Chapter 11

The Malouf judgment

Initially, the Cree and Inuit applied to the Superior Court of Quebec for an interlocutory injunction to stop the James Bay project. In the case of Chief Robert Kanatewat et al. v La Société de développement de la Baie James et al. et La Commission hydro-électrique de Québec [1974] RP 381 the application was heard by Judge Albert Malouf. In his 200-page judgment he considered 10,000 pages of transcribed evidence from 167 witnesses, with 312 exhibits produced before the court. In addition, we have two detailed lay accounts from Boyce Richardson2 and Roy MacGregor,3 who were both in court for the proceedings.

At the outset, Judge Malouf stated clearly the scope of his powers to grant the injunction, explaining that the applicants were seeking an interlocutory injunction, an order to the respondent corporations to cease the preliminary works on the James Bay project until the rights of the Cree and Inuit could be considered in a full court hearing. Such an injunction is granted when a judge decides that it is necessary to preserve the status quo in a case where continuation on the part of the respondents would prejudice the position of the applicants. The judge explained that an interlocutory injunction was granted on different criteria from those applicable to an application for a final injunction. All Judge Malouf had to consider was whether the construction project would have a sufficiently serious effect on the rights of the Cree and Inuit to the extent that it must be stayed in order to preserve those rights until the court could make a final decision on their validity. The granting of an interlocutory injunction did not establish rights. It proceeded on the basis that the plaintiff presented a good arguable case that such rights existed. The injunction simply preserved those potential rights intact. On this basis, the court could only consider the effects of the construction works currently undertaken, not the effects of the James Bay project in its entirety.

Judge Malouf described the land affected, lying between the Ontario border in the west, the 49th parallel in the south, the Gulf of St Lawrence in the east and the 55th parallel in the north, comprising 133,000 square miles, a fifth of the entire area of Quebec – an area twice the size of England and 60 per cent of the size of France.

The judge accepted evidence that the major part of Quebec lies in the sub-Arctic, characterised by a hard climate, subject to large fluctuations in temperature during winter and summer. In that region there are fewer species of animals. The number and types of vegetation are limited and their regeneration is usually slow. The Rupert, Great Whale, La Grande and Eastmain Rivers all had rapids which were very important for fish stocks. Other rivers in the territory would also be affected, including the Caniapiscau which flowed 200–250 miles through narrow gorges. Around the La Grande River, there were a great number of lakes, including Lake Caniapiscau (where families from Matimekush Lac John had hunted for generations).

Judge Malouf said that, at full capacity, the James Bay project would produce three times the power of the Upper Churchill Falls in Labrador, then the largest hydro project on the American continent. This was another part of Nitassinan, the Innu homeland, taken for hydro development without the consent of the indigenous people.4 In total, the project envisaged the construction of four plants, four dams, 18 diversions and control structures and 80 miles of dykes. By the end of 1975, the project would become irreversible.

The judge assessed the total population of Cree and Inuit affected by the project at 9,302. Since they were the only peoples who were parties to the case, populations of other indigenous groups who used the James Bay lands were not included. He accepted the evidence of anthropologists Ignatius Larusic and Harvey Feit that the Cree had occupied their territory at least since the 17th century (the time of initial contact with Europeans) and that they had lived on that land continuously since that date.

Judge Malouf dismissed the idea proposed by the respondent governments that the Cree were a warlike people, an assertion frequently made (and accepted by the judge at first instance in Delgamuukw v British Columbia 20 years later) in order to justify the right of settlers to take the land for themselves. On the contrary, he found that relations between white people and Indians had always been very good and very friendly.

