Fairford First Nation v. Canada (Attorney General), (1998) 156 F.T.R. 1 (TD)

• Judge: Rothstein, J.
• Court: Federal Court (Canada)
• Case Date: March 27, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 156 F.T.R. 1 (TD)

Fairford First Nation v. Can. (A.G.) (1998), 156 F.T.R. 1 (TD)

MLB headnote and full text

Temp. Cite: [1998] F.T.R. TBEd. NO.075

Edward Anderson, Garnet Woodhouse, Marshall Woodhouse, Robert McLean, Patrick Anderson, Ormand Stagg and George Traverse on their own behalf and on behalf of all members of the Fairford First Nation, a body of Indians described as the Fairford Band and declared to be a band for the purposes of the Indian Act by P.C. 1973-3571 (plaintiffs) v. The Attorney General of Canada on behalf of Her Majesty the Queen in right of Canada (defendant)

(T-2243-93)

Indexed As: Fairford First Nation v. Canada (Attorney General)

Federal Court of Canada

Trial Division

Rothstein, J.

November 12, 1998.

Summary:

The Fairford First Nation sued Canada for breach of fiduciary duty respecting Mani­toba's construction of a dam that caused extensive flooding of the Fairford reserve.

The Federal Court of Canada, Trial Divi­sion, allowed the action in part.

Crown - Topic 6890

Crown lands - Licences or permits to use -Indian reserves - Manitoba wanted to construct a temporary coffer dam on re­serve land - A Band council resolution approved the use of reserve land (provided that it was returned to its previous state) and waived compensation - The Band sued Canada alleging, inter alia, that Canada should have obtained some compensation for the land's use - The Federal Court of Canada, Trial Division, rejected the ar­gument - Canada left the matter of com­pensation to the Band council - At issue was the temporary use of a minimal amount of reserve land - Even if Canada had a duty to protect the Band from mak­ing an improvident decision in dealing with Manitoba, any reasonable compen­sation would have been negligible and not asking for compensation was not improvi­dent - See paragraphs 113 to 114.

Equity - Topic 3602

Fiduciary or confidential relationships - General principles - Elements of a fidu­ciary relationship - The Federal Court of Canada, Trial Division, discussed the elements of a fiduciary relationship - See paragraphs 40 to 52.

Equity - Topic 3611

Fiduciary or confidential relationships - General principles - Crown - The Federal Court of Canada, Trial Division, discussed the fiduciary duty owed to Indians by the Crown - See paragraphs 14, 23 to 52.

Indians, Inuit and Métis - Topic 3

General - Duty owed to Indians by Crown - The Federal Court of Canada, Trial Divi­sion, stated that "[t]he relationship between the Crown and Indian bands respecting their lands and rights is governed by the twin policies of autonomy and protection. Depending upon the significance of the rights at issue, different levels of protec­tion and autonomy may apply. ... even though there is protection afforded by the Indian Act, aboriginal peoples are to be treated as autonomous actors whose deci­sions must be respected and honoured. ... It is not necessary and, having regard to the fact that aboriginals are to be treated as autonomous actors, it may be undesirable, for Canada to actively participate in a band's negotiations with third parties." - See paragraphs 183 to 184.

Indians, Inuit and Métis - Topic 3

General - Duty owed to Indians by Crown - [See Equity - Topic 3611 and Indians, Inuit and Métis - Topic 5402 ].

Indians, Inuit and Métis - Topic 802

Personal or legal rights - General - Limita­tion of actions - A Manitoba dam project, constructed in 1960 and 1961, caused extensive flooding of an Indian reserve - In 1974 the Band signed a three party com­pensation agreement to accept certain compensation land and release Manitoba from further liability regarding flooding - Canada never ratified the agreement, but did accept transfer of the compensation lands for the reserve in 1992 - The Band claimed that it was not fully compensated for its losses - On September 15, 1993, it sued Canada for breach of fiduciary duty - The Federal Court of Canada, Trial Divi­sion, rejected the Band's argument that there was an "ongoing breach beginning in 1958" and held that some of the claims were statute barred - See paragraphs 286 to 299.

