BETWEEN:

Attorney General of Canada
c/o Davis & Company
Barristers and Solicitors
2800 Park Place
666 Burrard Street
Vancouver, BC V6C 2Z7

(Name and address of each Defendant):

Her Majesty The Queen In Right of the
Province of British Columbia
c/o British Columbia Ministry of Attorney General
Legal Services Branch
6th Floor, 1001 Douglas Street
Victoria, BC V8V 1X4

ELIZABETH THE SECOND, by the Grace of God, of the United Kingdom, Canada and Her other Realms and Territories, Queen, head of the Commonwealth, Defender of the Faith.

To the Defendant, Her Majesty the Queen in Right of the Province of British Columbia:

The Attorney General of Canada brings this action on behalf of Her Majesty the Queen in right of Canada.

1. The Defendant Her Majesty the Queen in Right of the Province of British Columbia is the owner of the seabed of the waterway known as the Strait of Georgia, British Columbia.

2. Under an exchange of notes initiated in 1965 and amended or renewed at ten year intervals,the Canadian Forces and the United States Navy have established, operated and maintained the Canadian Forces Maritime Experimental Test Ranges ("CFMETR") in the Strait of Georgia at Nanoose Bay, northwest of Nanaimo, British Columbia. The CFMETR is used by both Canada and the United States of America to test a variety of naval weapons, including torpedoes, and instruments, including sonars.

3. In June, 1986, Canada and the United States of America entered into the Exchange of Notes Constituting an Agreement between the Government of Canada and the Government of the United States of America to extend the Agreement of April 14, 1976 providing for the Continued Operation and Maintenance of the Torpedo Test Range in the Strait of Georgia, Canada Treaty Series 1986, No. 80 (the "Exchange of Notes").

4. The Exchange of Notes is a legally binding international treaty, and provides that Canada and the United States of America shall jointly fund the CFMETR. The Exchange of Notes further provides the Canadian Forces shall be responsible for the administration, security and control of the CFMETR.

5. The United States of America has installed equipment at the CFMETR valued at approximately $110 million. The Plaintiff has built infrastructure at the CFMETR valued at approximately $47 million.

6. The CFMETR has a full-time complement of sixty-nine employees, and employs an additional twenty people on a contractual basis. The CFMETR annually contributes between $8 million and $10 million to the local economy in the form of salaries, construction and local purchases.

7. The CFMETR is the only facility of its kind within Canada and on the west coast of North America. Its combination of underwater topography, acoustics and sophisticated electronic equipment are unique on the west coast of North America. The Plaintiff's use of the Defendant's lands at the CFMETR is for the defence of Canada, some particulars of which include:

   (a) the acquisition of knowledge, training and experience in submarine military capability by Canadian Forces;

   (b) the acquisition of technical expertise in submarine military capability resulting from the administration, security and control of the CFMETR by Canadian Forces;

   (c) the contribution to the development of submarine military capability by the United States of America for the joint defence of North America.

8. On or about September 5, 1989, the Plaintiff and the Defendant entered into Licence No. 103025 (the "Licence") which permits the Plaintiff, as Licensee, to enter onto the seabed of CFMETR, more particularly described in the schedule to the Licence entitled Legal Description Schedule. The Licence was entered into following a 1984 decision of the Supreme Court of Canada which held that the seabed in the area of CFMETR was a part of the Colony of British Columbia when it entered Confederation in 1871.

9. The purpose described in the schedule to the Licence entitled Special Proviso Schedule is as follows:

   1.1 Purpose

   The Licensee shall use the Land only for the periodic operation of a military underwater test range.

10. The Plaintiff, as licensee, has complied with all covenants owed to the Defendant, as owner, pursuant to the Licence.

11. The Licence provides in Article VI, s. 6.01(a):

    Article VI - Cancellation
    (6.01) In the event that

    (a) the Owner requires the Land for his own use or in his sole discretion, considers that it sin the public interest to cancel the rights herein granted, in whole or in part, ...

    the Owner may on 90 days written notice to the Licensee, cancel this licence and the rights herein granted, in whole or in part.

12. On or about May 22, 1997, the Honourable Cathy MacGregor, Minister of Environment, Land and Parks for the Province of British Columbia, sent a facsimile transmission to the Honourable Douglas Young, then Minister of National Defence for Canada, which purported to cancel the Licence pursuant to Article VI, s. 6.01(a) thereof (the "Notice of Cancellation"). No reasons for issuing the Notice of Cancellation were advanced in the facsimile transmission.

13. On or about May 23, 1997, the Honourable Glen Clark, Premier of British Columbia, sent a facsimile transmission to the Right Honourable Jean Chretien, Prime Minister of Canada, in which he stated the following:

    Dear Prime Minister:

    Today my Minister of the Environment, Lands and Parks has given 90 days notice to the Minister of National Defence of the cancellation of the licence of occupation that allows the use of the Canadian Forces Maritime Test Range at Nanoose Bay for the purpose of testing torpedoes including those of the United States.