The judge admitted the 14 treaties adduced by the applicants as aids to the court in its determination of the nature and extent of the land rights of the Cree and Inuit, especially in relation to their dealings with the Crown. The Court also considered the Loi de l’Extension des Frontières de Québec passed on 1 April 1912 (the ‘Law of 1912’). This extended the limits of the province of Quebec to incorporate Rupert’s Land; land which before Confederation was ceded to the Hudson’s Bay Company (HBC). The Law of 1912 contained the following clause, which informed his conclusion that the 14 treaties presupposed that the indigenous peoples of Canada had rights which they could negotiate away:

2c. The Province of Quebec shall recognise the rights of the native peoples in the territory … in the same way and shall ensure the delivery of these rights in the same manner that the government of Canada has heretofore recognised them and delivered them up.

Judge Malouf interpreted the words ‘government of Canada’ to include the James Bay Development Corporation and its associates because they were owned and controlled by the province of Quebec.

The second issue raised by section 2c was the nature and extent of the territorial rights of the Cree and Inuit who asserted a real (freehold) property right, a right which included the rights of usufruct and possession.5 The section recognised that the Cree and Inuit could cede the land to no one but the Crown, and so the plaintiffs claimed that the province of Quebec could not develop the land without having obtained the cession of the native rights which affected it.

Noting Lord Haldane’s dictum in the ruling In Re Southern Rhodesia v Commissioner for Native Affairs 6 that ‘there are indigenous peoples whose legal conceptions, though differently developed, are hardly less precise than our own. When once they have been studied and understood, they are no less enforceable than rights arising under English law’, Judge Malouf went on to consider the Law of 1912 and the obligations it conferred on the province of Quebec. He reviewed the position of the Canadian government vis-à-vis the lands to be ceded and observed that a 1910 Order-in-Council revealed the federal government’s intention that the Quebec government would enter into a treaty with the native peoples for the cession of their lands. The Quebec government had argued that a treaty was not necessary. However, in a further Order-in-Council the Canadian government reiterated that terms should be offered to the native peoples ‘for a relinquishment of their rights and title to the territory’. From this, the judge concluded that the legislation showed clearly and precisely that the province of Quebec had consented to recognise the rights of the native inhabitants of the land. Judge Malouf now had to determine what these rights were and in what manner the Canadian government had obtained their release.

The judge noted that, when Charles II of England made the grant of exploitation of the land to the Governor and Company of Adventurers of England, which became the HBC, the native peoples were already occupying most, if not all, of the territory. Both English and French authorities were concerned to recognise native rights at this time. They recognised the right to hunt and fish in all the unoccupied territories. As beneficiaries of indigenous trapping, they had no desire to disturb this right except in places where the land was needed for white settlers and, in these cases, they entered into treaties under which the Indians ceded all or part of their land rights.

Judge Malouf referred to the case of Calder v Attorney General for British Columbia in which, earlier that year, Judge Hall had reviewed the nature and extent of native title in detail, and he summarised the points which were relevant to the case now before him. He noted that, as early as the 17th century, the Crown had ordered its governors not to upset or disturb the Indians in the possession of their lands. In particular, he referred to the instructions given to Governor Murray of Quebec: ‘And you are upon no account to molest or disturb them in the possession of such parts of the said province as they at present occupy or possess …’

He further noted that immediately after Confederation the British imperial government took steps to terminate the jurisdiction of the HBC over the territory ceded to it by Charles II. This was acknowledged as part of the Confederation by the British North America Act, 1867. Set down in an Order-in-Council, the terms and conditions of this transfer included a provision to the effect that the Crown and the Canadian government would assume responsibility for any indemnity which might be paid to the Indians for the use of their land. Attached to the same Order-in-Council was a schedule containing the Address to the Queen of the Senate and Chamber of Commons of Canada which included the following request: ‘And further that before the transfer of the lands in question [including Prince Rupert’s Land] to the Government of Canada, the claims of the Indian tribes for lands required for the purpose of colonisation, shall be considered and regulated in conformity with the principles of equity which have uniformly guided the English Crown in its relations with the aboriginal peoples.’

