interests arising from Musqueam’s prima facie claim of aboriginal title in respect of the Golf Course Lands and, if so, whether that obligation has been breached: see Haida Nation v. British Columbia (Minister of Forests), 2002 BCCA 147, 99 B.C.L.R. (3d) 209 (“Haida No.1”), Gitanyow First Nation v. Canada, [1999] 3 C.N.L.R. 89, 66 B.C.L.R. (3d) 165 (S.C.) (“Gitanyow No.2”), Nunavik Inuit v. Canada (Minister of Canadian Heritage), [1998] 4 C.N.L.R. 68, 164 D.L.R. (4th) 463 (F.C.T.D.), R. v. Sparrow, [1990] 1 S.C.R. 1075, 46 B.C.L.R. (2d) 1; and

(ii)        Whether the Province has an obligation to negotiate in good faith with Musqueam arising from the Province’s commitment to negotiate a treaty with respect to Musqueam’s aboriginal title and rights and, if so, whether that obligation has been breached: see Gitanyow No.2, supra, Haida No.1, supra, and Taku River Tlingit First Nation v. Tulsequah Chief Mine Project, 2002 BCCA 59, 98 B.C.L.R. (3d) 16 (“Taku”). 

(b)            If the Province has breached its Constitutional and fiduciary duties to Musqueam, what is or are the appropriate remedy or remedies.

[15]        As noted above, the Province concedes its obligation to negotiate in good faith with Musqueam, but denies any breach.  It says the essential question is not the applicability of the duty to consult and accommodate, but rather whether the scope of that duty obligates the Province, having entered into treaty negotiations with the petitioner, to refrain from disposing of or otherwise alienating Crown land within the petitioner’s claimed traditional lands, pending completion of a treaty.  It also questions whether that issue can be resolved in the context of this judicial review proceeding.

[16]         UBC raises the additional issue of the nature and scope of third party obligations to Musqueam. 

THE PARTIES’ SUBMISSIONS

A.  The Alleged Breach of the Province’s Obligations

[17]        Musqueam submits that the Province failed to adequately consult with Musqueam before entering into the interim sale agreement with UBC on December 13, 2002.  The chronology of facts is not substantially in dispute. 

[18]        In July 2000, LWBC advised Musqueam by letter that it intended to dispose of the Golf Course Lands and included a report, the “Archaeol Report”, a portion of which indicated that the Golf Course Lands were entirely within Musqueam traditional territory. 

[19]        On September 20, 2000, Mr. Wenger of LWBC wrote to Musqueam advising that LWBC had completed its assessment of the Golf Course Lands with regard to potential aboriginal rights or title and had concluded that disposition could proceed.  LWBC says the view of the Province at that time was that any infringement of Musqueam’s prima facie claims had occurred long before the year 2000 and, as such, any further infringement could only be remedied by economic compensation. 

[20]        Two days later, on September 22, 2000, Ms. Sparrow, on behalf of the Musqueam and unaware of Mr. Wenger’s letter of September 20, wrote to LWBC explaining that the Musqueam council had not had an opportunity to review and comment on the July letter and requesting that no decision be made on the disposition of the Golf Course Lands.  In her letter, Ms. Sparrow requested a response indicating how LWBC would accommodate aboriginal rights or title. 

[21]        Between September 2000 and February 2001, Musqueam repeatedly requested information regarding the proposed disposition, and reiterated its claim to the lands as well as its understanding that there would be no disposition during the information exchange process.  During this period, it received a single expert report prepared by LWBC in September 2000.  The report concluded that disposition would not conflict with aboriginal rights or title, but also indicated that no traditional use study had been done concerning the Golf Course Lands and left blank the section relating to consultation with First Nations. 

[22]        In February 2001, at the request of Musqueam, a single meeting was held between Musqueam, LWBC and the chief negotiator for British Columbia, to address interim measures to prevent the continued disposition of Crown-held land, including the Golf Course Lands.  No conclusions were reached at that time. 

[23]        After this meeting there were no further communications between LWBC and Musqueam for almost two years.  During that time, LWBC discussed the Golf Course Lands with UBC and obtained an updated appraisal of the value of the lands.  The interim sale agreement was concluded on December 13, 2002.     

