T-4178-78
Joseph Apsassin, Chief of the Blueberry River
Indian Band, and Jerry Attachie, Chief of Doig
River Indian Band, on behalf of themselves and all
other members of the Doig River Indian Band, the
Blueberry River Indian Band and all present
descendants of the Beaver Band of Indians
(Plaintiffs)
v.
The Queen in right of Canada as represented by
the Department of Indian Affairs and Northern
Development and the Director of the Veterans
Land Act (Defendant)
INDEXED AS: APSASSIN V. CANADA (DEPARTMENT OF INDIAN
AFFAIRS AND NORTHERN DEVELOPMENT)
Trial Division, Addy J.—Vancouver, January
12-15, 20-22, 26-30, February 2-6, 9-13, 16-19,
23-27, March 9-12, 23-27; Ottawa, November 4,
1987.
Native peoples — Lands — Title to former Indian reserve
and mineral rights therein — Effect of surrender of mineral
rights and validity of subsequent surrender of reserve
Whether full, free and informed consent given by Indians —
Formalities — Nature of Indians' title to reserve land —
Nature of fiduciary relationship between Crown and Indians,
and of Crown's duty thereunder — Validity of transfer of
reserve land by Department of Indian Affairs to The Director,
The Veterans' Land Act — Inclusion of mineral rights in
transfer — Breach of fiduciary duty by Department with
respect to sufficiency of sale price — Director having neither
duty nor unfettered power to transfer lands or mineral rights
back to Indians — Under original treaty setting aside reserve,
Indians not entitled, after surrender of reserve, to same
number of acres of reserve land.
Constitutional law — Charter of Rights — Life, liberty and
security — Charter unavailable to challenge B.C. Limitations
Act s. 8 as not applying to interest in or damages pertaining to
disposal of property (surrender and transfer of Indian reserve
land) — Charter not retrospective — S. 7 referring to bodily
wellbeing of person, not extending to protection of property
Limitation period applicable to all residents of province not
offending principles of fundamental justice.
Constitutional law — Charter of Rights — Equality rights
— B.C. Limitations Act s. 8 barring action challenging validity
of surrender and transfer of Indian reserve land — S. 8 not
contrary to Charter s. 15 as equality rights guarantee provid
ing for similar treatment for persons similarly situated, not for
identical treatment for all regardless of circumstances — S. 15
not requiring identical laws in all provinces as not meant to
destroy federalism.
Bill of Rights — Equality before the law — B.C. Limita
tions Act s. 8 not contrary to Bill of Rights s. 1(b) — No
requirement under Bill of Rights for Parliament to enact
uniform laws throughout country — Limitations differences
from province to province not constituting discrimination.
Bill of Rights — Due process — Limitation provisions of
general application, as in B.C. Limitations Act, not denial of
due process — Ultimate limitation period not denying right to
litigate nor right of access to court — Merely imposing time
limitation for commencing action.
Practice — Limitation of actions — Pursuant to Federal
Court Act s. 38, British Columbia law on prescriptions and
limitations applicable — Action brought after expiration of
ultimate limitation period of 30 years — Limitation provisions
of Act prevailing over provisions in other Acts.
Practice — Evidence — Commission evidence — Videotap
ing — Recommendations as to how to film witnesses, how
judge should view videotape, use of sound — Recommendation
Court consider videotaping testimony at trial — Inadequacy of
transcripts.
Practice — Evidence — Commission evidence — Interpret
ers — Interpreter should translate questions and answers word
for word, not merely substance of conversation with witness
Commission hearings should be conducted in presence of
legally qualified and experienced persons, such as judge or
prothonotary, familiar with rules of evidence and courtroom
procedure.
Indian Reserve No. 172 (I.R 172), consisting of 18,168
acres, was set aside for the plaintiff Bands in 1916, pursuant to
"Treaty 8", the validity of which is admitted. In 1940, the
plaintiff Bands surrendered the mineral rights under I.R. 172,
for leasing, to the Department of Indian Affairs (D.I.A.). The
validity of this surrender is not disputed. In 1945, the whole
reserve was surrendered to the D.I.A. In 1948, the D.I.A.
transferred I.R. 172 to The Director, The Veterans' Land Act
for the sum of $70,000 and the Director subsequently disposed
of parts of that land, including mineral rights, to individual
veterans and others. In 1976, there was a major oil find on I.R.
172. This action centres around title to I.R. 172 and the
mineral rights under that land.
The plaintiffs allege (1) that between 1916 and 1945, the
defendant was guilty of several acts and omissions which
constituted negligence and breaches of its fiduciary obligations
towards them in allowing unauthorized land use and improper
provincial regulation; (2) that the 1945 surrender was void or
voidable; (3) that the defendant was guilty of fraud in securing
the Bands' consent to the 1945 surrender; (4) that the defen
dant's acceptance of the 1945 surrender was void because it did
not conform to section 51 of the Indian Act; (5) that the 1948
transfer to the Director did not conform to section 54 of the
Indian Act; (6) that the 1948 transfer was void with respect to
the mineral rights since they were never surrendered for sale
and since the surrender did not conform to section 54 of the
Indian Act and section 41 of the Dominion Lands Act; (7) that
in transferring the land in 1948 to the Director, the defendant
breached its fiduciary duties and acted fraudulently; (8) that
since 1948, the defendant and the Director acted in breach of
their fiduciary duty and fraudulently with respect to the miner
al rights; (9) that all transfers of mineral rights to the Director
since 1952 were void as they did not meet the requirements of
the Indian Act.
The plaintiffs claimed a declaration that the 1945 surrender
and the 1948 transfer were null and void regarding 1.R. 172 as
a whole or, at least, regarding the mineral rights. They also
sought a declaration that they continue to be entitled, pursuant
to Treaty 8, to the same number of acres of reserve land as was
originally set aside for them.
The defendant pleaded that the action was statute-barred.
The plaintiffs replied that limitations could not run against
them in view of the defendant's continuing fraud and breaches
of fiduciary duties. They also questioned the validity of sections
8 and 9 of the B.C. Limitations Act under the Charter and the
Bill of Rights.
Held, the action is dismissed.
A—Videotaped commission evidence. The videotaped evi
dence of seven witnesses had to be reviewed for accuracy
because it had not been obtained properly, the interpreters
being advised in each case of the substance of the information
counsel wished to obtain and reporting the net result of the
conversation with the witness. The videotape should give a
direct frontal close-up of the witness' face. It should include full
sound recording. At trial, the monitor should be placed in front
of the judge. Whenever possible, commission evidence should
be taken before a legally qualified and experienced person. It
might be worthwhile to consider whether the Rules of the
Court should provide for the videotaping of oral testimony at
certain trials, as an adjunct to the normal transcription services.
Transcripts can be misleading and considerable technical
advances had recently been made in videotaping and sound
recording.
B—Nature of title, relationship and duty. It had to be stated,
at the outset, that there is little doubt that, in the 1940's, the
plaintiff Bands did not possess the required skills to engage in
any financial planning or budgeting or to generally manage
their affairs from a financial standpoint.
It is established that the Indians' interest in real property is
not a legal property interest but merely a "personal and
usufructuary interest." The Indians' interest is inalienable
except upon surrender and places upon the Crown the equitable
fiduciary obligation, enforceable at law, to deal with the land
for the benefit of the Indians. This obligation is subject to
principles very similar to those which govern the law of trust
concerning, for example, the measure of damages for breach.
There is no special fiduciary relationship or duty owed by the
Crown with respect to reserve lands previous to surrender nor
after the surrendered lands have been transferred. Except for
certain restrictions in the Indian Act, Indians are not to be
treated at law as if they were not sui juris. However, when
advice is sought or proferred, there exists a duty on the Crown
to take reasonable care. The onerousness of that duty will vary
according to the degree of awareness or sophistication on the
part of the Indians. And where there does exist a true fiduciary
relationship, as in the case at bar following the 1945 surrender,
the Crown must exercise the same high degree of prudence and
care as in the case of a true trust.
The portion of the reasons dealing with evidence on the
mineral rights has been summarized in an Editor's Note. Based
on that evidence, there was no breach of the Crown's fiduciary
duties towards the plaintiffs. The Crown's officers, servants or
agents could not reasonably be expected to have anticipated, in
1948 or previously, that there would be any real value attached
to potential mineral rights under I.R. 172 or that there would
be any reasonably foreseeable advantage in retaining them.
C—Treaty 8. In 1950, after surrender and disposal of I.R.
172, which comprised 18,168 acres, the plaintiffs received three
new reserves comprising 6,194 acres. The plaintiffs claim to be
entitled, under the Treaty, to the difference, 11,974 acres.
However, even the most liberal interpretation leads to the
inevitable conclusion that once the Crown has laid aside as a
reserve the required amount of land, the obligation of the
Crown pursuant to the Treaty has been fulfilled insofar as
reserve land is concerned. There is no subsisting right, after
proper surrender and disposal of the reserve, to an area of land
equal to the original acreage set aside pursuant to the Treaty.
D-1940 and 1945 surrenders. As to whether the 1945
surrender included the mineral rights which had been surren
dered in 1940, the rule is that when, as here, there is no
restriction or reservation expressed in the description of the
property granted or ceded, all of the property mentioned,
whether it be real or personal, and all interest in that property,
whether it be legal, equitable or usufructuary, is presumed to
be the subject-matter of the grant.
The 1940 surrender did not sever the mineral rights from the
Indians' other interests in I.R. 172. The 1940 surrender was not
a surrender of "a portion of" the reserve as defined in para-
graph 2(e) of the Indian Act but only of a right in a part of the
whole reserve. Mineral rights could not therefore be considered
"Indian lands" which could not be surrendered, and the 1940
surrender, with its trust for lease, did not render the mineral
rights incapable of any other type of alienation except by
means of lease even if both parties agreed to it.
E—Breaches of duty between 1916 annd 1945. With respect
to the alleged acts of negligence and breaches of fiduciary duty
between 1916 and 1945, there was no legal duty upon the
Department to actively police the reserves nor to interfere with
legitimate provincial legislation of general application merely
because it happened to affect the Indians. Furthermore the
claims were statute barred.
F-1945 Surrender. The decision to accept the surrender was
an operational rather than a policy decision and, as such, it is
reviewable.
Based on the available evidence, the members of the Band
fully understood and freely consented to the surrender of I.R.
172 in September 1945. There was no evidence that the surren
der meeting was not summoned in accordance with subsection
51(1) of the Act. And, applying subsection 31(1) of the Inter
pretation Act, the person who held the surrender meeting was
duly authorized pursuant to subsection 51(1) of the Act.
Since subsection 51(3) of the Act was merely directory and
not mandatory, non-compliance with the formalities provided
for therein, had such non-compliance been proven, would not
have rendered the surrender null and void.
G-1948 transfer to The Director, The Veterans' Land Act.
The argument that since the 1948 transfer is silent as to
minerals, it does not have the effect of transferring them cannot
be sustained at law: unless an interest is specifically withheld,
and absolute conveyance of land includes all interests except
precious metals.
While there was no evidence of fraud at the time of the 1948
transfer, there was a breach of fiduciary duty in that the
defendant has not discharged the onus of establishing that a
full and fair price was obtained in 1948. That claim, however,
was statute barred.
The Director, The Veterans' Land Act did not hold the lands
in trust for the Indians. Nothing in the Act provides for such a
trust. Nor were the mineral rights reserved from all sales as
they had been previously by statute. Furthermore, the Act
provides that the Director may hold and transfer property only
for the purposes of the Act. There is no power, without consent
of the veteran concerned, to reconvey lands or any mineral
rights to the Crown for the benefit of Indians or to any other
person.
H—Alleged breaches since 1948. While the defendant did
not obtain mineral rights to the replacement reserves, there is
no evidence that it undertook to do so, nor did it have a duty to
do so. Nor was there any duty or promise to obtain the same
acreage of land in the new reserves as was surrendered in I.R.
172.
I—Limitations. Pursuant to section 38 of the Federal Court
Act, the Limitations Act of British Columbia applies in this
case. The statement of claim in this case was issued in Septem-
ber 1978, five and one half months beyond the ultimate limita
tion period of thirty years from the time the cause of action
arose—March 1948. No other legislation applies to override
this limitations period.
The validity of section 8 of the Limitations Act cannot be
challenged under section 7 of the Charter. The latter is not
applicable as it relates to the protection of the person and to
personal rights and freedoms and does not apply to interest in
or damages pertaining to the disposal of property. Furthermore,
the Charter, generally speaking, is not retrospective. And such
a limitation period applicable to all residents of a province does
not offend against the principles of fundamental justice.
The retrospective effect rule also applies to section 15 of the
Charter. It does not provide for identical treatment for all
regardless of circumstances. It is not discriminatory for the
Crown to be subject to provincial limitation provisions like
ordinary citizens. As far as civil law is concerned, section 15
does not require each province to enact the same laws, as this
would be a denial of federalism and be destructive of the
federal system itself.
Nor does section 8 of the Limitations Act violate paragraph
1(b) of the Bill of Rights. As in the case of the Charter, there is
no requirement under the Bill of Rights for Parliament to enact
uniform laws throughout the country. It has been recently
decided that even where the matter falls within federal jurisdic
tion, where federal law is silent on the subject, the provincial
law where the cause of action arose and is being litigated is to
be exclusively applied in determining the rights of the litigants.
And there is no more discrimination contrary to paragraph 1(b)
than under sections 7 or 15 of the Charter.
Section 8 of the Limitations Act does not violate the due
proccss provision in paragraph 1(a) of the Bill of Rights. An
ultimate limitation period does not deny the plaintiffs the right
to litigate nor the right of access to the court. It merely imposes
a time limitation within which the action must be commenced.
The claim for insufficiency of the sale price to the Director in
1948 is therefore statute barred and also extinguished pursuant
to sections 8 and 9 of the B.C. Limitations Act.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Evidence Act, R.S.C. 1970, c. E-10, s. 30.
Canadian Bill of Rights, R.S.C. 1970, Appendix III, ss.
1(a),(b), 2.
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), ss. 7, 8, 15.
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.)
[R.S.C. 1970, Appendix II, No. 5] (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1), s. 91(24).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 38.
Federal Court Rules, C.R.C., c. 663, R. 494(1).
Indian Act, R.S.C. 1927, c. 98, ss. 2(e),(j), 4, 35, 36, 50
(as am. by S.C. 1938, c. 31,s. 1), 51, 54.
Indian Act, R.S.C. 1952, c. 149, s. 18(1).
Interpretation Act, R.S.C. 1927, c. 1, s. 31(/).
Laws Declaratory Act, R.S.B.C. 1948, c. 179, s. 2 (11).
Limitations Act, S.B.C. 1975, c. 37.
Limitations Act, R.S.B.C. 1960, c. 370.
Limitation Act, R.S.B.C. 1979, c. 236, ss. 3(3), 6, 7, 8, 9,
14.
Royal Proclamation, 1763, R.S.C. 1970, Appendix II,
No. 1.
The Department of Mines and Resources Act, S.C. 1936,
c. 33, s. 9(2).
The Dominion Lands Act, S.C. 1908, c. 20, s. 41.
The Soldier Settlement Act, 1917, S.C. 1917, c. 21.
The Soldier Settlement Act, 1919, S.C. 1919, c. 71, s. 57.
The Veterans' Land Act, 1942, S.C. 1942-43, c. 33, ss. 3
(as am. by S.C. 1946, c. 70, s. 1), 5(3).
Trustee Act, R.S.B.C. 1948, c. 345, s. 86(1).
Trustee Act, R.S.B.C. 1960, c. 390, s. 93(1).
Veterans' Land Act, R.S.C. 1970, c. V-4, s. 5(1),(3),(4).
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335,
reversing [1983] 2 F.C. 656; (1982), 143 D.L.R. (3d) 416
(C.A.).
APPLIED:
Kruger v. The Queen, [1986] 1 F.C. 3 (abridged);
(1985), 58 N.R. 241 (C.A.); The Queen v. George,
[ 1966] S.C.R. 267; Montreal Street Railway Company v.
Normandin, [1917] A. C. 170 (P.C.); Melville (City of)
v. Attorney General of Canada, [1982] 2 F.C. 3 (T.D.);
Jasper Park Chamber of Commerce v. Governor General
in Council, [1983] 2 F.C. 98 (C.A.); Attorney-General of
British Columbia v. Attorney-General of Canada (1889),
14 App. Cas. 295 (P.C.); Reference re Saskatchewan
Natural Resources, [1931] S.C.R. 263; The Queen v.