Judge Malouf then began a review of the past Indian treaties. In all the 14 treaties adduced as evidence before him, the Indians had agreed to cede, release and surrender to the Crown all the land included in the territory described in the treaty. In most of the treaties the Crown recognised the right of the Indians to continue to hunt, trap and fish over the ceded territory. The judge held that, although it was not necessary to define exactly the nature of the Cree and Inuit title to the land for a decision on whether to grant the injunction, the judgments he had examined nevertheless demonstrated that they had enjoyed possession and occupation of the land together with personal and usufructuary rights.

Further, taking into consideration the obligations assumed by the province of Quebec under the terms of the Law of 1912, together with the fact that all other lands ceded to the Crown had been secured by a treaty, the only way in which Quebec could develop or otherwise open up the lands to colonisation was with the prior consent of the Cree and Inuit. It was irrelevant that, because the land had formerly been ceded to the HBC, it was not within the scope of the Royal Proclamation. This was, first, because the government of Canada had treated all Indians as having an interest in their lands and, second, because of the obligations imposed by the Law of 1912. The judge also decided that the land rights of the Cree and Inuit had never been extinguished, as evidenced by the Order-in-Council of 1907 which expressly reported this.

The Cree gave evidence that:

• they, their fathers and grandfathers trapped, hunted and fished in the greater part of Northern Quebec;

• the diet of Indian and Inuit populations consisted above all of food which they hunted, fished and trapped, known as ‘country food’. The proportion of country food consumed as opposed to shop-bought food was 90 per cent;

• the Cree and Inuit ate all the land animals and fish that they caught, including caribou, moose, bear, marten, beaver, rabbit, fox, squirrel, snow partridge, lynx, diver and otter. From the sea they took whale and seal in small quantities and a great variety of fish including trout, salmon, whitefish, arctic char, vairon, pike and sturgeon. They also hunted a large variety of birds, most importantly geese;

• several heads of family were full-time hunters and trappers, some were part-time. Most, if not all, of the rest hunted and trapped near the reserve on a part-time basis. They had used 75 per cent of their territory within the last five years;

• they fished in many of the lakes and rivers. A particular mention was made of the fishing near the first rapids on the La Grande River and between the first and second rapids, places where great quantities of fish were caught;

• the rivers were used as water routes which permitted them to go to their traplines and elsewhere with ease during the summer and winter;

• several among them had salaried employment;

• several of their deceased relatives had been buried along the rivers near to lakes and to their traplines;

• their religion was centred on the hunting of animals, and the killing of each animal has a religious significance for them; and

• they were happy with their way of life and strongly opposed to the hydro-electric project.

The respondent corporations challenged this evidence, pointing out the indigenous reliance on salaried employment, social security benefits and food bought from the store. One witness, Thérèse Pageau, went so far as to claim that in 1972–1973 each family in Fort George received C$10,167 – but this included the cost of all services and infrastructure together with the provision of roads and old-age pensions. This method of calculation was rejected by the judge, who said that to include the costs of provision of such services in the income of the individual defied logic. It was wrong to apply such a calculation to the Cree and Inuit when it was never applied in the calculation of the incomes of any other individual. Several Cree and Inuit attested that they had never received an income of C$10,000 in all their lives. The judge then also pointed out that, just because the Cree and Inuit bought provisions from the store, this did not mean that they were not dependent on hunting. This led the judge to conclude that:

• the Cree and Inuit who occupied the territory and the adjacent lands had hunted, trapped and fished there since time immemorial;

• they had exercised these rights on a large part of the territory and on the adjacent lands, including setting their traplines, and fishing in the lakes, rivers and streams;

• these occupations were still of great importance for them and constituted a way of life for a great number of them;

• their diet was dependent, at least in part, on the animals which they hunt and trap and on the fish which they catch;

• the sale of the animals for fur represented a source of revenue for them; and the animals which they trap and hunt and the fish which they catch represent, if measured in dollars, a form of additional revenue;

• the skins of certain animals were used for clothing;

• they had a unique concept of the earth. They made use of all its fruits and products including all the animal life there and any interference would compromise their existence as a people; and

• they wished to continue in their way of life.

