Background  

In Canada v Kitselas First Nation,the Crown in Right of Canada ("Canada") applied to the Federal Court of Appeal (the "Court") for a judicial review of a February 2013 decision of the Specific Claims Tribunal ("SCT"), which found that the Kitselas First Nation ("Kitselas") had validly established that Canada had breached a legal obligation to the Kitselas as a result of the non-inclusion of a 10.5 acre parcel of land in a reserve initially identified in 1891.

Canada submitted that the SCT Judge erred in law by holding that Canada had a fiduciary duty at the reserve allotment stage; the Judge made unreasonable determinations of fact, and of mixed fact and law in reaching his decision; and the Judge erred in finding that Canada was solely liable for breaches of Canada's alleged duty with respect to the excluded land.

Why the Decision is Important 

The decision is important as it was the first Judficial Review of a decision of the Specific Claims Tribunal, and has clarified several key issues of importance to resolution of historic claims. The following issues were considered by the Federal Court of Appeal:

  • What standard of review was applicable;   
  • Whether the Judge erred by concluding that Canada had a fiduciary duty to the Kitselas in the reserve allotment process;   
  • If the Judge did not err, whether the Judge erred by finding that Canada breached its duty; and   
  • If Canada did breach the duty, whether the Judge erred by finding Canada solely responsible for any losses flowing from the breach.

What is the Sandard of Review?

The Court agreed with Canada that the appropriate standard of review for the SCT ruling of law at issue was the standard of correctness. In making its determination, as per Dunsmuir,the Court considered the purpose of theSpecific Claims Tribunal Act,4 the nature of the issue subject to review, the specialized expertise of the SCT and the existence or absence of a privative clause.

Is There a Fiduciary Duty in the Reserve Allotment Process?

In support of its submission that there was no fiduciary duty, Canada argued that although the land excluded from the Kitselas may have been habitually used by the Kitselas, "habitual use" alone was not a cognizable interest since it was insufficiently specific, and Canada did not take discretionary control of the excluded land.

The Court did not accept Canada's submissions and agreed with the SCT Judge that Canada had a fiduciary duty owed to the Kitselas at the reserve allotment stage. This aspect of the decision is an important victory for First Nations. In making its determination, the Court cited Ross River5 andWewaykum,6 which both supported that the reserve creation process engaged the Crown's fiduciary duty.

Did Canada Breach its Fiduciary Duty?

The Court found that the SCT Judge's conclusion, that there was no disclosure of the exclusion of the 10.5 acres of land to the Kitselas, fell within the range of possible, acceptable outcomes which were defensible in respect of the facts and the law. The Court also found that it was reasonably open for the SCT Judge to conclude that Canada's commissioner did not exclude the 10.5 acres for public transportation purposes, as argued by Canada.

Should Canada be Solely Responsible for any Losses Flowing from the Breach of its Fiduciary Duty?

Canada argued that British Columbia also assumed a liability in this case, and that Canada's compensation responsibilities should be reduced accordingly. The SCT Judge bifurcated the issues of validity of the claim and compensation; accordingly, the Court concluded that the matter of compensation should be dealt with at the compensation stage of the hearing.

Conclusion

The Federal Court of Appeal dismissed Canada's judicial review application. The next phase of the litigation will focus on the compensation payable to the Kitselas and the extent of obligations to pay as between the federal and provincial governments. 

Natalie Cuthill