Richard L. Reese et al., [1956] Ex.C.R. 94; Bera v. Marr
(1986), 1 B.C.L.R. (2d) 1 (C.A.); Grabbe v. Grabbe,
[1987] 2 W.W.R. 642 (B.C.C.A.); Davidson v. Davidson
Estate, [1987] 2 W.W.R. 657 (B.C.C.A.); Smith, Kline
& French Laboratories Limited v. Attorney General of
Canada, [1986] 1 F.C. 274 (T.D.); R. v. Hamilton
(1986), 57 O.R. (2d) 412 (C.A.); R. v. Burnshine, [1975]
1 S.C.R. 693; (1974), 15 C.C.C. (2d) 505; Algonquin
Mercantile Corp. v. Dart Industries Canada Ltd., judg
ment dated June 17, 1987, Federal Court of Appeal,
A-692-86.
DISTINGUISHED:
St. Ann's Fishing Club v. The King, [1950] S.C.R. 211;
Humphries v. Brogden (1850), 12 Q. B. 739; Algoma Ore
Properties Ltd. v. Smith, [1953] 3 D.L.R. 343 (Ont.
C.A.); Stoughton v. Leigh (1808), 1 Taunt. 402; 127
E.R. 889 (H.C. Ch.); Ex p. Jackson, [1925] 1 D.L.R.
701 (Alta. S.C., App. Div.); Berkheiser v. Berkheiser and
Glaister, [1957] S.C.R. 387; Martyn v. Williams (1857),
1 H. & N. 817; 156 E.R. 1430 (Exch.); Earl of Lonsdale
v. Lowther, [1900] 2 Ch. 687; Dorset Yacht Co. Ltd. v.
Home Office, [1970] A.C. 1004 (H.L.); Anns v. Merton
London Borough Council, [1978] A.C. 728 (H.L.); Kam-
loops (City of) v. Nielsen et al., [1984] 2 S.C.R. 2; Toews
v. MacKenzie (1980), 12 C.C.L.T. 263 (B.C.C.A.);
Brusewitz v. Brown, [1923] N.Z. L.R. 1106 (S.C.);
Tufton v. Sperni, [1952] 2 The Times L.R. 516 (E.C.A.);
Allcard v. Skinner (1887), [1886-90] All E.R. Rep. 90
(E.C.A.); Lloyds Bank Ltd v Bundy, [1974] 3 All ER
757 (E.C.A.); R. v. Antoine (1983), 5 C.C.C. (3d) 97
(Ont. C.A.); Re McDonald and The Queen (1985), 51
O.R. (2d) 745 (C.A.); R. v. Konechny (1983), 10 C.C.C.
(3d) 233 (B.C.C.A.); Morgentaler v. The Queen, [1976]
S.C.R. 616; (1975), 20 C.C.C. (2d) 449; Curr v. The
Queen, [1972] S.C.R. 889; Piercey v. General Bakeries
Ltd.; The Queen in right of Newfoundland et al., Inter-
venors (1986), 31 D.L.R. (4th) 373 (Nfld. S.C.).
CONSIDERED:
Xerox of Canada Ltd. et al. v. IBM Canada Ltd. (1977),
33 C.P.R. (2d) 24 (F.C.T.D.).
REFERRED TO:
St. Catherine's Milling and Lumber Company v. Reg.
(1888), 14 App. Cas. 46 (P.C.); Smith v. The Queen,
[1983] 1 S.C.R. 554.
AUTHORS CITED
Armour, Edward D. The Law of Real Property, 2nd ed.
Toronto: Canada Law Book Company, 1916.
COUNSEL:
Leslie J. Pinder and Arthur Pape for
plaintiffs.
J. R. Haig, Q. C. for defendant.
SOLICITORS:
Mandell, Pinder & Ostrove, Vancouver and
Pape & Salter, Vancouver, for plaintiffs.
Deputy Attorney General of Canada for
defendant.
EDITOR'S NOTE
The Executive Editor has decided that His Lord
ship's 121 page reasons for judgment herein
should be reported as abridged. Some 31 pages
have been deleted in the published report. Two
portions of the reasons have been omitted. The
first was a review of the testimony concerning the
I.R. 172 mineral rights and the second, a review of
the oral and documentary evidence on the ques
tion of free informed consent to the 1945 surren
der. No editor's note has been prepared in
respect of the last-mentioned issue in that Addy
J. has provided a summary of his findings of fact
in that regard.
The following are the reasons for judgment
rendered in English by
ADDY J.:
THE PLAINTIFFS:
As the style of cause indicates, the two Indian
Chief plaintiffs are suing in their personal capacity
and on behalf of the members of their respective
Bands. Their right to represent all members of the
Bands, including former members who are still
alive, is undisputed. There is also an allegation in
the statement of claim, which allegation is admit
ted by the defendant, to the effect that the Chiefs
represent all past and future members of their
Bands. Although I entertain some very serious
doubts as to the legal validity of any such claim, I
refrain from making any finding on this issue,
since it is not before me to be tried.
The members, whose ancestors for many centu
ries lived as hunters and gatherers in the territory
north of Fort Saint John, British Columbia, for
some years had formed the Beaver Band which in
1962 was re-named the Fort Saint John Band. It
included people known as Dunne-za or Beavers
who spoke the Dunne-za or Beaver language and
members ethnically known as Crees who spoke the
Cree language. They are at times collectively
referred to as "Dunne-za/Crees". The Fort Saint
John Band was divided into 2 bands in 1977: the
Doig River Indian Band and the Blueberry River
Indian Band who are presently based in 2 separate
reserves, north of Fort Saint John.
THE ISSUES
The action centers around title to a former
Indian reserve, the Moberley reserve (subsequently
known as Indian Reserve No. 172 or I.R. 172),
and especially around the mineral rights under
that land.
There are issues pertaining to or arising out of:
1. A treaty known as "Treaty 8" signed in 1900
with the Beaver Band;
2. The setting aside in 1916 of I.R. 172 which
consisted of some 18,168 acres;
3. A surrender in 1940 to the Department of
Indian Affairs (D.I.A.) by the Band of petroleum,
natural gas and mining rights under I.R. 172 for
the leasing of those rights;
4. The validity of and the extent or effect of a
further surrender to the D.I.A. of I.R. 172 in 1945;
5. The transferring of I.R. 172 in 1948 by the
D.I.A. to The Director, The Veterans' Land Act
for the sum of $70,000; and
6. The subsequent disposal of parts of that land
including mineral rights by The Director, The
Veterans' Land Act to individual veterans and
others.
The validity of Treaty 8 and the surrender of
1940 is admitted but there is some dispute as to
the interpretation of those documents as well as
the legal effects flowing from them. There are
many contentious matters pertaining to and arising
out of I.R. 172. The claims and allegations of the
plaintiffs may be briefly summarized as follows:
1. That between 1916 and 1945 the defendant was
guilty of several acts and omissions which con
stituted negligence and breaches of its fiduciary
obligations towards them, in allowing unauthor
ized use of lands in which the plaintiffs had an
interest and improper regulation of land use by the
Province of British Columbia.
2. That the 1945 surrender of I.R. 172 was void
or, in the alternative, voidable.
3. That by various acts and omissions, the defen
dant acted both in breach of a fiduciary relation
ship and also fraudulently in securing the consent
of the Band to the 1945 surrender and in accepting
the surrender.
4. That the defendant's acceptance of the 1945
surrender was void because it did not conform to
section 51 of the Indian Act [R.S.C. 1927, c. 98].
5. That the defendant's transfer in 1948 to The
Director, The Veterans' Land Act was void as it
did not conform to section 54 of the Indian Act.
6. That, if the 1948 transfer was valid, it had no
force and effect or was void regarding the mineral
rights under I.R. 172, on the grounds that those
rights were never surrendered by the Band for sale
nor did the surrender meet the requirements of
section 54 of the Indian Act and section 41 of The
Dominion Lands Act, S.C. 1908, c. 20, section 1.
7. That in transferring the land in 1948 to The
Director, The Veterans' Land Act the defendant
was guilty of numerous breaches of its fiduciary
duties towards the Band and, in addition, acted
fraudulently.
8. That since 1948 the defendant and The Direc
tor, The Veterans' Land Act as such, acted both in
breach of their fiduciary duties to the plaintiff and
fraudulently in respect of the mineral rights under
I.R. 172.
9. That all transfers of mineral rights to The
Director, The Veterans' Land Act since 1952 were
void as they did not meet the requirements of the
Indian Act [R.S.C. 1952, c. 149].
The plaintiffs claim a declaration that both the
1945 surrender and the 1948 transfer to the Direc-
tor are null and void and of no force and effect
regarding I.R. 172 as a whole or, alternatively,
that they are of no force and effect regarding the
I.R. 172 mineral rights, and, in addition, a decla
ration that the plaintiffs continue to be entitled,
pursuant to Treaty 8, to 18,168 acres of reserve
land. The plaintiffs also claim an accounting and
damages under various heads.
The defendant denies all of the above claims and
allegations of the plaintiffs and, in addition, pleads
that the action is prescribed by various statutory
limitation provisions to which I shall later refer.
With regard to limitations, counsel for the plain
tiffs advanced the proposition that limitations
could not even begin to run against their clients for
many years following the surrender, as they had no
knowledge that they could apply for any recourse
before the courts because of their subordinate
position with regard to the Department of Indian
Affairs. It was also alleged by the plaintiffs that
there had been, during the intervening years, a
continuing fraud on the part of the defendant
perpetuated on the plaintiffs as well as continuing
breaches of the fiduciary duties owed to the plain
tiffs. Because of the nature and possible effect of
these allegations, counsel agreed that the question
of when any limitations would begin to run could
best be determined only after firm findings had
been arrived at on these issues and would therefore
have to be deferred until the end of the trial, after
all relevant evidence had been adduced.
SEVERANCE OF LIABILITY AND DAMAGES
At the outset of trial, because of what appeared
to be the very complex number of issues affecting
liability and also because of the estimates by coun
sel as to how long these matters would take to
resolve, I ordered that the issues of liability and
the quantum of damages be severed, the latter to
form the subject matter of a reference, subject to
such directions as might be deemed advisable after
the evidence as to liability had been determined.
LENGTH OF TRIAL
The trial, with 5 days being allocated for oral
argument in addition to comprehensive written
arguments, occupied 10 weeks of court time. The
issues, although complex to some extent, were, in
my view, unnecessarily further complicated by the
adducing of a substantial amount of evidence with
little or no relevancy or probative value. Both sides
seemed to some extent committed to the very
questionable practice of submitting evidence both
oral and documentary when they did not appear to
be convinced of its probative value at the time. The
"short statement giving a concise outline of the
facts" referred to in Rule 494(1) [Federal Court
Rules, C.R.C., c. 663] involved some 186 num
bered pages and took three and one half days to
deliver; 150 documents, which eventually would
become exhibits, were referred to therein. An
opening statement should normally not take more
than one half to one hour and, in complicated
cases, 2 to 3 hours should suffice to inform the
judge generally what the case involves since he
must be assumed to be acquainted with the con
tents of the certified record. Some allegations
which apparently could never be established in
evidence were maintained until the very end of the
trial.
The tendering of massive details on the assump
tion that this might help the court to more fully
understand the background of the case, more often
than not, serves to confuse the real issues and, far
from facilitating the court's task, merely compli
cates it unnecessarily.
DOCUMENTARY EVIDENCE
Counsel for the parties had jointly caused to be
prepared a series of books containing some 916
documents, the authenticity of which would not be
contested. Most of the documents produced as
exhibits at trial were contained in these books. A
few additional exhibits were also produced but
authenticity was never an issue.
A serious misunderstanding arose however
during the hearing regarding the purposes for
which the documents might be used as exhibits.
In presenting the plaintiffs' case, their counsel
tendered some 500 exhibits. Until the end of the
seventh week of trial, the Court as well as counsel
for the defendant, had been considering the evi
dence on the basis that all documents being ten
dered had been offered for all purposes including
proof of the truth of the contents.
When the plaintiffs were about to close their
case and the defendant had been requested, for the
convenience of the Court, to furnish a list of the
documents which they would eventually be submit
ting as exhibits, counsel for the plaintiffs then
made it known that they would be objecting to
their production as proof of the facts mentioned
therein unless the provisions of section 30 of the
Canada Evidence Act [R.S.C. 1970, c. E-10] were
complied with. Counsel for the defendant, how
ever, stated that there had been an agreement that
any of the documents contained in the book of
documents could be used as evidence of the facts
stated therein subject, of course, to normal con
siderations of relevancy, weight, probative value,
etc. It was at that time only, when the plaintiffs
denied any such agreement that the Court and the
defendant became aware of the fact that, with the
exception of a couple of exhibits presented through
witnesses, such as reports of the plaintiffs' experts,
none of the exhibits in the plaintiffs' case had been
tendered to establish the truth of their contents but
that each and every one of them was tendered
solely to establish either the state of mind of the
writer or the course of conduct of the defendant or
its agents. In order to make perfectly clear the
limited purposes for which I will be considering
the documents tendered in-chief on behalf of the
plaintiffs, I quote from the transcript of the 28th
of February 1987, as counsel for the plaintiffs
were about to close their case (See Volume 30 of
the transcript at pages 3951 and 3956):
MR. PAPE: I have no difficulty with answering your question,
my Lord. The documents we've tendered are for the purposes I
said.
THE COURT: Are what purpose?
MR. PAPE: Are for the purposes I said, that is to prove a course
of conduct and to prove the state of mind of the person who
wrote the document.
THE COURT: Only, solely?
MR. PAPE: That's correct, my Lord.
THE COURT: All right.
MR. PAPE: My Lord, as far as I know there is no document
which we will ask you to take as evidence tending to prove the
truth of its contents. Perhaps if I give a couple of examples of
the kinds of documents—
THE COURT: Well as long as you make that statement you don't
have to give examples.
MR. PAPE: Fine.
The announcement by the counsel for the plain
tiffs regarding the purpose for which the docu
ments had been tendered during the previous
weeks was totally unexpected and could only be
described as a bombshell, as it cast a completely
different light on the case. The defendant request
ed and was immediately granted a lengthy
adjournment to prepare to meet the requirements
of section 30 of the Canada Evidence Act and to
decide which documents including those already
submitted by the plaintiffs would be required to be
tendered by it as to proof of the truth of contents.
During the argument on that issue it turned out
that the plaintiffs had indeed, during the second
week of trial, furnished to the Court and the
defendant a 62 page document enumerating some
446 documents which they intended to submit as
exhibits and referring to specific portions of these
documents on which they wished to rely. At page 3
and in other sections of that list when referring to
some specific documents there was a statement to
the effect that the plaintiffs would be relying on
the documents for the purpose of establishing
intention of the writer and the course of conduct.
There was no statement that no such documents
could be relied upon to establish the truth of
contents. More importantly however that limita
tion directly contradicts in many ways how plain
tiffs' counsel in their opening address stated that
their case would be established. A written version
of the opening address was furnished to the Court
and to the defendant before trial began. A cursory
reading of the first 140 pages of that document
revealed that over 100 documents were alluded to
therein in support of various factual allegations
other than state of mind or course of conduct.
It is equally important to note that, even in the
written version of their final argument, exhibits
which counsel for the plaintiffs, on the 28th of
February, insisted had been produced for those
two limited purposes, were in fact being referred to
as proof of the matters mentioned in them e.g.: at
page 11 of the argument, the statement of the
commissioners in exhibit 1 is argued as being
evidence that the Indians had no developed institu
tions at the time; at page 27 of the argument, in
order to prove that the potential of I.R. 172 was
lost to the community, that lands to the North
were cut off, that good lands for the re-establish
ment of veterans was at a premium, etc., Exhibits
289 and 301 were referred to. These are but a few
examples, and I cite them and refer to Mr. Pape's
assertions of the 28th of February, for the sole
purpose of making it abundantly clear that none of
the exhibits submitted by the plaintiffs in-chief
will be considered by me for any purpose, other
than to show the state of mind and intention of the
originator of the document or a course of conduct
of the defendant or its agents, unless the document
has been duly confirmed by a witness as being his
own document or as being true or unless there has
been a formal agreement on the record between
counsel as to the truth of contents. This ruling, of
course, does not apply to exhibit 896 which was
admitted in rebuttal as to truth of contents or to
exhibits such as 713 which, although originally
submitted by the plaintiffs, were subsequently
admitted on motion by the defendant as to proof of
contents, nor would it apply to any other of the
defendant's exhibits admitted for that purpose.