Indians, Inuit and Métis - Topic 802

Personal or legal rights - General - Limi­tation of actions - A Manitoba dam proj­ect, constructed in 1960 and 1961, caused extensive flooding of an Indian reserve - In 1974 the Band signed a three party com­pensation agreement to accept certain compensation land and release Manitoba from further liability regarding flooding - Canada never ratified the agreement, but accepted transfer of the compensation lands for the reserve in 1992 - The Band claimed that it was not fully compensated for its losses - On September 15, 1993, it sued Canada for breach of fiduciary duty - The Federal Court of Canada, Trial Division, held that, although Canada breached its fiduciary duty to the Band through delay and failure to consult, the actions were mostly out of time - Part of the action for delay was saved by the discoverability doctrine - See paragraphs 300 to 311.

Indians, Inuit and Métis - Topic 5402

Lands - General - Disposition of Indian lands - The Federal Court of Canada, Trial Division, stated that "[t]here is no doubt that in questions involving surrenders of reserve land, there is a duty of consultation on the Crown. ... this duty of consultation extends to dispositions of reserve land by Canada under s. 35 of the Indian Act." - See paragraph 197.

Indians, Inuit and Métis - Topic 5404

Lands - Protection of Indian rights - Gen­eral - A provincial dam project caused extensive flooding to an Indian reserve - The Federal Court of Canada, Trial Divi­sion, noted that, in the absence of sur­render, s. 18(1) of the Indian Act did not impose a fiduciary duty on the federal Crown - The court addressed whether, apart from s. 18(1), the Crown's involve­ment in the study, approval and financing of the dam gave rise to a fiduciary duty; whether by statute, agreement, particular course of conduct or unilateral under­taking, the Indian Band and the Crown had a mutual understanding that the Crown would act on behalf of the Band, creating a reasonable expectation that the Crown would act in the Band's best interests to the exclusion of other interests - The court answered the question in the negative - See paragraphs 53 to 63.

Indians, Inuit and Métis - Topic 5404

Lands - Protection of Indian rights - Gen­eral - A provincial dam project caused extensive flooding to an Indian reserve - The Federal Court of Canada, Trial Divi­sion, noted that, in the absence of sur­render, s. 18(1) of the Indian Act did not impose a fiduciary duty on the federal Crown - The court then applied, inter alia, a "ceding of power-vulnerability approach" to determine if, apart from s. 18(1), a fiduciary duty on the part of the Crown arose because of its involvement in the study, approval and financing of the dam -The court answered the question in the negative - There was no statute, contract or unilateral undertaking which led to a ced­ing of the Band's power over any matter to the Crown - See paragraph 64.

Indians, Inuit and Métis - Topic 5404

Lands - Protection of Indian rights - Gen­eral - A provincial dam project caused extensive flooding to an Indian reserve - The Band sued the federal Crown for breach of fiduciary duty respecting the dam's construction - The Federal Court of Canada, Trial Division, noted that, in the absence of surrender, s. 18(1) of the Indian Act did not impose a fiduciary duty on the federal Crown - Further, there were no circumstances that otherwise gave rise to a fiduciary duty on the part of the Crown - However, Indians were not without re­course in the absence of a fiduciary duty on the part of the federal Crown - Section 31(3) of the Indian Act preserved for an Indian or Indian Band the opportunity to bring an action against anyone interfering with their rights - See paragraphs 55 to 56.

Indians, Inuit and Métis - Topic 5404

Lands - Protection of Indian rights - Gen­eral - A Manitoba dam project caused extensive flooding to an Indian reserve - For a time, Canada negotiated with Mani­toba for compensation for the Band with­out consulting with the Band - The Federal Court of Canada, Trial Division, held that "[w]hen Canada was unilaterally dealing with Manitoba, the duty to consult existed and the failure to consult during this period constituted a breach of fiduciary duty on the part of Canada" - See paragraphs 245 to 285.

Indians, Inuit and Métis - Topic 5404

Lands - Protection of Indian rights - Gen­eral - [See first Indians, Inuit and Métis -Topic 3 , Indians, Inuit and Métis - Topic 5402 and third Indians, Inuit and Métis - Topic 5475 ].

Indians, Inuit and Métis - Topic 5444

Lands - Lease of lands - Consent of band -Manitoba wanted to construct a temporary coffer dam on reserve land - The Band council approved the use of the reserve land by resolution - The Band alleged that: a vote of Band members was required; in the absence of legally valid authorization, use of the reserve for the coffer dam con­stituted a trespass; and Canada had a duty not to permit this trespass - The Federal Court of Canada, Trial Division, rejected the argument - The use of reserve land was a temporary use, not a permanent disposi­tion - Such temporary use required permis­sion of the Band council, not the Band - Further, as the use did not exceed one year, the Minister could have authorized such use without the Band council's con­sent - See paragraphs 84 to 111.

