You are on page 1of 11

-

,71

4 64

Court File No. ONTARIO SUPERIOR COURT OF JUSTICE

SOLID GOLD RESOURCES CORP. Plaintiff - and -

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO Defendant

STATEMENT OF CLAIM
TO THE DEFENDANT(S): A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiff. The claim made against you is set out in the following pages. IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil Procedure, serve it on the plaintiff's lawyer or, where the plaintiff does not have a lawyer, serve it on the plaintiff, and file it, with proof of service, in this court office, WITHIN TWENTY DAYS after this statement of claim is served on you, if you are served in Ontario. If you are served in another province or territory of Canada or in the United States of America, the period for serving and filing your statement of defence is forty days. If you are served outside Canada and the United States of America, the period is sixty days. Instead of serving and filing a statement of defence, you may serve and file a notice of intent to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten more days within which to serve and file your statement of defence. IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL LEGAL AID OFFICE. IF YOU PAY THE PLAINTIFF'S CLAIM, and $750.00 for costs, within the time for serving and filing your statement of defence, you may move to have this proceeding dismissed

2 by the Court. If you believe the amount claimed for costs is excessive, you may pay the plaintiff's claim and $400.00 for costs and have the costs assessed by the Court. Dated:

c2a

aioD

Issued by glilitr1111j

M. Sagaria
Registrar

Local Registrar

Address of court office: 393 Uni rsity Avenue, 10th Floor Toronto, Ontario M5G 1E6
TO: HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO C/O CROWN LAW OFFICE - CIVIL Dennis W. Brown Q.C.
Ministry of the Attorney General 8 th Floor, 720 Bay Street Toronto, ON M5G 2K1

CLAIM
1. (a) The plaintiff claims: the sum of one hundred million dollars ($100,000,000) for negligent misrepresentation, enrichment and implied contract of indemnity; (b) pre judgment and post-judgment interest in accordance with sections 128 and 129 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended; (c) (d) Solid Gold 2. The plaintiff Solid Gold Resources Corp. ("Solid Gold" or the "Company") is a the costs of this proceeding, plus HST; and such further and other relief as this Honourable Court may deem just.

company incorporated pursuant to the laws of Ontario. Solid Gold carries on business as a junior mining exploration company. Solid Gold is the holder of 109 unpatented mining claims in the Lake Abitibi region of Ontario (the "Mining Claims"). The Mining Claims cover approximately 53,800 acres of land in Lamplugh Township, Rand Township and Frenchville Township (the

"Claims Property").
Background 3. Solid Gold staked the Mining Claims, and they were recorded by the Ministry of

Northern Development and Mines ("MNDM"), in accordance with the Mining Act, R.S.O. 1990, Chapter M.14 (the "Mining Act"). 4. Treaty 9. The Mining Claims are located on land that was surrendered to the Crown under

-4 5. At all material times, Solid Gold had the right and entitlement under the Mining

Act to conduct mineral exploration activities on the Claims Property. Further, the Mining Act and its regulations required Solid Gold to conduct certain mineral exploration activities to maintain its interest in the Mining Claims. 6. Prior to the recording of the Mining Claims, Her Majesty The Queen In Right Of

Ontario ("Ontario") did not undertake any substantive efforts to consult with any First Nations or aboriginal communities. At the time the Mining Claims were staked and recorded, Ontario did not advise Solid Gold that Ontario had not undertaken any substantive efforts to consult any First Nations or aboriginal communities respecting the recording of the Mining Claims or that Ontario did not intend to undertake any such consultation. 7. In or around the Spring of 2011, Solid Gold began conducting mineral exploration

activities (the "Claims Exploration Program") on certain of the Mining Claims in accordance with its rights and obligations under the Mining Act. 8. On or around August 19, 2011, MNDM, on behalf of Ontario, sent a letter to

Solid Gold recommending that Solid Gold contact and engage certain aboriginal communities (the "August 2011 Ontario Letter"). In this letter, MNDM acknowledged that any potential legal duty to consult First Nations or aboriginal communities lies with Ontario. 9. The Claims Exploration Program did not adversely affect any treaty or aboriginal

rights of any First Nation or aboriginal community. Alternatively, any adverse effects to treaty or aboriginal rights were minimal and required, at law, only the provision of notice to affected First Nations or aboriginal communities.

