T-3904-78
Leo Bruno, Edward J. Arcand, James J. Arcand,
Arsene Arcand, Stanley Arcand, Angus Paul,
George LaFleche, for and on behalf of themselves
personally, and for and on behalf of the Alexander
Band Indian Council, and the Members of the
Alexander Band No. 134, and the Alexander Band
No. 134 (Plaintiffs)
v.
Her Majesty the Queen in Right of Canada as
represented by The Minister of Indian Affairs and
Northern Development (Defendant)
INDEXED AS: ALEXANDER BAND No. 134 V. CANADA (MINIS-
TER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT)
(T.D.)
Trial Division, Strayer J.—Edmonton, September
25; Ottawa, November 26, 1990.
Native peoples — Lands — Plaintiffs surrendering oil and
gas rights on reserve lands to Crown for lease on their behalf
— Losing $1 million due to unreasonable delays in adopting
Indian Oil and Gas Regulations in 1977 — Crown's general
fiduciary obligation towards each Indian band in respect of
reserve land discussed — Failure to adopt Regulations sooner
breach of duty — Although normally no obligation to legis
late, possible exception where necessary to adequately perform
fiduciary obligation — No liability for failure to legislate
Regulations sooner given general application and wide range
of activities covered — Narrow wording of special case pre
cluding Court from granting relief.
Crown — Plaintiffs losing $1 million due to unreasonable
delay in adopting Indian Oil and Gas Regulations — Fiduci
ary duty owed to each Indian band in respect of reserve land
discussed — Failure to adopt regulations sooner breach of
fiduciary duty — Normally no legal obligation to legislate,
but possible exception in sui generis relationship — No liabili
ty for failure to adopt Regulations sooner given general
application and wide range of activities covered — Exercise of
general legislative power surpassing fiduciary obligation owed
to particular plaintiffs.
Energy — Indian Oil and Gas Regulations adopted in 1977
of general application and covering wide range of activities
relating to mineral rights on reserve lands — Plaintiffs losing
$1 million during period of rapidly increasing international oil
prices due to unreasonable delay in adopting Regulations —
Fiduciary duty owed by Crown to Indians re: reserve lands
discussed — Effect of duty on obligation to legislate . — No
liability for failure to legislate sooner as Regulations of
general application and wide scope.
This was a special case for determination under Rule 475. In
1947 the Alexander Band surrendered to the Crown all of the
petroleum and natural gas rights on its reserve to lease on its
behalf, provided that it would be paid royalties. Many leases
were entered into under this arrangement between 1947 and
1977. Due to the actions of the Organization of Petroleum
Exporting Countries in 1973 there was a rapid increase in the
international price of oil, thereby increasing the value of oil and
gas extracted in Canada. The Alberta Government promptly
enacted regulations which raised royalties for most owners of
mineral rights, although the plaintiffs were excepted. Although
the federal Regulations were amended in 1974 to increase the
royalty rates paid for oil and gas produced from Indian
reserves, the plaintiffs still were not paid as much as other
Indian bands in Alberta which had the benefit of Alberta
regulations. In 1974 the new federal Indian Oil and Gas Act
authorized the Governor in Council to make regulations pre
scribing the royalties on oil and gas obtained from Indian lands.
No such regulations were made until the Indian Oil and Gas
Regulations were adopted in 1977. In the interval there had
been extensive consultation with Indian bands in western
Canada and Ontario. The plaintiffs lost approximately one
million dollars as a result of the delay. The plaintiffs argued
that the defendant had a duty to enact, in a timely manner,
Regulations raising the royalties received by them to levels
equivalent to those received by other Alberta bands. The
defendant argued that the exercise of the Governor in Council's
discretion to make regulations is unfettered and beyond judicial
review. The issues were: whether the defendant had a duty to
adopt the 1977 Indian Oil and Gas Regulations sooner; wheth
er it had breached any such duty; whether any such breach had
caused plaintiffs any damages; and the quantum of any such
damages.
Held, the action should be dismissed.
The plaintiffs suffered a loss which prima facie could have
been avoided by timely adoption of new regulations by the
defendant.