Indians, Inuit and Métis - Topic 5445

Lands - Lease of lands - Rent - Deter­mination of - [See Crown - Topic 6890 ].

Indians, Inuit and Métis - Topic 5464

Lands - Surrender of lands - What consti­tutes a surrender - [See Indians, Inuit and Métis - Topic 5444 ].

Indians, Inuit and Métis - Topic 5475

Lands - Surrender of lands - Duties of Crown re - By Band council resolutions in 1960 and 1962, an Indian Band agreed to transfer 11 and 23 acres of land to Mani­toba - Canada failed to effect the transfer of the 11 acres for over a decade and failed to secure full payment for the entire 34 acres until 1971 - The Federal Court of Canada, Trial Division, held that Canada's necessary involvement under s. 35 of the Indian Act in the transfer gave rise to a fiduciary duty upon Canada to ensure that the Band's best interests were protected insofar as Canada's unilateral discretion respecting the transaction was concerned - The court held that Canada breached that fiduciary duty - See paragraphs 160 to 164 and 169 to 172.

Indians, Inuit and Métis - Topic 5475

Lands - Surrender of lands - Duties of Crown re - A Manitoba dam project caused extensive flooding of an Indian reserve - The Band claimed that Canada breached its fiduciary duty to the Band by encouraging it to engage in land exchange negotiations with Manitoba when Canada knew that the construction and operation of the dam adversely impacted its practical and legal interests far beyond merely land and that the Band had no capacity or au­thority to conclude such negotiations or agreements - The Federal Court of Canada, Trial Division, held that no such duty existed during the negotiating stage - The Band was in the best position to know the losses it suffered - If and when Canada was called upon to ratify a negotiated agreement, a fiduciary duty arose to ensure that the Band had not been exploited, but not before - See paragraphs 174 to 186.

Indians, Inuit and Métis - Topic 5475

Lands - Surrender of lands - Duties of Crown re - The Federal Court of Canada, Trial Division, stated that "[t]he usual circumstance in which Canada has been found to act in the role of a fiduciary is with respect to the surrender of reserve land. What gives rise to the fiduciary duty is the discretion vested in Canada to deal with surrendered land and the vulnerable position of the Indian band once it has surrendered the land. The same conditions apply when land is to become part of an Indian reserve. ... [The band] is reliant on Canada to agree with the party providing the land as to the terms upon which the land is provided and to carry out the trans­action. ... the Crown is interposed between the party providing the land and the Indian band to protect the band from making an improvident transaction." - See paragraph 220.

Indians, Inuit and Métis - Topic 5475

Lands - Surrender of lands - Duties of Crown re - A Manitoba dam project caused extensive flooding of an Indian reserve - Compensation negotiations be­tween the Band and Manitoba began in 1967 and culminated in 1974 in Mani­toba's preparation of an agreement be­tween the Band, Manitoba and Canada for the transfer of compensation land - Canada received the agreement in 1977 - The Federal Court of Canada, Trial Division, held that, commencing at the beginning of 1978, Canada breached its fiduciary duty to make a timely determination that the compensation agreement was not accept­able, explain its reasons to (consult with) the Band and seek instructions on how to proceed - See paragraphs 203 to 230.

Indians, Inuit and Métis - Topic 5475

Lands - Surrender of lands - Duties of Crown re - [See first Indians, Inuit and Métis - Topic 3 and Indians, Inuit and Métis - Topic 5402 ].

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See second Indians, Inuit and Métis - Topic 802 ].

Limitation of Actions - Topic 1905

Actions - General - Breach of fiduciary duty - [See both Indians, Inuit and Métis - Topic 802 ].

Limitation of Actions - Topic 9305

Postponement or suspension of statute - General - Discoverability rule - [See sec­ond Indians, Inuit and Métis - Topic 802 ].

