Court File and Parties

Citation: Ogichidaakwe (Grand Chief) Diane Kelly v. Ontario Minister of Energy, 2013 ONSC 5089 Divisional Court File No.: 411/11 Date: 2013-08-16 Superior Court of Justice – Ontario Divisional Court

Re: Ogichidaakwe (Grand Chief) Diane Kelly on her own behalf, on behalf of all members of the Anishinaabe Nation in Treaty 3 and on behalf of Grand Council Treaty 3, Grand Council Treat 3, Chief Lorraine Cobiness, Chief Janice Henderson, Chief Kimberly Sandy-Kasprick, and Chief Earl Klyne, on their own behalf and on behalf of Grand Council Treaty #3, Chiefs in Assembly, Applicants And: Ontario Minister of Energy and Ontario Power Authority, Respondents

Before: Herman J.

Counsel: Scott A. Smith, Paul Seaman, for the Applicants Kisha Chatterjee, for the Ontario Minister of Energy Alexander Smith, for the Ontario Power Authority Geoff R. Hall, Brendan O. Brammall, for H20 Power Limited Partnership and Resolute FP Canada Inc.

Heard: June 25, 2013

Endorsement

[1] H20 Power Limited Partnership (“H20”) and Resolute FP Canada Inc. (“Resolute”) seek leave to intervene in this application for judicial review as added parties with full rights.

[2] The Ontario Minister of Energy (the “Minister”) and the Ontario Power Authority (the “OPA”) support H20 and Resolute’s position.

[3] The applicants (collectively referred to as the “Grand Council”) concede that H20 and Resolute may be adversely affected by the relief they are seeking. However, in their submission, if the Court decides to grant them intervener status, it should be limited to the issue of how they may be affected by the relief.

Background

[4] The Grand Council Treaty 3 is the traditional government of the Anishinaabe Nation in Treaty 3 territory and the political government of Anishinaabe communities in northwest Ontario and Manitoba included in Treaty 3.

[5] The individual applicants are the Grand Chief of Treaty 3 and the chiefs of various Treaty 3 communities. They bring this application on their own behalf and on behalf of the members of the Anishinaabe Nation.

[6] Treaty 3 is the treaty made on or about October 3, 1873 between Her Majesty the Queen in Right of Canada and the Anishinaabe Nation.

[7] H20 is the owner and operator of eight hydroelectric generating stations connected to the Ontario power grid located in northern Ontario. Five of these generating stations are located in a territory that the Grand Council claims is their traditional territory.

[8] In May 2009, the Minister issued a directive to the OPA to negotiate agreements with operators of hydroelectric facilities that were connected to Ontario’s power grid but were not owned by Ontario Power Generation. The program was called the Hydroelectric Contract Initiative (the “HCI”).

[9] The OPA and ACH entered into a contract, effective December 1, 2009, pursuant to the HCI, whereby the OPA would pay a contracted price for electricity generated by ACH Limited Partnership (“ACH”).

[10] Until May 27, 2011, H20 was known as ACH and was 75% owned by AbiBow Canada Inc., now known as Resolute.

[11] On May 27, 2011, Resolute and the 25% interest-holder in ACH sold ACH to H20 LP Partners Inc., Infra H20 GP Partners Inc. and BluEarth Renewables Inc. The value of the sale transaction was approximately $640 million.

The application for judicial review

[12] By application dated September 1, 2011, the Grand Council initiated its application for judicial review of the failure of Her Majesty the Queen in right of the Province of Ontario, as represented by the Minister and the OPA, to consult with and accommodate the Anishinaabe Nation in Treaty 3 in respect of the following matters:

(i) the direction of the Minister to the OPA to develop and implement the HCI;

(ii) the OPA’s development and implementation of the HCI;

(iii) the OPA’s decision to enter into an HCI contract with ACH for existing hydroelectric facilities; and

(iv) the OPA’s decision to provide written consent to a change in control of ACH under ACH’s HCI contract.

[13] The Grand Council asserts that the Crown had a duty to consult and accommodate because the Crown’s conduct has the potential to adversely impact the rights they hold under Treaty 3. In this case, what is at issue is the right to make a living by harvesting resources as their ancestors did prior to the making of Treaty 3, by hunting, trapping, fishing for lake sturgeon and harvesting wild rice in their traditional territory.

