APPEAL ALLOWED
Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4 – Aboriginal law — Land claims — Crown
On appeal from a judgment of the Federal Court of Appeal (2016 FCA 63), allowing the application for judicial review of a decision of the Specific Claims Tribunal (2014 SCTC 3).
The Williams Lake Indian Band’s (“band”) traditional territory 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 band. In response, the Colony enacted the Proclamation relating to acquisition of Land, 1860 (“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 mark them out as a reserve. After British Columbia joined Confederation, Canada assumed, under Article 13 of the British Columbia Terms of Union (“Terms of Union”), responsibility for the creation of Indian reserves according to a policy as liberal as the Colony’s. The federal Crown officials acknowledged that the pre‑emptions had been a mistake but were not prepared to interfere with settlers’ rights. Instead, they allocated to the band another tract of land as a reserve. The band filed a claim to compensation under the Specific Claims Tribunal Act (“Act”) for losses arising from these events.
Parliament established the Specific Claims Tribunal (“Tribunal”) with a mandate to award monetary compensation to First Nations for claims arising from the Crown’s failure to honour its legal obligations to Indigenous peoples. In this case, the Tribunal concluded that the band had a valid specific claim for losses arising from the Crown’s acts and omissions in relation to the Village Lands. It found that the Imperial Crown had owed, and breached, a legal obligation to the band in relation to the protection of its lands from pre‑emption based on s. 14(1)(b) of the Act and that the Crown in right of Canada (“Canada”) had owed, and breached, a fiduciary obligation to the band based on s. 14(1)(c). It further found that Canada could be held responsible under the Act for the band’s pre‑Confederation claim. Before the Tribunal ruled on compensation, Canada sought judicial review of the Tribunal’s validity decision. The Federal Court of Appeal allowed Canada’s application and dismissed the band’s claim.
Held (5-4): The appeal should be allowed and the Tribunal’s decision restored.
Per Abella, Moldaver, Karakatsanis, Wagner and Gascon JJ.:
The standard of review applicable to the Tribunal’s decision is reasonableness. The validity of the band’s claim did not depend on the resolution of a constitutional issue. Rather, it required the Tribunal to interpret its home statute to decide whether the grounds advanced relate to a legal obligation of the Crown within the meaning of s. 14 of the Act. It also required the Tribunal to derive legal obligations of the Crown from legislation, treaties and the common law, including fiduciary law. In making these legal determinations, the Tribunal applies judicial doctrines to historical circumstances that, by virtue of the applicable limitation periods, others will rarely consider. This distinctive task conferred by Parliament requires a measure of flexibility and adaptation to map onto historical claims. The application of fiduciary law in the historical contexts in specific claims and familiarity with the large and specialized evidentiary records fall within the Tribunal’s expertise and are entitled to deference.
The Tribunal’s analysis of the Crown’s sui generis fiduciary obligation is a sufficient basis on which to restore its decision, without considering the application of an ad hoc fiduciary obligation to the conduct of Crown officials under either s. 14(1)(b) or (c) of the Act. A sui generis fiduciary obligation arises from the Crown’s discretionary control over a specific or cognizable Aboriginal interest and is specific to the relationship between the Crown and Aboriginal peoples. The interest at stake must be sufficiently independent of the Crown’s executive and legislative functions to give rise to fiduciary duties. A fiduciary obligation requires that the Crown’s discretionary control be exercised in accordance with the standard of conduct to which equity holds a fiduciary, as embodied, for example, in the fiduciary duties of loyalty, good faith and full disclosure. The standard of care to which a fiduciary is held in its pursuit of the beneficiary’s interests is that of an ordinary prudence in managing one’s own affairs. The conduct of the fiduciary that comes under scrutiny is its exercise of discretionary control over the Aboriginal interest vulnerable to the exercise of discretion. The Crown fulfils its fiduciary obligation by meeting the prescribed standard of conduct, not by delivering a particular result. Although the Crown must have regard to competing interests, the existence of such interests does not absolve it altogether of its fiduciary duty to reconcile them fairly.
The Tribunal’s conclusion that the band had established a valid claim on the grounds of the Imperial Crown’s breach of a sui generis fiduciary obligation — before Confederation based on s. 14(1)(b) of the Act — was reasonable. The Tribunal identified the specific or cognizable Aboriginal interest at stake as the band’s interest in the Village Lands, and found that, by Proclamation No. 15, the Imperial Crown had assumed discretionary control over that interest. The Tribunal further found that the Crown had not acted with reference to the band’s best interest in exercising its control over these lands. The duty of ordinary prudence required the Crown, at a minimum, to inquire into the extent of the band’s settlement so that it could be protected, and the failure to do so put the Crown in breach of the fiduciary obligation. 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. In the Tribunal’s view, the band’s interest in the Village Lands in respect of which the Crown owed afiduciary duty did not depend on whether or not Crown officials took the appropriate action to secure land protection. This conclusion meets the requirement for an Aboriginal interest capable of grounding a sui generis fiduciary obligation insofar as officials were in a position to identify the interest at stake and it was sufficiently independent of the Crown’s executive and legislative functions. The band’s interest in the Village Lands was not created by colonial legislation. Rather, it was recognizedby enactments and policies as an independent interest in land anchored in collective use and occupation.
