Law Times

PAGE 10 Government sued over duty to consult Confusion leaves Crown vulnerable to litigation, lawyer says FOCUS BY MICHAEL McKIERNAN Law Times C ernment vulnerable to more law- suits after a junior mining com- pany announced its intention to sue, according to a Toronto lawyer with aboriginal expertise. Solid Gold Resources Corp. onfusion over the duty to consult with First Nations groups may leave the provincial gov- the Crown bears the ultimate responsibility for any duty to con- sult, the government is liable for the company' Solid Gold claims that since the suspension. It estimates the losses at more than $100 million. Ralph Cuervo-Lorens, a part- s losses as a result of plans to sue the province after it had to suspend exploratory drill- ing operations on Crown land considered traditional territory by the northern Ontario Wahgoshig First Nation. Ontario Superior Court Justice Jan. 3 decision Carole Brown's enjoined Solid Gold from drill- ing for 120 days after she found the company had failed to consult with the First Nation before start- ing its operations. ner with Blaney McMurtry LLP who regularly advises clients on aboriginal consultation, says the lawsuit has some foundation. In its 2004 decision in Haida Nation v. British Columbia (Minister of Forests), the Supreme Court of Canada said the Crown bears legal responsibility for consul- tation but that it may delegate procedural aspects of the duty to third parties. "If the duty belongs to the Crown, then there's a case for saying that they're responsible if things don't go well, Lorens. "The company can say these damages — and I have " says Cuervo- CANADIAN PATENT REPORTER EDITED BY MARCUS GALLIE, RIDOUT & MAYBEE LLP FOURTH SERIES (VOLUMES 1 TO 65): EDITED BY GLEN BLOOM, OSLER, HOSKIN & HARCOURT LLP FIRST, SECOND AND THIRD SERIES: EDITED BY GOWLING, STRATHY & HENDERSON FOUNDING EDITOR: GORDON F. HENDERSON, C.C., Q.C., LL.D. Let the experts help you to narrow your search and save you research time. Canadian Patent Reporter has been Canada's leading intellectual property law report since 1942. This renowned resource, available online and in print, includes precedent-setting intellectual property law judicial and board decisions from across Canada. This publication provides practitioners with the leading decisions on patent, industrial design, copyright and trade-mark law. Topical catchlines in bold print show the key issues involved in each decision. Expert case selection, editing and headnoting are a tradition with Canadian Patent Reporter. Weekly updates via email and in print, plus an annual cumulative index volume, ensure that this publication continues to be the prime reference source for intellectual property case law. INCLUDES eREPORTS (weekly electronic pdf version) Stay current as cases are issued with eReports emailed weekly to your desktop, with topically indexed case summaries linked to the full text judgments. ORDER # A26520 no doubt they have suffered significant damages — are the consequences of the lack of consultation and that the province should compensate them for that. That has merit, I think, and as far as I know hasn't been dealt with before by the courts." The problem in this case, he says, comes in the compa- ny' tion process. Solid Gold staked mining claims in the area as early as 2007. The province then warned it in 2009 that it should contact the Wahgoshig to consult. The province also offered to facilitate the process. But no consultation s attitude to the consulta- delegate and these are not." Richard King, a partner at Norton Rose Canada LLP, says many of his clients prefer to err on the side of caution when it comes to consultation with First Nations. He notes the issue is always among the most difficult they deal with on development projects. "It' but because it's so imprecise and undefined," he says. "It's s not just because it's new occurred before the company began drilling in the spring of 2011. Shortly after, members of the Wahgoshig discovered a drilling crew and attempted to initiate consultation themselves, according to Brown' In November 2011, the province again wrote to Solid Gold to insist that consultation occur. "Not only did Solid Gold, as s decision. 