The Crown owes a general fiduciary obligation to each
Indian band in respect of its reserve land: Guerin et al. v. The
Queen et al. The fact that since the Royal Proclamation of
1763 Indian title can only be surrendered to the Crown, and
only the Crown can alienate it thereafter, means that the
Crown is interposed between the Indians and prospective pur
chasers or lessees to guard against the exploitation of the
Indians. The grant of the discretion to the Crown in the Indian
Act, subsection 18(1) to determine what use of the reserve
lands may be "for the use and benefit of the band" imposes on
the Government a fiduciary obligation, which is the law's
means for controlling the exercise of such discretion. A court
can hold the Government to the fiduciary's strict standard of
conduct, which is that of utmost loyalty to his principal. The
Government of Canada did not obtain as good a return from
the lease of Indian reserve lands as could reasonably and
lawfully be achieved, thus breaching its fiduciary duty. What
was thought proper and lawful to do in 1977 could have been
done in 1973 or 1974 and that delay was unreasonable.
The Crown's obligation to the Indians with respect to their
interest in the land is not a public law duty, but rather in the
nature of a private law duty. Although there is normally no
legal obligation to legislate, there may be an exception where
the relationship between the Crown and the Indians is sui
generis. The Crown kept the exclusive right to acquire and
dispose of Indian title because it had the unique power and
responsibility to act as a protector of the interests of indigenous
peoples. Therefore the Crown should exercise these governmen
tal powers which only it has, to perform adequately the specific
fiduciary obligation it owes to a particular band whose Indian
title has been surrendered to the Crown.
Notwithstanding the foregoing, the Government was not
liable for failure to legislate because the special case related
only to the Indian Oil and Gas Regulations adopted in 1977.
The defendant did not have any judicially enforceable duty to
adopt those Regulations sooner, given their general application
and the wide range of activities in relation to mineral rights
covered. Such an exercise of a general legislative power goes far
beyond any fiduciary obligation owed to these particular plain
tiffs. The enactment of regulations was primarily the perform
ance of a political duty which is not enforceable in the courts.
The special case failed to put to the Court the question whether
it was a matter of fiduciary obligation that a simple provision
have been adopted, in a timely manner, increasing plaintiffs'
revenue from their particular mineral rights.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Rules, C.R.C., c. 663, R. 475.
Indian Act, R.S.C. 1970, c. I-6, s. 18(1) (now R.S.C.,
1985, c. I-5, s. 18(1)).
Indian Oil and Gas Act, S.C. 1974-75-76, c. 15.
Indian Oil and Gas Regulations, SOR/66-300 (as am. by
SOR/74-206).
Indian Oil and Gas Regulations, C.R.C., c. 963, s. 21(7).
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335;
(1984), 13 D.L.R. (4th) 321; [1984] 6 W.W.R. 481; 59
B.C.L.R. 301; [1985] 1 C.N.L.R. 120; 20 E.T.R. 6; 55
N.R. 161; 36 R.P.R. 1.
REFERRED TO:
Kwong's Estate and Kwong v. Province of Alberta,
Thompson's Estate, Stephaniuk and Lazarak (1978), 14
A.R. 120; 96 D.L.R. (3d) 214; [1979] 2 W.W.R. 1; 8
C.C.L.T. 1 (C.A.) affd sub nom Kwong et al. v. The
Queen in Right of Alberta, [1979] 2 S.C.R. 1010;
(1979), 18 A.R. 358; 105 D.L.R. (3d) 576; [1979] 6
W.W.R. 573; 12 C.C.L.T. 297; 29 N.R. 295; Kruger v.
The Queen, [1986] 1 F.C. 3; (1985), 17 D.L.R. (4th)
591; [1985] 3 C.N.L.R. 15; 32 L.C.R. 65; 58 N.R. 241
(C.A.).
AUTHORS CITED
Gautreau, J. R. Maurice "Demystifying the Fiduciary
Mystique" (1989), 68 Can. Bar Rev. 1.
COUNSEL:
Robert F. Roddick, Q.C. and Douglas E.
