Date: 20020322
Docket: A-447-01
Neutral citation: 2002 FCA 117
CORAM: STRAYER J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
(Defendant)
and
CHIEF LIZA WOLF on her own behalf and on behalf of the members of the DENE
TSAA FIRST NATION, otherwise known as the PROPHET RIVER INDIAN BAND
Respondents
(Plaintiffs)
Heard at Vancouver, British Columbia, on March 6, 2002
Judgment delivered at Ottawa, Ontario, March 22, 2002
REASONS FOR JUDGMENT BY: SHARLOW J.A.
CONCURRED IN BY: STRAYER J.A.
MALONE J.A.
Date: 20020322
Docket: A-447-01
Neutral citation: 2002 FCA 117
CORAM: STRAYER J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
(Defendant)
and
CHIEF LIZA WOLF on her own behalf and on behalf of the members of the DENE
TSAA FIRST NATION, otherwise known as the PROPHET RIVER INDIAN BAND
Respondents
(Plaintiffs)
REASONS FOR JUDGMENT
SHARLOW J.A.
[1] The respondent Chief Liza Wolf is Chief of the Dene Tsaa First Nation, who claim to be descendants of the Tse-K'nai Tsaa, also known as the Prophet River Sicannie People. On April 15, 1997 a statement of claim was filed on behalf of Chief Wolf and the members of the Dene Tsaa (Court No. T-705-97), seeking damages and other remedies relating to certain allegations (described in further detail below). The Crown filed a defence on July 15, 1997. The pleadings were closed on July 31, 1997 when the Dene Tsaa filed a reply.
[2] The Crown made a formal request for particulars on December 22, 2000. The Dene Tsaa replied to that request on April 9, 2001. The April 9, 2001 particulars prompted the Crown to file a notice of motion on June 15, 2001 for an order striking a large number of paragraphs in the statement of claim, and in the alternative for further and better particulars relating to some but not all of those paragraphs. The motion was heard on July 19, 2001 and dismissed (Dene Tsaa First Nation v. Canada, 2001 FCT 820).
[3] According to the Motions Judge, the paragraphs sought to be struck fell into two categories. The first category relates to allegations intended to respond to an expected limitations defence. Those allegations are not in issue in this appeal.
[4] As to the paragraphs in the second category, the Motions Judge dealt with all of them in summary fashion in paragraph [9] of his reasons, which reads as follows:
[9] The second broad area in which the Crown's motion rests upon paragraph a) of the Rule [221(1)] are a number of allegations in which the plaintiffs claim variously certain rights under treaty, claim that the fiduciary duty which was owed to them by the Crown was breached and claim that they were victim of fraudulent misrepresentations. The position taken by the Crown in its motion is that those allegations are so deficient, are so lacking in essential averments as not to disclose a reasonable cause of action. I have re-read the allegations recently and I am not satisfied that the attack can be sustained. While the Statement of Claim, when it is read as a whole and in conjunction with the particulars which have been furnished with regard to it may not be a model of draftsmanship, it certainly, in my view, states a claim which is known to the law under all of those headings and states it with sufficient particularity to allow the Crown to know the case it has to meet.
[5] The Crown challenges the correctness of the order of the Motions Judge as it relates to paragraphs 19 through 25, 50, 70, 71 of the Statement of Claim and paragraphs (a) and (i) in the prayer for relief in the Statement of Claim. The Crown seeks to have the order set aside as it applies to those paragraphs, and to have them struck out, and in the alternative for an order for further and better particulars.
[6] The authority to strike out pleadings pursuant to Rule 221(1) of the Federal Court Rules, 1998, SOR/98-106 is a discretionary power. This Court will interfere with such a decision only for an error of law or misapprehension of the pleadings: VISX Inc. v. Nidek Co. (1996), 209 N.R. 342 (F.C.A.). In exercising the discretion to strike, it is relevant to consider how much time has passed between the closing of pleadings and when the motion to strike pleadings was brought, and whether any defects in the pleadings can be corrected through amendments: Proctor & Gamble Co. v. Nabisco Brands Ltd. (F.C.A.) (1985), 62 N.R. 364 (F.C.A.); Sweet v. Canada (1999), 249 N.R. 17 (F.C.A.); Kelly Lake Cree Nation v. Canada (T.D.), [1998] 2 F.C. 270 (T.D.). In this case, counsel for the Crown argues that the Motions Judge misapprehended either the pleadings or the Crown's arguments as to why the pleadings should be struck.