In some instances, during final argument, for
the apparent purpose of establishing not merely
the state of mind of the writer but the state of
certain conditions and situations, counsel for the
plaintiffs referred to opinions expressed in docu
ments which he had insisted were not admitted for
the purpose of establishing the truth of contents. It
is difficult to understand the logic of how opinions
referred to in such documents could be relied upon
as evidence when the factual assertions do not so
qualify.
Regarding the exhibits of the defendant and the
purpose for which they will be considered as evi
dence, they have been dealt with in an order which
I rendered on the 20th of March 1987. To avoid
further encumbering these excessively voluminous
reasons for judgment, a copy of the aforesaid order
is annexed hereto as Schedule "A" [reported at
[1988] 3 F.C. 3].
VIDEOTAPED COMMISSION EVIDENCE
The evidence of 7 witnesses had been taken
several years previously (i.e. between 1980 and
1982) pursuant to 3 orders of this Court, mainly
because the witnesses were ill and getting very old
at the time and it was therefore deemed preferable
by both parties that their evidence be taken while
they were still available and capable of testifying.
The videotaped evidence was taken before an
official court reporter who acted as commissioner,
the orders having stated that either a prothonotary
of the court or an official court reporter could act
as commissioner.
Five of the witnesses testified in their native
language and an interpreter was used in each case.
It is unfortunate that they not only appeared to
lack any experience as legal interpreters but that
they also were members of the plaintiff Indian
Bands and therefore every bit as interested person
ally in the outcome of the trial as their elders being
interrogated. It is even more unfortunate that the
questioning of these witnesses was not properly
conducted by counsel. In each case the examina
tion had merely begun when, in lieu of addressing
questions directly to the witness, they proceeded to
address inquiries to the interpreter indicating to
the latter the substance of the information they
wished to obtain from the witness. The interpreter
would then address the witness following which, on
many occasions, lengthy exchanges between the
two would occur. The interpreter would then turn
to counsel conducting the examination and deliver
in a very few words what he, in turn, considered to
be the net result of each conversation. This method
of proceeding is of course, totally improper and
would never have occurred had the commission
hearings been conducted in the presence of a judge
or some other legally qualified person such as a
prothonotary, possessing a proper knowledge of the
rules of evidence and especially of court room
procedure.
For the above reasons, after listening to and
viewing some of the videotaped evidence, I became
quite concerned as to possible inaccuracies in both
the relaying of the inquiry by the interpreter to the
witness and the interpretation of the substance of
the replies into English. Upon inquiring from
counsel for the parties whether, in the intervening
years, anyone had taken the precaution of having
the interpretations verified, I was quite surprised
to hear that nothing had been done in this regard.
I immediately demanded that the required steps be
taken to ensure that, in the case of all videotaped
commission evidence, where interpretation was
involved, the English record represented at least
the true substance of each reply.
The end result was that, following verification
by other interpreters, counsel agreed that the
interpretation of the commission evidence of one of
the Indian witnesses was so inaccurate that it had
to be discarded and they also requested that the
record regarding another one of the witnesses be
modified in certain places to reflect the true mean
ing of the replies of the witness.
There, of course, still remains the fact that the
trier of facts is entitled to hear the verbatim
interpretation of all words spoken by a witness and
to judge their substance and effect for himself and
not have them judged by an interpreter. However,
since both counsel finally agreed as to the sub
stance and since at least one of the witnesses was
now deceased and some others are now too old or
senile to testify, I am accepting the recorded trans
lations of the evidence of those witnesses as accu
rate for the purposes of the case at bar, subject to
the modifications agreed upon by counsel.
The experience of listening to videotaped evi
dence in lieu of viva voce evidence at trial has led
to several observations and conclusions which pos
sibly might be of some assistance to parties apply
ing for an order for commission evidence of that
type and to judges considering under which condi
tions such applications should be granted.
In the first place, the camera, as was done in the
case at bar, should be focused in such a way as to
give a direct frontal close-up of the witness' face.
For TV viewing at the trial it should be placed in
front of the judge since he would normally, as I
did, have before him a transcript of the evidence
and thus would not be required to take notes. He is
then, in my opinion, in an even better position to
concentrate on, observe and therefore come to the
required conclusions regarding the demeanour of
the witness, all the voice inflections and generally
the manner in which the questions are answered,
than in the case of testimony received in a normal
way from a witness testifying orally from the
witness box. At trial a witness seldom faces the
judge, as a person being interrogated naturally
turns towards the questioner. However, it is much
more tedious and trying to listen to videotaped
evidence as it lacks the life and reality of oral
evidence at trial and as the judge can exercise no
control whatsoever over how it is adduced. Should
improper, leading, hearsay or irrelevant questions
be asked or answers given, he obviously is in no
position to interrupt the flow of evidence and must,
at a later date, decide what answers are to be
disregarded. Should the record contain many such
inadmissible answers from various witnesses in a
lengthy case such as the present one, the task of
dealing with them ex post facto can become
unnecessarily tedious. For that reason, as well as
for proper control of interpreted evidence as previ-
ously mentioned, it is my view that commission
evidence be taken wherever possible before a legal
ly qualified and experienced person who, in certain
circumstances, might well be a judge.
In the case at bar, the taking of commission
evidence was not controlled and counsel generally
examined the witnesses as if they were conducting
examinations for discovery of parties to the action.
Finally, and perhaps most importantly, in the case
of the witnesses who testified in the English lan
guage, it became abundantly clear that in many
instances, the transcript, although faithfully repro
ducing the spoken words, often failed to convey to
the reader the true meaning of and conclusions to
be drawn from the witnesses' answers. One can
well imagine the even greater discrepancies which
occur when the text of the transcript is the product
of an interpretation.
Although appellate tribunals have for many
years quite properly adopted the principle that one
must proceed very cautiously before relying on a
transcript of testimony to vary or reverse a finding
of fact resulting from oral evidence, the basic
validity of that principle becomes crystal clear
when one listens to and observes videotaped evi
dence with the written text in hand. It also brings
to light the obvious advantage of having video
taped evidence at hand as part of the record where
any question might arise on appeal as to the
validity of a finding of fact in the context of
certain answers of a witness. The spoken word and
the visual impression are both preserved as part of
the record to explain and at times to modify and
even upset the conclusions that one might other
wise come to by a mere reading of the transcript.
Having read the transcripts previously, I was quite
surprised to note the degree to which some of my
original impressions as to the effects of the evi-
dence were either modified or completely changed
upon viewing the actual videotaped recordings.
As Collier J. stated in the case of Xerox of
Canada Ltd. et al. v. IBM Canada Ltd. (1977), 33
C.P.R. (2d) 24 (F.C.T.D.), at page 42:
It is almost trite to observe that no matter how gifted the Court
reporter in recording words he cannot (and is forbidden to do
so) record the pauses in answers, the hesitancy of a witness, the
silent resistance to yielding the obvious, the demeanour and
manner in exchanges with counsel, the tone of voice and the
nuances of expression, facial and otherwise. Some of the illus
trations (earlier set out) for my critical assessment may, poss
ibly, seem unexceptional. But the print does not record the
atmosphere of the arena at the particular moment.
In conclusion, it seems very obvious that all
commission evidence should normally be video
taped with full sound recording. Furthermore,
having regard to the considerable technical
advances recently made in this field and to the fact
that both sound and video-recording are now com
bined in one small portable camera, it might be
worthwhile that, as an adjunct to the normal tran
scription services, some consideration be given to
provision being made in the Rulesçof the Court for
videotaping oral testimony of certain trials. The
true weight, probative value and effect of the
testimony would then be preserved with all the
important inflections, pauses, hesitations and atti
tudes of the witnesses none of which are apparent
in the arid transcripts, which in fact are at times so
misleading.
TOPOGRAPHY
In order to better understand the evidence, the
location in relation to I.R. 172 of certain places
most frequently referred to, are described in
Schedule "B" attached to these reasons. *
THE DUNNE-ZA CREE SOCIETY
An appreciation of the culture of the Dunne-za
Cree, their way of life and degree of sophistication,
as well as how the society was organized and
functioned, is of some importance in determining
many of the issues raised, such as how the surren-
* Editor's Note: The Schedules have been omitted.
der meeting of 1945 was in fact conducted, how it
should have been conducted, whether the Crown
owed any special duty to or stood in any special
fiduciary relationship to the Dunne-za Cree, the
extent of their comprehension and whether or not
they consented to the surrender with sufficient
knowledge of the basic relevant facts.
A considerable amount of testimony was heard
on their way of life, culture and other related
matters from the Indian witnesses themselves and
other witnesses called both by plaintiffs and the
defendant including an expert anthropologist
called by the plaintiffs. It is not my intention to
comment extensively on these matters, but to
merely touch on some of the highlights. The evi
dence of the anthropologist will be dealt with more
fully at a later stage.
The Dunne-za Cree who, for some centuries,
had been living in northeastern B.C. and were
originally engaged exclusively in hunting, fishing
and the gathering of berries, had also, for many
years previous to the 1940s, added trapping as an
integral part of their livelihood. Although they
remained hunters and gatherers, trapping in fact
had become the principal means of obtaining
money or credit and therefore goods, clothing,
amenities and supplies from the white man.
From 1930, the Provincial government of British
Columbia required that all trappers, including
Indians, confine their trapping activities to regis
tered trap lines. By 1945, the Department of
Indian Affairs had managed to obtain from B.C.
the registration of several trap lines all situated
together in a large area to the north and northeast
of I.R. 172, for the exclusive use of the Dunne-za
Cree. One further line was obtained in 1949. The
various hunting, fishing, trapping and berry pick
ing areas of the two Bands are indicated on maps
filed at trial as Exhibits 919 to 928 inclusively.
Although these maps show the areas exploited
during 1978 and 1979, they appear, generally
speaking, to represent approximately the same
areas as those used in the 1940s. Although they
hunted all year round, their trapping activities
took place in the fall and winter and also extended
until the middle of May for beaver furs. They
trapped beaver, muskrat, lynx, fisher, squirrel and
other fur bearing animals and hunted such animals
as bear, moose, deer, rabbit and porcupine as well
as grouse and other game birds. They would gener
ally eat the flesh of all animals trapped and hunted
except lynx, marten and fisher.
They would all meet every summer for a few
weeks in a summer gathering place where they
would rest, visit, exchange information, play
tames, engage in various activities and generally
;njoy and benefit from various social exchanges.
Their life was essentially a nomadic one. They
hunted and trapped in small hunting groups of
between 3 and 10 male members. The women also
took part in the hunting and trapping activities.
Each group recognized one Indian, generally the
eldest or, at times, the most skilful hunter, as the
leader. There were 7 such groups. They would
follow their trap lines during the trapping season.
During the remainder of the year, they would
spend some time at their summer gathering place
but most of the time gathering berries and looking
for game in their various hunting areas. Some
winter cabins were built along the various trap
lines. In the summer they originally used tepees
and, later on, tents.
In addition to the group leaders, there was in the
1940s a Chief of the Band, Chief Succona and also
a Headman or Sub-Chief, one Joe Apsassin. Until
approximately 1954, the Chiefs were appointed for
life. Since then, they are elected pursuant to proce
dures laid down by the Department of Indian
Affairs. I find that, even when the Chiefs were
appointed for life, they could nevertheless be
removed if they were deemed to no longer be wise
or good as Chiefs and another Chief could be
chosen. The witness John Davis at first denied this
but then subsequently admitted it upon being
faced, on cross-examination, with his previous tes
timony given on commission.
In the 1940s the Dunne-za Cree mixed very
little with white society although white settlers
were gradually moving north and their contacts
with white trappers and with some of the farmers
settling in the general area were becoming some
what more frequent. They maintained contact with
the Department of Indian Affairs through the
Indian Agent whose office was situated in Fort
Saint John. The Indian Agent would, throughout
the year, visit the Indians from time to time and
would also see them when they came to Fort Saint
John to trade their furs and would also meet with
them at treaty time wherever treaty money was to
be paid.
There seems to be little doubt that, in the 1940s,
the Dunne-za Cree did not possess the required
skills to engage in any financial planning or budg
eting or to generally manage their affairs from a
financial standpoint. They had no true organized
system of government or real law makers. They
also lacked to a great extent the ability to plan or
manage, with any degree of success, activities or
undertakings other than fishing, hunting and trap
ping. It seems that many of their decisions even
regarding these activities, could better be
described as spontaneous or instinctive rather than
deliberately planned. The witness Johnson-Watson
testified that, even during the years 1975 and 1978
when he was district manager for the Fort Saint
John district office, he found that the Dunne-za
Cree were greatly limited in the ability to manage
the financial aspect of their affairs, that they were
not successful farmers and that they still relied to
a large extent on advice and guidance from the
Department's staff. Most of the other bands were
considerably more advanced in these areas. The
society was individualistic, having to rely on one
another and the members were not inclined to be
competitive.
NATURE OF TITLE, RELATIONSHIP AND DUTY
The leading case pertaining to the nature of the
interest of status Indians in lands and of the
relationship existing between them and the Crown
is, without a doubt, the case of Guerin et al. v. The
Queen et al., [1984] 2 S.C.R. 335.
All of the judges recognized and reaffirmed that
the Indians' interest in real property was not a
legal property interest but merely a "personal and
usufructuary interest", as laid down by the Privy
Council in the case of St. Catherine's Milling and
Lumber Company v. Reg. (1888), 14 App. Cas.
46, and recently approved by the Supreme Court
in Smith v. The Queen, [1983] 1 S.C.R. 554.
In her reasons, concurred in by Ritchie and
McIntyre JJ., Wilson J. stated that, although sub
section 18(1) of the Indian Act [R.S.C. 1952, c.
149] did not per se create a fiduciary obligation on
the part of the Crown, it did recognize the exist
ence of such a relationship which has its roots in
aboriginal title and also did acknowledge the his
toric reality that Indians have a beneficial interest
in reserves and that the Crown has a responsibility
to protect it. The Crown does not, previous to
surrender, hold the land in trust. However, upon
surrender the fiduciary relationship which previ
ously existed at large is crystalized into an express
trust.
The Chief Justice [then Puisne Judge], whose
reasons were concurred in by three of the Judges
namely, Beetz, Chouinard and Lamer JJ., took a
somewhat different view of the relationship.
The nature of the Indians' interest is that it is
inalienable except upon surrender and places upon
the Crown the equitable obligation, enforceable at
law, to deal with the land for the benefit of the
Indians. They agreed with Le Damn J., who had
delivered the judgment in that case on behalf of
the Federal Court of Appeal [[1983] 2 F.C. 656;
(1982), 143 D.L.R. (3d) 416], that the Crown
does not hold land in trust for the Indians after
surrender. They did not agree that, at the time of
surrender, the Crown's obligation crystallized into
a trust either express or implied. They felt that
upon unconditional surrender, the Indians' right in
the land disappears. No property interest is trans
ferred which could constitute the res of the trust
nor is there a constructive trust created by the
surrender. The Crown must however hold the sur
rendered land for the use and benefit of the surren
dering band and that obligation is [at page 387]
"subject to principles very similar to those which
govern the law of trusts concerning for example,
the measure of damages for breach". They also
stated that, although the relationship does bear
some similarity to an agency, it does not constitute
an agency at law, as the Crown's authority to act
is not based on contract and the band is not a
party to the ultimate disposal of the land, which
would be the case if there were an agency
relationship.
After analyzing the effect of the Royal Procla
mation, 1763 [R.S.C. 1970, Appendix II, No. 1],
the reasons of the Chief Justice contained the
following statement at page 383:
The purpose of this surrender requirement is clearly to
interpose the Crown between the Indians and prospective pur
chasers or lessees of their land, so as to prevent the Indians
from being exploited. This is made clear in the Royal Procla
mation itself, which prefaces the provision making the Crown
an intermediary with a declaration that "great Frauds and
Abuses have been committed in purchasing Lands of the Indi-
ans, to the great Prejudice of our Interests, and to the great
Dissatisfaction of the said Indians...."
It appears clear however that the special fiduci
ary relationship arises upon surrender. The Chief
Justice states at page 382:
... it is also true, as will presently appear, that the interest
gives rise upon surrender to a distinctive fiduciary obligation on
the part of the Crown to deal with the land for the benefit of
the surrendering Indians. These two aspects of the Indian title
go together, since the Crown's original purpose in declaring the
Indians' interest to be inalienable otherwise than to the Crown
was to facilitate the Crown's ability to represent the Indians in
dealings with third parties. The nature of the Indians' interest
is therefore best characterized by its general inalienability,
coupled with the fact that the Crown is under an obligation to
deal with the land on the Indians' behalf when the interest is
surrendered. Any description of Indian title which goes beyond
these two features is both unnecessary and potentially mislead
ing. [Emphasis added.]