Sanders for plaintiffs.
D. Bruce Logan for defendant.
SOLICITORS:
Roddick & Peck, Edmonton, for plaintiffs.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
STRAYER J.:
Relief requested
Pursuant to a joint application by the parties an
order was made on April 26, 1990 by Lefebvre
S.P. for the determination of a special case pursu
ant to Rule 475 [Federal Court Rules, C.R.C., c.
663]. The questions stated for the opinion of the
Court are as follows:
(a) whether the Defendant was under any duty to the Plain
tiffs to enact the Indian Oil & Gas Regulations at some date
earlier than April 22, 1977;
(b) whether the Defendant breached any such duty;
(c) whether any such breach caused any damages to be
suffered by the Plaintiffs;
(d) the quantum of such damages, if any.
The Court is requested, upon determination of
these questions, to give judgment in the action
accordingly and to make an appropriate disposi
tion of costs.
Facts
The plaintiffs represent themselves and the
Indian Band of which they are members, namely
the Alexander Band No. 134 which has a reserve
in Alberta.
On June 24, 1947 the Band executed a surren
der to the Crown of all of the petroleum and
natural gas rights pertaining to its reserve:
... in trust to lease the same to such person or persons, and
upon such terms as the Government of the Dominion of
Canada may deem most conducive to our welfare and that of
our people.
And upon the further condition that all moneys received
from the leasing of the petroleum and natural gas mining rights
thereon shall be placed to our credit and the interest thereon
paid to us in the usual way.
From July 31, 1947 to April 21, 1977 the
defendant Crown entered into many petroleum
and natural gas leases in respect of this reserve and
royalties from those leases were credited to the
Alexander Band. By an agreement effective March
1, 1960 the interests of the lessees under these
leases were unitized by an agreement and thereaf
ter the field was operated by Norcen Energy
Resources Limited or its predecessors.
Although not spelled out in the agreed state
ment of facts my attention was drawn to certain
national and international events commencing in
the fall of 1973 which drastically affected the
international price of crude oil, and led to exten
sive governmental intervention in the pricing of oil
and gas produced in Canada. There was no dispute
between counsel as to the general nature of these
developments which were notorious and of which I
can take judicial notice. Associated with a crisis in
the Middle East in the autumn of 1973 the Organ
ization of Petroleum Exporting Countries by joint
action caused a rapid increase in the international
price of crude oil. As this had the effect of causing
a sudden and arbitrary increase in the value of oil
and gas extracted in Canada, the federal and
certain provincial governments were generally
quick to act to ensure that the new windfall profits
(generated by a sudden multiplication of market
prices without any accompanying increase in the
cost of production) should be shared with Canadi-
an public treasuries and Canadian owners of min
eral rights (provincial governments being among
the major owners). It was stated by counsel for the
plaintiffs, and not disputed, that the province of
Alberta enacted measures which had the effect of
raising the royalties received by the owners of most
mineral rights in Alberta. Two fields in the prov
ince were excepted from these measures and the
mineral rights of the plaintiffs were included in
one of those fields.
On March 28, 1974, the Governor in Council
amended the federal Indian Oil and Gas Regula
tions [SOR/66-300 (as am. by SOR/74-206)]
made under the Indian Act' to empower the Min
ister to increase the royalty rates to be paid for oil
and natural gas produced from lands situated on
Indian reserves across Canada. As will be seen,
this general increase did not have the effect of
producing as much revenue for the plaintiffs as
was being realized by other Indian bands in Alber-
ta. Those bands had the benefit of the Alberta
regulations because, as I understand it, production
from their reserves was unitized within fields made
subject to the provincial regulations.
On December 20, 1974 assent was given to a
new federal law, the Indian Oil and Gas Act. 2 It
was apparently adopted in part to overcome some
perceived uncertainties as to the validity of the
previous Oil and Gas Regulations made under the
Indian Act. Among other regulation-making
powers specifically given to the Governor in Coun
cil by this Act, he was authorized to make regula
tions prescribing the royalties on oil and gas
obtained from Indian lands. However, no such
regulations were made under this Act until the
adoption of the Indian Oil and Gas Regulations
' Then R.S.C. 1970, c. I-6.
