Teal Cedar Ltd. is going after leaders of the Fairy Creek blockades for millions in damages. Does Teal have a case?

Dec. 3, 2023

Teal Cedar’s claims of “irreparable harm” are not supported by its own numbers.

ON OCTOBER 4, 2023, Teal Cedar Products Ltd filed a statement of claim in BC Supreme Court against 15 individuals, an air service company and the “Rainforest Flying Squad”, all of whom, Teal claims, caused damage and loss to the company as a result of the blockades near Fairy Creek in TFL 46. The blockades began in August 2020 and peaked in the summer of 2021.

One person being sued by Teal, who requested anonymity, said the company is seeking millions in damages.

Teal’s claim alleges that “the Defendants and co-conspirators not named as Defendants in this action agreed, combined, and conspired to use unlawful means to conduct the Blockades and to engage in Blockade Support (the “Conspiracy”). The predominant purpose of the Conspiracy was to injure Teal Cedar by obstructing, delaying, and preventing lawful forestry or road construction activities in and around TFL 46. The Defendants knew or ought to have known that the Conspiracy would cause harm to Teal Cedar.”

While a BC Supreme Court will have to weigh for itself the validity of Teal’s claim that “the predominant purpose of the Conspiracy was to injure Teal Cedar”, the basis in law that Teal is making its claim is that the actions of the blockaders did the company “Irreparable harm”.

This is also the legal basis on which Teal sought an injunction against the blockades in 2021. At that time, Justice Frits E Verhoeven gave Teal an injunction. I wrote about this here, stating that Verhoeven’s decision was flawed.

In his judgment, Verhoeven stated, “There is also no doubt that Teal will suffer irreparable harm if the injunction is not granted.”

But there was doubt then, and there is even more now.

Back then, Verhoeven based his judgment on numbers that were provided to him by Teal Cedar. The numbers that Teal provided were a moment-in-time analysis of how Teal could be affected—in terms of the volume that it wouldn’t be able to log because of the blockades, and the money that it would then lose as a result.

However, because the volume logged in a TFL is governed by a five-year cut-control period, the court won’t be able to blame a drop in volume in TFL 46 for the year 2021, for example, and say it was because of the blockades. The court is going to have to look at the entire 5-year cut-control period and the volume Teal was allowed to cut under the conditions of its TFL.

An internal Teal document shows that the total volume it was permitted to log in TFL 46 for the five-year cut-control period between 2018 and 2022 was 1,837,155 cubic metres. That was the company’s production goal. All of its planning was based on that goal.

Ministry of Forests’ records show that the volume of logs Teal trucked out of TFL 46 during those five years was 1,774,421 cubic metres. In other words, Teal cut 97 percent of what it was legally entitled to cut without incurring carryover into the next cut control period or incurring financial penalties.

By the way, in the previous 5-year cut control period (2013-2017), Teal was able to log 99.5 percent of its permitted cut.

So Teal was able to cut most of what it planned to cut in TFL 46 in its 5-year cut-control period, 2018 to 2022. But the Teal document referred to above also shows that Teal planned to cut 367,431 cubic metres in TFL 46 in 2019. In fact, however, it cut only 238,947 cubic metres. That is 128,484 cubic metres less than it had planned to cut. This loss in what it had planned to cut can’t be attributed to the blockades, which didn’t start until August 2020. And this loss in the planned cut is greater than the difference between what Teal planned to cut during its 5-year cut-control period and what it did cut.

In other words, the blockades didn’t cause Teal’s slight decline in volume taken in 2019—something else did.

For more information, the court would need to consider nearby TFLs—and news reports.

Western Forest Product’s TFL 44 lies just north of Teal’s TFL 46. An internal Western Forest Products document shows that for the five-year cut control period between 2016-2020, the company was permitted to log 3,912,410 cubic metres. But Western was only able to produce 2,422,220 cubic metres—62 percent of what it was permitted to log. Western’s production was not limited by blockades. The internal document makes it clear that a significant portion of the area of TFL 44 that it is permitted to log is, in fact, “economically challenging” to log.

Could Teal’s slump in production in TFL 46 be related to similar “economically challenging” times? According to Teal itself, this loss in production was either caused by excessive stumpage rates or it was caused by poor market conditions. Take your pick.

In other words, there are other factors at play—besides whether or not a TFL has been the subject of blockades—that can have a much greater impact on how much of the permitted volume a TFL holder is able to extract. One of those factors is the market price for wood products, which clearly wasn’t so good in 2019. But nearly 43 percent of the volume Teal logged during its 2018-2022 5-year cut-control period was logged in 2021 and 2022 during a period of extraordinarily high prices for wood products.

Teal will also need to explain to the court why it reduced its production in Forest Licence A19201 in Timber Supply Area 30, where there were no blockades. A review of Teal’s total production during its 5-year cut-control period for that licence shows that Teal undercut its AAC there by 138,465 cubic metres, an even larger undercut than occurred in TFL 46. Had it not undercut in A19201, it would have had more than enough volume to meet its needs.

It’s difficult, then, to fathom why Teal is claiming in its statement of claim that, as a result of the blockades it incurred, for example, “the cost of acquiring timber from outside of TFL 46.”

Teal may claim that only TFL 46 can provide it with the old-growth cedar that it turns into shakes and shingles at its Surrey Mill. But here, again, Teal’s reliance on old-growth cedar—in the face of broad public criticism of the use of old forest for short-lived building materials like shakes and shingles—indicates a failure of the company to recognize it needs to implement changes in how it conducts its business. If it had to acquire “timber from outside TFL 46”, that self-inflicted cost may have been a function of its own poor corporate judgment.

Teal is seeking general damages, special damages and special costs. The company is also seeking a “permanent injunction enjoining the Defendants and anyone with knowledge of the Court’s order from interfering with Teal Cedar’s forestry and road construction activities, or that of its contractors” within the area established by the injunction granted to the company in 2021.

Hopefully, the “Fairy Creek Fifteen” will get themselves a team of good lawyers armed with a deep understanding of all the reasons most British Columbians want to see the remaining highly biologically-productive old-forest ecosystems in the province conserved and protected. In any case, the numbers shouldn’t hurt them.

Related stories:

Justice Verhoeven’s flawed decision on Fairy Creek blockades

Lies, guitars and a few facts about the Fairy Creek Rainforest blockades

Where was the “clarity of knowledge” in the Fairy Creek old-growth logging dispute?

[Top photo: Forest defenders march into Waterfall Camp near Fairy Creek Valley in June 2021. (Photo by Alex Harris)]