Torts - Topic 3002

Trespass - Trespass to land - What consti­tutes - In 1960, an Indian Band agreed to let Manitoba take 11 acres of land for highway purposes - The land was formally transferred in the 1970s - The Band al­leged that until the formal transfer Mani­toba was trespassing and Canada failed to obtain appropriate compensation for the trespass - The Federal Court of Canada, Trial Division, rejected the argument - The court considered that: the Band agreed to the transfer; 80 percent of the acquisition price was paid; there was authorized entry onto and use of the land without objection; when the final payment was made in the early 1970s, interest was added for the period of delay in payment and this was satisfactory to the Band at the time - See paragraphs 167 to 168.

Waters - Topic 224

Natural watercourses - Riparian rights - Non-tidal rivers - Boundary with adjoining land - Manitoba built a dyke as part of a river dam project - The plaintiffs conceded that Manitoba held title to the river, but alleged that the dyke trespassed on their land - At issue was whether the boundary line between the river and the plaintiffs' land was the high or low water mark - The Federal Court of Canada, Trial Division, held that the boundary between the river and the plaintiffs' land was the ordinary high water mark, the place where the vegetation ceased or where the character of the vegetation and soil changed - See paragraphs 127 to 133.

Cases Noticed:

Guerin v. Canada, [1984] 2 S.C.R. 335; 55 N.R. 161; [1985] 1 C.N.L.R. 120, refd to. [para. 14].

R. v. Sparrow, [1990] 1 S.C.R. 1075; 111 N.R. 241; 56 C.C.C.(3d) 263; 70 D.L.R.(4th) 385, refd to. [para. 14].

Opetchesaht Indian Band et al. v. Canada et al., [1997] 2 S.C.R. 119; 211 N.R. 241; 90 B.C.A.C. 1; 147 W.A.C. 1, appld. [para. 28].

Delgamuukw et al. v. British Columbia et al., [1997] 3 S.C.R. 1010; 220 N.R. 161; 99 B.C.A.C. 161; 162 W.A.C. 161; 153 D.L.R.(4th) 193, appld. [para. 28].

Blueberry River Indian Band and Doig River Indian Band v. Canada (Minister of Indian Affairs and Northern Develop­ment), [1995] 4 S.C.R. 343; 190 N.R. 89; 130 D.L.R.(4th) 193, appld. [para. 28].

R. v. Van der Peet (D.M.), [1996] 2 S.C.R. 507; 200 N.R. 1; 80 B.C.A.C. 81; 130 W.A.C. 81, refd to. [para. 28].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band, [1989] 1 S.C.R. 322; 92 N.R. 241; 25 F.T.R. 161, refd to. [para. 28].

Roberts v. Canada - see Wewayakum Indian Band v. Canada and Wewayakai Indian Band.

Semiahmoo Indian Band et al. v. Canada, [1998] 1 F.C. 3; 215 N.R. 241 (F.C.A.), refd to. [para. 28].

Chippewas of Nawash First Nation v. Canada (Minister of Indian and Northern Affairs) (1996), 116 F.T.R. 37 (T.D.), refd to. [para. 28].

Union of Nova Scotia Indians et al. v. Canada (Attorney General) et al. (1996), 122 F.T.R. 81 (T.D.), consd. [para. 34].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84; 42 D.L.R.(4th) 81; 9 R.F.L.(3d) 225, refd to. [para. 41].

Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14; 35 E.T.R. 1; 44 B.L.R. 1, appld. [para. 42].

Hodgkinson v. Simms et al., [1994] 3 S.C.R. 377; 171 N.R. 245; 49 B.C.A.C. 1; 80 W.A.C. 1; [1994] 9 W.W.R. 609; 22 C.C.L.T.(2d) 1; 117 D.L.R.(4th) 161, appld. [para. 44].

Custer and Morin v. Hudson's Bay Co. Developments Ltd. and Governor and Company of Adventurers of England Trading Into Hudson's Bay, [1983] 1 W.W.R. 566; 20 Sask.R. 89 (C.A.), refd to. [para. 66].

Blueberry River Indian Band and Doig River Indian Band v. Canada (Minister of Indian Affairs and Northern Develop­ment), [1988] 3 F.C. 3; 10 F.T.R. 122 (T.D.), revd. [1995] 4 S.C.R. 343; 190 N.R. 89; 130 D.L.R.(4th) 193, refd to. [para. 66].

Iverson v. Greater Winnipeg Water District (1921), 57 D.L.R. 184 (Man. C.A.), refd to. [para. 127].

