Coldwater Indian Band: Absent Exceptional Circumstances, Courts Should Not Interfere with Ongoing Administrative Proceedings

Coldwater Indian Band et al v The Minister of Indian Affairs and Northern Development et al was heard and decided on November 25, 2014.1 The Federal Court of Appeal overturned the Federal Court’s decision to allow, in part, a judicial review application brought by the Coldwater Indian Band (“Coldwater”) and grant certain declaratory relief.

Coldwater’s application arose from a request by Kinder Morgan Canada Inc. (“Kinder Morgan”) to the Minister of Indian Affairs and Northern Development to retroactively consent to the assignment of two easements for oil pipelines. The easements, located on one of Coldwater’s reserves, were granted in 1950s in favour of Trans Mountain Oil Pipeline Company and required the consent of the Minister in order to be assigned.

With the decision still before the Minister, Coldwater filed a judicial review application requesting, inter alia, an order prohibiting the Minister from giving his consent to the assignment of the easements as well as a declaration that the Minister was legally bound to follow Coldwater’s directions in respect of whether or not to grant consent.

In a decision dated November 7, 2013,2 the Federal Court judge found that the Minister did not have an absolute duty to follow the instructions of Coldwater and refuse to consent to the assignments. However, the Court also held that the Minister was required to re-examine whether Coldwater’s consent was required, particularly with respect to the second easement – which had remained unused since granted – in order to determine whether it was in Coldwater’s and the public’s interest to withhold consent. The judge also found that the Minister should consider whether the unused easement had expired for non-use, and “whether re-negotiation with Kinder Morgan for terms more favourable to Coldwater” was required.

Coldwater appealed, requesting a declaration that the Minister was required to follow Coldwater’s instructions and seeking an order prohibiting the Minister from providing the consent.

Kinder Morgan cross appealed, requesting that the judge’s decision be set aside and the application for judicial review dismissed. Kinder Morgan submitted that the application for judicial review was premature and that the judge exceeded his jurisdiction in ordering declaratory relief.

The Minister requested that the appeal be dismissed, but did not take a position on the cross appeal in written submissions. At the hearing, the representative for the Minister agreed that the application for judicial review was premature.

The Court of Appeal held that the judicial review application was premature and should be dismissed, as should Coldwater’s appeal. The Court found that there was “no basis for the Federal Court or this court to interfere with the administrative process which requires the Minister to decide whether he should consent to the two assignments sought by Kinder Morgan.”3 There were no “exceptional circumstances” justifying an intervention in the ongoing administrative process.4

Coldwater’s arguments as to why its application was justified had included the following: the Minister would be acting contrary to his fiduciary duty to First Nations and thus outside his jurisdiction; the Minister’s consent might “invigorate” the second easement agreement, which might otherwise have expired; and the consent might grant Kinder Morgan a legal interest in the reserve that could not afterwards be undone. Coldwater further argued that the Constitutional nature of the Minister’s fiduciary obligations made the intervention of the Federal Court appropriate.

The Court of Appeal found that Coldwater’s arguments did not amount to “exceptional circumstances” allowing a court to interfere with an administrative process prior to the exhaustion of remedial recourses available by way of the administrative process itself. Citing its decision in Canada (Border Services Agency) v C.B. Powell Ltd.,5 the Court noted that the threshold for “exceptional circumstances” justifying interference was high, and that very few circumstances would be found to be exceptional:

Courts across Canada have enforced the general principle of non-interference with ongoing administrative processes vigorously. This is shown by the narrowness of the “exceptional circumstances” exception […] Exceptional circumstances are best illustrated by the very few modern cases where courts have granted prohibition or injunction against administrative decision-makers before or during their proceedings. Concerns about procedural fairness or bias, the presence of an important legal or constitutional issue, or the fact that all parties have consented to early recourse to the courts are not exceptional circumstances allowing parties to bypass an administrative process, as long as that process allows the issues to be raised and an effective remedy to be granted […]6 (emphasis as added by the Court of Appeal in Coldwater)

The Court did not see any irreparable harm or prejudice in having the Minister decide as to whether or not to grant the consents, further noting that it was satisfied that the Minister could in fact grant the remedy requested by Coldwater (i.e., that consent to assignment be refused).

Again citing C.B. Powell, the Court explained the rationale for limiting early recourse to the judicial system:

This prevents fragmentation of the administrative process and piecemeal court proceedings, eliminates the large costs and delays associated with premature forays to court and avoids the waste associated with hearing an interlocutory judicial review when the applicant for judicial review may succeed at the end of the administrative process anyway….7

The Court observed that Coldwater’s judicial review application had indeed resulted in the delay of the Minister’s decision as well as, the Court presumed, significant costs to the parties. The Court added that there was a “real likelihood” that regardless of the decision arrived at by Minister, a judicial review application to quash the decision would be brought.8

Overall, the Court’s decision is a clear pronouncement in support of the principle that an applicant seeking a court’s intervention in an administrative proceeding must show exceptional or special circumstances that cannot await the conclusion of the tribunal’s proceeding.9 As long as an administrative process allows an applicant’s concerns to be raised and an effective remedy to be granted, a court will be reluctant to exercise its discretion to intervene. Coldwater was not successful in arguing that allowing the Minister to render a decision could result in consequences that could not afterwards be undone and thus that early judicial intervention was required. Moreover, the Court’s finding that the Minister could grant the very remedy sought by Coldwater demonstrated that an effective remedy was possible without judicial involvement. The Coldwater decision thus serves as a reminder that absent exceptional circumstances, courts are unlikely to interfere with an ongoing administrative process.

* Héloïse Apestéguy-Reux is an associate in McCarthy Tétrault’s Business Law Group in Toronto. She practices primarily in McCarthy Tétrault’s Energy Group, with a focus on both regulatory and corporate-commercial matters.

  1. Coldwater Indian Band v Canada (Indian Affairs and Northern Development), 2014 FCA 277 [Coldwater].
  2. Coldwater First Nation v Canada (Indian Affairs and Northern Development), 2013 FC 1138.
  3. Coldwater, supra note 1 at para 8.
  4. Ibid at para12.
  5. Canada (Border Services Agency) v CB Powell Limited, 2010 FCA 61, [2011] 2 FCR 332.
  6. Coldwater, supra note 1 at para 9.
  7. Ibid at para 13.
  8. Ibid at para 14.
  9. See Sara Blake, Administrative Law in Canada, 5th ed (Canada: LexisNexis, 2011), at 239.

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