The Tribunal’s conclusion that Canada owed, and breached, a fiduciary obligation in relation to the Village Lands, based on s. 14(1)(c) of the Act, was also reasonable. The Tribunal identified the specific or cognizable Aboriginal interest in the Village Lands as an interest that was vulnerable to the adverse exercise of Canada’s discretion. It held that after British Columbia’s entry into Confederation, Canada’s discretion in relation to Aboriginal land interests flowed from its position as the exclusive intermediary with the Province in relation to those interests in the reserve creation process. It openly acknowledged that such discretion was limited by the need for provincial cooperation and that Canada could not unilaterally create a reserve. Its conclusion that a fiduciary obligation arose in the absence of complete or exclusive control aligns with general principles of fiduciary law — that the alleged fiduciary have scope for the exercise of discretion or control to affect the beneficiary’s interests. The extent to which the claimed loss is attributable to Canada’s breach, as opposed to the Province, raises questions of causation to be determined at the compensation stage. Furthermore, the Tribunal did not ignore the distribution of powers and responsibilities under the Terms of Union when it found that the band’s interest lay in the Village Lands and defined Canada’s fiduciary obligation in relation to that interest. Neither Canada’s constitutional obligation to create reserves according to a particular policy, nor the Province’s obligation to convey land for that purpose, is in issue. The question is not whether the band was entitled to the allotment of the Village Lands as a reserve — either under the Terms of Union or as a consequence of Canada’s fiduciary obligation — but whether the actions, decisions and judgments of the federal Crown officials that would affect the band’s interest met the applicable standard of conduct in relation to that interest.
The Tribunal found that Canada had to fulfil the fiduciary duties with respect to an interest in the land with which the band had a tangible, practical and cultural connection, and that it had failed to discharge them. The Tribunal did not find that Canada owed the band a fiduciary duty at large, nor did it find that Canada’s obligation as fiduciary was to deliver the allotment of the Village Lands as a reserve. The Tribunal considered all of the circumstances, and the extent to which Canada met the requisite standard of conduct was a heavily fact‑based inquiry. It was reasonable for the Tribunal to conclude that federal Crown officials with knowledge of the circumstances surrounding the Williams Lake pre‑emptions and the band’s situation did nothing to challenge the pre‑emptions. Their inaction and the decision‑making that led to the eventual allotment of a reserve to the band elsewhere fell short of fulfilling the Crown’s fiduciary obligations. The Tribunal reasonably concluded that ordinary prudence required them to make use of the available means of preserving the band’s interest by seeking, on an immediate basis, enforcement of provincial protection for Indian settlements, and, on a more permanent basis, having the land allotted as a reserve. While Canada was obliged to consider settler interests, in this case, the only competing interests were those acquired as unlawful pre‑emptions, which the Tribunal did consider. The fact that Canada eventually procured a reserve for the band elsewhere cannot undo the breach of fiduciary duty, although the Tribunal reasonably concluded that it may reduce the amount of compensation.
The Tribunal’s definition of the Crown as a single, continuous and indivisible entity to validate the band’s claim against Canada for pre‑Confederation breaches, under s. 14(2) of the Act, was reasonable. This conclusion is grounded in the Tribunal’s decision as a whole, and expanding upon it based on the record, the arguments and the legal principles underlying the decision, constitutes permissible supplementing of the Tribunal’s reasons.
Section 14(2) defines “Crown” by reference to the legal obligation whose breach or non‑fulfilment forms the basis for a specific claim. A legal obligation of the Imperial Crown will satisfy the first branch — the “legal obligation” branch — where it “became . . . the responsibility of” Canada. Although the Tribunal did not apply it, the second branch — the “liability” branch — will be met where “any liability relating to its breach or non‑fulfilment became . . . the responsibility of” Canada. The Tribunal found that 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. This reading effectively projected Canada backwards into the place of the Imperial Crown for certain obligations. The Tribunal indicated that this interpretation of the legal obligation branch of s. 14(2) would not extend the application of s. 14(1)(b) to all potential liabilities of the Imperial Crown, and that Canada’s post‑Confederation fiduciary obligations supplied the limits contemplated by that branch.