[7] The issues raised in this appeal relate only to the portion of the statement of claim that contain allegations of the Dene Tsaa that they have been wrongfully deprived of the rights to minerals and other resources under the surface of their reserve at Prophet River and the reserves of a larger band, the Fort Nelson Slave Band, with which they were joined between 1957 and 1974. The mineral rights claim rests on a number of alleged breaches of the Crown's legal, fiduciary and trust obligations to the Dene Tsaa. I summarize as follows the allegations of fact in the statement of claim that seem to me to be the most germane to the mineral rights claim. For the purposes of a motion to strike pleadings, the facts alleged in the statement of claim must be assumed to be true.
[8] In this summary I have used some shorthand terms for convenience. The term "Dene Tsaa" means, depending on the context, the current Dene Tsaa or their ancestors, referred to in the pleadings as the Tse-K'nai Tsaa or the Prophet River Sicannie People. The term "mineral rights" refers to all rights relating to mineral and hydrocarbon resources. I have also left out the specific allegations of wrongdoing on the part of the Crown and its agents. For purposes of this appeal, it is enough to note that there are many such allegations relating to all of the events described in the statement of claim.
[9] The Dene Tsaa is a "band" as defined in the Indian Act, R.S.C. 1985, c. I-5. The ancestors of the current members of the Dene Tsaa inhabited the lands near Prophet River in what is now northeastern British Columbia. They adhered to Treaty No. 8 in 1910 or 1911.
[10] In the early 1950's, the Crown sought to create Indian Reserves for First Nations living at or near Fort Nelson or Prophet River, including the Dene Tsaa. In August of 1956, the Province of British Columbia agreed to provide lands for the Fort Nelson Slave Band. The Crown sought to amalgamate the claims of the Fort Nelson Slave Band with the claims of other First Nations in the area. In 1957, the Dene Tsaa transferred to the Fort Nelson Slave Band through a process of amalgamation on the condition that they would be provided with a sizeable reserve at a location known as Mile 232.
[11] After the amalgamation, the amalgamated Fort Nelson Slave Band began negotiations to have reserve lands set aside pursuant to Treaty No. 8. On the basis of the Treaty No. 8 provision allowing 128 acres per person, the amalgamated Band was entitled to 24,448 acres of land.
[12] The amalgamated Band obtained land consisting of several reserves, including approximately 920 (or 924) acres at Prophet River, which became the reserve of the Dene Tsaa. The remainder of the reserves for the amalgamated Band consisted of 23,523.2 acres. The past practice of the Crown in establishing reserves for First Nations who had adhered to Treaty No. 8 was to include mineral rights with the reserves. However, the reserves provided for the amalgamated Band did not include mineral rights. The amalgamated Band accepted the reserve lands without the mineral rights, on the condition that there would be no prejudice to their right to claim for such rights in future. The Crown was aware of the outstanding mineral rights issue, and so advised the Province of British Columbia in August 1960.
[13] In 1974, the Dene Tsaa separated from the amalgamated Band. Based on the relative populations of the Fort Nelson Slave people and the Dene Tsaa at the time of separation, the Dene Tsaa should have been entitled to 6,116.03 acres of reserve land and a similar proportion of Band funds, but they received only the 924 acres at Prophet River while the Fort Nelson Slave people retained the remaining 23,523.2 acres. The 924 acres of reserve land is also less than the 128 acres per person that the Dene Tsaa were entitled to under Treaty No. 8 at the time the reserves were established.
[14] After the separation, the Fort Nelson Slave Band reached an agreement in principle with the Province of British Columbia by which the revenue from the exploitation of subsurface rights on Fort Nelson Slave Band reserves is shared between the Province and the Band while the rights of ownership and administration remain with the Province. The agreement is referred to as the Revenue Sharing Agreement, or RSA.
