Kruger v. Canada, (1985) 58 N.R. 241 (FCA)

JudgeHeald, Urie and Stone, JJ.
CourtFederal Court of Appeal (Canada)
Case DateMarch 18, 1985
JurisdictionCanada (Federal)
Citations(1985), 58 N.R. 241 (FCA)

Kruger v. Can. (1985), 58 N.R. 241 (FCA)

MLB headnote and full text

Kruger, Gabriel, Pierre and Eneas v. Canada

(A-447-81)

Indexed As: Kruger v. Canada

Federal Court of Appeal

Heald, Urie and Stone, JJ.

March 18, 1985.

Summary:

In 1941 the federal Department of Transport expropriated 152.7 acres of Indian reserve agricultural land for an airport for national defence purposes. In 1946 the Department obtained the surrender of another 120 acres of the reserve after having taken possession in 1942 under an ostensible expropriation with no compensation settled. The take-over disrupted the agricultural life of the reserve. The consent of the Indians to the surrender and the price of both parcels at what appeared to be an undervalue was obtained after years of protracted negotiations, during which the Department of Indian Affairs strenuously pleaded the Indians' case. 33 years after the acquisition of the second parcel the Indians brought an action against the Crown for a declaration that they had been wrongfully dispossessed of the land and claiming that the Crown breached its fiduciary duty to them. They also claimed damages for breach of trust and loss of revenue and, alternatively, damages for compensation for wrongful taking.

The Federal Court of Canada, Trial Division, dismissed the action. The Indians appealed.

The Federal Court of Appeal dismissed the appeal. Urie and Stone, JJ., held that expropriation of Indian land was permissible under s. 48 of the Indian Act and that there was no breach of the Crown's fiduciary duty to the Indians. They found that the Indians' interests were represented honestly and prudently and that there was no conflict of interest in the Crown manifested by the conflict by the Indian Affairs Department's concern for the Indians' rights and the Department of Transport's interest in national defence. Heald, J., was of the opinion that there was a breach of the Crown's fiduciary duty to the Indians by the conflict of interest, but that the action was barred under the applicable limitation of actions statutes.

Equity - Topic 3606

Fiduciary or confidential relationship - Fiduciary relationship - What constitutes - The federal Department of Transport proposed to expropriate or obtain the surrender of land on an Indian reserve to build an airport - The Federal Court of Appeal held that the Crown, particularly the Department of Indian Affairs, in dealing with the proposal had a fiduciary duty to the Indians to act honestly and prudently for their benefit, including a duty to obtain proper compensation - See paragraphs 48 to 69, 83 to 90, 97 to 120.

Equity - Topic 3649

Fiduciary or confidential relationship - Fiduciary relationship - Breach - Conflict of interest - In 1941 the federal Department of Transport expropriated 152.7 acres of Indian reserve agricultural land for an airport - In 1946 the Department obtained the surrender of another 120 acres after having taken possession in 1942 under an ostensible expropriation with no compensation settled - The Indians' consent to the surrender and the price of both parcels at an apparent undervalue was obtained after years of protracted negotiations, during which the Department of Indian Affairs strenuously pleaded the Indians' case - The Federal Court of Appeal, Heald, J., dissenting, held that there was no conflict of interest in the Crown in the competing interests of the Department of Indian Affairs and the Department of Transport and no breach of fiduciary duty to the Indians.

Indians, Inuit and Métis - Topic 5481

Lands - Expropriation - General - Authority for expropriation - The Federal Court of Appeal held that the expropriation of Indian reserve lands in the 1940's under s. 48 of the Indian Act, R.S.C. 1927, c. 98, was proper - See paragraphs 19 to 42, 83, 91.

Limitation of Actions - Topic 6010

Trusts - Action against trustee - Recovery of trust property - What constitutes - Indians challenged the propriety of an expropriation of reserve lands in the 1940's, claiming recovery of the land or, alternatively, compensation - Section 83 of the Trustee Act, R.S.B.C. 1936, c. 292, provided no limitation period for actions for recovery of trust property - A judge of the Federal Court of Appeal in a minority judgment stated that, because the expropriation was authorized, recovery of the land as trust property was not available and that the claim for compensation was not a claim to recover trust property - See paragraphs 121 to 129.

Statutes - Topic 1624

Interpretation - Extrinsic aids - Other statutes - Prior statutes respecting same subject matter - The Federal Court of Appeal in considering whether section 48 of the Indian Act, R.S.C. 1927, c. 98, authorized expropriation of Indian reserve lands, considered the legislative evolution of the section - See paragraphs 27 to 36.

Cases Noticed:

Meek v. Parsons (1900), 31 O.R. 529, consd. [para. 38].

Masters v. Madison County Mutual Ins. Co. (1852), 11 Barb. 624, consd. [para. 38].

Point v. Dibblee Construction Co. Ltd., [1931] O.R. 142, consd. [para. 40].

Warne v. Province of Nova Scotia et al. (1969), 1 N.S.R.(2d) 150, dist. [para. 43].

Guerin v. Canada (1984), 55 N.R. 161, consd. [paras. 49, 86, 93].

Kitchen v. Royal Air Force Association, [1958] 1 W.L.R. 563, refd to. [para. 76].

Buttle et al. v. Saunders et al., [1950] 2 All E.R. 193, consd. [para. 88].

Calder v. Attorney General of British Columbia, [1973] S.C.R. 313, consd. [para. 95].

McLellan v. Milne & Magee, [1937] 3 D.L.R. 659, consd. [para. 125].

Statutes Noticed:

Expropriation Act, R.S.C. 1927, c. 64, sect. 2(g) [para. 21].

Federal Court Act, R.S.C. 1970, 2nd Supp., c. 10, sect. 38 [paras. 74, 122].

Indian Act, R.S.C. 1927, c. 98, sect. 19 [para. 94]; sect. 48, sect. 50 [para. 19].

Limitations Act, R.S.B.C. 1979, c. 236, sect. 3(4) [para. 74]; sect. 8, sect. 9 [para. 128]; sect. 14(3) [para. 126].

Trustee Act, R.S.B.C. 1936, c. 292, sect. 83 [para. 124].

Authors and Works Noticed:

Waters, Law of Trusts in Canada (1974), pp. 618-619 [para. 105]; 636 [para. 106].

Counsel:

W.J. Worrall and K.S. Campbell for the appellants;

W.B. Scarth, Q.C., and T.B. Marsh, for the respondent.

This case was heard on November 26 and 27, 1984, at Vancouver, B.C., before Heald, Urie and Stone, JJ., of the Federal Court of Appeal.

On March 18, 1985, the judgment of the Federal Court of Appeal was delivered and the following opinions were filed:

Urie, J. - see paragraphs 1 to 82;

Stone, J. - see paragraphs 83 to 90;

Heald, J. - see paragraphs 91 to 130.

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