City Subscribed to Crystal-Ball Gazing to Justify Figures in Land-Use Dispute

by Jane Gaffin


This relic from the scrapbooks originally appeared in the Whitehorse Star on December 6, 2000.

During the November 17, 2000, dispute, Jim McFaull debated a City of Whitehorse lawyer over mining laws and land conflicts when he represented the Yukon Chamber of Mines, an intervener in the first quasi-judicial Surface Rights Board hearing where the City was pushing its hand and wasting millions of taxpayers’ dollars on legal fees, trying to shaft a harmless prospector who was operating under precedent federal law. (See McFaull’s Report

There was no winner or loser between the two debaters. However, McFaull held his own against the lawyer who was not a mining-law specialist. While the lawyer seemed eager to continue the discussion to pick up pointers from McFaull’s extensive research and his repertoire of references and case law, they ran out the clock. The City lost its case to the strong federal mining law.


The City of Whitehorse’s engineering department has subscribed to doing number-crunching by gazing into a crystal ball, the Surface Rights Board was told during a recent hearing.

A thorny multiple land-use conflict that has raged between the city for surface rights versus prospector Rob Hamel’s subsurface rights on his dump claims finally came to a head after five years.

The city could have bought out Hamel’s interests but didn’t want to set a buy-out precedent for the 335 mineral claims staked within the 162 square miles that constitute the expansive city limits.

Rather, the city opted to try to squeeze out the independent operator and toyed with the idea of legal action several times.

On November 17, 2000, the Surface Rights board met for a full day to hear the case in which the city jacked up its $1-million security request to $3 million.

This case represents the first application approved for a dispute hearing since the quasi-judicial board was established about four years before.

The three-member panel adjudicating the case consisted of chair Stephen Mills, Brian MacDonald and Bruce Underhill.

In August 1997, former city solicitor Bruce Willis had written a letter to the mining recorder seeking a $1-million bond.

Pursuant to section 15.1 of the Yukon Quartz Mining Act, the mining recorder notified Hamel to post $2,000 per claim on Hat claims 1,3 and 27.

The city had applied to the Surface Rights Board on February 22 to appeal the decision of the Whitehorse mining recorder with regards to the amount of security to be posted by Hamel for three of his Hat mineral claims.

During the hearing, the city’s legal counsel, Dan Shier, who inherited the file, raised the stakes to the $1-million per claim.

Under persistent grilling from the board chair, Shier wasn’t clear on whether he was talking $1 million total or $1 million per claim. Mills wanted to know how the city’s request for security tripled.

“It grew from $2,000 to $1 million per claim,” said Shier. “What we’re doing here today is appealing the decision of the mining recorder.”

For clarity’s sake, the discussion narrowed at one point to Hat claim #1 and land-fill cell #2, which is only used for storage of metals, not for domestic waste.

“Can you tell me on Hat #1 how you came to $1 million as your request?” asked Mills.

“It’s a certain amount of crystal ball gazing,” responded Shier. He conceded that no cost accounting nor mathematical calculations were done to arrive at the figure.

“In your notice of response, you question the mining recorder by simply stating a flat amount and not looking at the costs?” asked Mills.

“You have set a million dollars but not really identified the method by coming to that amount? You appealed–or questioned–the amount of security set by the mining recorder’s office but are unable to provide us with…” He hesitated.

“It’s hard to figure out exactly what level you want to find this, other than setting an arbitrary amount on the other end of the scale.”

To Mills’ way of thinking, $2,000 and $1 million aren’t on the same end of the scale.

Shier thought the process could be negotiated between parties under an agreement like the one drawn up between the city and Kluane Drilling, which now owns half of the Hat claims.

The other half-interest belongs to the respondent, Norwest Enterprises, which was represented by Hamel without legal counsel.

The Yukon Chamber of Mines, represented by director Jim McFaull, intervened on behalf of the respondent.