[15] The Fort Nelson Slave Band has received substantial revenue under the RSA and the Dene Tsaa has also received some funds, but not its full share. As part of the RSA, the Fort Nelson Slave Band released all claims and interest in the mineral rights, but that release is not binding on the Dene Tsaa, which therefore retains a claim to the mineral rights relating to their Prophet River reserve as well as a per capita share of the mineral rights in the pre-separation reserve lands of the Fort Nelson Slave Band.
[16] Based on the foregoing summary, it seems clear to me that the position of the Dene Tsaa with respect to mineral resources is based on their adherence to Treaty No. 8. The essential complaint of the Dene Tsaa is that they have not received the same advantages from Treaty No. 8 as other First Nations. They allege that the Dene Tsaa have not been granted as much reserve land relative to their population as promised in Treaty No. 8, or as much reserve land as other First Nations. Nor have they received the same mineral rights relating to their reserve lands as other First Nations, or the same compensation in respect of mineral rights as the Fort Nelson Slave Band, even though they were once part of that group. The Dene Tsaa allege that they have been deprived of these advantages because of the Crown's breach of fiduciary obligations owed to them and that the Crown is liable to compensate them for what they would have received if they had been treated like the Fort Nelson Slave Band and other First Nations who are parties to Treaty No. 8.
[17] I cannot conclude that the Motions Judge misapprehended the statement of claim or the particulars, and therefore his refusal to strike the paragraphs must stand. However, in response to the Crown's submissions at the hearing of this appeal, counsel for the Dene Tsaa consented to an order for further and better particulars with respect to paragraphs 70 and 71 of the Statement of Claim. Given that consent, it is my view that this appeal should be allowed in part, to permit the Crown to pose additional questions by way of a new request for further and better particulars with respect to paragraphs 70 and 71.
[18] In the remainder of these reasons I will attempt to explain the questions that the Dene Tsaa might usefully address with respect to paragraphs 70 and 71. The particulars sought by the Crown in relation to those paragraphs, and the responses of the Dene Tsaa, read as follows (the underlined portions are intended to highlight the portions that have given rise to the ambiguities of which the Crown has complained):
Paragraph 70: The Defendant has breached its legal, trust or fiduciary duties owed to the Plaintiffs and their ascendants by persuading them to cede valuable lands and resources without providing independent legal advice nor rendering full disclosure regarding the nature of lands and resources that were ceded.
(a) Provide particulars of the legal, trust or fiduciary duties alleged to be owned by the Defendant to the Plaintiffs.
Response: The Defendant owes legal duties to the Plaintiffs pursuant to a number of constitutional and statutory instruments, including the Royal Proclamation of 1763, Treaty 8, the Constitution Act, 1982 and the Indian Act. The trust or fiduciary duties owing to the Plaintiffs by the Defendant have been clearly set out by the Supreme Court of Canada, and include the responsibility of the Defendant to act at all times on behalf of the Plaintiffs so as to protect their interests in transactions with third parties. The standard of care and diligence required of a fiduciary is that of a person of ordinary prudence in managing his or her own affairs or property. In any event, this is a question of law and is not properly answered by particularization.
(b) When did the Defendant "persuade [the Plaintiffs] to cede valuable lands and resources" as alleged in paragraph 70?
Response: The Defendant initially persuaded Treaty 8 First Nations to cede valuable lands and resources at the signing of Treaty 8 in 1899, but persuaded the Plaintiffs to cede valuable lands and resources in 1910 and 1911 when the ascendents of the Plaintiffs adhered to Treaty 8.
(c) What lands and resources were ceded?
Response: The lands and resources that the Defendant persuaded the Plaintiffs to cede when the ascendants of the Plaintiffs adhered to Treaty 8 in 1910 and 1911 were the surface lands and minerals to which the Plaintiffs had Aboriginal Title within the boundaries of Treaty 8. Such lands were settled upon the Defendant by the Plaintiffs pursuant to Treaty and the Defendant's promise and obligation to provide lands pursuant to the Treaty on the basis of current population in perpetuity insofar as the Defendant promised to "have reserves and holdings set apart in the future ... when required" and to "secure to them in perpetuity a fair portion of the land ceded."
(d) Which person or persons committed the alleged actions of the Defendant in paragraph 70?