2 S.C. 1974-75-76, c. 15.
brought into force on April 22, 1977. 3 Subsection
21(7) of those Regulations empowered the Manag
er of Indian Minerals of the Department of Indian
and Northern Affairs to notify a lessee of Indian
minerals of the
21....
(7) ... dollar value of the oil or gas that would be realized if
it were sold in a business-like manner, at the time and place of
production in an arm's length transaction ....
and upon such notice the lessee would be thereaf
ter obliged to calculate his royalty payments (nor-
mally fixed as a percentage of the value of the oil
or gas produced) on the basis of the deemed value
thus specified by the Manager. On May 2, 1977
the Manager sent such a notice to Norcen in
respect of the gas produced from the Alexander
reserve, the effect being to increase very substan
tially the unit value of that gas upon which royal
ties would have to be paid. On May 5, 1977
Norcen ceased gas production from this field, such
cessation being, according to the agreed statement
of facts:
... pending negotiations with its customers for payment at a
"fair market value".
It is also agreed that in the period between the
adoption of the Indian Oil and Gas Act in Decem-
ber, 1974, and the adoption of the Regulations
thereunder in April, 1977 there was extensive con
sultation with Indian bands with oil and gas pro
duction or potential production in Alberta, Sas-
katchewan, Manitoba, British Columbia, and
Ontario. National meetings were held for this
purpose. Representatives of the plaintiffs attended
one of these national meetings, in October, 1975
but did not participate in a subsequent meeting
also held for this purpose. It is agreed, however,
that between December, 1975 and March, 1977
the plaintiffs contacted representatives of the
defendant on several occasions and expressed their
concern about their loss of revenue due to the
failure to pass new regulations. Consistently with
this, a group of members of their Band picketed
C.R.C., c. 963.
the surface-lease site of Norcen on March 28,
1977, and prevented agents and employees of that
company from gaining access to or operating the
Alexander gas production and compression facili
ties. This demonstration was interrupted by an ex
parte injunction and shortly thereafter the new
federal regulations were adopted under the Indian
Oil and Gas Act.
The plaintiffs asserted in their statement of
claim in effect that the defendant was under a
duty to take timely action to raise the revenues
realized from the extraction of gas from the Alex-
ander reserve to a level equivalent to the royalty
revenues realized by other Indian bands in Alberta
during the period from 1973 to April, 1977. The
only evidence I have as to the extent of the alleged
loss is set out in paragraph 17 of the agreed
statement of facts which is as follows:
It has been estimated by the Defendant that the Plaintiffs
would have received approximately $1.056 Million more in
royalties from 1973 through 1977 had the wellhead prices
been similar to the fair market values prevailing during that
period. Attached hereto and marked Exhibit "N" is a copy of
a letter dated June 22nd, 1977, with attachment.
The letter referred to, trial Exhibit 1-N (part of
the agreed statement of facts) reads in part as
follows:
In reply to your recent request, a recalculation of the gas
royalties from 1973 through 1977 until shut-in, has been
made arid indicates that the Band would have received
approximately $1,056,000.00 more at prices received by
other Bands in Alberta.
It is next to impossible to be very precise in this calculation
because the prices used for other gas production vary by
Company, however the above value, which is based on
another field supplying an Alberta utility, is felt to be a
reasonable estimate.
It was agreed at trial by counsel that the correct
figure representing the additional amount "that
the plaintiffs would have received" is $994,415.82,
this reflecting errors in addition in the letter from
the Manager of Indian Minerals dated June 22,
1977 (Exhibit 1-N).
This action was commenced on August 25,
1978. No explanation was offered as to why there
has been a delay of over twelve years in com
mencement of the trial.
Conclusions
As the parties have elected to proceed on the
basis of an agreed statement of facts and an
agreed formulation of the questions to be
answered, I am obliged to draw the necessary
inferences from a very limited evidentiary base
and can answer only the precise questions put to
the Court.