The Tribunal treated s. 14(2) as a free standing basis for Canada’s liability for the Imperial Crown’s breaches of certain obligations and rejected the view that it operates as an enforcement mechanism. It found the legal obligation branch not to require an independent and outstanding obligation — transferred to Canada under the Terms of Union — to establish the Village Lands as a reserve. This interpretation of the legal obligation branch as encompassing certain fiduciary obligations of the former colonies is consistent with the structure of s. 14, and the nature of fiduciary obligations which does not require the transfer of the obligation itself. It was therefore open to the Tribunal to interpret s. 14(2) as giving effect, not to the assumption by Canada of a specific obligation, but of a discretionary power to affect the band’s interests in the context of an established fiduciary relationship. The Tribunal’s view of s. 14(2) is consistent with its understanding of the role Parliament intended the extended meaning of “Crown” to serve within the specific claims scheme — to remedy historical injustices committed by the Crown, be it the Imperial Crown or Canada. This view is also consistent with an Indigenous perspective on the continuity of the fiduciary relationship between Indigenous peoples and the Crown before and after Confederation.
Per Côté and Rowe JJ. (dissenting in part):
There is agreement with the majority that the Tribunal reasonably found that the Imperial Crown owed and breached a fiduciary duty to the band prior to Confederation, and that the federal Crown owed and breached a sui generis fiduciary duty to the band following the entry of British Columbia into Confederation. There is also agreement that the Act allows the Tribunal to validate specific claims based on certain wrongs committed by the “Sovereign of Great Britain and its colonies” prior to Confederation. In this case, the band has such a claim pursuant to s. 14(1)(b) of the Act based on the fiduciary breach by the Colony of British Columbia prior to 1871. For the Tribunal to hold the federal Crown liable for this claim, however, it must have found that the Colony of British Columbia came within the extended meaning of “Crown” pursuant to s. 14(2) of the Act. Given the near‑total silence of the Tribunal on whether and — more importantly — how the obligation or liability underlying the claim became that of the federal Crown upon Confederation, the matter should be remitted to the Tribunal for further consideration rather than adopting the supplementary reasons set out by the majority.
In a reasonableness review, reasons are an essential focus for reviewing courts as they describe both the result and — crucially — the justificatory process used to reach that result. It is not that reasons need attain a uniform standard of perfection. In many cases, reviewing courts will have a certain latitude to uphold administrative decisions that would, under stricter scrutiny, be deficient in their justification. In so doing, reviewing courts pay respectful attention to the reasons offered or which could be offered in support of a decision. Thus, in certain circumstances, reviewing courts will properly supplement the reasons under review. The power of reviewing courts to supplement deficient reasons, however, is not limitless. There must be a sufficient basis in the reasons themselves to which can be added supplementary justification.
In this case, the Tribunal was virtually silent on the operation of s. 14(2). Given the pivotal role played by s. 14(2) in the scheme of the Act, this lack of justification — this absence of reasons — is untenable. In supplementing — or even substituting — the Tribunal’s sparse reasons on the subject of s. 14(2), the majority sets out an analysis based on the common law of fiduciary obligations. While its reasons lead to the same conclusion as the Tribunal, this is the extent of their commonality. Having said nothing about the interplay between s. 14(2) and the common law of fiduciary obligations, the Tribunal did no more than state a bald conclusion about the operation of the Act relative to pre‑Confederation claims. The reasons of the majority, thus, are supplementary in that they supply the entirety of the analysis.
Reviewing courts can sometimes supplement reasons that are silent on certain issues that may have been implicitly decided. When the implied line of reasoning is obvious, supplementing may be an appropriate means of paying respectful attention to the reasons offered or which could be offered in support of a decision. However, when faced with an absence of analysis on an essential element such that the implied line of reasoning is inconclusive or completely obscure, the reviewing court should not impute its own justification as a means of upholding the decision. Supplementary reasons must build upon those actually provided by the legislature’s chosen decision maker. The matter should therefore be remitted to the Tribunal for further reasons on whether — and how — the obligations and liabilities of the Colony pursuant to s. 14(1)(b) of the Act became those of the federal Crown pursuant to s. 14(2).
Per McLachlin C.J. and Brown (dissenting):
The Tribunal’s decision is reviewable for reasonableness, subject to the caveat that its interpretation of the Terms of Union — a constitutional instrument — is reviewable for correctness. There is agreement with the majority’s conclusion that the Tribunal reasonably found that, prior to Confederation, the Imperial Crown breached its fiduciary duty owed to the band. However, the conclusion that Canada breached its ad hoc and sui generis fiduciary duties to the band is unreasonable, as is the Tribunal’s treatment of the legal question of Canada’s liability for the Imperial Crown’s breach pursuant to s. 14(2) of the Act. The matter should be remitted to the Tribunal for determination of whether the legal obligation that was breached or liability relating to its breach became the responsibility of Canada.