[24]        On January 23, 2003, more than one month after completion of the interim sale agreement, LWBC wrote to Musqueam stating:

I am writing as a follow-up to meetings [of February 2001] between representatives of [Musqueam], [LWBC] and the Provincial Treaty Negotiations Office regarding [the Golf Course Lands]…

We have reviewed your comments from these meetings, and the materials that you provided. With respect, we find that there is no information that would indicate aboriginal rights or title on the land.  Therefore, in response to your letter of December 8, 2000, and subsequent discussions, we advise that LWBC will proceed with the sale of the land. We can also advise that LWBC intends to sell the land to UBC.

[25]        On February 13, 2003, the Order in Council approving the sale was issued.  

[26]        After commencement of this proceeding, there were further discussions between Musqueam, LWBC and UBC, culminating in the offer in August 2003 and the counter-offer in September, outlined above.  Musqueam submits that the discussions subsequent to the conclusion of the sale agreement and Order in Council are incapable of constituting a bona fide endeavour to reach a workable accommodation because at that point, LWBC had already bound itself to sell the Golf Course Lands to UBC, which, in Musqueam’s submission, placed it in a conflict of interest.  Musqueam says LWBC could not seriously address Musqueam’s interests in the Golf Course Lands without compromising its agreement with UBC, and UBC was unwilling to consider any alternatives to sale.  On this point, LWBC replies that the fact that it commenced consultations after entering into an agreement with UBC does not render those consultations invalid: see Haida No.1, supra at ¶59-61. 

[27]        Musqueam also submits that the monetary offer of $550,000 constitutes only 5% of the value of the Golf Course Lands, which Musqueam takes as patently inadequate and indicative of the lack of good faith effort.  In considering whether that offer can amount to good faith accommodation, Musqueam says it is instructive to review Delgamuukw et al. v. British Columbia, [1997] 3 S.C.R. 1010, 66 B.C.L.R. (3d) 285, where the Supreme Court of Canada noted the inescapable economic aspect which may give rise to the availability of compensation for infringement of aboriginal title, at ¶169:

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. [counsel’s emphasis]

[28]        LWBC says the August 2003 proposal represented a reasonable effort to respond to Musqueam’s interests by an attempt to find appropriate economic compensation.  It says that questions concerning the precise value of such aboriginal interests and the consequent value of the infringement are extremely difficult and not yet determined, such that whether the Province has struck the right number in its offer of $550,000 is, in a sense, unknowable.  LWBC submits that the figure reflects the percentage of aboriginal persons relative to the population, a calculation method typically used in the treaty negotiation process.  Absent any finding of unreasonableness, LWBC submits that its offer to the petitioner is in compliance with its fiduciary duties prior to proof of aboriginal title or rights. 

B.  The Province’s Fiduciary and Good Faith Obligations 

Duty Arising from the Petitioner’s Prima Facie Case

[29]        Musqueam submits that where, as in this case, the asserted aboriginal claim is supported by a good prima facie case and the aboriginal claimants’ rights are affected by a proposed Crown act or decision, the Province has a duty to consult in utmost good faith with Musqueam in an effort to reach accommodation of the claimant’s interests: see Haida No.1, supra at ¶49-51. 

[30]        Musqueam presented evidence to establish that the Province knew at all material times that Musqueam had a strong prima facie claim, and therefore knew it had a duty to consult with Musqueam before contracting for the sale of the Golf Course Lands. 

[31]        Musqueam says the Province has been aware of the nature and strength of Musqueam’s claims since at least 1987, when Musqueam claimed aboriginal title over the entirety of the University Endowment Lands.  Musqueam says the Province knew when it entered into tripartite treaty negotiations that Musqueam had consistently asserted title to the lands over many years, such that the Supreme Court of Canada in Sparrow, supra at ¶30, noted the existence of Musqueam aboriginal rights in this area as “not the subject of serious dispute”. 

[32]        LWBC concedes that Musqueam has established a prima facie right that triggers its duty to consult and accommodate.  Insofar as LWBC questions the strength of Musqueam’s prima facie case, those arguments go to the issue of the nature and scope of the duty owed to Musqueam, addressed below.    

Duty Arising from Entering into Treaty Negotiations

[33]        Musqueam says that the duty to negotiate a treaty in good faith is necessarily linked to the Province’s duty to consult and accommodate Musqueam’s interests in the Golf Course Lands.  Musqueam says this tenet is central to treaty negotiations because it will ensure the preservation of assets for negotiations at the treaty table. 

