Summary

A recent decision of the Specific Claims Tribunal will be of interest to any First Nation who may have, or may have had in the past, a railway line that passes through their community. This decision may mean that a First Nation has a valid claim even where that claim has been rejected by Canada in the past. A new legal review of the claim may reveal that the First Nation could have a continuing legal interest in the lands, and Canada may have an obligation to secure reversion of the land to the First Nation upon abandonment of the line. Furthermore, where the abandoned lands have been sold to a third party, the First Nation may also be entitled to compensation.

The Osoyoos Indian Band Decision was the first decision rendered by the Specific Claims Tribunal. Released on July 4, 2012, the Tribunal decision is significant to First Nations with railway claims because it confirmed that in certain takings of reserve lands for railway purposes, the Crown has a continuing legal duty to protect and preserve the Indian interest in reserve lands even after abandonment of the line of rail.

Background

The Osoyoos decision is fundamentally about what legal interests and obligations continue to subsist following the abandonment of a railway right-of-way situated within a reserve.

In this case, the claim lands were taken for railway purposes in 1922 under the authority of the federal Railway Act. The lands were then abandoned for use by 1978, and subsequently sold to a third party shortly thereafter, despite the numerous efforts by the Osoyoos Band to have the claim lands returned to reserve status upon abandonment of use for railway purposes.

Decision and Reasoning of the Specific Claims Tribunal

At the Tribunal, Canada took the position that once the lands had been taken from the reserve, any remaining legal interest in the claim lands by the Band ceased to exist. However, the Tribunal concluded otherwise, instead holding that the Band had a continuing legal interest in the claim lands and that the Crown had a fiduciary duty to both protect and preserve that interest. In this regard, the Crown was under a positive obligation to take steps to both protect and preserve the Band’s legal interest in the claim lands. Having failed to do so, the Tribunal found that the Crown had breached a legal obligation owed to the Osoyoos Band.

The Tribunal reached this conclusion by relying upon a provision within the Railway Actwhich placed a restriction on the alienation of Crown lands when taken under the authority of the Act. In describing the nature of the breach,  the Tribunal concluded that “the Ososyoos Band has established a breach of a legal obligation arising from the Crown’s administration of reserve lands by failing to act on its duty to exercise its title on the abandonment of the line of rail over the Right of Way land for the use and benefit of the Band as reserve.” 

This decision is significant to First Nations because it confirms that where a taking of reserve lands for railway purposes may have occurred under the authority of the federalRailway Act, and the lands are no longer required for that purpose, that the Crown has a continuing fiduciary obligation owed to the Band which requires it to act on title, meaning the Crown must act to advance or assert the legal interest of the Crown and the resulting interest of the Band in the lands. 

Lastly, the fact that the Tribunal applied the fiduciary duty to both protect and preserve the Band’s legal interest in reserve in an expropriation context demonstrates that the principle is not restricted in application to circumstances regarding a surrender. Rather, it suggests that the Crown may have a general duty to both protect and preserve reserve interests.  This principle might arguably have broader application in other contexts and circumstances.