Estey J., for his part, chose to dispose of the case
strictly on the basis of an agency relationship,
without considering the problem of whether there
existed any trust, fiduciary relationship or pre-
surrender duty.
I feel that the views expressed by the Chief
Justice and the three Justices who concurred, are
binding upon me and also appear to be the most
plausible. This approach has since been followed
by Urie J. in the appeal of Kruger v. The Queen,
reported in [1986] 1 F.C. 3 (abridged); (1985), 58
N.R. 241 (C.A.), at pages 47-48 F.C.; 257 N.R.,
paras. 52 and 53. With the exception of any
special obligations which might be created by
treaty, there is no special fiduciary relationship or
duty owed by the Crown with regard to reserve
lands previous to surrender nor, a fortiori, is there
any remaining after the surrendered lands have
been transferred and disposed of subsequently. The
duty from that moment attaches to the proceeds of
disposition. There might indeed exist a moral,
social or political obligation to take special care of
the Indians and to protect them (especially those
bands who are not advanced educationally, socially
or politically) from the selfishness, cupidity, cun
ning, stratagems and trickery of the white man.
That type of political obligation, unenforceable at
law, which the Federal Court of Appeal in the
Guerin case (supra) felt should apply to the Crown
following surrender (which concept was, of course,
rejected by the Supreme Court), would be appli
cable previous to surrender. This legal issue is of
some importance in the present case since counsel
for the plaintiffs argued that, previous to the sur
render and also following final disposition of the
lands the Crown was in breach of certain alleged
fiduciary duties such as the duty to take action to
prevent some white farmers from grazing cattle on
certain parts of the reserve.
Although, as previously stated, three justices of
the Supreme Court (Ritchie, McIntyre and Wilson
JJ.) held that there existed, previous to surrender,
a fiduciary duty regarding the lands, neither they
nory anyone else at any time suggested that there
might continue to subsist some general continuing
legally recognized fiduciary duty regarding the
lands, once they have been disposed of.
The Indian Act does impose certain restrictions
on the actions and on the rights of status Indians.
Except insofar as those specific restrictions might
prevent them from acting freely, the Indians are
not to be treated at law somehow as if they were
not sui juris such as infants or persons incapable
of managing their own affairs, which would cause
some legally enforceable fiduciary duty to arise on
the part of the Crown to protect them or to take
action on their behalf. They are fully entitled to
avail themselves of federal and provincial laws and
of our judicial system as a whole to enforce their
rights, as they are indeed doing in the case at bar.
Finally, the provisions of our Constitution are of
no assistance to the plaintiffs on this issue. The
Indian Act was passed pursuant to the exclusive
jurisdiction to do so granted to the Parliament of
Canada by subsection 91(24) of the Constitution
Act 1867, [30 & 31 Vict., c. 3 (U.K.) [R.S.C.
1970, Appendix II, No. 5] (as am. by Canada Act
1982, 1982, c. 11 (U.K.) Schedule to the Consti
tution Act, 1982, Item 1)]. This does not carry
with it the legal obligation to legislate or to carry
out programs for the benefit of Indians any more
than the existence of various disadvantaged groups
in society creates a general legally enforceable
duty on the part of governments to care for those
groups although there is of course a moral and
political duty to do so in a democratic society
where the welfare of the individual is regarded as
paramount.
I must hasten to state however, that, wherever
advice is sought or whenever it is proferred,
regardless of whether or not it is sought or whether
action is taken, there exists a duty on the Crown to
take reasonable care in offering the advice to or in
taking any action on behalf of the Indians. Wheth
er or not reasonable care and prudence has been
exercised will of course depend on all of the cir
cumstances of the case at that time and, among
those circumstances, one must of course include as
most important any lack of awareness, knowledge,
comprehension, sophistication, ingenuity or
resourcefulness on the part of the Indians of which
the Crown might reasonably be expected to be
aware. Since this situation exists in the case at bar,
the duty on the Crown is an onerous one, a breach
of which will bring into play the appropriate legal
and equitable remedies.
Where there does exist a true fiduciary relation
ship such as in the case at bar, following the 1945
surrender, the same high degree of prudence and
care must be exercised in dealing with the subject-
matter to which the fiduciary duty relates, as in
the case of a true trust (refer Guerin et al. v. The
Queen et al., supra, at page 376). The test to be
applied is an objective one: good faith and a clear
conscience will not suffice. It is also similar to a
trust in another respect: where a trustee is in any
way interested in the subject-matter of the trust,
there rests upon him a special onus of establishing
that all of the rights and interests both present and
future of the beneficiary are protected and are
given full and absolute priority and that the
subject-matter is dealt with for the latter's benefit
and to the exclusion of the trustee's interest to the
extent that there might be a conflict. A similar
onus rests on the Crown in the case at bar regard
ing the equitable obligation which it owed the
plaintiffs.
EDITOR'S NOTE
With the exception of a one-year exploration
permit granted in 1940, no oil, gas or other miner
al leases in respect of I.R. 172 were sought or
granted until several years after the transfer to
The Director, The Veterans' Land Act in 1948. By
that year, no oil or gas field had been discovered
closer than 340 miles away (Leduc) except for a
small gas field at Pouce Coupé some 50 miles
distant on the Alberta—B.C. border. As late as
1981 there, was no oil field in the Pouce Coupé
area. No actual exploration for gas or oil was
done on I.R. 172 prior to 1976. Nor did I.R. 172 lie
within any of the 14 large areas of land in north
eastern British Columbia targeted for oil explora
tion in 1950 by a consortium of major oil
companies.
It was in 1976 that there was a major oil find, in
an unusual trap between rock layers, on l.R. 172.
The opinion of the plaintiffs' expert, that "by the
1940s it would have been obvious even to a
casual observer that the Peace River area of B.C.
had attracted serious commercial interest for oil
and gas", could not be accepted as the evidence
did not support that conclusion. The opinion of
the defendant's geologist was to be preferred.
The excitement over the discovery at Leduc in
1947 was restricted to the areas around Edmon-
ton and Calgary and had little if any effect in
British Columbia. In that year the question was not
considered as being whether there was oil on I.R.
172 but whether there were any economic oil or
gas accumulations anywhere in northeastern B.C.
The opinion of the defendant's expert was not
destroyed by the evidence that, in 1950, Sun Oil
Company had acquired exploration rights in
respect of I.R. 172. That company had risked a
limited amount of money but nothing resulted
therefrom for many years. There was evidence
that the oil discovery, made a quarter century
after 1947, was accidental and that the accumula
tion was so unique that it could not have been
anticipated in 1948. Until that discovery, the min
eral rights under I.R. 172 would have carried a
modest value. That opinion was supported by the
fact that mineral rights were apparently not con
sidered worthy of mention in the sale to the
Director and in the land sales to veterans.
I find that, taking into account the fiduciary
relationship then existing between Her Majesty
the Queen and the plaintiffs, none of her officers,
servants or agents, exercising due care, consider
ation and attention in the discharge of those
fiduciary duties, could reasonably be expected to
have anticipated at any time during 1948 or previ
ously that there would be any real value attached
to potential mineral rights under I.R. 172 or that
there would be any reasonably foreseeable advan
tage in retaining them.
TREATY 8
The plaintiffs formally adhered to Treaty 8 in
May 1900 (Exhibit 1 at trial). In 1916, pursuant
to that Treaty, they obtained I.R. 172 which com
prised 18,168 acres. The three new reserves which
they eventually received in 1950 after surrender
and disposal of I.R. 172, comprised some 6,194
acres. They claim to be entitled to the difference,
that is 11,974 acres, of new reserves as a loss of the
benefits of Treaty 8 because they allege that,
pursuant to its terms, the Crown was obliged to
secure for them in perpetuity a fair portion of the
ceded treaty territory.
There is no dispute over the fact that when the
plaintiffs received the 18,168 acres, they received
their full reserve land entitlement under the
Treaty. The three paragraphs dealing with reserve
land rights are to be found at the bottom of page
12 and top of page 13 of the Treaty. They read as
follows:
And Her Majesty the Queen hereby agrees and undertakes
to lay aside reserves for such bands as desire reserves, the same
not to exceed in all one square mile for each family of five for
such number of families as may elect to reside on reserves, or in
that proportion for larger or smaller families; and for such
families or individual Indians as may prefer to live apart from
band reserves, Her Majesty undertakes to provide land in
severalty to the extent of 160 acres to each Indian, the land to
be conveyed with a promise as to non-alienation without the
consent of the Governor General in Council of Canada, the
selection of such reserves, and lands in severalty, to be made in
the manner following, namely, the Superintendent General of
Indian Affairs shall depute and send a suitable person to
determine and set apart such reserves and lands, after consult
ing with the Indians concerned as to the locality which may be
found suitable and open for selection.
Provided, however, that Her Majesty reserves the right to
deal with any settlers within the bounds of any lands reserved
for any band as She may see fit; and also that the aforesaid
reserves of land, or any interest therein, may be sold or
otherwise disposed of by Her Majesty's Government for the use
and benefit of the said Indians entitled thereto, with their
consent first had and obtained.
It is further agreed between Her Majesty and Her said
Indian subjects that such portions of the reserves and lands
above indicated as may at any time be required for public
works, buildings, railways, or roads of whatsoever nature may
be appropriated for that purpose by Her Majesty's Government
of the Dominion of Canada, due compensation being made to
the Indians for the value of any improvements thereon, and an
equivalent in land, money or other consideration for the area of
the reserve so appropriated.
In The Queen v. George, [1966] S.C.R. 267, at
page 279, we find the following statement of the
law regarding an 1827 treaty:
We should, I think endeavour to construe the treaty of 1827
and those Acts of Parliament which bear upon the question
before us in such manner that the honour of the Sovereign may
be upheld and Parliament not made subject to the reproach of
having taken away by unilateral action and without consider
ation the rights solemnly assured to the Indians and their
posterity by treaty.
This same principle would certainly apply to
Treaty 8.
Even the most liberal interpretation, in accord
ance with the above mentioned principle in The
Queen v. George of the above quoted treaty
clauses, leads one to the inevitable conclusion that,
once the Crown had laid aside as a reserve the
required amount of land, the obligation of the
Crown pursuant to the Treaty had been fulfilled
insofar as reserve land is concerned. In other
words, the second and third paragraphs are incon
sistent with any perpetual obligation to continue
providing reserve bases from time to time to the
extent of that acreage, after a reserve has been
legally and properly surrendered by the Band and
subsequently disposed of and the proceeds of dis
position have been set aside to the credit of or paid
to the Band. There is no subsisting right on the
part of the Band under the Treaty itself to receive,
over and above the proceeds of disposition, addi
tional reserve land up to the amount of acreage
initially set aside pursuant to the Crown's treaty
obligations.
Counsel for the plaintiffs relied on certain state
ments of the report of the Commissioners for
Treaty 8, dated 22nd September 1899. The report
is annexed to the Treaty as part of Exhibit 1 at
trial.
The Commissioners were responsible to negoti
ate and obtain the adhesion of various Indian
bands who were within the territory to be covered
by the Treaty. It was argued by counsel that
representations made by the Commissioners, as
evidenced by the report, created the obligation to
continue to supply reserve land to the extent men
tioned in the Treaty, notwithstanding the fact that
the land might have at one time been properly
disposed of with the full consent of the Indians.
Because of the special relationship existing be
tween the Crown and the Indians, the iiiiteracy of
the latter and their dependency on the advice of
agents of the Crown, if there was in fact a special
representation made to the Indians to that effect
previous to signature, any such representation
would be fully binding at law on the Crown,
notwithstanding the fact that it might not have
been incorporated in the formal terms of the
Treaty.
The plaintiffs rely specifically on the underlined
sentence of the following paragraph contained in
the report of the Commissioners:
The Indians are given the option of taking reserves or land in
severalty. As the extent of the country treated for made it
impossible to define reserves or holdings, and as the Indians
were not prepared to make selections, we confined ourselves to
an undertaking to have reserves and holdings set apart in the
future, and the Indians were satisfied with the promise that this
would be done when required. There is no immediate necessity
for the general laying out of reserves or the allotting of land. It
will be quite time enough to do this as advancing settlement
makes necessary the surveying of the land. Indeed, the Indians
were generally averse to being placed on reserves. It would have
been impossible to have made a treaty if we had not assured
them that there was no intention of confining them to reserves.
We had to very clearly explain to them that the provision for
reserves and allotments of land were made for their protection
and to secure to them in perpetuity a fair portion of the land
ceded, in the event of settlement advancing. [Emphasis added.]
I simply cannot read into that statement the
meaning which the plaintiffs urge that I attribute
to it: the undertaking is to provide reserve lands
when required by the Indians up to the amount
stipulated. Once that land has been provided it will
be theirs in perpetuity and they cannot then be
deprived of it without their consent. That is the
effect and substance of the statement. There is no
mention whatsoever that, if a reserve is subse
quently disposed of with the properly obtained
consent of the Indians, new reserves will be fur
nished. There might well exist in certain circum
stances a political or moral obligation to do so, but
not a legal one pursuant to Treaty 8. The provi
sions of fresh reserve lands might also be one of
the conditions imposed by the Indians or suggested
and agreed upon by the Crown at the time of the
surrender of a reserve but this would be the
subject-matter of a new agreement and has noth
ing to do with Treaty 8 nor is it dealt with either
directly or indirectly in the Treaty or by the
Commissioners in their report.
1940 SURRENDER
On the 9th of July, 1940 the plaintiffs surren
dered to the Crown their mineral rights in I.R. 172
"in trust to lease the same to such person or
persons and upon such terms as the Government of
Canada may deem most conducive to our welfare
and that of our people". That surrender document
was executed by Succona and Joseph Apsassin, the
same Chief and Headman who subsequently
signed the 1945 surrender. The 1940 surrender
was also signed by 3 councillors or "principal
men".
Section 51 of the Act prescribes the require
ments for a valid release or surrender of "Indian
lands". The first part of that section reads as
follows:
51. Except as in this Part otherwise provided, no release or
surrender of a reserve, or a portion of a reserve, held for the use
of the Indians of any band, or of any individual Indian, shall be
valid or binding, unless the release or surrender shall be
assented to by a majority of the male members of the band of
the full age of twenty-one years, at a meeting or council thereof
summoned for that purpose, according to the rules of the band,
and held in the presence of the Superintendent General, or of
any officer duly authorized to attend such council, by the
Governor in Council or by the Superintendent General.
As previously stated, neither the validity of that
surrender nor, presumably, the Indians' informed
consent to it were, unlike the subsequent surrender
of 1945, disputed. The latter was for sale or lease
and the issue between the parties regarding the
1940 surrender of the mineral rights for lease was
whether it resulted in the mineral rights not being
included in the 1945 surrender or not being cap
able of being included in it.
It is of some importance to remember that the
title of the reserve lands remained in the Crown at
all times. What might be termed the granting
clause in the 1940 surrender effectively released to
the King whatever usufructuary interests the
plaintiffs had in "the petroleum and natural gas
and the mining rights in connection therewith"
pertaining to I.R. 172. The 1945 surrender, on the
other hand, refers to the reserve itself and not to
any particular limited right in the reserve and
purports to release to His Majesty for ever the
entire reserve. This, of course, can only mean
whatever usufructuary interest or rights the Indi-
ans might have in the entire reserve. There is no
restriction in the granting clause; the habendum
clause mentions that it is "in trust to sell or lease
... and moneys received shall be placed to our
credit in the usual way." When there is no restric
tion or reservation expressed in the description of
the property granted or ceded all of the property
mentioned, whether it be real or personal and all
of the interest in that property whether it be legal,
equitable or usufructuary, is presumed to be the
subject-matter of the grant. This is not only a rule
of common law but one of common sense.