With that caveat in mind, I would conclude at
the outset that the plaintiffs did not receive, during
the period 1973-1977 covered by Exhibit 1-N,
royalty revenues from gas produced from their
reserve in an amount which they could and should
have received. I have no basis for taking at other
than its face value the statement by E. A. Moore,
Manager, Indian Minerals, in his letter of June 22,
1977, Exhibit 1-N, that "the Band would have
received ... [a larger amount, as now corrected] at
prices received by other Bands in Alberta". Mr.
Moore takes pains to say in his letter that he has
made his calculation based on revenues from com
parable fields. While at trial counsel for the
defendant speculated on what might have hap
pened to prevent these extra revenues from being
realized, I must go on the basis of the agreed
evidence which can only be reasonably interpreted
as meaning that the plaintiffs would have received
more money had they had the benefit of a regula
tory scheme comparable to that imposed by the
province of Alberta which had the effect of raising
the royalties received by all other Indian bands in
Alberta with petroleum producing reserves. In
short, a loss was suffered by the plaintiffs, a loss
which prima facie could have been avoided by
timely action by the defendant in the form of new
regulations.
Having reached that conclusion, I must then
consider whether the defendant had any duty to
adopt the Oil and Gas Regulations adopted in
April, 1977 and if so, whether it met that duty by
producing effective regulations only some three
and one-half years after more adequate royalties
were being received by other Alberta bands pursu
ant to provincial regulations. This is the form in
which the issues are put to me by the special case.
It now appears clear, since the decision of the
Supreme Court of Canada in Guerin et al. v. The
Queen et a1. 4 that there is a general fiduciary
obligation owed by the Crown in right of Canada
towards each Indian band in respect of the reserve
land of each band. Indian title predates and is
independent of the Indian Act' but is recognized
by, inter alia, subsection 18(1) of the Act which
provides as follows:
18. (1) Subject to this Act, reserves are held by Her Majesty
for the use and benefit of the respective bands for which they
were set apart, and subject to this Act and to the terms of any
treaty or surrender, the Governor in Council may determine
whether any purpose for which lands in a reserve are used or
are to be used is for the use and benefit of the band.
In the view of Dickson J. [as he then was], writing
on behalf of four judges of the Supreme Court, the
fact that, ever since the Royal Proclamation of
1763 it has been recognized that Indian title can
only be surrendered to the Crown, and only the
Crown can alienate it thereafter, means that the
Crown is interposed between the Indians and pros
pective purchasers or lessees "so as to prevent the
Indians from being exploited". 6 While subsection
18(1) appears to confer on the Government the
[1984] 2 S.C.R. 335.
5 Now R.S.C., 1985, c. 1-5; the relevant provision in the
present case, subsection 18(1) was part of R.S.C. 1970, c. 1-6
and remains unchanged today.
6 Guerin case, supra, note 4, at p. 383. Only eight judges
participated in this judgment. While Wilson J. writing on
behalf of three judges held that the Crown was in the role of
(Continued on next page)
discretionary power to determine what use of the
reserve lands may be "for the use and benefit of
the band", it was held in Guerin that this did not
have the effect of excluding the jurisdiction of the
courts to review the Crown's exercise of its discre
tion. Instead, the grant of this discretion, by put
ting the Indians "at the mercy of the [Govern-
ment's] discretion" imposes on the Government a
fiduciary obligation which is the law's means for
controlling the exercise of such discretion. A court
through its equity jurisdiction can supervise such a
relationship by holding the Government "to the
fiduciary's strict standard of conduct".' The duty
of a fiduciary "is that of utmost loyalty to his
principal".S
The facts of the Guerin case are, of course,
distinguishable from the present case in at least
two respects. First, in Guerin members of the band
had conveyed to the Government their views as to
what the minimum acceptable terms for a lease of
their surrendered land would be, and the Govern
ment ignored those views. Secondly, the Govern
ment was acting in essentially the same role as a
private party in negotiating a lease of the land to a
golf club. In the present case, there are no express
or implied terms in the surrender of the plaintiffs'
mineral rights as to the terms upon which they
might be leased for exploitation. Further, as I
understand it (and I specifically questioned coun
sel for the plaintiffs in this respect) the plaintiffs
are not asserting that the Government here could
(Continued from previous page)
trustee, she viewed this as a specialized form of fiduciary
obligation owed by the Crown. The Federal Court of Appeal
has regarded the judgment of Dickson J. on behalf of four
judges as being definitive, in Kruger v. The Queen, [1986] 1
F.C. 3 (C.A.). While the Royal Proclamation, 1763, did not
apply in most respects to lands such as these formerly within
the domain of the Hudson's Bay Company, it is not disputed in
the present case that the same fiduciary obligation devolved on
the Government of Canada in respect of Indian lands in
Alberta.