'If the duty belongs to the Crown, then there's a case for saying that they're responsible if things don't go well,' says Ralph Cuervo-Lorens. the Crown's duty to consult didn't duty, why does delegatee of the operational, on- the-ground aspects of the duty to consult regarding its mining exploration activities, fail to con- sult with WFN; the evidence indi- cates that it made a concerted, willful effort not least until after its flow-through share monies for 2011 had been exhausted, to consult, at so-called free-entry system under the Mining Act guaranteed its right to exploratory drilling with- out even engaging the duty to consult despite the province' Solid Gold claimed Ontario's " wrote Brown. that it had met the threshold. "In most cases when there' dispute about consultation and accommodation, it' s view s a company tried and the aborigi- nal group says it was not enough, which raises the question of what is sufficient consultation," says Cuervo-Lorens. "That is a hard one to answer. "But in this case, Solid Gold didn't even bother to do any. It's s because the hard logically for them to say that lack of consultation caused all these problems when they didn't even try. If they had given it even a little bit of a try, then I think they' be in a much better position." Neal Smitheman, the Fasken $423 price per volume Subscription price includes parts, bound volume and eReports Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. d Martineau DuMoulin LLP part- ner who represents Solid Gold, says the injunction decision effec- tively confers a duty to consult on junior exploration compa- nies, an outcome he says "flies in the face" of the case law. In Haida, the Supreme Court con- cluded its decision by stating that AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 extend to Weyerhaeuser Co. Ltd., the company involved in the case. "So if they Smitheman asks. "Delegation of procedural aspects of the Crown' duty to consult doesn't mean that the duty can be simply down- loaded to the company. comes into play, Smitheman sees the process as an exchange of information, overseen by the Crown, between an explora- tion company that explains its planned sites of operation and a First Nation that outlines its specific concerns. In the Solid Gold case, Where the duty to consult " Smitheman claims the company has attempted unsuccessfully to engage with the Wahgoshig. He says the First Nation had failed to provide evidence of sacred, burial or culturally sensitive sites. If the government agreed that studies are necessary to determine whether they exist as part of the consulta- tion and accommodation process, then the province, not the company, should pay for it, says Smitheman. "We find ourselves in this situ- s didn't have a Solid Gold?" covered by the Solid Gold dis- pute at the provincial legislature, says the government' of a letter of support or some formal agreement." John Vanthof, the NDP MPP who represents the area not like all the other approv- als and permits they've got lined up. You can't just check a box. The only way you truly know if the aboriginal group is satisfied with consultation is if they say so and agree in some way with you by way April 30, 2012 • lAw Times approach to the duty to consult has encouraged confusion over the extent to which the Crown can delegate it and increased the chances of disagreements. "It seems like they would rather s hands-off just back away, let the combatants fight among themselves, and hope it goes away rather than saying, 'Here are the rules.' They've never really looked at the big picture and said these are the guidelines that everyone must work within." According to Vanthof, the pro- vincial government should have taken a more proactive role when it became clear that Solid Gold was ignoring its requests to con- sult with the Wahgoshig. "If I got a letter from the minis- ation in the position of having to try to prove a negative. It seems like the ramifications of this might be that the junior explora- tion companies, who don't have funding available, have an obliga- tion to prove there are no signifi- cant sites," he says. "This case represents the reality that there's still confusion out there as to whose duty it is to consult, and what exactly the Crown can dele- gate, Miller Thomson LLP. "Delegation is happening across Canada, and there' where the court says these are appropriate procedural aspects to " says Sandra Gogal, a partner at s no case I'm familiar with try telling me to stop doing some- thing, I would stop. And If I didn't stop, I'm assuming there would be some type of consequence. They should have stepped in and stopped them from drilling. The problem cases like this cause is that over the broader picture, they slow development down and risk killing it completely because nobody can trust the system." According to Gogal, draft amendments to the Mining Act currently under public consulta- tion could help fill in some of the gaps between the free-entry system and the duty to consult. Proposed amendments would require permits for drilling in cer- tain cases and force companies to file plans with aboriginal groups as well as the government before the start of any work. "It' more clarity around the roles of the Crown and the proponent, which is really needed, s going to help in bringing " she says. LT CANADA LAW BOOK® www.lawtimesnews.com

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