The Federal Court of Appeal dismissed a judicial review application filed by Canada pursuant to section 28 of the Federal Courts Act with respect to a decision of the Specific Claims Tribunal. In February 2013, the Tribunal held that the Kitselas First Nation in northwestern British Columbia had established a breach of legal obligation of the Crown due to the non-inclusion of lands in an Indian Reserve established in 1891. The excluded land included the site of an ancient Kitselas village. The Tribunal held that the Crown owed a fiduciary duty to the Kitselas when dealing with this cognizable interest in the land, and breached this duty by failing to include the site in the Kitselas Indian Reserve. The Federal Court of Appeal found that the Tribunal made no reversible error of law in regards to the issue of fiduciary duty, and the finding of a breach of duty was based upon findings of fact that it was open for the Tribunal to make. It was unnecessary for the Court of Appeal to consider whether Canada should be solely liable for the breaches of duty, as that issue was not yet determined by the Tribunal.

The decision of Mr. Justice Slade, the Chairperson of the Tribunal, is reported at 2013 SCTC 1 and was summarized in our e-newsletter of 27 March 2013.  The Kitselas submitted this specific claim in April 2000. It claimed that the Crown breached its fiduciary obligations by excluding a 10.5 acre parcel of land, known as Lot 113, from Kitselas Indian Reserve No. 1 in 1891. Lot 113 includes the site of an ancient village named Gitaus. The Minister rejected the claim in 2009.

This claim proceeded in stages pursuant to a bifurcation order. The initial stage dealt with the validity of the claim, with the claim for compensation to be determined later.

The Tribunal reviewed the actions of Peter O’Reilly, the Indian Reserve Commissioner appointed in 1880, to allot reserve lands to the Kitselas. Slade J. held that Lot 113 was the site of an ancient village named Gitaus that, from the Aboriginal perspective, was never abandoned. There were still individual dwellings at Gitaus in 1891. There were no claims of white settlers to the lands at Lot 113. O’Reilly’s description of Kitselas Indian Reserve No. 1 stated that 10 acres on the left bank of the Skeena, on which a Hudson’s Bay Company storehouse stood, was not included. He wrote to the provincial Chief Commissioner of Lands and Works that “it would prove a convenience to the public to have this land declared a public reserve”. The excluded land (Lot 113) was landlocked within IR No. 1. British Columbia later subdivided the 10 acres into 50 lots, and some were purchased by speculators. It was the site of a short-lived boomtown before World War I. All of the lots later reverted to the Province, and the land is now a provincial park.

Slade J. held that the Kitselas had a cognizable interest in the Gitaus site, and Article 13 of the Terms of Union recognized the Indian interest in the ongoing occupation of land they used. The Crown had discretionary control over the creation of reserves, and if O’Reilly had not excluded Lot 113 from Kitselas IR No. 1, “there is no basis in the evidence that would support a finding that it would not form part of Kitselas I.R. No. 1 today”.  Slade J. also held that there was a breach of the Crown’s fiduciary duty in connection with the allotment of Kitselas IR No. 1. The Crown’s duty included obligations of loyalty, good faith, full disclosure, and acting reasonably and with diligence in regards to the best interests of the Indians. O’Reilly knew that the Kitselas wanted Lot 113. The Tribunal was not satisfied, looking on the evidence as a whole, that O’Reilly informed the Chiefs that Lot 113 had been excluded from Kitselas IR No. 1. Slade J. found that if the Kitselas Chief had been told that the Gitaus site had been excluded, “he would surely have objected”. The Tribunal held that Commissioner O’Reilly failed to act reasonably, and with due diligence as regards the best interest of the Kitselas peoples. This claim therefore fell within section 14(1)(c) of the Specific Claims Tribunal Act. The Kitselas established a breach of legal obligation of the Crown due to the non-inclusion of land in excess of the requirements of the Hudson Bay Company (1 acre) in Kitselas IR No. 1.