Assuming for the moment that full, free and
informed consent was given by the plaintiffs to the
1945 surrender, one would normally conclude on
the mere reading of those two documents and
failing evidence to the contrary, that it was intend
ed by.both parties on executing the 1945 surren
der, that all of the property rights of the plaintiffs,
including any property or other rights in minerals
which they might possibly have were being surren
dered for the purposes mentioned in that docu
ment, that is, for sale or lease by the Crown for the
benefit of the Indians. I find that, in interpreting
the document pursuant to the principle mentioned
in The Queen v. George (supra), the wording
imposes, upon sale or absolute disposal of the
reserve, the obligation on the part of the Crown to
set aside for the plaintiffs not only whatever con
sideration might be attributable to the usufructu-
ary interests ceded, but also whatever part of the
total consideration might arguably be attributable
to the remainder of the absolute title. In any event,
the absolute title, when subject to the burden of a
perpetual unlimited usufructuary interest affecting
the whole of the land involved, would have no real
value.
Counsel for the plaintiffs argued however that,
whatever meaning one might attempt to attribute
to the 1945 surrender document, their clients'
interests in the petroleum and natural gas rights
were no longer capable at law of being surrendered
by that document because they were no longer
encompassed within the reserve: upon surrender in
1940 and acceptance of the surrender by Order-in-
Council they became "Indian lands" and were
unavailable for re-surrender in 1945. The mineral
rights were, by the 1940 surrender, severed from
the Indians' other interest in I.R. 172.
The 1940 instrument of surrender was, pursuant
to the requirements of subsection 51(4) of the
Indian Act duly accepted by the Governor in
Council in November 1941 by Q.C. 8939 (Exhibit
214 at trial).
The argument rests mainly on the definitions of
"Indian lands" and "reserve" as they are found in
the 1927 Act. Paragraph 2(e) of that act defines
"Indian lands" as:
2. ...
(e) any reserve or portion of a reserve which has been
surrendered to the Crown;
"Reserve" is defined in paragraph 2(j) as follows:
2....
(j) "reserve" means any tract or tracts of land set apart by
treaty or otherwise for the use or benefit of or granted to a
particular band of Indians, of which the legal title is in the
Crown, and which remains set apart and has not been
surrendered to the Crown, and includes all the trees, wood,
timber, soil, stone, minerals, metals and other valuables
thereon or therein;
Based on these definitions, counsel for the plain
tiffs argued that, once the 1940 surrender was
taken, the petroleum and gas became "Indian
lands" and therefore no longer a reserve or a
portion of a reserve and subject only to disposal as
petroleum and natural gas rights on reserves pur
suant to the 1930 Regulations, paragraph 1(a) of
which provided that they could be leased at a
rental of 50¢ per acre for the first year and then at
$1 an acre for each subsequent year, if they had
been released to His Majesty in trust in accord
ance with section 50 of the Indian Act. They relied
mainly on the case of St. Ann's Fishing Club v.
The King, [1950] S.C.R. 211, at page 215, where
Taschereau J. stated:
These lands in question were formerly part of a "Reserve"
for the use or benefit of the Chippewa and Pottawatomie
Indians of Walpole Island, and there is no doubt that they
could not be originally leased in May, 1881, to the predecessors
of the appellant, unless they had been surrendered to the
Crown. The effect of a surrender is to make a reserve or part of
a reserve, "Indian Lands", defined in section 2 of the Indian
Act, para. (k) ((i.e. 2(e) of the 1927 Act)) as "any reserve or
portion of a reserve which has been surrendered to the Crown".
[Emphasis and text in double parentheses added.]
They also relied on the following statement by
Kerwin J. at pages 212 and 213 of the same case:
During the argument a question was asked as to whether a
contention could be advanced that the surrender "to the end
that said described territory may be leased to the applicants for
the purpose of shooting and fishing for such term and on such
conditions as the Superintendent of Indian Affairs may consid
er best for our advantage", was really a surrender upon condi
tion, and that if the condition were not fulfilled the land would
revert. It was suggested in answer thereto that this would not
assist the appellant and this was made quite clear by Mr.
Jacket when he pointed to ss. 2(i) and (k) ((i.e. 2(j) & (e) of
1927 Act)), 19, 48 and 49 of the Indian Act, c. 81, R.S.C.
1906. If by some means the lands again became part of the
reserve, then s. 49 ((i.e. see 51 of 1927 Act)) would apply and,
except as in Part I otherwise provided, no release or surrender
of a reserve or a portion thereof shall be valid or binding unless
the release or surrender complies with the specified conditions.
[Emphasis and text in double parentheses added.]
The St. Ann's Fishing Club case can clearly be
distinguished from the present one as it involved
the surrender of an entire island being a portion of
a reserve while the gas and oil rights are merely an
interest in the whole of the reserve. The 1940
surrender was not a surrender of "a portion of" the
reserve as defined in paragraph 2(e) and as con
sidered in the St. Ann's Fishing Club case but only
of a right in a part of the whole reserve. Further
more, in the Act, a reserve is contemplated as
being an extent or stretch of territory which is
defined therein as a "tract or tracts of land set
apart ... and includes ... the trees, wood ...
minerals, metals and other valuables". That simply
means that the land of the reserve includes these
objects and does not mean that a right or interest
such as a leasehold interest in any of these objects
constitutes a reserve. The inclusion of those objects
in the term "reserve" might have been deemed
preferable as the Indians do not have a title to the
reserve but merely an usufructuary interest in it
and there does not exist in such a case a common
law rule which, as in the case of an absolute title,
provides that all of these objects are necessarily
included in a fee simple unless specifically
excepted.
Finally, there is nothing in the Indian Act pro
hibiting the Band from changing its mind and
giving approval and consent to another arrange
ment with the Crown. Counsel for the plaintiffs
were in fact arguing that, because of the trust for
lease imposed on the Crown by the 1940 surren
der, that surrender rendered the interests of the
Indians in mineral rights incapable of any oher
type of alienation except by means of lease even if
both the Crown and the Indians subsequently
agreed to a sale or to a further type of alienation
as part of the whole reserve. This would lead to the
absurd conclusion that these oil and gas rights
would be forever incapable of sale although the
remaining rights in the reserve could be surren
dered for that purpose. In order to arrive at any
such extraordinary conclusion, there would have to
be a clear and unequivocal provision in the Indian
Act to that effect. No such restraint on alienation
exists therein. Legislative enactments do at times
lead to absurdities, but, before accepting them, the
Courts must, at the very least, insist that in such
cases the intention of the legislators be not only
clearly and unequivocally expressed but that the
text be completely incapable of supporting any
other interpretation.
Counsel for the plaintiffs, in their argument
regarding severance of oil and gas rights from the
remaining rights in the reserve and the conse
quences of such severance, referred to several cases
as well as to Armour on Real Property, 2nd Ed.,
1916. The cases referred to were Humphries v.
Brogden (1850), 12 Q. B. 739; Algoma Ore Prop
erties Ltd. v. Smith, [1953] 3 D.L.R. 343 (Ont.
C.A.); Stoughton v. Leigh, (1808), 1 Taunt. 402;
127 E.R. 889 (H.C. Ch.); Ex p. Jackson, [1925] 1
D.L.R. 701 (Alta. S.C., App. D.), at page 702;
Berkheiser v. Berkheiser and Glaister, [1957]
S.C.R. 387; Martyn v. Williams (1857), 1 H. &
N. 817; 156 E.R. 1430 (Exch.), and Earl of
Lonsdale v. Lowther, [ 1900] 2 Ch. 687. That
jurisprudence does not affect the fundamental
issue of whether the rights surrendered for lease in
1940 were legally capable of forming part of the
1945 surrender and of being eventually sold free of
any trust for lease in favour of the plaintiffs
originally created by the 1940 surrender.
I therefore find that the oil and petroleum rights
surrendered for the purpose of leasing in 1940
were still at law capable of being surrendered with
the remainder of the reserve in 1945 for either
leasing or sale or both.
BREACHES OF DUTY BETWEEN 1916 AND 1945
The acts of negligence and of non-fraudulent
breach of fiduciary duty alleged by the plaintiffs to
have occurred between 1916 and 1945, in allowing
unauthorized use of the lands in which the plain
tiffs had an interest and also in allowing the
Province of British Columbia to improperly regu
late the use of certain lands are without foundation
at law. There is no legal duty statutory, fiduciary
or otherwise, cast upon the Department of Indian
Affairs to actively police the Indian reserves nor is
there any legal duty on the part of the defendant
to interfere with or to use its constitutional power
to override legitimate provincial legislation of gen
eral application merely because it also happens to
affect the Indians.
By reason of their very nature, the incidents
complained of must necessarily have been known
to the plaintiffs at the time they occurred. There is
no evidence that any complaint was ever made to
Superintendent General or to the departmental
officials regarding these alleged trespassers which
might bring into play any duty on the part of the
Department to prosecute trespassers as mentioned
in sections 35 and 36 of the Indian Act of 1927.
For the reasons which I will be dealing with
subsequently these claims are also statute barred
by the mere fact that they are all alleged to have
occurred during a period well over 30 years previ
ous to the institution of the action and no fraud on
the part of the defendant pertaining thereto has
even been alluded to.
1945 SURRENDER
a) Statute Law applicable:
In order to be valid, the 1945 surrender must,
among other things, have been carried out in
accordance with the provisions of the Indian Act
applicable at that time, namely sections 4, 50 [as
am. by S.C. 1938, c. 31, s. 1] and 51. They read as
follows:
4. The Minister of the Interior, or the head of any other
department appointed for that purpose by the Governor in
Council, shall be the Superintendent General of Indian Affairs,
and shall, as such, have the control and management of the
lands and property of the Indians in Canada.
50. Except as in this Part otherwise provided, no reserve or
portion of a reserve shall be sold, alienated or leased until it has
been released or surrendered to the Crown for the purposes of
this part; but the Superintendent General may lease, for the
benefit of any Indian, upon his application for that purpose, the
land to which he is entitled without such land being released or
surrendered, and may, without surrender, dispose to the best
advantage, in the interests of the Indians, of wild grass and
dead or fallen timber.
2. The Governor in Council may make regulations enabling
the Superintendent General in respect of any Indian reserve, to
issue leases upon such terms as may be considered proper in the
interest of the Indians and of any other lessee or licensee of
surface rights,
(a) upon surrender in accordance with this part, of any land
deemed to contain salt, petroleum, natural gas, coal, gold,
silver, copper, iron or other minerals and to grant in respect
of such land the right to prospect for, mine, recover and take
away any or all such mineral, and
(b) without surrender, to any person authorized to mine any
of the minerals in this section mentioned, of surface rights
over such area of any land within a reserve containing any
such minerals as may be necessary for the mining thereof.
(As amended by S.C. 1938, c. 31, s. 1.)
51. Except as in this Part otherwise provided, no release or
surrender of a reserve, or a portion of a reserve, held for the use
of the Indians of any band, or of any individual Indian, shall be
valid or binding, unless the release or surrender shall be
assented to by a majority of the male members of the band of
the full age of twenty-one years, at a meeting or council thereof
summoned for that purpose, according to the rules of the band,
and held in the presence of the Superintendent General, or of
any officer duly authorized to attend such council, by the
Governor in Council or by the Superintendent General.
2. No Indian shall be entitled to vote or be present at such
council, unless he habitually resides on or near, and is interest
ed in the reserve in question.
3. The fact that such release or surrender has been assented
to by the band at such council or meeting shall be certified on
oath by the Superintendent General, or by the officer author
ized by him to attend such council or meeting, and by some of
the chiefs or principal men present thereat and entitled to vote,
before any person having authority to take affidavits and
having jurisdiction within the place where the oath is
administered.
4. When such assent has been so certified, as aforesaid, such
release or surrender shall be submitted to the Governor in
Council for acceptance or refusal. R.S., c. 81, s. 49; 1918, c. 26,
s. 2.
b) Status of decision to surrender
In dealing with the decision of the Department
in 1945 to sell I.R. 172, counsel for the defendant
argued that the question of whether a particular
surrender should be taken and accepted was a
policy function of the Department as opposed to an
operational function and was therefore not review-
able by the Courts. He relied on a statement by
Lord Diplock in Dorset Yacht Co. Ltd. v. Home
Office, [ 1970] A.C. 1004 (H.L.), at page 1067,
wherein he is quoted as stating:
It is, I apprehend, for practical reasons of this kind that over
the past century the public law concept of ultra vires has
replaced the civil law concept of negligence as the test of the
legality, and consequently of the actionability, of acts or omis
sions of government departments or public authorities done in
the exercise of a discretion conferred upon them by Parliament
as to the means by which they are to achieve a particular public
purpose. According to this concept Parliament has entrusted to
the department or authority charged with the administration of
the statute the exclusive right to determine the particular
means within the limits laid down by the statute by which its
purpose can best be fulfilled.
That statement of the law was reaffirmed and
followed subsequently by the House of Lords in
Anns v. Merton London Borough Council, [1978]
A.C. 728 (H.L.), at page 754:
Most, indeed probably all, statutes relating to public authori
ties or public bodies, contain in them a large area of policy. The
courts call this "discretion" meaning that the decision is one for
the authority or body to make, and not for the courts. Many
statutes also prescribe or at least presuppose the practical
execution of policy decisions: a convenient description of this is
to say that in addition to the area of policy or discretion, there
is an operational area. Although this distinction between the
policy area and the operational area is convenient, and
illuminating, it is probably a distinction of degree; many `oper-
ational" powers or duties have in them some element of "dis-
cretion." It can safely be said that the more `operational" a
power or duty may be, the easier it is to superimpose upon it a
common law duty of care.
The principle was also approved by the Supreme
Court of Canada in Kamloops (City of) v. Nielsen
et al., [1984] 2 S.C.R. 2, and by the British
Columbia Court of Appeal in Toews v. MacKenzie
(1980), 12 C.C.L.T. 263 (B.C.C.A.).
I do not accept the argument that, in the cir
cumstances of this case, the decision to accept the
surrender cannot be reviewed or that an action in
damages could not be founded on its improper
exercise. The decision is more properly character
ized as being in the "operational" rather than in
the "policy" field. Although it is a provision in a
statute which confers powers on the Department,
the scale 'and the extent to which the power can be
exercised is left to the Department. The discretion
is not absolute but must be accompanied by a
properly obtained consent on the part of the Indi-
ans and the Department in effect can only recom
mend: the approval depends ultimately on accept
ance by the Governor General in Council. Finally,
in the case at bar, the consent of the Indians
depended to some extent at least on the advice and
guidance which they sought and received from the
Department and the decision to accept the surren
der cannot logically be considered separately from
that advice given by the same authorities. Finally,
the plaintiffs are, in essence, not complaining of
the policy, but rather of the manner in which it
was actually implemented. That is reviewable and,
if improper, can form the basis of an action for
damages.
c) Surrender documents
One of the main issues to be tried was whether
the members of the Band fully understood and
freely consented to the surrender of I.R. 172 on
the 22nd of September, 1945. A closely related
issue was whether an individual vote was taken at
the meeting.
The indenture of surrender (Exhibit 295) and
the reporting letter by Mr. Grew (Exhibit 294)
dated September 24, 1945 are, of course, impor
tant exhibits to be considered on these issues.
The surrender document, witnessed by Mr.
Grew and Mr. Galibois, was executed on behalf of
the Band by Chief Succona and four other mem
bers of the Band, one of whom was the Headman
Joseph Apsassin and two of the remaining three
were leaders of their respective groups. Attached
to the actual surrender document is what counsel
described as an improperly executed affidavit
taken by Mr. Grew and also by Chief Succona and
Headman Joseph Apsassin, before one J. S. Young
described therein as "a Justice of the Peace in and
for British Columbia". Since the validity of this
document has been strongly objected to by counsel
for the plaintiffs, it is set out hereunder textually:
DOMINION OF CANADA
Province of British Columbia
County of Cariboo
To Wit:
Personally appeared before me
J. L. Grew
of the city of Ottawa
in the Province of Ontario
and Chief Succona and Headman Jos Apsassin Chiefs of the
St. John Beaver Band of Indians
And the said J. L. Grew
for himself saith:—
That the annexed release or surrender was assented to by a
majority of the male members of the said band of Indians of
the full age of twenty-one years entitled to vote, all of whom
were present at the meeting or council.
That such assent was given at the meeting or council of the
said Band summoned for that purpose and according to its rules
or the rules of the Department.
That the terms of the said surrender were interpreted to the
Indians by an interpreter qualified to interpret from the English
language to the language of the Indians.
That he was present at such meeting or council and heard
such assent given.
That he was duly authorized to attend such council or
meeting by the Deputy Superintendent General of Indian
Affairs.
That no Indian was present or voted at said council or
meeting who was not a member of the band or interested in the
land mentioned in the said release or surrender.
