In recent years, there has been significant media attention and court consideration of the Crown's duty to consult with First Nations in respect of, among other things, decisions relating to Crown land. In British Columbia, the consultation process often injects time, uncertainty and cost into private entities' dealings with the Province. However, the recent sale of the Willingdon lands in Burnaby illustrates another possibility: a consulted First Nation simply may take the opportunity for itself.
The Willingdon lands are a 40 acre parcel of Crown land on the corner of Willingdon Avenue and Canada Way in Burnaby. The Province concluded that the lands were surplus and the City of Burnaby, thinking the lands were suitable for an expansion of BCIT or Burnaby Hospital, commenced discussions with the Province about acquiring them. While some of the facts are in dispute, it appears the Province granted to the City an exclusive dealing period in connection with the Willingdon lands, but did not enter into a purchase contract with the City. The City commenced its due diligence and carried out studies and appraisals on the assumption that it would contract to purchase the lands in due course. The Province commenced consultation with the two affected First Nations, the Musqueam and Tsleil-Waututh First Nations, to discharge its obligations. The Province advised the City that it would be unable to accept an offer for the Willingdon lands until it completed its consultation process and then later, to the City's surprise, advised that it had sold the lands to the two First Nations. On March 27, 2014, the Province issued a press release advising of the sale (see http://www2.news.gov.bc.ca/news_releases_2013-2017/2014MTICS0004-000385.htm.)
There are many possible reasons why the Willingdon sale occurred in this manner. Evidently, the Province was focussed on completing a sale by the end of March for budgetary reasons, and perhaps the First Nations were better positioned to close within that time frame. Perhaps the First Nations were willing to pay more than the City. Perhaps a sale to the First Nations suited the current policy directives of the Province (the press release announcing the sale also announced the signing of a new protocol agreement intended to facilitate the sharing of economic benefits arising from the sale of Crown land occuring within these First Nations' territories). Whatever the reason, a key take away for private industry dealing with the Province on a potential Crown land purchase is to take steps to ensure a firm contractual arrangement is in place with the Province (preferrably with an exclusive dealing period extending beyond the end of the estimated consultation process) prior to the commencement of First Nations consultation. If that is not possible, it would be prudent to exercise care when expending funds in connection with the proposed purchase or seek an indemnity from the Province to cover due diligence costs in the event the purchase cannot proceed as a result of the outcome of the consultation process.
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