Trying to force Hamel and Norwest off their claims by exceeding the security provisions of the Yukon Quartz Mining Act is totally unacceptable to the mining industry and is not lawful, the chamber argued.

“Any demand by the City of Whitehorse for additional security is therefore frivolous or vexatious at best, and exorbitant or extortionate at worst.”

It was further pointed out that the city hasn’t spent any money in the area where Hat #3 touches on cell #3, which is not contemplated for development until 2007 to 2013.

The claim touches the net cell that won’t be prepared for use until possibly 2013 to 2023.

However, based on a consultant’s recommendation, the city has invested $8.5 million to develop the 504-hectare land-fill expansion site using an Alberta model.

Hamel submitted that the city could have cleaned up and carried on for another 12 years using the War Eagle mining pit which Hudson’s Bay Mining transferred to the city for one dollar 24 years ago.

Six lots transferred to the city are Crown Grants. It is spelled out in the quartz mining act that Crown Grants and mineral claims can only be used for mining purposes.

The city is operating without proper permits or a water license. In an administrative report to council at Monday’s council meeting, it was noted that the city is in the process of getting the proper permits and water license.

It has tried to force Hamel to relinquish his legal claims since he staked them in August 1995, he recalled.

He noted that his 48-claim package was recorded as legal quartz claims first, before any land titles were transferred to the city from the Yukon government.

Hamel wants the city to stop scattering garbage over his claims. “I’m not mining this site,” explained the prospector, who views the situation as a tempest in a teapot blown out of proportion at great taxpayers’ expense.

“I am doing exploration work. The city is doing more damage to my claims than I am to their cells. Their garbage is producing methane gas.”

His statement about finding good mineralization was corroborated a few days later by government geologists’ talks at the annual Geoscience Forum in Whitehorse. (The dump location encroached on the historic Copperbelt that had been mined for a hundred years.)

But it’s a lot of work to excavate garbage to find the minerals, declared Hamel.

Keeping with basic principles of law, he feels that as a law-abiding citizen, he should not have his legal rights taken away and given to someone else.

There are allegations both ways as to who is operating within the law and who isn’t, Mills reminded both parties.

“We are dealing with the issue of a person who is going to exercise certain rights he has on quartz claims and certain rights the city has under section 15.1 for adequate security to protect the city, should loss or damage occur from those activities.”

Under the federal mining land-use regulations, Hamel is required to backfill trenching and do certain reclamation work.

If he goes into Hat #3 to do some trenching, Mills wanted to know, where would the $1-million potential loss enter the equation?

Shier assured him the city is not suggesting that every activity falls in that $1-million range.” A gradient security would meet the city’s requirements.”

The city was willing to go back and relook at a graduated scale.

The board instructed the city to provide substance.

Hamel has until the end of the year to respond to the city’s written submission before the board makes a decision.


The upshot of this hearing was published in Justice Served Up Yukonslavia Style, pages 89 to 93, )


The all-day Yukon Surface Rights Board hearing extended to 6 p.m. on a Friday. A group of mining people, who attended to offer support to Hamel, had to leave at various intervals to attend other meetings.

One was down the street in the Premier’s office to discuss secret back-room deals of withdrawing lands for a Yukon park. Another contingent dashed across the street to the courthouse to offer support to Allen Carlos.

It was highly unusual for important meetings to be held on Fridays, anyway, and definitely a puzzle why all three overlapped. Was it to serve as a method to persecute and harass miners in one fashion or another?


Back where it started, the board merely required Hamel/Norwest Enterprises to
post security in relation to mining activities conducted pursuant to the Yukon
Quartz Mining Act on undeveloped land.

The city was directed to provide Hamel/Norwest Enterprises with at least a year’s notice in writing of its intentions to change the designation of land in the extended land-fill site from undeveloped land to developed land.

When working on developed land, Hamel/Norwest Enterprises would be required to follow the mining land-use regulations (MLUR’s) as described in the Yukon Quartz Mining Act.



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