The Saskatchewan Court of Queen’s Bench ordered that a claim brought by the plaintiffs in relation to the operation of two dams since the 1930s be dismissed as statute-barred. The plaintiffs’ claim involved breach of the honour of the Crown (including a continuing breach of the duty to consult), breach of fiduciary duty, trespass (including a continuing trespass), and infringement of Aboriginal and treaty rights. In this summary judgment application, the Court held that the only claims that survive initial scrutiny are the claims for past breach of fiduciary duty and past breach of the honour of the Crown. There are no grounds for a current or continuing breach of the honour of the Crown or breach of fiduciary duty. Likewise, the flooding of a portion of the plaintiffs’ reserve since 1942 does not constitute a continuing trespass. Any claim for damages relating to trespass would have been discoverable by 1942, and the material facts were known by at least 1981.  The dam projects proceeded on the consent of Canada, who had the ostensible authority of the First Nation, and the plaintiffs are therefore estopped from recovering the land itself. Any claim for damages based upon past breach of fiduciary duty and past breach of the honour of the Crown was discoverable by 1942, and is statute barred by the provincial limitations legislation. The Court declined to exercise its discretion to extend the limitation period.

The plaintiff First Nation occupies Indian Reserve 200 (IR 200) at the south end of Reindeer Lake in northeastern Saskatchewan. The First Nation is an adherent to Treaty 6.

In 1928, the Churchill River Power Company was authorized by Canada to develop and operate the Island Falls Dam on the Churchill River. This dam is located approximately 48 kilometres downstream of IR 200. Construction was completed in 1931. A licence issued in 1937 provided authorization for the Power Company to operate the dam for the period until 1981. It was noted that as a result of the Natural Resource Transfer Agreement of 1930 (NRTA), the administration and control of the waterpower harnessed by the dam was transferred to Saskatchewan.

A second permanent hydroelectric facility began to be developed in 1938. The Whitesand Dam was completed in 1943, and was constructed about 11 kilometres downstream from IR 200. During the development of the Whitesand Dam, the Secretary of Indian Affairs granted his approval for the construction, as no “unfavourable results” on the “Indian interest” were anticipated. The final licence for the operation of this dam was issued in 1943.

The operation of both the Island Falls Dam and the Whitesand Dam has caused an increase in the water level, and led to flooding of a portion of IR 200. At any one time, a portion of IR 200 – ranging from 240 to 600 acres – remains flooded. Since 1984, Saskatchewan Power Corporation has operated both dams.

The evidence indicated that, as early as 1981, the plaintiffs retained legal counsel to investigate a claim for trespass due to flooding and sent demand letters to all defendants. This action was commenced in 2004, but no steps were taken until an amended claim was filed in September 2013.

The plaintiffs relied upon the Manitoba Métis decision of 2013 in regards to their claim for breach of the honour of the Crown. Justice R.S. Smith agreed that the honour of the Crown is always at stake when dealing with Aboriginal issues, but that not all interactions between the parties will engage the doctrine. The doctrine can be engaged by explicit obligations owed to Aboriginal groups. The Manitoba Métis decision results in “a rather amorphous duty on the Crown which arises upon a ‘solemn promise’”. The plaintiffs argued that such a principle applied here due to clause 11 of the NRTA, which required Canada to administer Indian reserves for the benefit of the bands. Justice R.S. Smith did not agree that this clause created a “solemn promise”, or created a legal obligation of the highest order. This section of the NRTA did not create Aboriginal rights, but was essentially “clerical in nature”. In consequence, the honour of the Crown was not engaged.

The plaintiffs also relied upon the Crown’s duty to consult Aboriginal peoples. The plaintiffs alleged that there had been no consultation before the construction of either dam. The Court found that there was no present breach of the duty to consult. Justice R.S. Smith stated:

With regard to the allegation that there is present breach of the duty to consult, this claim must be dismissed for two reasons. First, this matter cannot be characterized as a continuing breach because there is no new or novel impairment of Aboriginal or treaty rights, as contemplated in Rio Tinto. Members of PBCN are precluded from hunting, fishing and trapping on substantially the same area of flooded land regardless of the operational decisions made by SaskPower. This remains so since the time of the original act.

Further, a failure to consult claim can only be made against the Crown, not third parties. The dams are currently operated by SaskPower, a Crown corporation, which is a separate entity and owes no fiduciary duty to the plaintiff.

The plaintiffs argued that a claim for past breaches of the duty to consult cannot be statute-barred, in the same way that a breach of the honour of the Crown is not statute-barred. Justice R.S. Smith found no authority for this assertion. He also concluded that it would create an “unjustified distinction” between damages for breach of fiduciary duty and damages for breach of the duty to consult. It is settled that damages for breach of fiduciary duty are subject to provincial limitation periods.

The Court held that provincial limitation periods apply to any claim of the plaintiffs for breach of fiduciary duty. The plaintiffs alleged that Canada failed to protect their legal interest by granting a licence that led to the flooding of reserve land, and that it is a continuing breach as long as the land remains flooded. The defendants submitted that Indian Affairs had the ostensible authority of the Band to consent to the project in 1939. Such consent amounted to a transfer of land and an alienation of title, thus crystallizing any claim for breach of fiduciary duty into a monetary claim for damages. The Court did not accept the defendants’ argument on this point. However, Justice R.S. Smith concluded that there was no claim for a “continuing fiduciary breach”. The Power Company was entitled to rely upon the ostensible authority of the Crown, and the plaintiffs are now estopped from asserting that they are not bound by this agreement. In consequence, the plaintiffs cannot seek an in rem remedy against SaskPower, but only a claim for breach of fiduciary duty against Canada for consenting in the first place. The Court also relied upon Wewaykum and McCallum v. Canada, 2010 SKQB 42 for the proposition that there is no continuing fiduciary duty. Such an argument would defeat the purpose of limitation periods. A breach of the duty must be located at a specific point in time. In this case, there is no repetition of the allegedly injurious act; any damage arising from the breach had already been done at the time of the first flooding.