[34]        LWBC responds that the Crown’s obligations arising under the treaty negotiation process are separate and distinct from its obligations of consultation and accommodation under Taku and the Haida decisions, all supra.  LWBC says that the duty to negotiate in good faith does not arise in this case, where the issue is disposal of Crown-held lands, and that only the duty to consult and accommodate is relevant. 

Nature and Scope of the Duties

[35]        At the heart of the parties’ dispute are their diverging concepts of what the duty to consult and accommodate, and the duty to negotiate in good faith, entail.  

[36]        The parties agree that the scope of the duty to consult and accommodate depends in part on the severity of the potential infringement.  In Delgamuukw, supra at ¶168, the Supreme Court of Canada held:

The nature and scope of the duty of consultation will vary with the circumstances.  In occasional cases, when the breach is less serious or relatively minor, it will be no more than a duty to discuss important decisions that will be taken with respect to lands held pursuant to aboriginal title.  Of course, even in these rare cases when the minimum acceptable standard is consultation, this consultation must be in good faith, and with the intention of substantially addressing the concerns of the aboriginal peoples whose lands are at issue.  In most cases, it will be significantly deeper than mere consultation.  Some cases may even require the full consent of an aboriginal nation...

[Emphasis added]

[37]        Musqueam submits that the infringement in the present case could not be more serious.  It says the proposed sale represents the final stages of a disposition process amounting to the cumulative alienation of the entirety of Musqueam’s traditional land base, an infringement which no level of monetary compensation could entirely alleviate. 

[38]        Therefore, Musqueam submits that the Province’s duties in this case run deeper than mere consultation.  It says the duties require a serious attempt to consider alternatives to the sale of the lands to UBC, which minimize the impact on the interests of Musqueam, even if this accommodation results in some hardship to the Province or third parties.  It says the Province has a duty to consider Musqueam’s predominant interest in acquiring a land base rather than economic compensation.    

[39]        The thrust of LWBC’s argument in response is that, because of the interim nature of the parties’ relationship in this case, the Crown’s duty to consult and accommodate amounts to a duty to offer economic compensation.  LWBC submits that because Musqueam relies solely on prima facie claims which have not been proven at trial or settled in a treaty, at this stage, LWBC’s obligations amount to a duty to formulate a practical interim compromise.  LWBC says a reasonable offer of economic compensation is appropriate accommodation at this interim stage: see Chemainus v. B.C. Assets and Land Corporation, [1999] 3 C.N.L.R. 8, [1999] B.C.J. No. 682 (Q.L.) (S.C.). 

[40]        LWBC says that the Crown’s duty to accommodate requires it to balance prima facie aboriginal title and rights against the short- and long-term objectives of the Crown in disposing of Crown-held lands in accordance with the public interest and compelling legislative objectives.  Here, it says the settlement of populations, the building of infrastructures and the development of a large multicultural urban community is the driving force behind the “expropriation” of the Golf Course Lands.  The Province submits that these objectives justify an infringement of Musqueam’s claimed aboriginal title and rights.  In its submission, the question then remaining is what amounts to fair compensation for the infringement. 

[41]         LWBC says the prima facie nature of the aboriginal rights in this case support a conclusion that the Province’s duty to accommodate is met by economic accommodation.  LWBC says Musqueam’s right is expressed as a title claim based on previous use of the lands as hunting and harvesting grounds and as a transportation corridor.  This, to LWBC, is a weak claim in two ways.  First, it says that exclusive occupation necessary to establish a title claim may not be proven at trial.  It points, inter alia, to research that indicates that the Golf Course Lands may be the subject of overlapping claims from other aboriginal groups such as the Squamish and StÓ:lo First Nations. 

[42]        Second, LWBC says that even if it is proven that Musqueam has rights rather than title, such as rights to hunt or harvest, a final determination may establish that those rights had been expropriated long ago.  It says the Golf Course Lands have long since been transformed such that they are no longer capable of supporting use as hunting grounds or as transportation corridors to seasonal village sites.  In that sense, LWBC submits that the sale of the Golf Course Lands will not meaningfully infringe on Musqueam’s prima facie aboriginal rights and title claims.  It says the only remaining aspect of title and rights is the economic aspect. 

[43]        In reply to that point, Musqueam argues that there is no evidence before the Court of any other First Nation demonstrating a prima facie right or pursuing a claim to the subject lands.   