And the said Chief Succona and Headman Joseph
Apsassin
say:—
That the annexed release or surrender was assented to by
them and a majority of the male members of the said band of
Indians of the full age of Twenty-one years.
That such assent was given at a meeting or council of the
said band of Indians summoned for that purpose as herein-
before stated, and held in the presence of the said
J. L. Grew
That no Indian was present or voted at such council or
meeting who was not a habitual resident on the reserve of the
said band of Indians and interested in the land mentioned in the
said release or surrender.
That the terms of the said surrender were interpreted to the
Indians by an interpreter qualified to interpret from the English
language to the language of the Indians.
That they are Chief and Headman of the said band of
Indians and entitled to vote at the said meeting or council.
Sworn before me by the deponents
at the P.O. of Rose Prairie
In the County of Cariboo
This 22 day of September
A.D. 1945
J. E. Young
A Justice of the Peace
in and for British Columbia
Also annexed to the surrender document is what
is described as a complete list of voters dated
September 22, 1945. It lists 27 members as having
been present and having voted in favour of the
surrender, 4 as having been absent and none as
being against the surrender. The list was certified
as correct by J. L. Grew.
In his reporting letter (Exhibit 294) addressed
to Mr. Hoey, the Director of the Indian Affairs
Branch, Mr. Grew stated that he was enclosing the
signed surrender papers together with the voters
list and also informed Mr. Hoey that, on Saturday,
September 21, the Fort Saint John Band of Indi-
ans unanimously agreed to the surrender for sale
of their reserve.
The documents to which I have referred consti
tute at least prima facie evidence to the effect that
the Band had freely consented to the surrender of
I.R. 172 for the purpose of sale and, in the absence
of convincing evidence to the contrary, the plain
tiffs would fail on this issue.
Regarding the actual subject-matter of the sur
render and the conditions attached to it, I have
already discussed to some extent the granting and
habendum clauses of the document when dealing
with the 1940 surrender (refer page 53 supra). To
summarize: the document purports to grant all of
the interest of the Band in I.R. 172 subject only to
the fiduciary obligation of the Crown to sell or
lease to such persons and upon such conditions as
the Crown may deem conducive to the welfare of
the Band, with the proceeds to be placed "to our
credit in the usual way". It is obvious that,
although the surrender is drawn as if the fee
simple were being granted, it could not operate as
such since the title of the lands was in the Crown
before the surrender. The legal effect could only be
to grant or surrender whatever rights the plaintiffs
had in I.R. 172.
d) Informed consent:
The plaintiffs argued that the majority of the
Band did not consent and that, in any -event, if
consent was given it was not an informed consent:
the matter having been put to the Indians too
suddenly, they did not have time to consider the
matter and really know what the implications of
the surrender were. It is further alleged that not
only was there a failure to disclose important
matters but improper advice was actually given
and it was given because the Crown actually had
an interest in obtaining the surrender and that that
interest was the governing reason for the action. In
support of the above arguments and what might be
described as the superior position of the Crown in
relation to the Indians, the plaintiffs relied greatly
on the doctrine of undue influence as defined in
such cases as Brusewitz v. Brown, [1923] N.Z.
L.R. 1106 (S.C.); Tufton v. Sperni, [1952] 2 The
Times L.R. 516 (E.C.A.); Allcard v. Skinner
(1887), [1886-90] All E.R. Rep. 90 (E.C.A.);
Lloyds Bank Ltd y Bundy, [1974] 3 All ER 757
(E.C.A.) and other cases. In the Brusewitz case
(supra) we find the following statement at page
1109:
Where there is not merely an absence or inadequacy of con
sideration for the transfer of property, but there also exists
between the grantor and the grantee some special relation of
confidence, control, domination, influence, or other form of
superiority, such as to render reasonable a presumption that the
transaction was procured by the grantee through some uncon-
scientious use of his power over the grantor, the law will make
that presumption, and will place on the grantee the burden of
supporting the transaction by which he so benefits, and of
rebutting the presumption of its invalidity.
In the Lloyds Bank case (supra) Sir Eric Sachs
states at page 768 of the report:
As regards the second class of undue influence, however, that
word in the context means no more than that once the existence
of a special relationship has been established, then any possible
use of the relevant influence is, irrespective of the intentions of
the persons possessing it, regarded in relation to the transaction
under consideration as an abuse—unless and until the duty of
fiduciary care has been shown to be fulfilled or the transaction
is shown to be truly for the benefit of the person influenced.
This approach is a matter of public policy.
I fully accept as authoritative the statements of
law expressed in those cases when considered in
the light of the factual situations to which they
relate. Based on those principles, counsel for the
plaintiffs however, in their oral argument, went on
to state that, in view of the relationship existing
between the parties, it was now incumbent upon
the defendant to prove positively that some 16
matters enumerated at pages 29, 30 and 31 of
their written argument (which I have not repro
duced here) had been explained to the Band before
informed consent could be found to have existed
and that, failing the discharge of this burden, the
plaintiffs would succeed. In the first place, I total
ly reject the argument that all these matters had to
be explained. Many of them are redundant or
irrelevant, others would obviously be known to the
Indians, and others would be required only if they
were not only dependant persons but actually non
compos mentis, in which case no consent could
validly be obtained. In the second place, it would
be manifestly ludicrous to require now, 40 years
after the event, when all of the persons who might
have given the advice are either deceased or too
senile to testify, that the defendant establish posi
tively that advice was given on all these matters. It
would have to have been communicated orally in
any event as none of the Indians could read or
write. Finally, even where there exists a special
relationship between the parties, when an agree
ment in writing is being challenged and especially
an indenture under seal such as the present one, it
seems that there would have to be something more
than a bare allegation of improper conduct before
there is any duty on the person in the dominant
position to adduce evidence to establish that the
special duty was properly fulfilled.
In the case at bar, there was, however, at the
outset, sufficient evidence adduced by the plain
tiffs to put in issue from a factual standpoint the
question of whether informed consent was in fact
given. This casts upon the defendant the burden of
establishing on a balance of probabilities that
there was no failure in the performance of any of
the duties entailed by the existence of the special
relationship. The duties to which that burden will
extend will depend, among other things, on the
nature of the relationship on the subject-matter in
issue, and on the capability of the subordinate
party to fully understand and consent to the issue.
* * * *
Review of evidence on consent to the 1945 sur
render deleted. See findings of fact infra.
* * * *
To summarize, with regard to the question of
informed consent to the 1945 surrender, I make
the following findings of fact:
1. That the plaintiffs had known for some consid
erable time that an absolute surrender of I.R. 172
was being contemplated;
2. That they had discussed the matter previously
on at least three formal meetings where repre
sentatives of the Department were present;
3. That, contrary to what has been claimed by the
plaintiffs, it would be nothing short of ludicrous to
conclude that the Indians would not also have
discussed it between themselves on many occasions
in an informal manner, in their various family and
hunting groups;
4. That, at the surrender meeting itself, the matter
was fully discussed both between the Indians and
with the departmental representatives previous to
the signing of the actual surrender;
5. That neither Mr. Grew, Mr. Galibois nor Mr.
Peterson appeared to have attempted to influence
the plaintiffs either previously or during the sur
render meeting but that, on the contrary, the
matter appears to have been dealt with most con
scientiously by the departmental representatives
concerned;
6. That Mr. Grew fully explained to the Indians
the consequences of a surrender;
7. That, although they would not have understood
and probably would have been incapable of under
standing the precise nature of the legal interest
they were surrendering, they did in fact under
stand that by the surrender they were giving up
forever all rights to I.R. 172, in return for the
money which would be deposited to their credit
once the reserve was sold and with their being
furnished with alternate sites near their trapping
lines to be purchased from the proceeds;
8. That the said alternate sites had already been
chosen by them, after mature consideration.
I therefore conclude that not only the majority
of but all of the male members of the Band present
at the surrender meeting gave their free and
informed consent to the surrender and that each,
in turn, orally signified his consent in accordance
with the voters list attached to the surrender docu
ment. There is also evidence which I accept to the
effect that the voters list included all of the Indi-
ans of the Fort Saint John Band who were entitled
to vote and no others.
e) Other objections to 1945 surrender:
Several further arguments regarding the validity
of the surrender were raised by counsel for the
plaintiffs. They all relate to section 51 of the
Indian Act, R.S.C. 1927, c. 98, in force at the
time. I am reproducing again for the sake of
convenience the relevant portions of section 51:
51. Except as in this Part otherwise provided, no release or
surrender of a reserve, or a portion of a reserve, held for the use
of the Indians of any band, or of any individual Indian, shall be
valid or binding, unless the release or surrender shall be
assented to by a majority of the male members of the band of
the full age of twenty-one years, at a meeting or council thereof
summoned for that purpose, according to the rules of the band,
and held in the presence of the Superintendent General, or of
any officer duly authorized to attend such council, by the
Governor in Council or by the Superintendent General.
3. The fact that such release or surrender has been assented
to by the band at such council or meeting shall be certified on
oath by the Superintendent General, or by the officer author
ized by him to attend such council or meeting, and by some of
the chiefs or principal men present thereat and entitled to vote,
before any person having authority to take affidavits and
having jurisdiction within the place where the oath is
administered.
4. When such assent has been so certified, as aforesaid, such
release or surrender shall be submitted to the Governor in
Council for acceptance or refusal. R.S., c. 81, s. 49; 1918, c. 26,
s. 2.
The objections raised were the following:
1. The meeting was not summoned in accordance
with subsection 51(1) of the Act.
2. The meeting was not held before a duly author
ized officer in accordance with that section.
3. The required certificate under subsection 51(3)
was not obtained and furnished.
With regard to the first objection, there is no
evidence whatsoever that the Fort Saint John
Band had any rules regarding the summoning of
its meetings or councils. The Indians were
informed in plenty of time of the meeting. Wit
nesses of the plaintiffs also admit that they were
convened to the meeting although some claim that
they were unaware of the purpose. There were four
members of the Band absent but there is no evi
dence that they were not aware of the meeting or
that they ever complained of insufficient notice. In
any event the onus on this issue is clearly on the
plaintiffs and it has not been met.
On the question of whether Mr. Grew was duly
authorized pursuant to subsection 51(1) to hold a
surrender meeting it is of some importance that he
was directed to do so by Mr. Hoey who at the time
was the Director of Indian Affairs Branch of the
Department and possessed all the powers of the
Deputy Minister pursuant to subsection 9(2) of
The Department of Mines and Resources Act
[S.C. 1936, c. 33] which read as follows:
9. ...
(2) The chief officer in charge of the branch of the Depart
ment in which is included Indian Affairs may, under the
Deputy Minister, perform and exercise all the duties, powers
and functions with respect to Indian Affairs which are or may
be vested in the Deputy Superintendent General of Indian
Affairs by any Act of the Parliament of Canada or by any
order or regulation made under the authority thereof.
Paragraph 31(l) of the Interpretation Act
[R.S.C. 1927, c.1] in effect in 1927 provides that a
Deputy Minister may exercise a Minister's power
in administering the Department. That provision
reads as follows:
31....
(1) words directing or empowering a minister of the Crown
to do any act or thing, or otherwise applying to him by
his name of office, include a minister acting for, or, if
the office is vacant, in the place of such minister, under
the authority of an order in council, and also his succes
sors in such office, and his or their lawful deputy;
There is nothing in section 51 of the Indian Act
to indicate that the Parliament intended that the
Superintendent General rather than his Deputy
was to personally authorize any individual to
attend the surrender meeting. Paragraph 31(l) of
the Interpretation Act would therefore apply.
Finally, there is nothing to say that the Superin
tendent General could not authorize the person
orally or instruct Mr. Hoey to direct Mr. Grew to
attend the meeting. There is no evidence that this
was not in fact what happened. The onus of estab
lishing that Mr. Grew was not authorized rests
with the plaintiffs and that onus is not discharged
by simply establishing that Mr. Grew was directed
by Mr. Hoey to attend the meeting and to take the
surrender since, as previously stated, this might
well have been done with the full authority,
approval and direction of the Superintendent
General.
On the question of whether non compliance with
all of the provisions of subsection 51(3) of the Act
would invalidate the surrender, a legal issue arises
as to whether those provisions are mandatory or
merely directory. In the latter case non-compliance
would not render void the surrender itself nor its
subsequent acceptance by the Governor in
Council.
In considering this issue the actual wording of
the other provisions of section 51 are of some
importance. Subsection (1) provides that "no sur
render ... shall be valid or binding unless assented
to". This is clearly a substantial or mandatory
provision. Subsection (2) defines who is entitled to
vote at a meeting and subsection (4) provides that
the Governor in Council may either accept or
refuse the surrender. These provisions are also
clearly substantial or mandatory. Subsection (3),
however, provides the means by which the fact
that the surrender has been properly taken and
executed is to be evidenced or established.
The leading decision in this area of the law is
the Privy Council case of Montreal Street Railway
Company v. Normandin, [1917] A. C. 170. This
case involved a claim that a jury verdict should be
set aside due to the failure of the sheriff to update
voters' lists to empanel juries. In it the Privy
Council laid down the general principles to guide
courts on this issue. At pages 174 and 175 they
stated as follows:
The statutes contain no enactment as to what is to be the
consequence of non-observance of these provisions. It is con
tended for the appellants that the consequence is that the trial
was coram non judice and must be treated as a nullity.
It is necessary to consider the principles which have been
adopted in construing statutes of this character, and the
authorities so far as there are any on the particular question
arising there. The question whether provisions in a statute are
directory or imperative has very frequently arisen in this coun
try, but it has been said that no general rule can be laid down,
and that in every case the object of the statute must be looked
at. The cases on the subject will be found collected in Maxwell
on Statutes, 5th ed. p. 596 and following pages. When the
provisions of a statute relate to the performance of a public
duty and the case is such that to hold null and void acts done in
neglect of this duty would work serious general inconvenience,
or injustice to persons who have no control over those entrusted
with the duty, and at the same time would not promote the
main object of the Legislature, it has been the practice to hold
such provisions to be directory only, the neglect of them,
though punishable, not affecting the validity of the acts done.
The Montreal Street Railway case was followed
in this Court in Melville (City of) v. Attorney
General of Canada, [1982] 2 F.C. 3 (T.D.), by
Mr. Justice Collier, whose decision was upheld by
the Federal Court of Appeal in the parallel case of
Jasper Park Chamber of Commerce v. Governor
General in Council, [1983] 2 F.C. 98.
The City of Melville case involved the allegation
that the failure to register an Order in Council
within the prescribed time limits, relating to the
discontinuance of rail service, was fatal. Mr. Jus
tice Collier dealt with this claim at page 14 of the
report, applying the principles set out in the Mon-
treal Street Railway case. The Federal Court
upheld his finding at pages 118 and 119 of the
Jasper Park case (supra).
As stated in the Montreal Street Railway case,
the object of the statute must be considered. It
seems clear that section 51 has been enacted to
ensure that the assent of the majority of adult
members of the Band has been properly obtained
before a surrender can be accepted by the Gover
nor in Council and become valid and effective. The
object of that section is to provide the means by
which the general restrictions imposed on the sur
render sale or alienation of Indian reserve lands by
section 50 of the Act can be overcome. In other
words, the sale or lease of Indian reserve lands
must be made pursuant to the wishes of the Indian
Band and must, of course, also be approved by the
Governor in Council. The last requirement would
presumably involve the Governor in Council being
satisfied that the surrender has been properly
approved, that it is for the general welfare of the
Indians and that they are not being unfairly
deprived of their lands.
Examination of the object of the statute reveals
that a decision which would render the surrender
null and void solely because of non-compliance
with the formalities of subsection 51(3) would
certainly not promote the main object of the legis
lation where all substantial requirements have
been fulfilled; it might well cause serious inconve
niences or injustice to persons having no control
over those entrusted with the duty of furnishing
evidence of compliance in proper form. In the
subsection, unlike subsection (1), where it is pro
vided that unless it is complied with no surrender
shall be valid or binding, there is no provision for
any consequences of non-observance. I therefore
conclude that the provisions of subsection 51(3)
are merely directory and not mandatory.
It is also of some importance that the subsection
does not state specifically that an affidavit must be
submitted attesting to those facts but merely pro
vides that:
51....
3. The fact that such release or surrender has been assented
to by the band ... shall be certified on oath ... before any
person having authority to take affidavits and having jurisdic
tion....