After reviewing in detail the evidence of biologists, ecologists, geographers and engineers from both sides, the judge concluded that the Cree and Inuit were justified in fearing that their rights were in danger of being prejudiced. Danger to flora and fauna was already occurring. Much greater damage would be caused by the works currently being undertaken.

The judge concluded that the evidence showed that these works would have an adverse effect on the birds, fish and animals, and on aquatic life in general. The number of animals would be significantly reduced. The native people would no longer be able to hunt, trap or fish in the affected territories. The ecological balance which existed in the territory would be seriously compromised. The entire ecosystem, which had taken 8,000 years to develop, would be destroyed. It would take at least 30 to 50 years for a new wetland habitat to re-establish.

One argument put forward by the development corporations was that they enjoyed Crown immunity as agents of the Crown, but the judge held that immunity does not protect an agent of the Crown which exceeds its authority. Reviewing the terms of Bill-50, which created the James Bay Development Corporation and defined its powers, he concluded that the James Bay Energy Corporation, as a subsidiary company, was not protected. He found that the corporations were only authorised to operate in the territory defined in Bill-50. Since some of the works were being carried out in basins outside the defined territory, the corporations were acting outside the scope of their powers and thus did not enjoy Crown immunity. Similarly, Hydro-Québec had exceeded its powers and could not take advantage of a privative clause7 in the Hydro-Québec Act, which exempted it from proceedings by way of injunction.

Judge Malouf also found that the Cree and Inuit had brought proceedings within a reasonable time and that there was no delay which would preclude the granting of the injunction.

Having previously discussed the damage which would occur to the flora and fauna, the judge found that, if the works were to continue, a tort and an irreparable prejudice would be caused to the Cree and Inuit. It would not be possible to give back life to the fish and animals which would die, and it would no longer be possible to restore the vegetation which would be destroyed. The evidence had shown that it would take many, many years before the flora and fauna were re-established. Further, if the court were to allow the respondents to continue the works, a state of fact would soon be created which would render any final or permanent injunction ineffective. It would thus be physically impossible to return the parties to their current positions. Because of the nature and extent of the works which were being undertaken and which were projected for the months to come, the project would become irreversible at the end of that year. On the other hand, there was doubt as to whether the prejudices suffered by the respondent corporations, if the injunction were granted, were of the nature of irremediable losses.

The general rule was to allow the parties to remain in their respective positions until their respective rights were determined by the final judgment. The judge held that, in carrying out these works, the respondents had succeeded in changing the status quo which existed between the parties at the time of the institution of the proceedings. Further, they had the intention to continue the works according to their production schedule. The continuation of the works would cause a state of fact which could not be remedied adequately by a final judgment. The judge had no doubt that it would be preferable for the parties to remain in their respective positions until their rights were determined by the full hearing.

Since the Cree and the Inuit had established a clear right to occupation of the land, it was not strictly necessary for Judge Malouf to consider the balance of convenience between the parties, but since this was an issue of importance to the respondent corporations, the judge took time to consider the case which they put forward. The balance of convenience is considered in order to establish whether a party would suffer unduly if an injunction were granted.

The judge held that the respondent corporations had of their own accord commenced work on the project without taking account of the opposition expressed by the applicants. Even after the institution of the present proceedings, the respondents continued the project and spent large sums of money. This was a very unfortunate decision. The respondents knew that the Cree and Inuit were in possession of the territory and the adjacent lands. They also knew that the Indians and the Inuit occupied and made use of the land. They took the risk to proceed with the works. No one had forced them to do this. It would have been much more prudent to await the decision of the court.