[44]        Musqueam also disputes that its only remaining right is a claim for monetary compensation.  Delgamuukw, supra, is authority that aboriginal title consists of the right to use and occupy the land, and the physical modification of the land by logging or the operation of the golf course does not prevent Musqueam from exercising aboriginal title rights over the lands today.  Musqueam says nothing in Delgamuukw, supra, suggests that the Province may unilaterally expropriate aboriginal lands subject only to the payment of money. 

C.  UBC’S Obligations and Their Alleged Breach

[45]        Counsel for Musqueam says that in Haida Nation v. B.C. (Minister of Forests), 2002 BCCA 462, 5 B.C.L.R. (4th) 33 (“Haida No.2”), the Court of Appeal extended the Crown’s obligation to consult and accommodate to parties who have participated with the Crown in a potential infringement.  Musqueam says that UBC has an obligation to cooperate with the Crown’s duty to accommodate aboriginal interests, even to the extent of foregoing its contractual rights which, in any event, are subject to an inherent defect which makes the contract of sale unenforceable.  In Haida No.2, supra at ¶123, Chief Justice Finch wrote:

…Weyerhaeuser’s duty to consult existed at least when it received replacement [tree forest licences] in 2000, and when this Court declared that the licence was issued by the Minister of Forests in breach of the Crown’s duty to consult.  Upon that finding, Weyerhaeuser become possessed of a licence with a fundamental legal defect.  It is a defect that absent a declaration of invalidity, can only be remedied by the participation of both Weyerhaeuser and the Crown in consultation with the Haida. 

[46]        Counsel for Musqueam submits that Mr. Justice Lambert in his concurring judgment added an additional reason for imposing the fiduciary obligation upon Weyerhaeuser.  He referred, at ¶65-73, to the doctrine of “knowing receipt”; that is, Weyerhaeuser “must have been aware, or at least, could have become aware on reasonable and necessary inquiry, of the Crown breach of its fiduciary duty to the Haida…” (¶71). 

[47]        Musqueam says that UBC was aware of Musqueam’s interest in the University Endowment Lands, including the Golf Course Lands, when it entered into the agreement with LWBC to buy the Golf Course Lands, and that UBC knew, or would have known if it had made reasonable and necessary inquiries, that the Province had not satisfied its Constitutional and fiduciary obligations to consult with Musqueam.  For instance, Musqueam says that during meetings regarding the University Boulevard Neighbourhood Plan, UBC vice-president, Dennis Pavlich, acknowledged that UBC is located in Musqueam traditional territory.  It also cites similar acknowledgements in UBC’s Cliff Erosion Management Planning document. 

[48]        In response, UBC says, first, that the petitioner has failed to seek a declaration that UBC owed the petitioner a duty to consult regarding the acquisition of the Golf Course Lands.

[49]        Second, UBC says that in any event, it did engage in good faith negotiations with Musqueam prior to entering into the agreement and made every reasonable effort in commercial terms to ensure that the Crown had discharged its duty to Musqueam.  UBC says it met with the petitioner on two occasions to discuss the pending transaction, although agreement was not reached between UBC and Musqueam at those meetings. 

[50]        Further, UBC points to an express term in the sale agreement that provides that the Crown had complied with all of its obligations to consult with the petitioner.  It was initially a condition precedent of the agreement that the Province would determine that it could complete the transaction in accordance with the appropriate consultation on aboriginal rights and title.  UBC says that when the condition precedent was removed, UBC was obligated to increase, and did increase, its deposit to one million dollars.  UBC says these contractual terms, in combination with its meetings with Musqueam, sufficed to meet any duties UBC owed to Musqueam.     

[51]        Third, UBC submits that, on a policy basis, the Court should not order LWBC to abrogate a lawful, freely contracted agreement conferring rights on a third party, especially when that agreement itself reflected efforts to ensure that the duty to consult and accommodate had been met.  On this point, Musqueam responds that LWBC’s fiduciary obligations preceded its contractual obligations, and that LWBC cannot circumvent its fiduciary and Constitutional duties by entering into contracts with third parties. 