[14] The relief sought by the Grand Council includes the following:

(i) a declaration that the Minister and the OPA breached their duties to consult and accommodate the Anishnaabe Nation;

(ii) an order quashing the OPA’s decision to enter into the HCI contract with ACH or, in the alternative, an order prohibiting the respondents from making any decisions or engaging in any conduct under ACH’s HCI contract until the required consultation and accommodation has occurred;

(iii) an order quashing the OPA’s decision to provide written consent to a change in control of ACH under ACH’s HCI contract or, in the alternative, an order suspending the OPA’s decision to provide written consent to a change in control of ACH until the required Crown consultation and accommodation has occurred;

(iv) a declaration that the Minister and the OPA have a continuing duty to consult and accommodate, including a duty to consult with respect to the terms and conditions that should be incorporated into the HCI program, ACH’s HCI contract, and the OPA’s written consent to a change in control of ACH to ensure that the Aboriginal and treaty harvesting rights are reasonably accommodated.

General principles

[15] Rule 13.01(1) and (2) (Rules of Civil Procedure, R.R.O. 1190, Reg. 194) provides for a motion for leave to intervene:

13 (1) A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,

(a) an interest in the subject matter of the proceeding;

(b) that the person may be adversely affected by a judgment in the proceeding; or

(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.

(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.

[16] A person only needs to satisfy one of the criteria in order to be able to move for leave to intervene pursuant to Rule 13(1) (Beardon v. Lee, [2005] O.J. No. 1834 (S.C.J.); at para. 31, Finlayson v. GMAC, 2007 4317 (ON SC), [2007] O.J. No. 597 (S.C.J.)).

[17] If at least one of the criteria is met, the judge must then consider whether to exercise his or her discretion to grant the motion for leave to intervene and, if leave is granted, the terms of that intervention.

[18] Rule 13.01(1) directs the court to consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties.

[19] In Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada Ltd., 1990 6886 (ON CA), 74 O.R. (2d) 164 (C.A.) at para. 10, Dubin, C.J.O. set out the following considerations: “the nature of the case, the issues which arise and the likelihood of the applicant being able to make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties”.

[20] If the proposed intervener has a contribution to make, the court must consider whether that intervention is sufficient to counterbalance the added “magnitude, timing, complexity and costs” (M. v. H. (1994), 1994 7324 (ON SC), 20 O.R. (3d) 70 (Ont. Gen. Div.) at para. 37).

[21] Grand Council points to authority for the proposition that Rule 13.01 should be interpreted narrowly: M. v. H., paras. 30-33; Tanudjaja v. Canada (Attorney General), 2013 ONSC 1878 (S.C.J.), at para. 10. Both of these cases involved public interest litigation, in which the proposed interveners were public interest organizations. Thus, the nature of their interests and the type of contributions they could make to the proceedings were very different from the nature of the interests and potential contribution of H20 and Resolute. Further, in Tanudjaja, the motions to intervene were brought pursuant to Rule 13.02, which deals with intervention “as a friend of the court”.

[22] In deciding whether to grant H20 and Resolute leave to intervene, and in determining what limits, if any, should be placed on their intervention, the following questions need to be considered:

(i) Do H20 and Resolute satisfy at least one of the criteria in Rule 13(1)?

(ii) What is the nature of the case and the issues that arise?

(iii) What useful contribution would H20 and Resolute make to the proceeding?

(iv) Would their involvement either prejudice or delay the determination of the rights of the parties to the proceeding?

(v) What terms or conditions might be imposed to lessen any prejudice or delay?

Application to this case

Do H20 and Resolute satisfy at least one of the criteria in Rule 13(1)?

[23] The Grand Council is seeking an order to quash the OPA’s decision to enter into the contract with ACH and an order to quash the OPA’s decision to consent to the change of control of ACH, which was a condition precedent to the sale of ACH.

[24] H20 and Resolute therefore satisfy at least one of the criteria in the Rule, that is, “the person may be adversely affected by a judgment in the proceeding” (Rule 13(1)(b)). An order quashing the OPA’s decision to enter into the contract could have a significant negative impact on H20’s revenues. Resolute also has an interest because consent to the change of control was one of the conditions precedent to the closing of the sale of ACH. The relief sought could, if granted, undo the sale.

[25] H20 and Resolute also have “an interest in the subject matter of the proceeding” (Rule 13(1)(a)), in so far as the contract with ACH (now H20) and the consent to the change of control of ACH are both being challenged.

[26] The Grand Council concedes that H20 and Resolute may be adversely affected by some of the relief it is seeking in its application for judicial review, even though it is not seeking any relief directly from H20 and Resolute. Grand Council’s primary argument is that H20 and Resolute’s interest is limited to the issue of relief, and its participation should be limited accordingly.

What is the nature of the case and the issues that arise?

[27] The Grand Council alleges that the Crown failed in its duty to accommodate and consult with the Anishinaabe Nation.