The corporations’ case rested on the amount of money they would lose if the works were suspended. However, on an examination of the figures, supplemented by the production in evidence by the Cree and Inuit of the corporations’ construction contracts with third parties, the court found that these sums were greatly inflated. The contracts showed that, in the event of a suspension of works, the corporations were not obliged to compensate the contractors. The figure for purchase contracts claimed by the corporations was reduced on examination of the evidence from C$9 million to C$1 million. Claims for preliminary research on the project were dismissed, as were claims for interest incurred on loans for the project. Only items of expenditure in the immediate future were taken into consideration. Amounts expended on the construction of roads which would be lost as a result of the suspension were considered to be very small. The judge considered claims by Hydro-Québec for interest on investment in the development corporation to be too remote. None of these sums could be taken into account when assessing the balance of convenience, nor could the projected needs of Quebec in 1980 for electricity.

In addition to the financial arguments, the corporations claimed that the project would only affect a small proportion of indigenous land and that the Cree and Inuit could exercise their rights elsewhere. However, the judge held that it was not the magnitude of the region which was important but more the use which the applicants made of those particular places where the works were proposed. Their argument on this subject could not be sustained because the evidence revealed that the lands, the lakes, the rivers and the streams affected by the project were of extreme importance to the applicants. Further, if the works were to continue, a state of affairs would arise which would render any final injunction ineffective because it would be impossible to restore the status quo. The pursuit of the works would lead to a fait accompli.

Turning to the losses which would be suffered by the Cree and Inuit were the injunction not granted, Judge Malouf concluded that in many cases such losses would be not only devastating but also irreparable. Although he found it difficult to compare the monetary losses of the corporations with the losses which the Cree and Inuit would suffer, he held that the right of the applicants to pursue their way of life in the lands subject to the litigation far surpassed any consideration given to monetary loss. For these reasons, even if he had had to consider the balance of convenience, the judge said that he would say that the balance of convenience swung in favour of the Cree and Inuit. In conclusion, Judge Malouf granted the interlocutory injunction and ordered the James Bay Development Corporation, James Bay Energy Corporation and Hydro-Québec to cease all operations on the hydro-electric project until after the matter could be brought to full trial.

Judge Malouf’s order was overturned by the Quebec Court of Appeal just one week later. The decision to reverse Judge Malouf’s carefully considered decision was taken only on the grounds of a public interest argument, that the interests of all Québécois should have priority over those of the few indigenous people affected. This was an issue dealt with in the original application citing case law to demonstrate that public interest should not be taken into account when balancing the needs of the parties.

Although largely unreported, the Malouf judgment is of the utmost importance for several reasons.

Firstly, it is revealing in its very detailed assessment of the magnitude of the project and the catastrophic effect that it would have on the ecology of the region, described by one witness as equivalent to a major natural catastrophe. Hélène Lajambe described it as the first ecological judgment in the world.8

Secondly, Judge Malouf makes the case for an Indian title which rests on primary and secondary legislation of the British and Canadian governments. This was read together with the implications of the treaties by which the federal government extinguished Indian title and which gave minimal compensation in return.9 If the federal government had held title to the land, there would have been no need for the treaties which ceded it.

The case also reveals the approach to indigenous rights taken by the federal and provincial governments, the James Bay Corporations and Hydro-Québec. It is clear that the respondents did not consider these rights and had no real answer to the case put together by the lawyers for the Cree and Inuit. Indeed, witnesses for the respondents admitted that their prime consideration was the production of electricity, not the preservation of the area’s ecology, let alone the livelihood of the indigenous peoples and their respect for the land and its creatures. Their calculation of potential pecuniary damage which would result from an order to cease work was grossly exaggerated. It required only examination of the construction contracts with third parties by the lawyers for the Cree and Inuit to demonstrate that the damage suffered would be minimal in comparison with the sum claimed. Albert Malouf had not been afraid to ‘speak truth to power’ but the Quebec provincial government experienced little difficulty in finding a forum to deliver the answer it needed. This is just one instance in a consistent pattern of action by Canadian federal and provincial governments in cases concerning the establishment of indigenous rights.