This was in fact done and J. E. Young, whose
signature is admitted and whose authority as a
justice of the peace in and for the Province of
British Columbia is uncontested and which I must
accept (in the absence of any evidence to the
contrary) has stated that the deponents were sworn
before him and that they testified as mentioned in
the document. The failure to actually require the
deponents to sign or affix their mark to the docu
ment can well be understood when one considers
the lack of legal training or knowledge of some
persons who are granted commissions as justices of
the peace in remote areas of Canada.
Finally, the Department, in addition to this
document, had before it for submission to the
Governor General in Council if required, the sur
render document itself, the attached voters list and
Mr. Grew's letters of the August 8, 1945 (Exhibit
283) and September 24, 1945 (Exhibit 294). There
was therefore ample evidence that the substantial
requirements of section 51 had been complied
with. In addition, I have found as a fact that the
surrender was fully assented to.
To summarize, I find that subsection 51(3) was
in fact sufficiently complied with and, if not, the
plaintiffs' objection on this ground must neverthe
less fail as subsection (3) is merely directory and
not mandatory.
1948 TRANSFER TO THE DIRECTOR, THE VETER
ANS' LAND ACT
a) Effect of the transfer
Section 54 of the Indian Act, 1927 provides that
all reserve lands "shall be managed, leased and
sold as the Governor in Council directs, subject to
the conditions of surrender and the provisions of
this Part." The special provisions in the Act which
apply to the facts of this case are sections 50 and
51. I have already dealt with them as well as the
terms of the surrender. The Department obviously
had the right to alienate the lands by absolute sale.
There were no special directions given by the
Governor in Council and the letters patent (Exhib-
it 506) transferring the lands from the Department
of Indian Affairs to the Director contain no reser
vation whatsoever except for the public road allow
ance reserved through the parcel. The grant is to
the Director, his heirs and successors forever and is
absolute in every way.
The plaintiffs claim that, since the document is
silent as to minerals, it does not have the effect of
transferring them. This argument cannot be sus
tained at law: unless an interest is specifically
withheld, an absolute conveyance of land includes
all interests except precious metals (Attorney-
General of British Columbia v. Attorney-General
of Canada (1889), 14 App. Cas. 295 (P.C.), at
pages 302, 303 and 306).
b) Whether the Department of Indian Affairs
had the duty to retain the minerals
The plaintiffs also claim that the Department of
Indian Affairs had a fiduciary duty to retain the
minerals for the plaintiff Band in March 1948
when the letters patent were granted to the Direc
tor. They argue that the Department should have
noticed the error subsequently and should have
required that the letters patent be corrected.
I have already made several findings affecting
this issue in dealing with the value and foreseeabil-
ity of potential mineral rights under I.R. 172
(refer pages 48-49 supra) and, in the concluding
paragraph, I held that the defendant had suf
ficiently established that, in 1948, no fiduciary
could reasonably have anticipated or foreseen that
there would be any value to those rights.
The evidence indicated that no importance was
attached to minerals either at the time of the
transfer to the Director nor until many, if not all
of the veterans, had at least taken possession pur
suant to their respective agreements to purchase
and, as a result, no mention whatsoever was made
of mineral rights in those documents. A duty on
the Department of Indian Affairs to retain the
minerals has not been established.
c) Breach of duty of defendant upon transfer to
the Director
The plaintiffs also argue that, at the time of the
transfer to the Director in 1948, the defendant
acted fraudulently and also in breach of the fiduci
ary duties which it owed the Band at the time.
With regard to the allegations of fraud, I find that
they have failed completely to establish that the
defendant had, in any way, through its agents or
servants, been guilty of fraud towards them at any
times relevant to this action. The allegations of
breaches of fiduciary duty at the time of the
transfer to the Director, however, have much
greater substance. Mr. Justice Dickson (as he then
was) stated in the Guerin case (supra) that upon
unconditional surrender, the Indians' right in the
land disappeared but that there subsisted however
an obligation of the Crown to the Indians which
was trust-like in that "the Crown must hold the
surrendered land for the use and benefit of the
surrendering Band". (Refer Guerin case (supra) at
page 387.) Regardless of whether the opinion of
the majority expressed by Chief Justice Dickson in
the Guerin case, that no true trust whether con
structive or otherwise is created, or whether one
adopts the view of Wilson J. concurred in by
Ritchie and McIntyre JJ. to the effect that an
express trust is created, the duty cast upon the
defendant as represented by the Department of
Indian Affairs, which arises upon surrender of the
land by the Indians, is equally as onerous, since the
obligation is at least "trust-like".
It appears that, as in the case of Kruger v. The
Queen, [1986] 1 F.C. 3 (C.A.), there existed in the
case at bar a conflict of interest between the
Department of Indian Affairs and The Director,
The Veterans' Land Act: the former was seeking
the best price available for the land and was
interested in obtaining it immediately in order to
purchase substitute reserves closer to the trap lines
(See Exhibit 428). The latter, on the other hand,
wanted to secure good agricultural land at the
lowest possible price in order to allow the veterans
to obtain a greater benefit from the purchase.
The statement of Heald J. at page 17 of the
above cited report of the Kruger case is particular
ly relevant here:
Bearing in mind that it is the Crown which owes the fiduci
ary duty to the Indians, the facts of this case clearly raise the
issue of conflict of interest, in my view. It seems evident that
two Departments of the Government of Canada were in conflict
concerning the manner in which the Indian occupants of Parcel
A should be dealt with. The evidence seems to unquestionably
establish that the officials of the Indian Affairs Branch were
diligent in their efforts to represent the best interests of the
Indian occupants. On the other hand, the Department of
Transport was anxious to acquire the additional lands in the
interests of air transport. This situation resulted in competing
considerations. Accordingly, the federal Crown was in a con
flict of interest in respect of its fiduciary relationship with the
Indians. The law is clear that "one who undertakes a task on
behalf of another must act exclusively for the benefit of the
other, putting his own interests completely aside" and that
"Equity fashioned the rule that no man may allow his duty to
conflict with his interest". On this basis, the federal Crown
cannot default on its fiduciary obligation to the Indians through
a plea of competing considerations by different departments of
Government.
There is also the argument that there might well
be an element of self-dealing involved. As stated in
the case of Reference re Saskatchewan Natural
Resources, [1931] S.C.R. 263, at page 275:
There is only one Crown, and the lands belonging to the Crown
are and remain vested in it, notwithstanding that the adminis
tration of them and the exercise of their beneficial use may,
from time to time, as competently authorized, be regulated
upon the advice of different Ministers charged with the appro
priate service.
There is, of course, a rather important distinc
tion to be drawn between the last mentioned case
and the case at bar. We are not dealing with a
question of the land being administered for the
Crown by one Minister or another on behalf of
their respective departments but of the transfer
from a department of government, namely the
Department of Indian Affairs, to a corporation
sole, namely The Director, The Veterans' Land
Act, created by Parliament for the express purpose
of acquiring, administering and disposing of lands
for the exclusive benefit of veterans in accordance
with the specific provisions of the Act and
independently of the control normally exercised by
a Minister over his department. Be that as it may,
I find that, in the case at bar, there rested an
onerous fiduciary duty upon the Department of
Indian Affairs to ensure that all reasonable efforts
were made to obtain the best price possible for the
land at the time of sale.
Where such a fiduciary duty exists there also
rests upon the person by whom the duty is owed,
an onus of proving that it has been discharged.
The evidence establishes that an appraiser
engaged by the Department of Indian Affairs
appraised the value of the land at $93,160 (Exhibit
414). After lengthy negotiations between that
department and The Director, The Veterans' Land
Act, who would not purchase at that price, the
land was finally sold to him for the sum of $70,000
on March 30, 1978 (Exhibit 506). In addition, the
cost of survey was borne by the Department of
Indian Affairs.
There is a lack of evidence adduced by the
defendant to justify the discrepancy between the
appraised price and the actual sale price. Although
I am not making any finding as to the actual
value, since the question of damages is not before
me and also because Exhibit 414 is not in evidence
for the purpose of establishing the truth of the
assertion that the land was in fact worth $93,160,
the evidence does establish that the defendant was
fully aware of a discrepancy between the appraised
price of its own appraiser and the sale price. The
sufficiency of the sale price is therefore a real issue
and not merely a speculative or a theoretical one.
The defendant had a duty to convince the Court
that it could not reasonably have been expected to
obtain a better price. There was no evidence as to
what other offers were sought and what efforts
were made to obtain a better price elsewhere.
Since the onus of establishing that a full and fair
price was in fact obtained in March 1948 has not
been discharged by the defendant, I find that the
latter was guilty of a breach of its fiduciary duty
towards the plaintiffs in that regard. Unless the
claim is statute barred, the amount of damages
sustained by the plaintiffs due to the possible
insufficiency of the sale price would thus remain to
be determined at a later hearing or upon a refer
ence for assessment of damages. However, as pre
viously stated, the evidence does not establish the
probability of fraud, of fraudulent intent or of
willful concealment.
d) Whether The Director, The Veterans' Land
Act held in trust for Indians
The plaintiffs argued that, following the transfer
to The Director, The Veterans' Land Act, in 1948,
the latter continued to hold the mineral rights in
trust for the plaintiffs and should have transferred
them back when some interest in obtaining
exploration permits subsequently arose.
Regarding title to minerals, the present case is
clearly distinguishable from the matters which
arose under and were dealt with under the former
The Soldier Settlement Act, 1917 [S.C. 1917, c.
21] later replaced by The Soldier Settlement Act,
1919 [S.C. 1919, c. 71] which were enacted for the
resettlement of veterans of the first Great War.
Section 57 of the 1919 Act specifically provided
that "mines and minerals shall be and shall be
deemed to have been reserved" from all sales made
by the Board. Therefore, one could not obtain
from the Board any title or claim to mines or
minerals regardless of whether or not they were
reserved or regardless of any statement in the
document of conveyance. When Parliament in
1942 enacted The Veterans' Land Act, 1942, [S.C.
1942-43, c. 33] for the benefit of the veterans of
the 1939-45 War it chose to omit any such reser
vations or limitations. The general law must there
fore be applied.
In addition, however, there would have been a
serious legal impediment to any conveyance by the
Director to the Department of Indian Affairs or to
any person other than a veteran. The Veterans'
Land Act, 1942 (R.S.C. 1970, c. V-4) provides
that the Director is a corporation sole with per
petual succession, having power to hold and trans
fer property which he is "by this Act authorized to
acquire, hold, convey, transfer, agree to convey or
agree to transfer, but for such purposes only"
[underlining added] (subsection 5(1)), and that
"All property acquired for any of the purposes of
this Act shall vest in the Director as such corpora
tion sole" (subsection 5(4), formerly subsection
5(3)). The Director obtains land by grant in fee
simple from the Crown as in the case of any other
person or corporation. In order for the Crown to
obtain title to those lands, they must be recon-
veyed by the Director. The powers of disposition of
land of the Director and the purposes for which
land is to be acquired by him are strictly defined in
considerable detail in the Act. There are provisions
for reconveyance of the land to the Crown where it
is required for a public purpose or for conveyance
to any person with the consent of the interested
veteran or for the sale of land which eventually
might not be required for the purposes of the
Director. There is no power however, without con
sent of the veteran concerned, to reconvey lands or
any mineral rights to the Crown for the benefit of
Indians or to any other person for that matter.
Section 3 of the Act as amended in 1946 [S.C.
1946, c. 70, s. 1] renders the Director responsible
to the Minister of Veterans Affairs and subject to
the latter's direction. It is obvious, however, that
the Director must comply strictly with the provi
sions of the Veterans' Land Act and that the
Minister cannot instruct him to exercise powers as
Director which are not contained in the Veterans'
Land Act nor to act in any way contrary to the
statute.
If any authority were needed to support the
proposition that the Director's powers and author
ity are strictly limited to those conferred upon him
by the Veterans' Land Act, the case of The Queen
v. Richard L. Reese et al., [1956] Ex.C.R. 94,
could be cited as relevant and authoritative. In
that case, a promise made to convey mineral rights
under the Soldier Settlement Act was declared to
be unenforceable against the Crown even though
the undertaking was given to a soldier. Since the
Director (formerly "the Board" under the Soldier
Settlement Act) can only bind the Crown for the
purposes mentioned in the Act, the latter cannot
be vicariously liable for the Director's failure to
either administer or reconvey the land for the
benefit of the Indians, nor can the Crown order
him to do so without an amendment to the Veter
ans' Land Act.
Finally, once the letters patent had been issued,
the full purchase price had been paid by the
Director to the Department of Indian Affairs and
the latter had set aside the funds as required by
the Act for the benefit of the Indians, the lands of
I.R. 172 no longer formed the object of the trust, if
it was a trust, or, alternatively, no longer constitut
ed the object to which the special fiduciary duty of
the defendant related. From that moment on,
namely from March 30, 1948, the proceeds of the
sale in lieu of the land were to be administered by
the defendant for the benefit of the plaintiffs.
For the above reasons the plaintiffs' argument
on the issue of the Director's duty to reconvey
mineral rights to or on behalf of the Indians
cannot succeed.
e) Non-compliance with The Dominion Lands
Act, 1908
There is no merit to the argument founded on
paragraph 78 of the statement of claim that the
1948 transfer of mineral rights in I.R. 172 would
be void as regards those rights because of non
compliance with the requirements of section 41 of
The Dominion Lands Act, 1908, c. 20. This section
refers exclusively to terms of payment of the pur
chase price of school lands. No part of I.R. 172
was ever designated as school lands pursuant to
the Act nor is there any evidence that any part was
used for such purpose.
ALLEGED BREACHES SINCE 1948
Numerous breaches of trust and of duty towards
the Indians are alleged to have occurred since
1948. Unlike the issue of sufficiency of the sale
price of I.R. 172, the onus of proof of these
allegations rests upon the plaintiffs.
It has not been established as alleged in para
graph 35 of the statement of claim that the
defendant undertook to obtain replacement
reserves which would be situated beyond the area
of future agricultural settlements.
With regard to the alleged delay in actually
acquiring legal title until 1950 to the reserves from
the Province of British Columbia, since I.R. 172
was actually sold in 1948 and some time was
required to complete surveys I do not feel that the
delay was excessive. More importantly, however,
there can be no damage since the evidence indi
cates that the plaintiffs apparently continued to
enjoy the benefit and use of those reserves between
1945 and 1950. The evidence establishes also that
they had in the past been making very limited use
of reserve lands.
The plaintiffs also complained that they did not
obtain mineral rights to the replacement reserves.
Treaty lands normally carried mineral rights, since
those rights had been held by the Crown in right of
Canada in the first place. This did not apply to the
replacement reserves after the mineral rights had
been transferred to the Province. Unlike I.R. 172,
the replacement reserves were merely reserves
obtained for the benefit of the plaintiffs under the
provisions of the Indian Act and in pursuance of
the conditions of the 1945 surrender of I.R. 172,
and were not treaty reserves. It turned out that the
Department could not, in view of the general
policy of the Provincial Government regarding
reservation of all mineral rights, obtain title to
those rights for the benefit of the Indians. The
Department was apparently not aware of this
policy nor of the reservation of rights until some
time later when, in error, some of its officials
indicated a readiness to grant an exploration
licence on the replacement reserves to an oil com
pany. Furthermore, although the defendant, had it
obtained mineral rights in the replacement
reserves, would undoubtedly have considered them
as forming an integral part of the reserve, there is
a lack of evidence that the defendant, as a condi
tion of the 1945 surrender, undertook in any way
to obtain mineral rights in the replacement
reserves. There is also evidence which might tend
to indicate the contrary. Before being chosen, the
areas were considered by both parties merely from
the standpoint of their suitability for habitation,
their proximity to the hunting, fishing and trap-
ping grounds of the Indians, their distance from
white settlements in the vicinity and the possible
future development of the lands for agricultural or
cattle farming by the Indians. There is no evidence
of any thought whatsoever having been given to
mineral rights under the new reserves.
Although there were rumours at some time
during 1950 that the British Columbia Govern
ment was contemplating a change of policy regard
ing the granting of lands for the purpose of estab
lishing Indian reserves, it was only in January
1951 that the Canadian Government was advised
that the Provincial Government had, in November
1950, formally decided that, altogether apart from
the reservation of mineral rights, no more lands
would henceforth be transferred in fee to the
Department of Indian Affairs to be used for
Indian reserves unless an equivalent amount of
land was obtained in exchange. As a result of that
decision many, if not all, proposed land purchases
by the defendant for the benefit of other Indian
bands in the Province had to be abandoned (refer
Exhibit 688). No promise of the defendant was
established to the effect that the same acreage of
land would be obtained in the new reserves as was
surrendered in I.R. 172 nor does there seem to be
any evidence that the plaintiffs at that time
expected the defendant to do so. There was a
considerable amount of correspondence pertaining
to the proposed replacement and to the reserves
themselves when they were obtained and in none
of this correspondence or the memoranda of the
various officials does there appear to be any ques
tion of equivalent acreage.
