Moulton Contracting Ltd. v. British Columbia, 2015 BCCA 89

In this important appeal decision, the British Columbia Court of Appeal held that the province had no obligation to pass along information about Aboriginal dissatisfaction that may threaten the ability of a company to avail itself of rights under a license.1

The B.C. Ministry of Forests entered into two timber sale licence agreements with Moulton, permitting Moulton to harvest timber near Fort Nelson. Before entering into the licence agreements, the province had consulted with the Fort Nelson First Nation. When Moulton's logging was impeded by a blockade by a Fort Nelson First Nation trapper, Moulton brought a claim against the province and was awarded $1.75 million in damages. The trial judge held that it was an implied term of the licences that the province was not aware of any First Nations expressing dissatisfaction with the consultation, other than what the province had already disclosed to Moulton, and that the province had negligently breached an implied continuing representation.

The Court of Appeal reversed the award, finding that the province was not liable in breach of contract or negligent misrepresentation for its failure to warn about the threat of a blockade. The Court noted that a term can only be implied into a contract when it is necessary and is what the parties intended, not when it would merely be reasonable, and it rejected Moulton's argument that the principle of good faith from Bhasin v. Hyrnew, 2014 SCC 712 justified implying such a term. Similarly, the Court found that there was no support for imposing a positive duty on the province to inform Moulton of the blockade threat. Finally, the Court upheld a clause in the licences that operated to exempt the province from liability for the acts of third parties.

For more on this decision and it potential impacts, see McCarthy Tétrault LLP's Mining Prospects blog post entitled "Appeals Court Overturns Damages Award to Proponent for Aboriginal Blockade."

Footnotes

1. Moulton's application for leave to appeal to the Supreme Court of Canada has been dismissed: 2015 CanLII 67634.
2. Bhasin v. Hyrnew was discussed in Mining in the Courts, Vol. V.

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