' Ibid, at p. 384; see also the judgment of Wilson J., at pp.
349-351.
8 Ibid, at p. 389.
have simply acted like a private party and renego
tiated the mineral leases in the period 1973-1977
in order to obtain a suitable increase in the royalty
being paid for extracted gas. Those leases pro
vided, apparently, for a fixed royalty and a fixed
deemed wellhead price which, according to normal
rules of contract, would have remained stable and
thus below the actual market price of gas during
this period. In other words I must consider, in
determining if the Guerin principles apply here,
whether the Crown had a duty to use governmen
tal powers to achieve unilaterally a revision of the
mineral leases covering the plaintiffs' reserve in
order to yield to them returns comparable to those
being obtained by other Indian bands in Alberta
and, even if so, did that duty include the earlier
adoption of the precise regulations finally adopted
in 1977?
With respect to the first point, having regard to
the historical relationship between the Crown and
Indians, I believe the fiduciary's duty of "utmost
loyalty to his principal" would in general oblige
the Crown to seek to achieve as good a return from
the property of the beneficiary of the fiduciary
obligation as could reasonably and lawfully be
achieved. 9 On the face of matters here, the Gov
ernment of Canada did not do this. It is undisput
ed, and Exhibit 1-N (the letter from the Manager
of Indian Minerals in the Department of Indian
and Northern Affairs) confirms, that the Band
represented by the plaintiffs would have received
approximately one million dollars more at prices
received by other bands in Alberta. It is further
accepted that other bands in Alberta received the
higher prices because of timely legislative action of
the Government of Alberta, action of a type which
the Government of Canada took in a very moder-
9 See J. R. Maurice Gautreau, "Demystifying the Fiduciary
Mystique" (1989), 68 Can. Bar. Rev. 1, at pp. 18-20 where it is
said that the scope of the fiduciary duty is in part defined by
what the fiduciary has undertaken to do. In its historical role of
protector, doing what the band is not itself empowered to do,
the Crown can surely be seen to have assumed a responsibility
to get the best price it can reasonably and lawfully achieve.
ate way in 1974 but did not again take until the
adoption of the Indian Oil and Gas Regulations in
1977. Subject to the next point to be discussed
below, one could conclude that what it was
thought proper and lawful to do in 1977 could
have been done in 1973 or 1974 and that the delay,
resulting in a loss of some million dollars to this
Band, was unreasonable.
The second issue to be addressed, however, is
that of whether the Government can in any con
text be liable for a failure to legislate. The defend
ant relies mainly on the general principle that the
failure to pass regulations cannot be the subject of
an action and it is not open to a court to say that
there should have been regulations and award
damages for failure to adopt them. 10 The basis for
this principle is, I take it, that legislatures and
those having delegated legislative powers have the
discretion to adopt or not adopt laws and that it is
not for the courts to second-guess them. This
excellent principle, while no doubt generally
sound, may sometimes have to give way in light of
the decision in the Guerin case. For the essence of
that decision is that the Government of Canada,
once it accepts a surrender of Indian title in
respect of a particular reserve, undertakes a fiduci
ary obligation towards the Indian band in question
to exercise its discretion with "utmost loyalty" to
the band and its interests. Thus it was found in
Guerin that the seemingly unfettered discretion
given to the Governor in Council by subsection
18(1) of the Indian Act to decide how surrendered
reserve lands might best be used for the benefit of
the band was limited by the overriding fiduciary
obligation of utmost loyalty. In the present case
the defendant is arguing that the exercise of the
discretion given to the Governor in Council to
make regulations under either the Indian Act or
the Indian Oil and Gas Act is completely unfet-
10 Kwong's Estate and Kwong v. Province of Alberta,
Thompson's Estate, Stephaniuk and Lazarak (1978), 14 A.R.