The Tribunal’s finding that an ad hoc fiduciary duty of utmost loyalty was owed to the band by operation of Article 13 of the Terms of Union is contrary to binding authority and is, as such, unsustainable. As to its finding that Canada breached a sui generis fiduciary duty under s. 14(1)(c) of the Act, the Tribunal’s starting premise for this conclusion — that the band’s best interests could lie only in securing the Village Lands as a reserve — is misguided in three respects. First, this assertion is neither justified in the Tribunal’s reasons nor supported by the evidentiary record. Second, the finding of a breach of Canada’s fiduciary duty fails to account for the limits of Canada’s responsibilities and powers under the Terms of Union, and in particular, under Article 13. The exercise of discretion by Canada in relation to Aboriginal interests was confined by the country’s federal structure and the Terms of Union. Canada could not unilaterally mark out provincial land as reserves. The Province retained jurisdiction over the setting apart of provincial Crown lands as a reserve and exercised that effective veto. Third, the Tribunal’s premise does not cohere to jurisprudence, which calls for a measure of flexibility, grounded in the historical context of a matter, in relation to the creation of reserves under Article 13. This provision imposed upon Canada not an obligation to continue the Colony’s policy regarding the creation of Indian reserves, but rather to pursue a policy that is as liberal as that pursued by the Colony. In light of Article 13, Canada owed no obligation arising from cognizable interests in specific lands. The sui generis fiduciary duty does not demand a perfect solution, and Canada did not fail to discharge this duty in its dealings with the band relating to the Village Lands. Finally, by confining the significance of Canada’s allotment of land to the band, the Tribunal unduly narrowed its focus, thereby truncating its analysis of Canada’s efforts to discharge its fiduciary duty. The band’s claim brought under s. 14(1)(c) of the Act should therefore be dismissed.
The Tribunal also unreasonably held Canada responsible for the Imperial Crown’s breach of this duty. Section 14(2) of the Act does not impose blanket responsibility upon Canada for all colonial obligations and liabilities that are the subject of a specific claim under s. 14(1)(b). It 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. This interpretation is consistent with the careful wording of the provision, which expresses Parliament’s intention to disclaim liability for matters falling under provincial responsibility. In this case, s. 14(2) of the Act can only be triggered by an obligation or liability acquired by Canada under Article 13 of the Terms of Union. Canada’s responsibility for the Imperial Crown’s breach on the liability branch of s. 14(2) could also be triggered by Article 1 of the Terms of Union, by which Canada agreed to be “liable for the debts and liabilities of British Columbia existing at the time of the Union”. The Tribunal, however, failed to consider whether this provision embraces the Imperial Crown’s liability for its failure to protect the Village Lands from pre‑emption. It simply equated pre‑Confederation colonial obligations and liabilities with post‑Confederation obligations and liabilities, which is not remotely defensible by any standard of review.
The majority’s “backward‑looking projection” theory of Canada’s statutory liability is not an appropriate supplement to the Tribunal’s deficient reasons regarding s. 14(2) of the Act. It fails to account for the intention of Parliament and has no support in law. On this theory, a finding of a post‑Confederation breach of a legal obligation under s. 14(1)(c) would appear to be determinative of Canada’s liability in respect of pre‑Confederation breaches, and s. 14(2) is superfluous where a related post‑Confederation breach by Canada is made out. The fact that the theory may be consistent with Indigenous views as to the continuity of fiduciary relationships with the Crown, and Canada’s growing acceptance of responsibility for remedying historical wrongs does not justify the Tribunal’s reading out of clear statutory text. The legal obligation or liability relating to its breach must still be shown to have otherwise become the responsibility of Canada. This theory furnishes no comprehensible guidance to the Tribunal as it adjudicates the claims brought before it. Nor does it explain how the Tribunal is to apply ss. 14(1)(b) and 14(2) where the legislative shortcut via this theory is unavailable — that is, where liability has not been imposed on Canada for breach of a related legal obligation under s. 14(1)(c).
Rights and responsibilities whose discharge is of potentially central importance to achieving reconciliation between Canada and Indigenous peoples in British Columbia were constitutionally entrenched, by mutual accord, between the Province and Canada. The Tribunal’s reasons elide that constitutional division of responsibilities, and thereby risk upsetting that accord. The question of whether Articles 1 and 13 of the Terms of Union, correctly understood and interpreted, support Canada’s liability under s. 14(2) should therefore be remitted to the Tribunal for determination. If the band succeeds on either question, the matter may then proceed to the compensation stage.
Reasons for judgment: Wagner J. (Abella, Moldaver, Karakatsanis and Gascon JJ. concurring)
Reasons Dissenting in Part: Rowe J. (Côté J. concurring)
Dissenting Reasons: Brown J. (McLachlin C.J. concurring)
Neutral Citation: 2018 SCC 4
Docket Number: 36983
https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/16969/index.do