Response: In 1899, at the initial signing of Treaty 8, Treaty Commissioners David Laird, J.A.J. McKenna and J. H. Ross persuaded Treaty 8 First Nations to cede valuable lands and resources without providing independent legal advice or rendering full disclosure regarding the nature of the lands and resources that were ceded. At the 1910 adhesion to Treaty 8, Treaty Commissioner H.A. Conroy persuaded the Plaintiffs' ascendants to cede valuable lands and resources without providing independent legal advice or rendering full disclosure regarding the nature of the lands and resources that were ceded. At the 1911 adhesion to Treaty 8, Assistant Indian Agent Harold Laird persuaded the Plaintiffs' ascendants to cede valuable lands and resources without providing independent legal advice or rendering full disclosure regarding the nature of the lands and resources that were ceded.
(e) When did the actions alleged in paragraph 70 take place?
Response: The actions alleged in paragraph 70 of the Statement of Claim took place on or about June 21, 1899, on or about August 15, 1910, and on or about August 4, 1911.
(f) What facts "regarding the nature of lands and resources" did the Defendant allegedly not fully disclose to the Plaintiffs?
Response: The Defendant did not fully disclose to the Plaintiffs' ascendants that valuable minerals had already been discovered within the Treaty 8 by the Defendant prior to the Treaty. Further, the Defendant had full knowledge of the existence, volume, extent and value of petroleum, natural gas and minerals within the Treaty 8 territory prior to entering into the Treaty, and did not advise the First Nation signatories at the time of treaty and did not advise the Plaintiffs' ascendants at the time of the adhesions or any time subsequent to the adhesions of the existence, volume, extent and value of such resources. At no time subsequent to 1899, 1910 or 1911 did the Defendant advise the Plaintiffs of the fact that the Treaty purported to obtain the surrender of the Plaintiffs' Aboriginal Title to lands and minerals. The Plaintiffs were never put in a position to know what their actual rights were with regard to the ownership of petroleum, natural gas and mineral title within Treaty 8 territory, including their right to enforce those rights and to obtain compensation for the loss of those rights as against the Defendant.
Paragraph 71: The Defendant has failed to meet its legal, trust or fiduciary duties owed to the Plaintiffs and their ascendants by fraudulently or negligently failing to translate relevant portions of Treaty No. 8 which dealt with the ceding of land and natural resources by the Plaintiffs and their ascendants.
(a) Provide particulars of how the Defendant "fraudulently or negligently" failed to translate relevant portions of Treaty 8.
Response: Paragraph 71 refers to breaches of legal, trust or fiduciary duties. Accordingly, fraud and negligence in the context of this paragraph relate to equitable fraud or breaches of trust or fiduciary duty in not making full disclosure of all relevant facts and information at the time of Treaty No. 8 or afterward.
When the ascendants of the Plaintiffs adhered to Treaty 8 in 1910 and 1911, the Defendant did not translate the portions of the Treaty that stated that the ascendants of the Plaintiffs were surrendering the surface lands and valuable mineral title to the entire area of Treaty 8 or explain to the ascendants of the Plaintiffs that they were entitled to select mineral rich lands for reserves and to retain the mineral rights to such lands. The Defendant also failed to convey this to the First Nation signatories at the initial signing of the Treaty in 1899.
[...]
(b) Which person or persons committed the actions alleged as fraud or negligence?
Response: In 1899 these actions were committed by Treaty Commissioners David Laird, J.A.J. McKenna and J.H. Ross. In 1910 these actions were committed by Treaty Commissioner H.A. Conroy, in 1911 these actions were committed by Assistant Indian Agent Harold Laird, [...]
(c) When did these actions occur?
Response: As noted above, these actions occurred in 1899, 1910, 1911, [...]
(d) What are the "relevant portions of Treaty 8" referred to in this paragraph?
Response: As noted above, when the ascendants of the Plaintiffs adhered to Treaty 8 in 1910 and 1911, the Defendant did not translate the portions of the Treaty that stated that the ascendants of the Plaintiffs were surrendering the surface lands and mineral title to the entire area of Treaty 8 or explain that the entitlement to 128 acres of reserve land per person or 160 acres of land per person in severalty permitted the Plaintiffs to select mineral rich lands and to retain the mineral title. Nor were the Plaintiffs advised of the promises of the Treaty Commissioners as set out above in paragraph 8(c).
[...]
