Canada: Trends To Watch In Tort Liability For 2022: BC Supreme Court Confirms Private Entities Can Rely On Statutory Authority As A Shield To Tort Claims Brought By Aboriginal Rights Holders

The BC Supreme Court recently confirmed that third-party proponents can be held liable for torts affecting a First Nations' established or claimed Aboriginal rights and title. However, the Court confirmed the defence of statutory authority can apply to relieve the third party from liability if the third party acts within the bounds of its statutory authorization.

The decision

In the lengthy decision in Thomas and Saik'uz v. Rio Tinto Alcan Inc., 2022 BCSC 15 (RTA), Justice Kent signals the courts are willing to consider whether a private entity can be held liable to an Indigenous nation for tort claims affecting Aboriginal rights and title if the private entity steps outside the bounds of its regulated authority. Regulation and Aboriginal rights and title are increasingly coming under the scrutiny of the BC courts – a trend likely to continue in 2022 and beyond.

Rio Tinto Alcan (Rio Tinto) was statutorily authorized in 1950 by the Province of British Columbia (BC) to construct and operate a dam to generate power for aluminum smelting. The dam constructed is the Kenney Dam (the Dam). As part of the Dam's construction, Rio Tinto was further authorized to create a reservoir and to divert water from the Nechako watershed, with the requirement to release water in accordance with a water allocation agreement entered into with BC in 1987.

The Saik'uz First Nation and Stellat'en First Nation (collectively, the First Nations) claimed in nuisance and for breach of riparian rights as against Rio Tinto for the diversion of water from the Nechako watershed, which affected Nechako white sturgeon, sockeye and chinook salmon fish stocks such that their Aboriginal right to fish for food and for use for social and ceremonial purposes found by Justice Kent was impaired. In response, Rio Tinto argued a breach of Aboriginal rights could only be claimed against the Crown and denied there was a nuisance or a breach of riparian rights. In the alternative, Rio Tinto argued if there was a nuisance committed, it was statutorily authorized to do so and could not be held responsible for the effects of constructing and operating the Dam on the Nechako watershed.

Justice Kent held the reduction in flow and diversion of water resulting from the Dam contributed to the decline of all three fish species such that it had a substantial impact on the First Nations' Aboriginal right to fish. He found Rio Tinto to be liable to the First Nations for the tort of private nuisance unless they could argue they were statutorily authorized to commit the nuisance.

Rio Tinto successfully argued such statutory authorization was constitutionally valid and permitted it to commit the nuisance and was not responsible for BC authorizing the construction and operation of the Dam despite knowing it would affect fish population in the Nechako watershed. In relation to the statutory authorization, the Court in RTA  considered whether Rio Tinto had acted outside of what it was authorized to do. The Court found Rio Tinto had strictly complied with all regulatory requirements imposed upon it by BC and could not be held liable to the plaintiffs on this account.

Takeaways

The RTA decision is likely to set the stage in 2022 and beyond for other Indigenous nations to claim in tort against private entities operating on lands claimed as Aboriginal title lands, and in areas where Aboriginal rights are claimed or exercised. Although RTA  is likely to be appealed, the key takeaway for third-party private entities with operations in British Columbia is that there is scope for liability in tort for actions affecting Aboriginal rights and title. This is particularly so if the claiming Indigenous group can establish the private entity acted outside of what it is statutorily authorized to do. As such, strict compliance by private entities with regulatory frameworks is an important measure to mitigate the risk of an Indigenous nation being able to establish tort liability. Regulated work by private entities is increasingly coming under scrutiny by Indigenous nations and this trend is likely to continue in 2022 and beyond.

To read other articles in the Dentons' pick of Canadian Regulatory Trends to Watch in 2022 series,  click here.

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