April 19, 2018
On February 2, 2018, the Supreme Court released its decision in Williams Lake Indian Band v Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, marking the first time the country’s top court reviewed (and ultimately restored) a decision by the Specific Claims Tribunal (“SCT”).
This decision is also important since it is the first occasion whereby the Supreme Court has held Canada legally liable for a pre-Confederation breach of fiduciary obligation by the Crown owed to a First Nation.
The Court considered the Williams Lake Indian Band’s (“WLIB’s”) claim for losses resulting from: a) the failure of the Imperial Crown to prevent certain parcels of the WLIB’s lands from being taken up by settlers in the years leading up to British Columbia’s entry into Confederation in 1871; and b) the failure of the Imperial Crown and the federal Crown to remedy the situation (para 1).
In the SCT, the Claim was bifurcated into validity and compensation phases. In its Reasons on the Claim’s validity, the SCT held that the Imperial Crown was under a legal obligation to set aside the WLIB’s village and surrounding lands (“Village Lands”) as a reserve under the appropriate colonial legislation. As a result, the SCT held that the WLIB had a valid claim because no such measures had been taken (para 4). The SCT further held that the federal Crown’s failure to rectify the Imperial Crown’s omission after British Columbia joined Confederation in 1871 also constitutes grounds for a specific claim (para 5).
Before the SCT issued a decision regarding compensation, Canada applied for judicial review of the SCT’s validity decision. The Federal Court of Appeal allowed Canada’s appeal, thereby substituting its own decision for that of the SCT, and dismissing the WLIB’s Claim on the basis that the federal Crown had not breached a legal obligation to the WLIB. The WLIB appealed to Supreme Court (para 6).
The majority of the Supreme Court allowed the appeal and restored the SCT’s decision on the basis that the SCT reasonably determined that both the Imperial Crown and the federal Crown owed and breached fiduciary obligations to the WLIB with respect to the protection of its Village Lands from being taken up by settlers (para 7). The Court issued two separate sets of dissenting reasons.
Majority Reasons per Wagner J.:
Wagner J., writing for the majority, found the following conclusions by the SCT to have been reasonable: (1) the Imperial Crown breached a legal obligation by failing to take steps to reserve the Village Lands from pre-emption pursuant to paragraph 14(1)(b) of the Specific Claims Tribunal Act (SCTA), which relates to a breach of legal obligation as a result of the provision or non-provision of reserve lands; and (2) the Imperial Crown breached its fiduciary obligation to use ordinary prudence when its representatives failed to take any steps to secure the Village Lands and improperly prioritized the taking up of lands by settlers (paras 57 and 73-74).
According to Wagner J., Crown officials were aware that the taking up of lands by settlers was contrary to the applicable legislation. While they received assurances from the Province that a “sure and speedy remedy” was forthcoming, they did not utilize such a remedy to preserve the WLIB’s interest in the land. Since the alternative was the WLIB’s permanent denial of that interest, the SCT’s finding that ordinary prudence required Crown representatives to utilize the remedy was reasonable (para 97). The Crown’s fiduciary obligation was to reconcile these interests fairly (para 100).
The SCT held that the Crown, in its fiduciary capacity, ought to have deprived the settlers of a form of interest in the Village Lands instead of depriving the WLIB of a form of interest in the Village Lands. Wagner J. emphasized that he would not disturb this finding and thus held that the SCT reasonably determined that Crown representatives acted contrary to its fiduciary duty and therefore validated the claim pursuant to paragraph 14(1)(c) of the SCTA (paras 100 and 101).
Liability of the Crown for Pre-Confederation Breaches
For a First Nation to establish a specific claim based on a breach of a pre-Confederation treaty, statutory or fiduciary duty, the Imperial Crown must come within the extended definition of “Crown” pursuant to subsection 14(2) of the SCTA (para 102). There are two elements to the definition of “Crown” provided in subsection 14(2) of the SCTA: a legal obligation of the Imperial Crown will satisfy the first branch of s. 14(2) where it “became…the responsibility of the Crown in right of Canada”. It will satisfy the second branch where “any liability relating to its breach or non-fulfillment became…the responsibility of the Crown in right of Canada”” (para 103).
The SCT held that, pursuant to subsection 14(2) of the SCTA, a fiduciary obligation of the Imperial Crown became the responsibility of Canada where: (1) the fiduciary duty is a legal issue that became a responsibility of Canada upon Confederation, and (2) the fiduciary duty is one that, Canada, if in place of the Colony, would have violated (para 106). Wagner J. acknowledged that, although the SCT’s reasons are “sparse” in relation to subsection 14(2) of the SCTA, when considered in its entirety, the reasons “provide a reviewing court with an adequate account of why that decision as made that serves the purpose of showing whether the result falls within a range of possible outcomes” (para 107).
