Federal Court - Christian Aboriginal Infrastructure Developments ...

Federal Court - Christian Aboriginal Infrastructure Developments ... Federal Court - Christian Aboriginal Infrastructure Developments ...

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Page: 270 [1024] I find that highly relevant information, that is the Department’s concern that the timber inventory was too high, should have been disclosed to LPL at the July 15, 1997 meeting. It was not. [1025] The evidence is clear that the joint venturers were aware that there were concerns with the timber supply. It was for that exact purpose that this July 1997 “due diligence” meeting occurred. However, as a result of the assurances given at this meeting the decision was made to proceed with 2010 FC 495 (CanLII) the Watson Lake sawmill project. [1026] In considering the evidence, I find that the Plaintiffs became aware in 1998 of the proposed reduction in the harvest ceiling for Y02 and Y03 from 350,000 m 3 per year to 128,000 m 3 per year; see the Response to the Request to Admit and there is other evidence to that effect. I conclude that this state of knowledge is consistent with the failure of the Defendant to reveal their concerns about the inventory. [1027] It is also important to remember that, as I have previously discussed, the Defendant had publicly relied upon the impugned inventory. This public reliance makes the Defendant’s failure to disclose highly relevant information within the exclusive control even more egregious. [1028] Considering that the very purpose of the July 1997 meeting was to determine if timber would be provided to a proposed mill, given the significant investment proposed, and the continually developing proximate relationship with LPL, the Defendant was obliged to have informed LPL that the Department believed that the inventory was too high. The information that

Page: 271 was withheld addressed the nature and extent of the timber inventory. It was insufficient that LPL knew that the inventory could change. [1029] On the facts of this case, I find that there was a concern within the Regional Office that the inventory, as produced in the Sterling Wood report, was too high. As such the Regional Office should have informed LPL of this fact at the July 15, 1997 meeting. The failure to do so breached 2010 FC 495 (CanLII) the standard of care. [1030] This finding is not based on the fact that the Defendant might change the AAC, which is a discretionary policy decision in the authority of the Defendant. My finding is based on the fact that the Defendant had exclusive knowledge that she believed that the inventory was too high. The inventory was relied upon by LPL in formulating its business plans. Just because the AAC is derived from the inventory does not mean that a change in the inventory is a “policy decision” which may be immune from review. [1031] Moreover, I note that Mr. Monty, the only witness for the Defendant who attended the July 1997 meeting, testified that he did not have the authority to make the representation that was made. In light of my findings, that the reliance was foreseeable, that there would be reliance, and that the Defendant knew that LPL was basing its planned business plans on the existing inventory, I find that on the facts of this case that the standard of care was breached.

Page: 271<br />

was withheld addressed the nature and extent of the timber inventory. It was insufficient that LPL<br />

knew that the inventory could change.<br />

[1029] On the facts of this case, I find that there was a concern within the Regional Office that the<br />

inventory, as produced in the Sterling Wood report, was too high. As such the Regional Office<br />

should have informed LPL of this fact at the July 15, 1997 meeting. The failure to do so breached<br />

2010 FC 495 (CanLII)<br />

the standard of care.<br />

[1030] This finding is not based on the fact that the Defendant might change the AAC, which is a<br />

discretionary policy decision in the authority of the Defendant. My finding is based on the fact that<br />

the Defendant had exclusive knowledge that she believed that the inventory was too high. The<br />

inventory was relied upon by LPL in formulating its business plans. Just because the AAC is<br />

derived from the inventory does not mean that a change in the inventory is a “policy decision”<br />

which may be immune from review.<br />

[1031] Moreover, I note that Mr. Monty, the only witness for the Defendant who attended the July<br />

1997 meeting, testified that he did not have the authority to make the representation that was made.<br />

In light of my findings, that the reliance was foreseeable, that there would be reliance, and that the<br />

Defendant knew that LPL was basing its planned business plans on the existing inventory, I find<br />

that on the facts of this case that the standard of care was breached.

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