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Federal Government can be Liable for Pre-Confederation Fiduciary Breaches

Fasken
Reading Time 4 minute read

On February 2, 2018, the Supreme Court of Canada held that Canada could be held responsible for failures to lay out reserves prior to confederation in 1871. In Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, the Supreme Court allowed the appeal and restored the Specific Claims Tribunal’s decision that held the Federal Government liable for pre-confederation fiduciary breaches.

Background

The traditional territory of the Williams Lake Indian Band (WLIB) includes the site of a village near Williams Lake in British Columbia (“Village Lands”). In the early days of the Colony, settlers were rapidly taking up unsurveyed lands, including those occupied by the WLIB. The Colony enacted Proclamation No. 15 under which Indian Settlements were not available for pre-emption. The officials responsible for implementing the pre-emption system took no steps to protect the Village Lands from pre-emption or to mark them out as a reserve. The federal Crown officials acknowledged that the pre-emptions had been a mistake but were not prepared to interfere with settler’s rights. Instead, they allocated to the WLIB another tract of land. The WLIB filed a claim for compensation under sections 14(1)(b) and 14(1)(c) of the Specific Claims Tribunal Act, S.C. 2008, c. 22 (“Act”), which sought to obtain compensation for losses of lands within its traditional territory pre-empted by settlers before Confederation.

The Tribunal held that the WLIB had a valid specific claim for losses arising from the Crown’s acts and omissions in relation to the Village Lands. The WLIB appealed the FCA’s decision to restore the Tribunal’s decision on the grounds of the Imperial Crown’s breach of a sui generis fiduciary obligation.

In Canada v Williams Lake Indian Band, 2016 FCA 63, the Federal Court of Appeal (“FCA”) allowed Canada’s application for judicial review of a Tribunal’s decision, therefore dismissing the specific claim brought by the WLIB.

Supreme Court of Canada

The SCC restored the Tribunal’s decision that held the Federal Government liable for pre-confederation fiduciary breaches. The SCC found the following conclusions by the Tribunal reasonable:

  • The Village Lands would have qualified as “Indian Settlements” under Proclamation No. 15 and the colonial policy governing its implementation ought to have led to measures reserving them from pre-emption.
  • The Crown has a sui generis fiduciary obligation, which arises from its discretionary control over a specific Aboriginal interest. This obligation is specific to the relationship between the Crown and Aboriginal peoples, and it is sufficiently independent of the Crown’s executive and legislative functions.
  • The inaction of federal Crown officials and the decision-making that led to the eventual allotment of a reserve to the WLIB elsewhere fell short of fulfilling the Crown’s fiduciary obligations, which included a duty of ordinary prudence that required the officials to seek enforcement of provincial protection for Indian settlements.
  • The definition of the Crown as a single, continuous and indivisible entity.
  • The Imperial Crown came within the extended meaning of “Crown” because the fiduciary obligation that it had allegedly breached was a legal obligation that became the responsibility of Canada, and for which Canada would, if in the place of the colony, have been in breach, projecting Canada backwards into the place of the Imperial Crown for certain obligations. (“Backward-looking projection” theory)
  • Both the Imperial Crown and the Crown in right of Canada had owed, and breached, fiduciary obligations to the WLIB in relation to the protection of its Village Lands from pre-emption and therefore the WLIB’s pre-Confederation specific claim was valid under the Act.
  • The fact that Canada eventually procured a reserve for the WLIB elsewhere cannot undo the breach of fiduciary duty, although it may reduce the amount of compensation.

The dissenting opinion rejected the “backward-looking projection” theory and held that the matter should be remitted to the Tribunal for determination of whether and, more importantly, how the obligation or liability of the Colony became that of the federal Crown upon Confederation.

Conclusion

The SCC agreed with the Specific Claims Tribunal in that both the Imperial Crown and the Crown in right of Canada owed and breached fiduciary obligations to the WLIB. Thus, Federal Government can be held liable for pre-confederation fiduciary breaches. Although this case will have limited application, it is relevant that the SCC continues to push the bounds of the duty on the Crown to act honourably and is loath to let the Crown, Provincial or Federal, avoid that obligation. 

 

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