The Cree felt they had no alternative but to accept the government’s ultimatum and settle, giving the Malouf decision perhaps its most important role as the basis on which the James Bay and Northern Quebec Agreement was negotiated and, through this, becoming the foundation of Canada’s Comprehensive Land Claims Policy. The subsequent negotiations were seen by some as the negotiation of an out-of-court settlement in the light of the original Malouf judgment, since the appeal decision was not handed down until after the settlement had been negotiated.10 Speaking ten years later, James O’Reilly, solicitor to the Cree, acknowledged that, without the Malouf judgment, the Cree and Inuit would have been at the mercy of Robert Bourassa and that ‘the forces against the Indians and the Inuit in the quest for recognition and conservation of their way of life were overpowering’.11

He spoke of the significance of the judgment in forcing governments to the negotiation table:

The judgment of 15th November 1973 marked a turning point in the attitude of the government of Quebec. If the government wished to respect the schedule, it could no longer afford to take the chance that it would be the courts that would decide whether the project proceeded or not. Moreover, if the judge who had heard over seven months of proof dealing with the question of Indian rights, as with other questions, had concluded against the government of Quebec, there was at least a risk that the Supreme Court of Canada might eventually affirm such a judgment.12

O’Reilly goes on to point out that the Malouf judgment was ground-breaking, preceding Calder – where the decision was delivered during the hearing for the interlocutory injunction. It also preceded the moratorium imposed by Thomas Berger on the Mackenzie Valley pipeline.

In 1975, after the negotiations were completed and an Agreement in Principle was in place, the Court of Appeal delivered its judgment on the merits of Judge Malouf’s findings.13 The decision of the court was written by Judge Turgeon who had delivered the decision to overturn the interlocutory injunction in 1973. The reasons he gave were much the same, stating his task as ‘to expand to forty pages’ his previous four-page judgment.14 The judgment accused Malouf of ignoring the evidence in chief 15 of the corporations’ witnesses, choosing to accept only the evidence given by the respondents under cross-examination, and claiming that he made ‘grave errors’ in his assessment of the evidence before him on, inter alia, effects of erosion and effects on the beaver, and saying that he made ‘many mistakes’ and ‘false interpretations’. Justice Turgeon noted that of the 27,000 people living in the James Bay area affected, 21,000 were white, and he accepted the spurious claims of witness Thérèse Pageau that between 75 and 80 per cent of the Cree relied on shop-bought food, even accepting her estimate of a C$10,167 income per annum. The higher court ignored the rule that it should not interfere with the findings of fact of the judge at first instance, holding that Malouf’s finding that the flooded lands were of great importance to the Indians was irrational, claiming that the scientific witnesses for the Cree and Inuit were giving evidence on matters which were ‘entirely outside their field’.16 Finally, on what purports to be legal argument, a travesty of the close consideration of the issues by Albert Malouf, Judge Turgeon held that, since there was no mention of Indian rights in the charter of the HBC, he had serious doubts about the existence of any Indian rights to the land.17 Turgeon J tells us that ‘judges and authors had held that the Royal Proclamation of 1763 created rather than confirmed aboriginal land rights’. No sources were identified. He went through each of the statutes and orders leading to the Law of 1912 and gave an interpretation diametrically opposed to that given in the first instance, concluding that, even if there were aboriginal rights over the land, no one could say what they were. He dismissed the effect of Calder because the judges were divided 3:3. On the issue of balance of convenience, Turgeon J took only economic inconvenience into consideration. Further, he pointed out that the harm to caribou was only predicted to occur after 1979, that caribou could find their own territory and that they were not affected by fluctuations of water levels, as predicted by the Cree and Inuit at the interlocutory injunction hearing.

Nevertheless, it was too late by then to stifle the potential of the Malouf judgment to influence the way in which the governments dealt with the Cree and Inuit. This Court of Appeal decision was itself overturned by the Supreme Court of Canada in Manitoba (AG) v Metropolitan Stores (MTS) Ltd and others.18 James O’Reilly, lawyer to the Cree, points out that they were given leave to appeal from this judgment but, since by that time the James Bay and Northern Quebec Agreement was in place, they took the matter no further.19