In relation to a claim made pursuant to paragraph 14(1)(b) of the SCTA, the SCT used subsection 14(2) to place the federal Crown in the same legal position as the Imperial Crown. According to Wagner, J., a fiduciary duty became responsibility of the federal Crown if it:
… mirrors a post-Confederation fiduciary obligation of Canada. This [includes] circumstances where… pre-and post-Confederation fiduciary obligations required the Crown to act with reference to the best interests of the same beneficiary in exercising a discretionary power to affect the same Aboriginal interest in the context of the same fiduciary relationship (para 119).
According to Wagner, J., the SCT refused to “adopt a statutory construction that would exclude the [WLIB’s] specific claim, which it believed would have been permitted to proceed under Canada’s Specific Claims Policy” (para 122). Wagner, J. therefore concluded that it was reasonable for the SCT to admit that the legal obligation element of subsection 14(2) of the SCTA can apply to fiduciary duties. If it was Parliament’s intention that only the liability element of subsection 14(2) applies to fiduciary duties, it could have drafted a separate meaning of “Crown” for the purposes of paragraph 14(1)(c) of the SCTA, which explicitly mentions fiduciary obligations (para 128).
Rowe, J. issued a dissent, in part, on behalf of himself and The Honourable Mr. Justice Cote. Rowe, J. held that for the SCT to determine that the federal Crown is liable for such a claim, the SCT must conclude, “that the Colony of British Columbia came within the extended meaning of “Crown’ pursuant to s. 14(2) of the [SCTA]” (para 136). This ultimately requires the SCT to determine, “how the obligation or liability of the Colony became that of the federal Crown upon Confederation” (para 137).
Given the SCT’s lack of explanation on this issue, Rowe, J. held that he would remit the matter to the SCT for further consideration instead of adopting the supplemental reasons provided by the majority (para 137). He further acknowledged that while reviewing courts may supplement reasons that are silent on issues that may have been implicitly determined, they may only do so if the issue was not raised by the parties. However, in this instance, the parties raised the interpretation of subsection 14(2) of the SCTA (para 153).
Brown J. issued a dissent on behalf of himself and The Honourable Madam Chief Justice McLachlin. Brown, J. disagreed with the reasonableness of the SCT’s conclusion that Canada breached its fiduciary to the WLIB. As a result, he held that the matter ought to be remitted to the SCT to determine whether, in accordance with subsection 14(2) of the SCTA, the legal obligation that was breached or associated liability became the responsibility of Canada (para 159).
Brown, J. was not convinced that the SCT reasonably held that Canada is responsible for the Colony’s breach of this obligation (para 180). This is because subsection 14(2) of the SCTA, “is an enforcement mechanism which compels Canada to answer for the Imperial Crown where Canada has by some other means acquired responsibility for an obligation or a liability relating to Indians or lands reserved for Indians” (para 183).
He further held that Article 13 of the British Columbia Terms of Union only required Canada to pursue “a policy as liberal” as that pursued by the Colony. This does not require Canada to protect Indian settlements from pre-emptions (para 190).
Brown J. found that, while Canada occasionally owed a fiduciary duty to the WLIB in terms of reserving land, this duty differed from the duty owed by the Colony such that it cannot be concluded that the Colony’s fiduciary duty became the duty of Canada pursuant to subsubsection 14(2) of the SCTA for two reasons: (1) the SCT does not explain how the Colony’s legal obligations became the responsibility of Canada when the legislative protection of Indian settlements from pre-emption existed in Provincial law post-Union; and (2) the SCT did not establish Canada’s liability for the Colony’s violations (paras 192-193).
Brown, J. thus held that the SCT’s reasons in relation to subsection 14(2), “lacks each of the principal hallmarks of a reasonable decision: justification, transparency, and intelligibility” (para 195). With respect to the majority supplementing the SCT’s reasons, Brown, J. held that, “the proper focus when interpreting legislation is, and must always be, on what the legislator actually said, not on what one might wish or pretend it to have said” (paras 199-202). Instead of assuming that subsection 14(2) is the result of poor legislative drafting, the SCT ought to have assumed that, “Parliament means what it says” (para 204).
In sum, the Supreme Court was tasked with determining whether the findings by the SCT were reasonable. The majority ultimately concluded that the SCT’s findings were reasonable and restored the SCT’s decision thereby confirming Canada’s liability for pre-Confederation breaches of fiduciary obligations by the Crown.