Da’naxda’xw/Awaetlala First Nation v BC Hydro

The British Columbia Supreme Court released a decision on January 8, 2015 in <a href="http://www.canlii.org/en/bc/bcsc/doc/2015/2015bcsc16/2015bcsc16.html" title="Da'naxda'xw/Awaetlala First Nation v. BC Hydro">Da&amp;#8217;naxda&amp;#8217;xw/Awaetlala First Nation v. British Columbia Hydro and Power Authority</a>, allowing the judicial review application of Da’naxda’xw/Awaetlala First Nation (DAFN) with respect to the conduct of British Columbia’s Minister of Energy, Mines and Natural Gas in relation to a hydro-electric power project within DAFN’s traditional territory, but rejecting the specific orders sought by DAFN and the Kleana Power Corporation as remedies.

This case arises from a legal dispute between DAFN, Kleana and the Minister over a run-of-the-river hydro-electric project Kleana had proposed for the Klinaklini River within the traditional territory of DAFN. In 2008, Kleana had planned to submit a proposal in the “Clean Power Call” of BC Hydro in the hope of being awarded an energy purchase agreement for the sale of electricity generated by the project on the Klinaklini River. The DAFN saw this project as an economic opportunity consistent with their cultural and ecological interests, but the proposed boundary of a conservancy within DAFN’s traditional territory created a barrier for the project.

According to DAFN and Kleana, the Minister assured them that if they lost the opportunity to participate in the 2008 Clean Power Call due to delays involved in amending the conservancy's boundaries then the Minister would direct BC Hydro to enter into negotiations with Kleana for an energy purchase agreement at a price for power linked to the results of the winning bids coming out of the 2008 Call. DAFN and Kleana asserted that the Minister’s assurance was clear, unambiguous and unqualified and that, in reliance on this assurance, they spent time and resources pursuing the boundary amendment necessary for their project to proceed. They brought judicial review proceedings that culminated in a 2011 decision of the BC Supreme Court finding that the Minister had a legal duty to consult with DAFN over their request for an amendment to the conservancy boundary with a view to reasonable accommodation, and that the Minister failed to fulfill this duty. Following that decision, the conservancy boundary was eventually amended. However, DAFN and Kleana argued that the Minister had failed to honour the assurance and commitment given to them by the previous Minister in 2008 and they brought this judicial review application to obtain an order requiring the Minister to direct BC Hydro to enter into good faith negotiations with Kleana for a power purchase agreement based on the terms and factors applied in the 2008 Clean Power Call. In the alternative, they sought an order quashing the Minister’s outstanding weak direction to BC Hydro and replacing it with one that reflected the 2008 assurance of the then Minister.

In seeking to have the application dismissed, the Province argued that there was no statutory power authorizing the Minister to direct BC Hydro to enter into contractual negotiations with DAFN and Kleana; any such directions from the Minister would be made pursuant to a prerogative power and would not be subject to judicial review. The Court disagreed and found that the Minister’s power to give directions did have a sufficient statutory basis to be subject to judicial review. However, the Court found that the Minister had limited powers over BC Hydro (a separate legal entity) and had no authority to bind BC Hydro to anything in the nature of future contractual terms with a third party such as Kleana. The Court was also not persuaded that the Minister’s commitment to assist DAFN and Kleana was as fully and finally expressed as the petitioners claimed. In its view, subsequent letters from the Minister had clarified and narrowed the scope of this commitment, and while there was a commitment to direct BC Hydro to enter into negotiations with Kleana for the acquisition of power from the project following the conservancy amendment, there was no commitment binding BC Hydro to “benchmark” those negotiations based on the results of the 2008 Clean Energy Call. As a result of these findings, the Court rejected the petitioners’ claims for relief based on administrative law remedies such as public law estoppel and the doctrine of legitimate expectations.

The Court also rejected DAFN’s argument that the allegedly inadequate direction issued by the Minister to BC Hydro following the conservancy boundary amendment gave rise to a separate breach of the duty to consult. On the other hand, the Court did accept that further relief was required to remedy the previous breaches of the duty to consult found by the BC Supreme Court in 2011. The Court noted that in spite of the conservancy boundary change that followed that previous judicial review application, the project was no longer viable as a consequence of the Province’s earlier breaches of its duty to consult. As the effects of those earlier breaches on DAFN remained unresolved, the Court held the outcome to be inconsistent with the honour of the Crown. The Court noted that various remedies were available for the breach of the duty to consult, including injunctive relief and damages, and an order for further consultation was only one option. In its view, a reasonable form of accommodation of DAFN’s interests had yet to be considered by the Province and the Court issued an order declaring that the Province had a duty to consult with DAFN with a view to considering such reasonable accommodation.