[52]        Finally, UBC says the foundation of the transaction was a restrictive covenant that UBC would use the Golf Course Lands as a public golf course, which covenant UBC intends to observe.  UBC points out that the petitioner has conceded the value of the public interest in maintaining the lands as a golf course, and that the petitioner itself, if it comes into possession of the lands, is prepared to maintain the lands as a golf course, albeit for a limited number of years.  UBC says this factor should be considered by the Court in balancing the public interest and considering whether UBC’s duty to Musqueam, if it exists, has been met.

D.  Submissions on the Appropriate Remedy

[53]        Musqueam seeks the following remedies:

(a)A declaration that the Province owes Musqueam Constitutional and fiduciary duties of consultation and accommodation before disposition of the lands; and a declaration that the Crown has not satisfied those obligations;

(b)An order quashing the Order in Council and a declaration that the sale agreement between UBC and LWBC is of no force and effect, on the basis that the sale agreement, the approval of the sale by LWBC’s board, and the Order in Council were all invalid because they were in breach of LWBC’s obligations to Musqueam;

(c)Interim injunctive relief restraining both LWBC and the Minister from proceeding with the disposition of the Golf Course Lands until the duties of consultation and accommodation have been met; and

(d)An order requiring the parties to engage in good faith consultation and accommodation, untainted by the presence of conflicting contractual obligations.     

[54]        Musqueam says that if the sale agreement is set aside and injunctive relief is granted, no real prejudice will result to any of the respondents; whereas if the sale proceeds, the disposition of the Golf Course Lands would be a severe infringement of Musqueam’s claimed title and rights.  Musqueam states that it faces a serious land crisis, while UBC has a land surplus.  Further, Musqueam says there is no evidence of any urgency requiring the sale of the Golf Course Lands to UBC, while Musqueam perceives urgency in preserving what it sees as one of the last remaining portions of its traditional territory. 

[55]        Musqueam says any prejudice to the respondents caused by delay is readily compensable by a monetary award.  Conversely, Musqueam says it will suffer irreparable harm incapable of economic compensation if these lands are alienated by sale to UBC.  It says it has a deep historical, prehistorical, cultural and spiritual connection with these lands.  On that basis, Musqueam submits, Chemainus, supra, is distinguishable.  In that case, Mr. Justice Melvin held that an interlocutory injunction should not be granted because the First Nation had not proved irreparable harm and, unless there was something particularly unique with the lands, damages were an appropriate remedy.  Melvin J. also noted that the particular claim for aboriginal title was weak. 

[56]        The respondents dispute all of the remedies put forward by Musqueam.  Regarding the declarative relief and the question of good faith negotiation, LWBC says that the sale agreement and Order in Council have little or no impact on Musqueam’s claimed rights and title, and therefore the Province is under no obligation to consult regarding those items.  LWBC says the Order in Council has no effect on the claimed rights because it merely confers on the Minister a discretion to dispose of the Golf Course Lands by Crown grant to UBC.  If the Minister does not exercise that discretion, the Order in Council can have no effect on the petitioner’s original rights and/or title claims.  In any event, LWBC says it is under no obligation to consult in relation to the exercise of its legislative powers. 

[57]        In response to LWBC’s argument that the Order in Council cannot infringe Musqueam’s aboriginal title because it merely confers a discretion upon the Minister, Musqueam says that the Order in Council in the case at bar is indistinguishable from the decision of the Minister in Taku, supra, which decision was found to be invalid because it failed to take into account the Province’s fiduciary obligations. 

[58]        Regarding the validity of the sale agreement and Order in Council, LWBC says that even if the Court finds that the Crown failed to meet its obligations to the petitioners, it does not follow that the sale agreement itself must be quashed.  LWBC says that, as noted by Lambert J.A. in Haida No.1, supra at ¶58-62, the proper time to determine questions concerning the validity of licences, leases and instruments such as Crown grants, is at the same time as the determination of the aboriginal title, rights, prima facie infringement and justification.  LWBC says the issues raised in this proceeding require evidence adduced in the context of a trial with all of the parties to the treaty negotiations present, including the federal Crown.  LWBC cites Gitanyow First Nation v. Canada, [1999] 1 C.N.L.R. 66, [1998] B.C.J. No. 2732 (Q.L.) (S.C.) (“Gitanyow No.1”), where Williamson J. noted that grievances about the treaty making process such as the length of time negotiations have taken, the cost of negotiations and the treaty negotiation office’s refusal to bank lands or to negotiate compensation are all matters which cannot be determined by way of Rule 18A proceeding, let alone by way of judicial review application, particularly when it involves a tripartite process and only two of the three parties have been joined in the proceedings.