    The failure of the United States to meet its obligations under the Pacific Salmon Treaty is a clear failure on the part of the U.S. government to honour the good neighbour policy which we have pursued to this point. It is no longer tolerable to have the U.S. government enjoy the benefits of the use of Nanoose Bay, at the same time as it denies Canada the benefits and protection owing to Canadian salmon under the Pacific Salmon Treaty. Action must be taken to protect British Columbia salmon stocks and the jobs and communities that depend on the resource, and to pressure the United States to recognize Canada's rights to Canadian fish.

    Cancelling the agreement will demonstrate that there are consequences when the U.S. ignores its international obligations, including treaty commitments to Canada. We are determined to do whatever is required to protect salmon stocks on the west Coast and we fully expect you will take this opportunity to send a clear message to the United States. In this regard, it is vital that the federal government take strong, direct action to show clear resolve on this issue. I am therefore urging you to take immediate steps to cause the Pacific Salmon Treaty to be fully implemented.

    Sincerely,

    Glen Clark
    Premier

14. At all times material to this action, the matter of compliance by the United States of America with the Pacific Salmon Treaty, Canada Treaty Series 1985, No. 7, was the subject of diplomatic exchange and negotiations between the Plaintiff and the United States of America.

15. The Plaintiff says that the Notice of Cancellation is invalid for the following reasons:

    (a) the expression "public interest" in the context of Article VI, s.6.01(a) of the Licence refers to matters pertaining to the management of the public lands of the province, or otherwise lying within the jurisdiction of the provincial government, and does not extend to matters within the expertise and exclusive authority of the Plaintiff,including fisheries, foreign affairs, and defence;

    (b) the Notice of Cancellation was issued in breach of an implied term of the Licence that the parties would exercise their contractual rights and perform their contractual obligations reasonably and in good faith, and with due regard to the respective governmental duties, responsibilities and commitments of the parties, which term precluded cancellation of the Licence for the sole and primary purpose of frustrating the exercise and discharge by the Plaintiff of its powers, duties and responsibilities in relation to matters falling within the Plaintiff's exclusive constitutional jurisdiction; and

    (c) no party in the position of the Defendant, acting reasonably and in good faith, could have concluded that the cancellation of the Licence would serve the public interest, having regard to all the circumstances of the case.

16. As a result of the Defendant's issuance of the Notice of Cancellation, the Plaintiff has suffered, and may continue to suffer damages, some particulars of which include:

    (a) interference with and discharge by the Plaintiff of powers, duties and responsibilities in relation to matters falling within the Plaintiff's exclusive constitutional jurisdiction, including fisheries, foreign affairs, and defence;

    (b) loss of the use of the CFMETR, and the resulting increase in costs and reduction in military capability;

    (c) breach of the Plaintiff's obligations under the Exchange of Notes, contrary to the Plaintiff's obligation under international law to perform treaties in good faith (pacta sunt servada) as codified in Article 26 of the Vienna Convention on the Law of Treaties, Canada Treaty Series 1980, No. 37, and the resulting damage to its international reputation;

    (d) the need for the Plaintiff to seek access to test facilities in the United States of America and elsewhere, and the resulting increase in costs and reduction in military capability;

    (e) interference with the Plaintiff's ability to enter into future commitments with the United States of America and other allies with respect to military operations;

    (f) exposure of the Plaintiff to claims for financial compensation, whether warranted or unwarranted, by the United States of America and others;

    (g) exposure of the Plaintiff to retaliatory action by the United States of America, whether warranted or unwarranted, including interference with:

    (i) bilateral test and evaluation agreements between Canada and the United States of America which provide the Canadian Forces with access to test facilities in the United States of America at minimal cost;

    (ii) defence equipment purchases from Canada by the United States of America, valued at approximately $1.6 billion annually;

    (iii) the appropriation of approximately US$100 million by the Congress of the United States of America to provide the Plaintiff with financial assistance in its efforts to clean up former U.S. military sites in Canada; and

    (iv) other retaliatory measures, whether related or unrelated to national defence; and

    (h) other damages, particulars of which will be provided in advance of the trial of this action.

    WHEREFORE THE PLAINTIFF CLAIMS:
    (a) a declaration that the Notice of Cancellation is invalid;
    (b) special and general damages;
    (c) pre-judgement interest on the amount described in paragraph (b);
    (d) post judgement interest on the amounts described in paragraphs (b) and
    (c) from the date of judgement herein to the date of payment; and
    (e) the costs of this action.

Dated Aug 14, 1997

Davis & Co. /JJLH

Davis & Company (John J.L. Hunter, Q.C.)
Solicitors for the Plaintiff

This WRIT OF SUMMONS WITH STATEMENT OF CLAIM is filed by the firm of Davis & Company, Barristers and Solicitors, (JJLH), whose place of business and address for service is 2800 Park Place, 666 Burrard Street, Vancouver BC, V6C 2Z7

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