5 10. In or around October 2011, a representative of Wahgoshig First Nation ("WFN")

contacted Solid Gold requesting information about the Claims Exploration Program. WFN, a First Nation based near Matheson, Ontario, asserted that the Claims Exploration Program was being conducted on land that WFN asserted as its traditional territory. 11. As a result of the misrepresentations of Ontario particularized below at

paragraphs 17 21, beginning in November 2011, Solid Gold undertook extensive efforts to consult with WFN (the "Consultation Efforts") including: (a) A presentation and information sharing session on November 4, 2011, at which Solid Gold met with WFN and Ontario to discuss the Claims Exploration Program and how to address any concerns raised by WFN; (b) The delivery of further information about the Claims Exploration Program to WFN and Ontario; and Meetings with WFN and Ontario over the course of several months to discuss the Claims Exploration Program, any claimed potential impacts on WFN's treaty and aboriginal rights and how to address any WFN concerns. 12. Despite the Consultation Efforts, and following the misrepresentations of Ontario

(c)

particularized below at paragraphs 17 - 21, WFN took the position that Solid Gold's Claims Exploration Program was contrary to WFN's treaty and aboriginal rights and that WFN had not been adequately consulted. WFN also insisted that the Claims Exploration Program could not continue without the express consent of WFN.

6 13. Moreover, it brought a motion for an order preventing Solid Gold from

conducting any further exploration on the Mining Claims (the "Injunction Motion"). Ontario was a party to the Injunction Motion. Ontario was aware, at all material times, of the allegations made by WFN on the Injunction Motion and supported WFN, in particular that all exploration by Solid Gold on the Mining Claims must cease. Ontario owes a duty of care to Solid Gold 14. Based on the special relationship of proximity between Solid Gold and Ontario,

Ontario owes a duty of care to Solid Gold in respect of how it deals with the conflict between WFN and Solid Gold over the Mining Claims. 15. Through its influence over the beliefs held by WFN respecting its treaty and

aboriginal rights and any corresponding entitlements, Ontario had extraordinary power to affect Solid Gold's interests and legal rights respecting the Mining Claims. 16. It was reasonably foreseeable to Ontario that Solid Gold could suffer significant

damages if Ontario encouraged, promoted and perpetuated mistaken beliefs on the part of WFN. Ontario encouraged and promoted the conflict with WFN through misrepresentations 17. Around the time of Solid Gold's initial contact with WFN, and despite the August

2011 Ontario Letter, MNDM, on behalf of Ontario, began engaging in a course of conduct that facilitated, encouraged and perpetuated several mistaken beliefs of WFN, including: (a) (b) that WFN has a property interest in the lands comprising the Claims Property; that the Claims Exploration Program did have, or might have, an impact on aboriginal or treaty rights possessed by WFN;

7 (c) that Solid Gold's activities as part of the Claims Exploration Program were attributable to Ontario; (d) that Solid Gold's activities were capable of triggering a duty to consult at law, irrespective of their impact; (e) that the efforts by Solid Gold to engage, and provide information to, WFN were insufficient to satisfy any duty to consult at law that Ontario may have had; and that the Claims Exploration Program required WFN's consent to continue. On November 8, 2011, MNDM sent a letter on behalf of Ontario (the "November

(f) 18.