(e) What and where is the "land and natural resources" referred to in this paragraph?
Response: The "land and natural resources" referred to in paragraph 71 of the Statement of Claim are the lands and natural resources to which the Plaintiffs had Aboriginal Title within the boundaries of Treaty 8 and which the Defendant allegedly persuaded the Plaintiffs to cede when the ascendants of the Plaintiffs adhered to Treaty 8 in 1910 and 1911 or in 1899 when Treaty 8 was first signed.
[19] As I see it, these responses give rise to a number questions, which I summarize below. This summary is intended only to provide some guidance to the parties. It is not intended to preclude the Crown from putting to the Dene Tsaa its own formulation of these or other questions in its new request for further and better particulars.
(a) Is it the position of the Dene Tsaa for the purposes of these proceedings that if Treaty No. 8 had never existed or if the ancestors of the Dene Tsaa had not adhered to it, the Dene Tsaa would have had Aboriginal Title to certain lands within what has become the area of Treaty No. 8, including the related mineral rights?
(b) In this respect, it may be that counsel for the Dene Tsaa has a different understanding of the meaning of the term "Aboriginal Title" than counsel for the Crown, who appears to be adopting definitions from recent jurisprudence. It might be helpful if counsel for the Dene Tsaa were to explain precisely what he means by the term "Aboriginal Title" as he uses it in the context of the response to the Crown's request for particulars.
(c) If the answer to (a) is no, why is Aboriginal Title referred to in the responses to the Crown's request for particulars?
(d) If the answer to (a) is yes:
(i) How is the existence of the alleged Aboriginal title relevant to the claims now made by the Dene Tsaa in relation to mineral rights? In other words, if at trial the existence of the alleged Aboriginal Title is not proved, would the claims of the Dene Tsaa in relation to mineral rights be affected, and if so how?
(ii) If the existence of the alleged Aboriginal Title is relevant, what is its factual foundation (for example, is it based on the use and occupation of the ancestors of the Dene Tsaa for a period of time, and if so, how was the land used and occupied and for how long, and was their use and occupation exclusive or shared with others)?
(e) If the answer to (a) is yes, is it the position of the Dene Tsaa for the purposes of these proceedings that, but for the adherence of their ancestors to Treaty No. 8, they would have had Aboriginal Title (including mineral rights) to:
(i) the land comprising the present reserve of the Dene Tsaa,
(ii) the land comprising the reserves that were granted to the amalgamated Band (that is, the band created by the amalgamation of the Dene Tsaa and the Fort Nelson Slave Band),
(iii) both (i) and (ii), or
(iv) some other area (and if so, exactly what area)?
(f) If the answer to question (a) is yes, is it the position of the Dene Tsaa for the purposes of these proceedings that, because of the misconduct of the agents of the Crown, Treaty No. 8 is invalid in any respect or is not binding on the Dene Tsaa? If so:
(i) Is it the position of the Dene Tsaa that they retain Aboriginal Title to the land referred to in question (e) and the related mineral rights?
(ii) And if so, how does that position relate to the portions of the statement of claim that indicate that the claims of the Dene Tsaa for mineral rights are based on Treaty No. 8 being valid and binding on them?
[20] It seems to me that the answers to these questions would clarify, not only the factual foundation for the mineral rights claimed by the Dene Tsaa, but also the legal basis. If the source of the claim of the Dene Tsaa for mineral rights is Treaty No. 8, that would suggest that the validity of the Treaty and the status of the Dene Tsaa as adherents are essential elements of their claim. On the other hand, if the source of their claim for mineral rights is Aboriginal Title, that would suggest that the validity of Treaty No. 8 and the status of the Dene Tsaa as adherents are not essential elements of their claim.
[21] In this regard, I note from the Statement of Defence that the Crown does not admit that the Dene Tsaa are adherents to Treaty No. 8, and therefore are presumed to deny it (Rule 184(1) of the Federal Court Rules, 1998). I am unable to determine from the material in the appeal book whether the Crown has since admitted that allegation.
[22] For these reasons the appeal will be allowed in part, in accordance with the judgment to be issued concurrently with these reasons.
"K. Sharlow"
J.A.
"I agree
B.L. Strayer J.A."
"I agree
B. Malone J.A."