Sales under the agreements which the Director
had entered into with the veterans gave each veter
an purchaser a right to immediate possession of
the lands upon the signing of the agreement and
payment of the deposit and also the right, upon
payment in full of the purchase price, to a deed
and fee simple free of all encumbrances. Para
graph 14 of the agreement reads as follows:
14. It is agreed that upon punctual payment by the Veteran
of all moneys hereby by him agreed to be paid and subject to
performance of all and singular the aforesaid provisions, condi
tions and agreements, and upon the surrender of this contract,
he shall be entitled to a conveyance of the said land in fee
simple free from all encumbrances other than such as may have
resulted through the act and neglect of the Veteran, but subject
to all reservations, limitations, provisos and conditions con
tained or expressed in the title held by the Director. (Refer
Exhibit 986 D)
There were no reservations, limitations, provi
sions or conditions contained or expressed in the
title held by the Director. Paragraph 14 above is a
complete answer to the argument of plaintiffs'
counsel to the effect that, until the deeds in fee
simple were actually delivered to the veterans, the
Director could have somehow repossessed the
lands for the benefit of the Indians. Sales by
agreements for sale to veterans were made as
follows: 1948: 19; 1949: 13; 1950: 2; 1951: 1; 1956:
1. Thus, by the end of 1950 all but two of the lots
were in the possession of veterans who had a
contractual right to an absolute title in fee simple.
Four of the lots which were in surplus to the
Director's requirements were disposed of by the
Director in 1952 by public auction in accordance
with the terms of the statute.
In any event, all of the above allegations regard
ing subsequent dealings with the land by the
Director are of no real help to the plaintiffs. As I
have already held, from March 30, 1948 the plain
tiffs were no longer entitled to any part of I.R. 172
and the Director, who then held the lands in fee
simple, could not in the circumstances and because
of the provisions of the Veterans' Land Act, be
considered a fiduciary or a trustee, constructive or
otherwise, for the benefit of the Indians.
The plaintiffs have failed to establish any practi
cal requirement for further reserves, even up to the
time of trial. The question of trap lines has already
been dealt with. The Department, many years ago,
secured numerous registered trap lines for their
exclusive use and there is a lack of evidence as to
the requirement for any additional lines or for
large hunting and fishing areas reserved for their
exclusive use as now claimed by the plaintiffs.
The evidence contained in the Band council
resolutions which were filed together with annual
budgets deposited in evidence, points to the fact
that the funds received from the sale were duly
retained for the benefit of the plaintiffs and that
all accrued interest thereon was duly credited to
their account. Payments from this account plus
additional monies from the general appropriations
of the Department of Indian Affairs were, from
time to time throughout the years, spent for their
benefit. There is no evidence whatsoever that any
of such monies were misappropriated as claimed.
On the contrary, the evidence indicates that all
disbursements from those monies and accrued in
terest were made for the benefit of the plaintiffs,
who also received additional monies to which they
were not contractually entitled, for their various
undertakings, projects, social and collective
requirements, etc.
To summarize with regard to alleged breaches
since 1948, I find that the onus of proof resting
upon the plaintiffs has not been satisfied but that,
on the contrary, whatever credible and admissible
evidence which does exist regarding these issues
would tend to lead one to conclusions contrary to
those which they seek.
LIMITATIONS
a) Application
Pursuant to section 38 of the Federal Court Act
[R.S.C. 1970 (2nd Supp.), c. 10] the law to be
applied regarding prescriptions and limitations in
this action is clearly that of British Columbia
(Kruger v. The Queen, [1986] 1 F.C. 3; (1985), 58
N.R. 241 (C.A.)).
Because counsel were unaware of what my ulti
mate findings might be regarding various claims
and allegations of fraud and of continuing
breaches of fiduciary responsibilities, considerable
argument was addressed to the Court and numer
ous authorities were quoted and statutory provi
sions referred to on the question of limitations, in
order to cover all possibilities. Since I have found
that there was but a non-fraudulent breach of
fiduciary duty which related to the sufficiency of
the amount received by the Department of Indian
Affairs on March 30, 1948 and have found no
continuing negligence, breaches of trust or other
breaches of duty, whether fiduciary or statutory,
the issues regarding limitations are considerably
simplified.
The cause of action must therefore be held to
have arisen on the 30th of March 1948. The
statement of claim was issued on September 19,
1978, i.e. five and one half months beyond thirty
years from the time the cause of action arose.
b) Sections 8 and 9 of the B.C. Limitations Act
British Columbia is apparently the only province
in Canada with a statute providing for what is
termed an ultimate limitation period. The new
Limitation Act was enacted in 1975 [Limitations
Act, S.B.C. 1975, c. 37] and may be found in the
1979 Revised Statutes, R.S.B.C. 1979, c. 236. The
relevant portions of section 8 of that Act read as
follows:
8. (1) Subject to section 3 (3), but notwithstanding a confir
mation made under section 5 or a postponement or suspension
of the running of time under section 6, 7 or 12, no action to
which this Act applies shall be brought after the expiration of
30 years from the date on which the right to do so arose.....
(2) Subject to subsection (1), the effect of sections 6 and 7 is
cumulative.
Subsection 3(3) refers to special classes of
action, none of which are applicable to the findings
in the case at bar. Section 6 mentioned in subsec
tion (2) above provides for the postponement of
the running of time in certain specific instances
and section 7 deals with persons under disability.
Section 12 is not applicable. It seems clear that, on
reading section 8, although the effects of sections 6
and 7 are cumulative, those sections are not to be
taken into account in calculating the 30 year
period mentioned in subsection (1). Thus, neither
disability nor knowledge come into play with
respect to the 30 year ultimate limitation.
The Court of Appeal of B.C. dealt with the
effect of section 8 in the case Bera v. Marr (1986),
1 B.C.L.R. (2d) 1. In that case Esson J.A., with
whom Cheffins J.A. concurred, stated at page 27:
A significant part of the "balance" created by ss. 6, 7 and 8
is that the 30-year ultimate limitation is long enough so that no
action by an infant can be barred before he comes of age and
other actions falling within ss. 6 and 7 cannot be ultimately
barred for more than a generation.
Craig J.A., who dissented on another point, was
of the same view regarding section 8 (refer pages
11 and 12 of the above-mentioned report).
Subsection 9(1) is also of some importance since
it provides that on expiration of a limitation period
in an action to recover a debt, damages or for an
accounting, etc., not only is the right to sue pre
scribed but the cause of action itself is extin
guished. This is clearly a provision of substantive
law of general application throughout the Prov
ince. The statute also provides (section 14) that no
cause of action that was statute barred on July 1,
1975, is revived and also that the statute applies to
prescribe an action that arose before that date, by
July 1, 1977, at the latest, if the limitation period
under the 1975 Act would expire by that date and
is shorter than the former limitation.
The 30 year period, after the right to sue for
whatever damages might have resulted from the
insufficiency of the sale price, expired on March
30, 1978. Since the statement of claim was only
filed on September 19, 1978, unless some other
legislation either statutory or constitutional could
lead to a different conclusion, the right of action
would have already been prescribed under section
8 of the Act and, by virtue of section 9, the cause
of action itself would also have been extinguished.
c) Other Legislation
Insofar as other legislation is concerned, subsec
tion 2(11) of the former Laws Declaratory Act,
R.S.B.C. 1948, c. 179, declared that, except as
provided in the Trustee Act, [R.S.B.C. 1948, c.
345], no claim of a cestui que trust against his
trustee, held upon an express trust, could be barred
by any statute of limitations. On the other hand,
subsection 93(1) of the Trustee Act in 1948 [s.
86(1)] which may be found in R.S.B.C. 1960, c.
390, provided that, unless the claim was founded
upon a fraud to which the trustee was a party or
was for the recovery of trust property, the trustee
would enjoy all the rights and privileges of the
limitation statutes of the Province. Even if it could
have been argued that, contrary to the majority
finding of the Supreme Court of Canada in the
Guerin case (supra), the surrender created an
express trust, the claim could not be considered as
one of recovery of trust property and, more impor
tantly, limitations provisions of these two statutes
were repealed by the 1975 Act, which now deals in
some considerable detail with trust property and
breaches of trust. Finally, the wording of the sec
tions of the 1975 Act, to which I have referred,
make it quite clear that the provisions of section 8
would prevail.
d) Charter of Rights
The plaintiffs sought to challenge the validity of
section 8 also under the Canadian Charter of
Rights and Freedoms [being Part I of the Consti
tution Act, 1982, Schedule B, Canada Act 1982,
1982, c. 11 (U.K.)] and paragraphs 1(a) and 1(b)
of the Canadian Bill of Rights [R.S.C. 1970,
Appendix III]. In arguing that section 8 of the
B.C. Limitations Act infringed the Charter, and
more particularly section 7 which protects the
right not to be deprived of one's life, liberty and
security of the person, against the principles of
fundamental justice, counsel for the plaintiffs
referred to recent decisions such as R. v. Antoine
(1983), 5 C.C.C. (3d) 97 (Ont. C.A.); Re McDon-
ald and The Queen (1985), 51 O.R. (2d) 745
(C.A.); R. v. Konechny (1983), 10 C.C.C. (3d)
233 (B.C.C.A.) and several other such cases. I find
however that these cases are not applicable and
that none of the plaintiffs' Charter arguments can
be sustained for two very simple reasons, the first
one being that the Charter relates to the protection
of the person and to personal rights and freedoms
and does not apply to interest in or damages
pertaining to the disposal of property. The second
one is that the Charter, generally speaking, is not
retrospective. It was held, in cases such as the ones
cited above, to be applicable where there has been
a continuing injustice following the date of pro
mulgation of the Charter such as cases where
incarceration of a person continued beyond that
date, where the law pursuant to which he was
incarcerated at the time now infringes the Charter.
This has been characterized as a prospective
application of the Charter as opposed to a retro
spective one. There is no question of prospective
application here as the source of the complaint
arose in 1948 and does not constitute a cause of
action continuing beyond that time.
Two recent decisions of the B.C. Court of
Appeal, namely Grabbe v. Grabbe and Davidson v.
Davidson Estate, both reported in [1987] 2
W.W.R., at pages 642 and 657 respectively have
held that section 15 of the Charter does not oper
ate retrospectively.
I also subscribe to the argument that the equal
ity rights provided for in subsection 15 (1) of the
Charter merely guarantee that persons similarly
situated should receive similar treatment. They do
not provide for identical treatment for all regard
less of circumstances (Smith, Kline & French
Laboratories Limited v. Attorney General of
Canada, [1986] 1 F.C. 274 (T.D.)).
In the recent case of R. v. Hamilton (1986), 57
O.R. (2d) 412, which was referred to at trial, the
Court of Appeal of Ontario found that section 15
of the Charter had been infringed because the
equal application of criminal law, which is exclu
sively within federal jurisdiction, once enacted,
cannot depend on the acquiescence of Provincial
Attorneys General. That same case, however,
recognizes the validity of the principle insofar as
civil law is concerned in any event that section 15
of the Charter does not require each Province to
enact the same laws within its own jurisdiction, as
this would constitute a denial of federalism and
would be destructive of the federal system itself.
The Supreme Court of Canada in R. v. Burnshine,
[1975] 1 S.C.R. 693; (1974), 15 C.C.C. (2d) 505,
although dealing with the Bill of Rights and not
with the Charter, came to the same conclusion
regarding the nature of federalism.
Where, in situations such as the present one, to
the extent that federal legislation is silent on the
matter, the liability of the Crown as well as the
quantum and nature of damages which would be
recoverable are to be determined by provincial law,
it cannot logically be argued that it is discrimina
tory in a pejorative sense for the Crown to be
subject to and to also enjoy the benefit provincial
limitation provisions to the same extent as ordi
nary citizens of the province.
Insofar as section 7 of the Charter is concerned
it has also been held in several cases, including
Smith, Kline & French (supra) that life, liberty
and security of the person mentioned therein refers
to the bodily wellbeing of a person: it does not
extend to the protection of property. Furthermore,
a 30 year ultimate limitation period applicable to
all residents of a province does not offend against
the principles of fundamental justice.
e) Bill of Rights
The plaintiffs also submit that section 8 of the
new Limitation Act violates paragraph 1(b) of the
Canadian Bill of Rights and is, to the extent of
that inconsistency, of no force or effect. The text
of that legislation on which they rely is as follows:
1. It is hereby recognized and declared that in Canada there
have existed and shall continue to exist without discrimination
by reason of race, national origin, colour, religion or sex, the
following human rights and fundamental freedoms, namely,
(b) the right of the individual to equality before the law and
the protection of the law;
As in the case of the Charter, there is no
requirement under the Bill of Rights for Parlia
ment to enact uniform laws throughout the coun
try. The plaintiffs are subject to, section 8 of the
Limitation Act in the same manner as are all other
British Columbia litigants. In its as yet unreported
decision in the case of Algonquin Mercantile Corp.
v. Dart Industries Canada Ltd., judgment dated
June 17, 1987, Federal Court file A-692-86, our
Court of Appeal approved and applied the princi
ple that even where the matter falls within federal
jurisdiction, the provincial law where the cause
arose and is being litigated, is to be exclusively
applied in determining the rights of the litigants,
where federal law is silent on the subject. The
decision dealt with rates of interest to be applied
and recognizes that the mere fact that the result
would have been different had the law of some
other province been applicable, is not to be taken
into account.
Section 38 of the Federal Court Act meets the
test that those who are similarly situated should
receive similar treatment. The mere fact that liti
gants in other Provinces are not subject to an
ultimate 30 year limitation does not constitute
discrimination against paragraph 1(b) of the Bill
of Rights any more than it does under sections 7
or 15 of the Charter. Although the Bill of Rights
has been in effect for over 27 years, counsel for the
plaintiffs were unable to cite one authoritative case
capable of supporting this territorial argument for
civil cases.
The plaintiffs also argued that paragraph 1(a)
of the Bill of Rights which protects their right to
"life, liberty, security of the person and enjoyment
of property, and the right not to be deprived
thereof except by due process of law" would
render inoperative section 8 of the (B.C.) Limita
tion Act by reason of the overriding provisions of
section 2 of the Bill of Rights.
In support of this proposition, counsel for the
plaintiffs referred to a statement of Laskin C.J.,
speaking for the minority in the case of Morgen-
taler v. The Queen, [ 1976] 1 S.C.R. 616, at page
633; (1975), 20 C.C.C. (2d) 449, at page 462, and
to another statement of Ritchie J. in Curr v. The
Queen, [1972] S.C.R. 889. Neither of these state
ments support the proposition advanced by the
plaintiffs.
Reliance by the courts on limitation provisions
of general application does not constitute a denial
of due process nor does the legislation itself consti
tute such a denial. An ultimate limitation period
does not deny the plaintiffs the right to litigate nor
the right of access to the court. It merely imposes
a time limitation within which the action must be
commenced. Thus it does not, as argued by the
plaintiffs, fall within the situation which was
before the Supreme Court of Newfoundland in
Piercey v. General Bakeries Ltd.; The Queen in
right of Newfoundland et al., Intervenors (1986),
31 D.L.R. (4th) 373.
f) Conclusion re: limitations
I conclude that the claim for insufficiency of the
sale price to the Director in 1948 is statute barred
and also extinguished pursuant to sections 8 and 9
of the 1975 B.C. Limitation Act, R.S.B.C. 1979, c.
236.
LACHES AND OTHER LIMITATION PROVISIONS
Counsel for the defendant raised the defence of
laches and also relied upon other sections of the
B.C. Limitation Act and also the former Act to be
found in R.S.B.C. 1960, c. 370. Considerable
argument was advanced and numerous authorities
referred to by both counsel on these subjects.
In view of my finding regarding the 30 year
ultimate limitation provisions, no useful purpose
would be served in referring to these arguments
nor to my findings of fact pertaining to them. I
will however add that, after taking into account
the saving provisions of sections 6 and 7 and the
transitional provision of section 14 of the 1975
Act, I would have concluded that the action was in
any event, also barred by reason of the former
Limitations Act and also by reason of section 3(4)
of the new Act.
FINDING
For the above reasons, judgment will issue dis
missing the action. Costs will follow the event.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.