[28] The duty to consult arises when “the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it.” (Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511 at para. 35)

[29] The duty to consult is the Crown’s duty. Third parties do not have a duty to consult or accommodate and they cannot be held liable for failing to discharge the Crown’s duty to consult and accommodate. (see Haida Nation, paras. 53, 56)

[30] The Crown may, however, delegate procedural aspects of consultation. There is no suggestion here that the Crown has delegated any of the procedural aspects to H20 or Resolute. H20 and Resolute, therefore, cannot be held liable for failing to discharge the Crown’s duty to consult.

[31] There are two overriding questions to be answered in order to determine whether the Crown had a duty to consult and accommodate:

(i) Did the Crown have real or constructive knowledge of the rights that the Anishinaabe Nation holds pursuant to Treaty 3?; and

(ii) Might the Ministerial directive and subsequent related Crown conduct adversely impact those rights?

[32] The Grand Council would answer both of these questions in the affirmative. In particular, it asserts that the Crown had a duty to consult and accommodate because its conduct has the potential to adversely impact the rights they hold under Treaty 3, that is, their right to make a living by harvesting resources as their ancestors did prior to the making of Treaty 3 by hunting, trapping, fishing for lake sturgeon and harvesting wild rice in their traditional territory.

[33] The conduct in question is: (i) the direction of the Minister to the OPA to develop and implement the HCI; (ii) the OPA’s development and implementation of the HCI; (iii) the OPA’s decision to enter into the contract with ACH; and (iv) the OPA’s decision to provide written consent to a change of control of ACH.

[34] The Grand Council claims that the OPA’s decision to execute a contract with ACH has the potential to cause new adverse impacts on Aboriginal and treaty rights in three ways: (i) it provided financial incentives to ACH to change the timing and amount of water stored or released for electricity generation purposes at the dams; (ii) the likelihood of the generating stations continuing to operate was substantially increased by the contract; and (iii) the Minister and the OPA could have required the generating stations to be operated in a way that reduces impacts on Aboriginal and treaty harvesting rights.

[35] If the court concludes that the Crown had a duty to consult and accommodate, that is not the end of the matter. As Binnie J. noted in Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388 at para. 34, the establishment of the duty to consult is subject to a low threshold. The flexibility lies not with whether the duty is triggered, but with what the content of the duty is. There is a variety of possible remedies available to the court, once it has found that the duty has been triggered.

What useful contribution would H20 and Resolute make to the proceeding?

[36] Simply repeating the issues, evidence and argument put forward by the main parties to the application is not a “useful contribution”. Rather, the moving party should show that it has something to add or contribute to the resolution of the issues

[37] Furthermore, the ability to provide useful evidence is not, in itself, a sufficient justification since that evidence could be made available to one of the parties (Halpern v. Toronto (City) 2000 29029 (ON SCDC), 139 O.A.C. 300 (Div. Ct.) at paras. 18-19, 26).

[38] Given the impact on H20 and Resolute of the relief sought, it is my opinion that H20 and Resolute have a useful contribution to and interest in what relief the court grants, which are fundamentally different than the contributions and interests of the Minister and the OPA.

[39] The Grand Council’s position is that the issue of relief is the only contribution H20 and Resolute can or should make. The Grand Council proposes that the hearing be bifurcated, with the issue of the appropriate relief to be adjourned to allow appropriate consultation to occur. However, it will be up to the court hearing the application for judicial review to decide whether to adjourn the relief portion of the application.

[40] H20 and Resolute submit that they have a distinct contribution they can make that goes beyond the issue of relief. Furthermore, they contend that the issue of relief is intertwined with the issue of whether there was a duty to consult and the scope of that duty.

[41] In particular, H20 and Resolute submit that they have a useful contribution to make to the issue of whether the conduct in question might adversely impact Aboriginal and treaty rights, in view of their knowledge, experience and expertise in the operation of the generating stations. The operation of the generating stations is at the core of the Grand Council’s claim that there may be an adverse impact that triggers the Crown’s duty to consult.

[42] The Grand Council says that the OPA and the Minister have the necessary evidence to enable them to respond to the application and that H20 and Resolute have nothing useful to add. The Minister and the OPA, on the other hand, maintain that they require evidence from H20 and Resolute with respect to the operation of the generating stations.

[43] However, the fact that H20 and Resolute might have useful evidence is not, in itself, a justification since that evidence could presumably be provided to one of the parties.

[44] The question, then, is whether H20 and Resolute have a contribution to make that is distinct from the contribution of the Minister and the OPA and that goes beyond the provision of evidence.

[45] In my opinion, they do. Although the Grand Council’s application challenges Crown conduct, it is the impact of that conduct on the operation of the generating stations that is fundamental to the determination of whether the Crown had a duty to consult. H20 and Resolute have unique perspectives to provide to the court to assist it in making this determination, which are different in kind from the perspectives of the Minister and the OPA.