[59]        Thus, LWBC says that at this stage, the only question is how much compensation is fair.  LWBC suggests that if the Court finds that the Province’s offer for economic compensation is inadequate, the Court may direct the Province to consider further the appropriate amount of economic compensation that should be made available.

[60]        Regarding interim injunctive relief, LWBC says that to order the federal and provincial Crowns to cease the disposition or sale of any Crown land in claimed traditional areas until a treaty is concluded, would constitute an unprecedented and unwarranted intrusion by the courts into the heart of the treaty process.  The notion that the Crown cannot dispose of land that is of interest in a treaty negotiation, particularly given the process in British Columbia which has no time limits and which proceeds in the absence of any sort of proof of claim, goes well beyond any requirement of good faith negotiations. 

[61]        The Province says that it had advised the petitioner since the commencement of treaty negotiations that it was not prepared to “bank” lands at the early stages of negotiations. LWBC says that the treaty negotiation process with Musqueam is currently at the conclusion of Stage 3; that is, identifying the issues to be negotiated, and setting up the goals, procedures and a timetable for negotiations.  LWBC submits that the treaty negotiation process properly provides for “interim protection measures” only at Stage 4 of the process, after the parties have examined in detail the issues and the range of rights and obligations which will form the basis of the treaty and conducted a lands inventory of potentially available Crown lands.  Thus, it submits that the remedies sought by the petitioner are not only premature, but are also remedies that strike at the heart of the negotiation process.

[62]        Further, LWBC says a duty to be bound to a “land freeze” until the conclusion of a treaty cannot exist in light of the fact that the Crown cannot be forced to conclude a treaty: see Williamson J.’s comments in Gitanyow No.2, supra, that nothing obliges the Crown to negotiate a treaty or remain in the treaty negotiation process once it has begun.  

[63]        Finally, LWBC says that a duty to engage in a “land freeze” during treaty negotiations could not be determined nor be found to have been violated in a summary proceeding such as this judicial review.  LWBC says that in proceedings under the Judicial Review Procedure Act, this Court is asked to review the exercise of a statutory power (in this case, the sale agreement and Order in Council) and determine whether the exercise of statutory power is within the jurisdiction conferred by the legislation.  LWBC argues that the decision to proceed with the sale of the Golf Course Lands can be reviewed under the Judicial Review Procedure Act on a jurisdictional question, but that it is wrong to suggest, as the petitioner does, that the decision to proceed with the sale can be challenged on the grounds that the Crown’s duty to negotiate in good faith requires it to refrain from disposing of Crown land pending the completion of a treaty. 

[64]        LWBC says the petitioner’s position assumes that the decision-maker had jurisdiction to consider and express an opinion on the Crown’s duties to negotiate in good faith; put differently, the enabling legislation would have had to confer on the decision-maker a jurisdiction to consider the progress of treaty negotiations in any potential sale of Crown land: see Haida First Nation v. B.C. (Minister of Forests), 2000 BCSC 1280, [2000] B.C.J. No. 2427 (Q.L.) (S.C.) at ¶32, reversed on another point in Haida No.1, supra.  Absent such a statutory power, the decision-maker would have no jurisdiction to refuse to sell the Golf Course Lands to UBC on the grounds that the decision-maker disagreed with the approach taken by the treaty negotiation office, which had advised the petitioner since the commencement of negotiations that it was not prepared to “bank” lands at the early stages of treaty negotiations.

[65]        Musqueam responds that LWBC’s argument is based on the premise that a breach of the Province’s interim obligation of consultation and accommodation is not a sufficient basis for challenging the validity of a statutory decision.  It says such an argument misapprehends Taku, supra, and the Haida decisions, supra.

E.  Submission of the Respondents UBC Properties Investments Ltd. and UBC Properties Trust

[66]        It is not disputed by the petitioner that there is no admissible evidence that either UBC Properties Investments Ltd. or UBC Properties Trust is a party to the agreement for the sale and purchase of the Golf Course Lands.  Accordingly, UBC Property Investments Ltd. and UBC Properties Trust ask that the petition should be dismissed as against them with costs.

