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A judge ruled Wednesday that proper consultations must occur with eligible First Nations over the Kapyong Barracks land.

OTTAWA -- Any hope of seeing development at the old Kapyong barracks site in southwest Winnipeg sometime soon evaporated Wednesday when a federal judge ordered the government to shelve its decision to sell the land until after it consults with Manitoba First Nations.

The land, about 225 acres at Kenaston Boulevard and Grant Avenue, has been in limbo since 2004 when the Princess Patricia's Canadian Light Infantry Unit shipped out to Shilo, Man.

In November 2007, the Treasury Board, under president and Manitoba senior cabinet minister Vic Toews, ordered the land sold for $8.6 million to the Canada Lands Company for development. The federal Crown corporation planned to turn the land into an innovative mix of housing, shops and parks.

But in January 2008 the seven Treaty One First Nations filed a court case to halt the sale, arguing they had claims to the land through treaty land entitlement.

The court case halted any work on the property, and as it dragged on Canada Lands even closed its Winnipeg office fearing it would be years before it might get the land, if ever.

The court case was argued in early September and Wednesday Judge Douglas Campbell ruled in favour of the First Nations.

Ottawa had argued because it paid money to the First Nations they no longer had any land claims to make against Kapyong, but Campbell said that was not true.

He said there were several legal precedents outlining both the duty of Ottawa to consult First Nations and how it should be done.

He noted only two First Nations in Treaty One are affected -- Peguis and Brokenhead -- because they are the only two with provable rights to buy surplus federal land.

Campbell said while there was some discussion between the federal government and two of the First Nations about it, he says it was clear to him Canada had no intention of ever granting meaningful consultation.

He also said if Canada went ahead and sold the land to Canada Lands it would put the land out of reach to the First Nations. Therefore, he said Canada must not transfer the land and ordered that the process retreat back to the point in November 2007 when the decision to sell the land was made.

Norman Boudreau, the Winnipeg lawyer acting for the First Nations, said the judgment was a full victory for them.

"The judge has rejected any and all arguments made by Canada," he said.

Winnipeg Liberal MP Anita Neville, whose Winnipeg South Centre riding includes Kapyong, said she thinks the decision will disappoint a lot of people who had been hoping to see something done with the property.

She pointed out it is a prime location and putting off development will impact municipal planning and development, including helping ease traffic woes along Kenaston Boulevard.

Ottawa has spent over $10 million maintaining the vacant barracks since 2004.

Neville said the government can either appeal the decision or sit down with the First Nations and talk.

Toews did not respond to a Free Press interview request. Neither did the federal attorney who argued the case for Ottawa.

Boudreau said he doesn't believe the Canadian government will appeal, especially since it was a seasoned and respected appeals judge who made the ruling.

The ruling doesn't mean Kapyong will be handed automatically over to the First Nations, but it does mean development won't be moving forward any time soon, said Boudreau.

Ottawa will have to go back to square one and consult with the Treaty One bands and there is a requirement to accommodate their wishes in some way. That means the land won't be turned over to Canada Lands for some time, if at all.

Boudreau also says the case sets a precedent for other big projects where bands have appealed to the courts for proper consultation.

Peguis Chief Glenn Hudson applauded the decision.

"It's tremendous, wonderful," said Hudson.

Hudson wouldn't say exactly what the bands may propose for the barracks land. But Treaty One chiefs have already been in some spotty talks with Ottawa over Kapyong, and they expect discussions to start as soon as possible.