The Court also rejected the argument that there is a continuing trespass or a continuing breach of Aboriginal rights. There is a distinction between trespass by chattel (i.e. failure to remove something that has been brought on land) and trespass by failure to restore the land to the previous unaltered condition. In this case, the dams are not located on IR 200. Water is not a chattel that has been left on the land. Further, there is no new, actionable wrong that occurs each day. The flooding has persisted since 1942. There is no continuing harm and no continuing tort of trespass, or continuing breach of Aboriginal or treaty rights. Any trespass or breach occurred as early as 1942.

The Court held that The Public Officers’ Protection Act R.S.S. 1978, c. P-40 (POPA) was the relevant limitation legislation for the purposes of this summary judgment application. The current Limitations Act in Saskatchewan states that proceedings based upon Aboriginal and treaty rights are governed by the laws respecting the limitation of actions that would have been in force if the new Act had not been passed. The former Limitation of Actions Act provided for a limitation period of six years, and such period has expired. The now-repealed POPA related to the acts of public authorities and provided for a limitation period of one year, but this limitation period could be extended at the discretion of the court.

The Court rejected the plaintiffs’ argument that possession of reserve lands lie at the core of s. 91(24) and therefore the doctrine of interjurisdictional immunity renders provincial legislation inapplicable. The Supreme Court of Canada reviewed this doctrine in Tsilhqot’in Nation and concluded that it is not the appropriate analysis. Justice R.S. Smith held that the plaintiffs are precluded from claiming interjurisdictional immunity due to impairment of Aboriginal or treaty rights. He also disagreed with the plaintiffs that Tsilhqot’in Nation is limited to Aboriginal title lands, whereas previous authority such as Derrickson is still authority for the principle that provincial laws do not apply to reserve lands. The Court found that there is no such distinction between Aboriginal title lands and reserve lands.

Provincial laws of general application may apply as to regulate section 35 rights so long as that regulation complies with the Sparrow analysis for justifiable infringement. The purpose and effect of provincial limitations legislation is not aimed at regulating possession of reserve land or the beneficial use of such land. Limitations legislation seeks to ensure the fair balancing of rights as between plaintiff and defendant. The Court also noted that limitation periods apply to Aboriginal claims, regardless of whether they stem from Aboriginal or treaty rights. Referring to the Sparrow analysis, Justice R.S. Smith held:

I respectfully posit that it is clear from the above that the purpose and effect of the legislation is not aimed at infringement of the right of possession, or use and benefit, nor does it cause undue hardship. On the contrary, the legislation is of general application aimed at regulating the time in which any claim can be brought before the court in order to ensure a fair balancing of interests between the parties.

Furthermore, in regard to the third criteria in Tsilhqot’in for determining a prima facie infringement of an Aboriginal right, imposition of limitations legislation does not preclude the rights holder from their preferred means of exercising the right. The plaintiff was free to exercise the right of possession, or commence an action for infringement of this right. The limitations legislation itself does not limit the plaintiffs’ ability to do so, it merely bars the right to bring the claim and receive a remedy after the lapse of the prescribed limitation period.

The plaintiffs relied upon section 14.1 of the provincial Interpretation Act which provides that no enactment abrogates or derogates from existing s. 35 rights. They argued that limitation legislation should therefore not apply because it would effectively extinguish treaty rights. The Court disagreed:

Again, respectfully, I am of a different view. Interpretation acts are in place so as to provide a mechanism for consistent operation and application of statutes. They stipulate meanings and act as aids of construction so that any given statute may be interpreted and applied in a similar and consistent fashion.

The Court also noted that s. 14.1 was introduced in 1996, whereas the new Limitations Act was enacted in 2005. It does not make sense that the Legislature would create a provision in the Interpretation Act that precludes limitation acts applying to s. 35 rights, and then later affirm in a new Limitations Act that the limitations do apply to proceedings based upon s. 35 rights.

The Court held that s. 14.1 of the Interpretation Act is merely interpretative, and not substantive. It pertains to how other statutes should be administered, interpreted and read. It is a rule of construction. Justice R.S. Smith held that it was therefore unnecessary to determine whether limitation periods are substantive. Nevertheless, he noted the traditional rule that limitation periods are merely procedural in that they bar a remedy, rather than extinguish a right. It would only be in a conflicts of laws analysis that a limitation period is treated as a substantive right.

The Court held that this action was appropriate for summary judgment. The only claims that survive initial scrutiny are the claims for past breach of fiduciary duty and past breach of the honour of the Crown. Both claims were discoverable by 1942, and are statute-barred by the POPA and the former Limitation of Actions Act. The Court declined to exercise the discretion under the POPA to extend the limitation period. The Court stated:

I decline to exercise my discretion under s. 2(1)(b) of POPA to extend the limitation period in this matter. There was ample time wherein the plaintiffs could have brought a claim. Indeed, as I have said, this claim was canvassed with legal counsel and demand letters were sent out to the same defendants as the within action as early as 1981. The plaintiffs cannot now have recourse to an extension of the limitation period after they have sat dormant on the action for so long.

The defendants’ application for summary judgment was therefore allowed, and the claim was dismissed.

http://www.canlii.org/en/sk/skqb/doc/2014/2014skqb327/2014skqb327.html

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law