CONCLUSION

A.  Should Declaratory Relief be Granted?

[67]        The parties agree that Musqueam has established a prima facie case sufficient to trigger the Province’s duty to consult with Musqueam and seek accommodation of Musqueam’s interests.  The question I must decide is whether that duty was met at the relevant times: when the Province entered into the sale agreement with UBC, when the Order in Council was issued, and during the meetings between the parties after those events but before this hearing.    

[68]        I find that the Province was in breach of an enforceable, legal and equitable duty to consult with Musqueam and to seek an accommodation with the Band at the time when the processes for the conclusion of the sale agreement and the issuance of the Order in Council were under way.  The evidence shows that LWBC knew of Musqueam’s claim to the Golf Course Lands at the relevant times and, in fact, was a party to treaty negotiations involving those very lands.  As early as July 2000, LWBC formed an intention to dispose of the Golf Course Lands and assessed the viability of such disposal without any consultation with Musqueam.  Its belief was that any infringement of Musqueam’s prima facie claims had occurred long before the year 2000 and thus the claim could only be remedied by compensation.  It is difficult to conceive of how or on what basis, without consultation with Musqueam, LWBC could come to such conclusions and determine that Musqueam’s asserted aboriginal rights and title did not bar disposition of the lands.  Despite Musqueam’s subsequent objections, LWBC clung to that original assessment.  Nothing in the evidence indicates that LWBC resiled in any way from its original position or made bona fide efforts to be responsive to Musqueam’s repeated requests for information.  The sparse correspondence from LWBC to Musqueam indicates LWBC’s lack of a bona fide attempt to inform itself of Musqueam’s interests in the lands.  The reports that it forwarded to Musqueam were incomplete or did not conclusively support or clarify LWBC’s position.  Desultory communications and lack of transparency, in my view, cannot amount to fulfilment of the Province’s weighty obligations of consultation and accommodation towards Musqueam, which pre-exist any contractual obligations entered into by the Province.              

[69]        If the matter had ended there, I would have granted the declaratory relief sought.     

[70]        After this proceeding was commenced, however, LWBC, UBC and Musqueam engaged in further consultations.  I do not find that the fact of the existence of the interim sale agreement and the Order in Council, in itself, negatives the opportunity for subsequent bona fide consultations.  However, where an agreement with a third party has come into existence in breach of the Crown’s obligations to the First Nation, subsequent bona fide consultations are predicated on the Crown’s readiness to consider, as one option, abrogating its contractual obligations and bearing the consequences thereof.       

[71]        At this interim stage where Musqueam relies solely on prima facie claims, in my opinion the duty of consultation and accommodation amounts to a duty to formulate a practical interim compromise.  What form that compromise ultimately takes will depend on the facts and circumstances of each particular case.  It will depend, inter alia, on the strength of the prima facie case, the seriousness of the proposed infringement, the course of the dealings between the parties, and the various specific interests of the parties.   

[72]        In the particular circumstances of the case at bar, I am satisfied that the duty of consultation and accommodation at the interim stage was met when, after a series of meetings, LWBC made an offer to Musqueam resting primarily on reasonable economic compensation. 

[73]           I find that, in this case, a balance between the strength of the prima facie claim and the severity of the infringement favours the respondents’ characterization of the nature and scope of their duty to consult and accommodate. 

[74]        It is not necessary, or indeed possible, for me to decide at this stage whether a claim for economic compensation is Musqueam’s only remaining right.  What I have found is that, in the circumstances, LWBC’s duty of consultation and accommodation is met by offering economic compensation.    

[75]        Whether the compensation offered is reasonable under all of the circumstances remains to be determined after any final determination of the prima facie claim.    

[76]        I note that Musqueam says LWBC has a duty to accommodate its interests insofar as those interests center on claims to land in preference to economic compensation.  However, while I appreciate the significance of interests in these lands to the petitioner, I cannot find at this interim stage that LWBC’s duty to accommodate necessarily mandates granting Musqueam interests in the land.  In my view, that is a matter for final determination by treaty negotiations or at trial, not for disposition at this summary proceeding.        

[77]        With regard to UBC, the authorities have established that a third party who cooperates with the Crown in a potential infringement of aboriginal rights or title also owes legal and equitable duties to the First Nation. 

[78]         I find that UBC was aware at all material times of Musqueam’s claim to the Golf Course Lands, and therefore knew that it owed duties to Musqueam comparable to the duties owed by the Crown.     

