Court dismisses Northern Superior claim on duty of care – by Jennifer Brown (Canadian Lawyer Magazine – June 6, 2016)

An Ontario Superior Court judge has dismissed a $110-million claim launched by a junior mining exploration company against the province of Ontario for breach of duty of care on the duty to consult, but the inherent question in the case will likely rise again, say experts.

In 2012, Sudbury-based Northern Superior Resources Inc. claimed it lost access to mining claims near Thunder Bay, Ont. Going back to 2002, it had conducted exploration activities in Northwestern Ontario, but in 2012, it abandoned efforts on its gold properties after disputes with the people of the Sachigo Lake First Nation.

NSR claimed the failure of its relationship with Sachigo Lake First Nation was the result of a breach of duty of care by the province and that it should be compensated accordingly. The company alleged the province breached its duty of good faith and implied statutory duty of care to properly discharge Ontario’s constitutional obligations to consult with affected first nations.

NSR claims Ontario failed to warn it of its unstable relationship with affected first nations and potential overlapping claims. NSR also alleged Ontario breached its duty of good faith, duty of fairness, and implied statutory duty of care under the Mining Act by creating the mineral exclusion zone. Ontario denied all allegations.

On May 25, Justice Thomas Lederer dismissed the action, saying in Northern Superior Resources Inc. v. Ontario: “To put it simply, Northern Superior cannot reasonably expect to be compensated by the Crown which was never directly involved in its relationship with Sachigo Lake First Nation and who it contacted only for the purpose of seeking compensation.”

“In this case, the Crown was unaware of any difficulties between Northern Superior and Sachigo Lake First Nation until July 5, 2012 and did not understand the relationship to be in peril until the letter of September 6, 2012. Until then, it had no idea that there was any concern that the activities of Northern Superior were seen as adversely affecting any Aboriginal title or rights. By then, Northern Superior was unprepared to do anything other than sue. The Crown had no knowledge of the problem until its efforts at redress were refused. Its efforts to consult and look for a resolution were summarily turned down by Northern Superior.”

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