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Ratcliff lawyers succeed before Specific Claims Tribunal with finding that Canada breached its fiduciary duty to the Huu-ay-aht First Nations

July 15, 2014

Ratcliff lawyers John Rich, Kate Blomfield and Emma Hume succeed in securing the Specific Claim Tribunal’s first compensation decision, successfully arguing that Canada breached its fiduciary duty to the Huu-ay-aht First Nations (“HFN”) multiple times and the HFN must be compensated.

Breaches of Fiduciary Duty

The Tribunal found that Canada breached its fiduciary duty to the HFN in 1948 when the HFN raised concerns and asked that an illegal timber licence be cancelled, particularly given Canada failed to investigate the HFN’s concerns or give them any serious consideration. The Tribunal also found that “Canada committed numerous breaches of its fiduciary duty to the HFN”, including by agreeing to the long-term renewable Licence, by selling the timber on terms that were outside of the HFN’s surrender, repeatedly failing to consult with the HFN, and failing to protect the HFN’s interests by cancelling the unlawful Licence.

Damages and Compensation

The Tribunal held that as a result of Canada’s breaches, the HFN suffered damages including loss of timber revenues and reduction in the value of the timber on IR1. Canada must compensate the HFN for these damages.

With respect to lost timber revenues, the sharp increase in timber prices between 1942 (when the rights to the IR1 timber were sold) and 1948 (when the HFN requested that the unlawful deal be cancelled and a new one entered), meant that the HFN ought to have obtained significantly more for the IR1 timber than was actually received. The Tribunal awarded close to $280,000 in 1948 dollars to the HFN for lost revenue, less the amount actually received by the HFN. This amount must be brought forward to current value through negotiations or a subsequent hearing.

The Tribunal further concluded that Canada’s failure to cancel the Licence in 1948, and the prolonged logging by BSW that followed, significantly reduced the value of the timber on IR1 because regeneration of the timber was delayed and uneven. The Tribunal ordered that Canada pay the HFN just over $1.5 million in 2012 dollars for the reduction in the IR1 timber’s value.

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