[79]        In the particular circumstances of the case at bar, I find that UBC fulfilled its duties by requiring the inclusion of a contractual term in the sale agreement that the Province would satisfy its obligations to Musqueam.  A third party entering in good faith into an arms’ length contract with the Crown, which contract triggers duties to a First Nation, is entitled to rely on contractual representation by the Crown that it has met its duties of consultation with Musqueam.  However, a third party which blindly relies on such contractual representations, knowing that it also owes duties to the First Nation independent of the Crown’s duties, runs the risk of having the contract abrogated if those duties were not, in fact, met by the Crown.  In such a case, if it is found that the Crown breached its duties to the First Nation when forming the contract, the third party which has failed to directly consult with the First Nation can hardly hope to rely on the faulty contractual provision.  Fortunately for UBC, that was not my conclusion in this case.             

B.  Should the Sale Agreement and Order in Council be Quashed?

[80]        In light of my finding that the Crown has not breached its obligations to Musqueam, I decline to quash the interim sale agreement and the Order in Council.

C.  Should Interim Injunctive Relief be Granted?

[81]        Applying the three-part test in RJR MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385, I agree with the Province’s submissions that to require the Province to refrain from disposing of land that is of interest in treaty negotiations, especially considering that the treaty negotiation process is lengthy and premised on prima facie claims, would go far beyond the present nature and scope of the Crown’s duties as established in the authorities.  Those duties require consultation and efforts to seek accommodation before the disposition of lands subject to aboriginal claims.  I cannot find that these duties amount to an obligation to “freeze” dispositions of all Crown-held lands pending a final determination of aboriginal claims of title and rights. 

[82]        In so deciding, I have considered that in many cases, the duty to consult and seek accommodation (which arises when a Crown decision-maker is making a decision which may impact asserted aboriginal title or rights) and the duty to negotiate in utmost good faith (which arises upon entering into treaty negotiations) may converge or overlap.  The case at bar is one example.  I have focussed on the duty to consult and accommodate. 

[83]        However, turning my mind to the duty to negotiate in good faith, I do not think that the disposal of Crown-held lands which are the subject of prima facie claims amounts to a breach of the duty to negotiate in good faith, even when the lands sought to be disposed are lands currently on the negotiation table.  However, it may be said that the duty to negotiate in good faith requires that, where the Crown seeks to dispose of lands that are the subject of treaty negotiations, it breaches its duty to negotiate in good faith if it breaches its duty to consult and seek accommodation before such disposition.       

[84]        I agree with the respondents that an order “freezing” disposition of Crown-held lands would be premature in the case at bar, in the sense that it would pre-empt the treaty negotiation process.  I echo the words of Lambert J.A. in Haida No.1, supra at ¶57:

Of course, as both this Court and the Supreme Court of Canada have said many times, a negotiated settlement, by treaty or otherwise, complete or partial, is always better than a judgment after litigation pursued to the end.

[85]         In my view, an intrusion by the Court into the treaty negotiation process at this stage of this case would unduly distort the development and outcome of those negotiations.

[86]        An order “freezing” disposition of Crown-held lands in this case is also premature in the sense that this Court, in this summary proceeding, does not have the benefit of the range of evidence which would be properly required to make a determination of this nature.  I follow Williamson J.’s words in Gitanyow No.1, supra, in this regard.      

[87]        I decline to grant this remedy sought by the petitioner.

[88]        I note that if the aboriginal claims are ultimately established, the Band will be at liberty to apply for compensation, whether economic or otherwise, in the future.  

[89]        I leave it for another case to decide the question of whether a provincial decision-maker approving the interim sale agreement or issuing the Order in Council would have no jurisdiction to refuse to sell the Golf Course Lands to UBC on the grounds that the decision-maker disagreed with the treaty negotiation office’s position on that issue. 

D.  Should an Order Requiring Good Faith Consultation be Granted?

[90]        I decline to grant this remedy sought by the petitioner.  I have noted above that whether the economic compensation ordered was adequate is a matter that I am unable to determine on the evidence presented in this summary proceeding.  However, I urge the parties to continue the process of consultation in an effort to reach a mutually beneficial arrangement.      

E.  Other Orders

[91]        I grant an order dismissing the petition as against UBC Property Investments Ltd. and UBC Properties Trust, with costs.

[92]        Costs will follow in the cause. 

“T.P. Warren, J.”
The Honourable Mr. Justice T.P. Warren