R. v. Nikal (J.B.), [1996] 1 S.C.R. 1013; 196 N.R. 1; 74 B.C.A.C. 161; 121 W.A.C. 161, refd to. [para. 127].

R. v. Badger (W.C.) et al., [1996] 1 S.C.R. 771; 195 N.R. 1; 181 A.R. 321; 116 W.A.C. 321, refd to. [para. 144, footnote 13].

Diggon-Hibben Ltd. v. R., [1949] S.C.R. 712, refd to. [para. 166, footnote 21].

Woods Manufacturing Co. v. R., [1951] S.C.R. 504, refd to. [para. 166, footnote 21].

Kruger v. Canada, [1986] 1 F.C. 3; 58 N.R. 241 (F.C.A.), refd to. [para. 170].

Alexander Indian Band No. 134 et al. v. Canada (Minister of Indian Affairs and Northern Development, [1991] 2 F.C. 3; 39 F.T.R. 142 (T.D.), refd to. [para. 221].

C.D.C. v. Starzecki, [1996] 2 W.W.R. 317 (Man. Q.B.), refd to. [para. 287].

Sandvik, A.B. v. Windsor Machine Ltd. and Stihl Chain Saw (Canada) Ltd. (1986), 2 F.T.R. 81 (T.D.), dist. [para. 290].

Wewayakum Indian Band v. Canada and Wewayakai Indian Band (1996), 99 F.T.R. 1 (T.D.), refd to. [para. 297].

Lower Kootenay Indian Band v. Canada (1991), 42 F.T.R. 241 (T.D.), refd to. [para. 297].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109; 37 C.C.L.T. 117; 31 D.L.R.(4th) 481, refd to. [para. 300].

K.M. v. H.M., [1992] 3 S.C.R. 6; 142 N.R. 321; 57 O.A.C. 321; 96 D.L.R.(4th) 289, refd to. [para. 300].

Statutes Noticed:

Crown Lands Act, R.S.M. 1954, c. 57, sect. 5(c)(i) [para. 130].

Indian Act, R.S.C. 1985, c. I-5, sect. 2(2), sect. 2(3) [para. 100]; sect. 18(1) [para. 23]; sect. 18(2) [para. 103]; sect. 28(2) [para. 104]; sect. 31(1), sect. 31(3) [para. 66]; sect. 35 [para. 161]; sect. 37(1) [para. 108].

Navigable Waters Protection Act, R.S.C. 1952, c. 193, sect. 4(1), sect. 5(1) [para. 155].

Authors and Works Noticed:

Canada, Indian Treaties and Surrenders (1957), generally [para. 144, footnote 19].

Hobbs (E.E.) and Associates, Hobbs Re­port, It Has Cost Us Our Lives - His­torical Analysis of Canada/Manitoba Events (1977 to 1984) giving rise to Water Control Structure (1992), vol. 1, generally [para. 306].

Finn, Paul D., The Fiduciary Principle: Equity, Fiduciaries and Trusts (1989), pp. 50, 51 [para. 53, footnote 11].

Lambden and de Rijcke, Legal Aspects of Surveying Water Boundaries (1996), generally [para. 131].

Macklem, Patrick, Aboriginal Rights and State Obligations (1997), 36 Alta. Law Rev. 97, p. 112 [para. 32].

Manitoba, Report on Fish and Wildlife Resources in Relation to the Manitoba Central Basin Project (1948), generally [para. 75, footnote 15].

Rotman, Leonard Ian, Parallel Paths: Fidu­ciary Doctrine and the Crown-Native Relationship in Canada (1996), pp. 104 to 110 [para. 31].

Counsel:

E. Anthony Ross, Kevin J. Scullion and Brian H. Hay, for the plaintiffs;

Craig J. Henderson and Sidney R. Restall, for the defendant.

Solicitors of Record:

Harris & Harris, Etobicoke, Ontario, for the plaintiffs;

Morris Rosenberg, Deputy Attorney Gen­eral of Canada, Ottawa, Ontario, for the defendant.

This action was heard in Winnipeg, Mani­toba, on 28 days between January 5 and March 27, 1998, by Rothstein, J., of the Federal Court of Canada, Trial Division. Rothstein, J., delivered the following judg­ment on November 12, 1998, in Ottawa, Ontario.