[46] Furthermore, regardless of whether the issue of relief is adjourned, the determination of relief is linked to the court’s findings and to its basis for determining that there was a duty to consult, in the event it makes such a determination. H20 and Resolute’s interest in and contribution to the issue of relief cannot be easily disentangled from their interest in and contribution to the court’s determination of whether there was a duty to consult in the circumstances.

Would H20 and Resolute’s involvement either prejudice or delay the determination of the rights of the parties to the proceeding?

[47] Grand Council submits that unrestricted participation by H20 and Resolute will cause further delays, extend and complicate the proceedings with little to no corresponding benefit and cause the Grand Council to incur additional costs in expert and legal fees.

[48] H20 and Resolute have largely addressed the concern for delay by agreeing to abide by the same timetable as has been agreed to by the parties.

[49] However, there is no doubt that the participation of H20 and Resolute has the potential to increase the Grand Council’s costs, in so far as H20 and Resolute will provide further evidence, another factum and further submissions to which the Grand Council will need to respond. Their participation also increases the Grand Council’s exposure to a costs order.

What terms or conditions might be imposed to lessen any prejudice or delay?

The Grand Council submits that, if leave to intervene is granted, the court should impose the following conditions:

(i) H20 and Resolute must be collectively represented by the same lawyers;

(ii) H20 and/or Resolute agree to, and will be bound by, the timetable consented to by the Grand Council, the Minister and the OPA;

(iii) H20 and/or Resolute may only raise the issue of how they may be adversely impacted by the relief that the Grand Council is seeking, and for further certainty, they may not include perspectives and arguments advanced by the Minister and the OPA;

(iv) H20 and Resolute may file one common affidavit and one common factum;

(v) H20 and Resolute may make up to one hour of oral argument in the judicial review hearing;

(vi) H20 and Resolute shall not seek costs against the Grand Council but the Grand Council may seek costs against them;

(vii) In the alternative, H20 shall not be able to seek costs and will not be liable for costs; and

(viii) H20 shall pay additional costs by any other party as a result of H20 and/or Resolute’s intervention.

[50] H20 and Resolute agree to abide by the timetable previously agreed to by the parties. They also agree to be represented by one counsel and to provide one factum. They propose that they should otherwise have full participation rights.

[51] Courts have set a variety of conditions on participation in order to reduce any added prejudice or delay, including: adherence to timetables; a limit to the number of affidavits; a limit in the scope of the evidence to be put forward; limits to oral and written argument both with respect to length and the issues to be addressed; collective representation by the same counsel; no costs to be sought; and no liability for costs (see, for example, Can West Media Works Inc. v. Canada (Attorney General), 2006 CarswellOnt 6809 (S.C.J.), Tanudjaja v. Canada (Attorney General), 2013 ONSC 1878 (S.C.J.)).

[52] H20 and Resolute’s agreement to abide by the same timetable goes some way towards addressing concerns with delay. However, it does not answer the legitimate concern of the Grand Council that their participation will increase costs, except in so far as H20 and Resolute have agreed to be represented by the same counsel and provide one factum.

[53] It is possible to lessen the potential increase in costs by limiting the number of affidavits, restricting H20 and Resolute’s contribution to areas in which they have particular knowledge, expertise or experience, and avoiding any duplication of evidence or arguments put forward by the Minister and the OPA.

[54] While the Grand Council’s concern about an increased exposure to costs is understandable, I am of the opinion that the court that hears the application for judicial review will be in the best position to make a determination of costs. In particular, the court will be in a position to determine whether H20 and Resolute’s participation or contribution has been duplicative of that of the Minister and the OPA.

Conclusion

[55] H20 and Resolute are therefore granted leave to intervene as added parties on the following terms:

(i) they will adhere to the timetables agreed to by the Grand Council, the Minister and the OPA;

(ii) they will be represented by the same counsel;

(iii) they will collectively limit their evidence to no more than two affidavits;

(iv) they will limit their cross-examination on any affidavits to matters that are within their particular knowledge, experience or expertise;

(v) they will provide one factum; and

(vi) their evidence, factum and oral argument will be limited to matters that are within their particular knowledge, experience or expertise, and will not duplicate the evidence, arguments or perspectives advanced by the Minister and the OPA.

[56] The parties are encouraged to resolve the costs of this motion. If they are unable to do so, H20 and Resolute may provide written submissions within 14 days. The other parties have 14 days within which to respond. The submissions will be no more than 3 pages in length, plus a costs outline.

Herman J.

Date: August 16, 2013