2011 Ontario Letter") copied to WFN informing Solid Gold that its efforts to consult WFN were inadequate and demanded that Solid Gold halt the Claims Exploration Program. 19. knowing that: (a) (b) (c) Solid Gold had no obligation to consult with WFN; The Crown had no obligation to consult with WFN; any obligation that might have existed to consult with WFN, the existence of which is denied, rested solely with Ontario; (d) the Consultation Efforts undertaken by Solid Gold prior to the November 2011 Ontario Letter were more than sufficient to discharge any consultation obligations that Ontario may have had to WFN; and Ontario sent the November 2011 Ontario Letter to Solid Gold and WFN despite

8 (e) in the alternative to (d), Solid Gold's commitments to WFN as part of the Consultation Efforts would be sufficient to discharge any present consultation obligations that Ontario might owe to WFN. 20. After the November 2011 Ontario Letter, Ontario continued to encourage,

promote and perpetuate WFN's mistaken beliefs as outlined in paragraphs 17 and 19 above. 21. Ontario knew, or ought to have known, that the mistaken beliefs that it

encouraged, promoted and perpetuated were not founded in fact or law. Alternatively, Ontario failed to take reasonable care in communicating with WFN in respect of Solid Gold and the Claims Exploration Program. 22. As a result of Ontario's encouragement, promotion and perpetuation of the

mistaken beliefs, Solid Gold's attempts to resolve the conflict with WFN were rendered impossible. The unresolved conflict between Solid Gold and WFN resulted in an inappropriate and highly prejudicial halt of the Claims Exploration Program, the loss of financing for the Company and the inability to carry on business. Unjust Enrichment 23. At all material times, any obligation that existed to consult with WFN was the

legal duty of Ontario. Nonetheless, Ontario, through its actions and misrepresentations, effectively forced Solid Gold to satisfy that purported duty on its behalf. 24. As a result, Ontario was enriched through avoiding the costs of consultation with

WFN, which it otherwise would have incurred.

-9 25. Solid Gold suffered a corresponding detriment by incurring the costs of

consultation on behalf of Ontario. 26. There is no juristic reason for Ontario's enrichment at the expense of Solid Gold.

Implied Contract of Indemnity 27. In undertaking the Consultation Efforts, Solid Gold undertook efforts to discharge

Ontario's obligations at Ontario's request. 28. Solid Gold is entitled to be indemnified by Ontario for losses and expenses

incurred by Solid Gold in the performance of the Consultation Efforts. Damages 29. As a result of the actions of Ontario described above, Solid Gold has suffered

damages, including: (a) Solid Gold's costs of the Consultation Efforts, including business interruption losses; (b) Solid Gold's costs of lost opportunity, including losses flowing from Solid Gold's inability to access the capital markets, where those opportunity losses are a result of Ontario's negligent misrepresentation described above; and (c) The portion of the loss in value of the Mining Claims attributable to Ontario's negligent misrepresentation described above.

-1030. At the present time, Solid Gold estimates that its damages will constitute

approximately $100,000,000. Solid Gold undertakes to provide to Ontario the quantum and complete details of its damages prior to trial. Solid Gold proposes that this action be tried in Toronto.

January 22, 2012

FASKEN MARTINEAU DuMOULIN LLP Barristers and Solicitors 333 Bay Street, Suite 2400 Bay Adelaide Centre, Box 20 Toronto, ON M5H 1T6 Neal J. Smitheman (LSUC No. 207781) Tracy A. Pratt (LSUC No. 36577N) Andrew M. Baerg (LSUC No. 60353Q)
Tel: 416 366 8381 Fax: 416 364 7813 Lawyers for the plaintiff Solid Gold Resources Corp.

SOLID GOLD RESOURCES CORP. Plaintiff

- and - HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO Defendant Court File No.

N4e --41464

ONTARIO SUPERIOR COURT OF JUSTICE Proceeding commenced at Toronto

STATEMENT OF CLAIM

FASKEN MARTINEAU DuMOULIN LLP Barristers and Solicitors 333 Bay Street, Suite 2400 Bay Adelaide Centre, Box 20 Toronto, ON M5H 1T6 Neal J. Smitheman (LSUC No. 207781) Tracy Pratt (LSUC No. 36577N) Andrew M. Baerg (LSUC No. 60353Q)
Tel: 416 366 8381 Fax: 416 364 7813 Lawyers for the plaintiff Solid Gold Resources Corp.