British Columbia’s Supreme Court has ruled that Doman Industries Ltd should be allowed to pursue a lawsuit against the state government.
The court turned down an attempt by the government to dismiss Doman’s action, which alleges breach of promises regarding provincial timber rights.
Cash-strapped Doman, currently under court-ordered creditor protection, claims that 10 years ago the then state premier Mike Harcourt and attorney-general Colin Gableman promised its subsidiary Western Forest Products an additional 500,000m3 of timber per year for its Port Alice pulp mill. For its part, Doman was to invest C$65m in environmental improvements at the plant.
Doman says the mill needed the timber to maintain year-round operations. It operated for just 35 days last autumn before shutting down on December 22, with no date currently set for its 345 employees to return to work.
The state argues the alleged promises are not binding because they are contrary to legislation setting out procedures for granting timber rights.