120 (C.A.), confirmed by [1979] 2 S.C.R. 1010.
tered and beyond review by a court. But as Dick-
son J. said in the Guerin case:
It should be noted that fiduciary duties generally arise only
with regard to obligations originating in a private law context.
Public law duties, the performance of which requires the exer
cise of discretion, do not typically give rise to a fiduciary
relationship. As the "political trust" cases indicate, the Crown
is not normally viewed as a fiduciary in the exercise of its
legislative or administrative function. The mere fact, however,
that it is the Crown which is obligated to act on the Indians'
behalf does not of itself remove the Crown's obligation from the
scope of the fiduciary principle. As was pointed out earlier, the
Indians' interest in land is an independent legal interest. It is
not a creation of either the legislative or executive branches of
government. The Crown's obligation to the Indians with respect
to that interest is therefore not a public law duty. While it is
not a private law duty in the strict sense either, it is nonetheless
in the nature of a private law duty. Therefore, in this sui
generis relationship, it is not improper to regard the Crown as a
fiduciary."
It will be noted that Dickson J. regarded the
government's obligation to the Indians in such
circumstances not to be a mere "political trust"
nor a "public law duty". Instead, it is "in the
nature of a private law duty". Accepting, then,
that normally neither Parliament nor those exer
cising delegated legislative powers have a legal
obligation to legislate, here in this sui generis
relationship, as the Supreme Court called it, the
Governor in Council at least may be in a different
position. One can deduce from the protective
stance taken by the Crown ever since the Royal
Proclamation, 1763 that the Crown kept to itself
the exclusive right to acquire and dispose of Indian
title because it had the unique power and responsi
bility to act as an appropriate protector of the
interests of the people who inhabited this land
before the arrival of Europeans. It is wholly con
sistent with this view that the Crown should exer
cise these governmental powers which only it has,
where this may reasonably and lawfully be done to
perform adequately the specific fiduciary obliga
tion it owes to a given band whose Indian title has
been surrendered to the Crown.
" Supra, note 4, at p. 385.
I am, however, constrained by the terms of the
special case to determine only one question as to
the defendant's duty, namely:
... whether the Defendant was under any duty to the
Plaintiffs to enact the Indian Oil and Gas Regulations at
some date earlier than April 22, 1977.
Having regard to the principles to which I have
referred earlier, I am unable to say that the
defendant had any judicially enforceable duty to
adopt at an earlier date the particular regulations
obviously being referred to in this question in the
special case, namely the regulations adopted on
April 22, 1977. An examination of these regula
tions reveals that they apply generally to all Indian
lands in Canada in respect of mineral rights, and
include provisions which cover a whole range of
activities in relation to the management, disposi
tion, and exploitation of mineral rights including
exploration and production. As such they involve
the exercise of a general legislative power granted
to the Governor in Council which goes far beyond
any possible fiduciary obligation owed by the
defendant to these particular plaintiffs in the par
ticular facts of this case. The enactment of the
regulations must be seen as primarily the perform
ance of a political duty which is not enforceable in
the courts. Because of the general nature of these
regulations, it must also be recognized that wide
consultation among all Indian bands with mineral
production was not only desirable but required by
section 7 of the enabling legislation. Thus it would
not be appropriate for a court to assess the timeli
ness of their adoption.
In the circumstances, it is not open to me to
determine whether the early adoption of a simple
provision to increase the revenue of the plaintiffs
from their particular mineral rights, so as to
equate these returns to those of other Alberta
bands, was a matter of fiduciary obligation. That
question was not put to me by the special case.
Having so concluded, it is not necessary to
consider the questions of quantum or of the pre
judgment interest claimed by the plaintiffs.
The action is therefore dismissed with costs to
the defendant.
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.