The Federal Court of Appeal agreed with Canada that, in regards to the issue of whether a fiduciary duty was owed to the Kitselas in the reserve allotment process, the standard of review is correctness. The purpose of the Specific Claims Tribunal Act is to determine old historic claims that are generally precluded from adjudication before the superior courts due to the passage of time. The Tribunal judge must determine the validity of the claim and then determine the appropriate level of compensation. The validity of a claim must be determined in accordance with general legal principles, such as federal common law relating to aboriginal matters. Members of the Tribunal are superior court judges, and they must apply and interpret the law in the same manner as a superior court judge. There is no strong privative clause in the Act. Further, these claims are not exclusive to the Tribunal and could also be adjudicated before the superior courts. Mainville J.A. held that it is important that decisions on matters such as the Royal Proclamation of 1763 and section 35 of the Constitution Act, 1982 be consistent. He stated:

For example, in the case at bar the Judge relied on a constitutional provision, Article 13 of the British Columbia Terms of Union, as part of his analysis leading to his finding that a fiduciary duty was incumbent on the Crown in the circumstances of this case. Inconsistency on such fundamental matters would be unseemly and give rise to significant practical consequences.

The Federal Court of Appeal held that the Tribunal reached the appropriate legal conclusion with respect to the issue of fiduciary duty. There is a sui generis fiduciary relationship that binds the Crown and Aboriginal peoples which, in certain circumstances, leads to a judicially enforceable fiduciary duty. Such an enforceable duty can arise when the Crown assumes discretionary control over specific Aboriginal interests. Mainville J.A. referred to the Supreme Court of Canada cases of Ross River (2002) and Wewaykum (2002) in regards to the engagement of the fiduciary duty during the reserve creation process. The Tribunal in this case followed the same approach as the Wewaykum court in finding a high degree of discretionary control assumed by the Crown over the lives of Aboriginal people and that, in the circumstances of this case, a sufficient cognizable interest in Lot 113 triggered the fiduciary duty. The unilateral undertaking of the Crown, set out in Article 13 of the Terms of Union, was itself sufficient to engage the obligations of loyalty, good faith and full disclosure and of acting reasonably and with diligence in the best interest of the beneficiary.

The Federal Court of Appeal found “no fundamental legal error” with respect to these findings. Mainville J.A. stated:

In this case, the Judge appropriately had regard to the unique context of reserve creation history in British Columbia. Contrary to Ontario and most of Western Canada, reserve creation in British Columbia did not result from a treaty process, but rather from a unilateral undertaking of the Crown, notably set out in Article 13 of the British Columbia Terms of Union and in the various Crown instructions issued to implement that Article. As a result, there were no negotiations with aboriginal peoples to determine the parameters of the reserve allotment policy, and the actual allocation of land for reserve creation purposes was largely left to the discretion of Crown officials acting pursuant to the instructions they received.

The instructions that governed the implementation of the unilateral Crown policy of reserve allocation “clearly required” that the officials take into account the actual land uses of the Aboriginal groups.  Such instructions were given to Commissioner O’Reilly in 1880. In light of the findings of fact of the Tribunal – such as Lot 113 containing dwellings in 1891, as well as being the site of an ancient village that “had never been abandoned” – there was no error in law in the conclusion that the Kitselas had a cognizable interest in Lot 113 that gave rise to an enforceable fiduciary duty. Mainville J.A. added:

The land at issue was clearly delineated and identifiable, and the cognizable interest in that land was its historic and contemporary use and occupation as a settlement by the Kitselas themselves, a land interest specifically contemplated by Article 13 of the British Columbia Terms of Union and by the Crown instructions issued to implement that Article. [emphasis added by Mainville J.A.]

The Tribunal’s conclusion that Canada breached this duty is based upon findings of fact, and the more deferential standard of reasonableness applies to this part of the application. The Federal Court of Appeal held that it was open to Slade J. to make the findings that he did, such as the conclusion that Commissioner O’Reilly did not properly inform the Kitselas of the exclusion of Lot 113 from the reserve. The Court of Appeal also held that it was open to the Tribunal to conclude that Commissioner O’Reilly failed to act reasonably and with due diligence in excluding Lot 113. Canada argued that it was reasonable to exclude Lot 113 due to the site’s strategic importance for public transportation. Mainville J.A. concluded that this argument ignores the findings of the Tribunal that Commissioner O’Reilly had already excluded land for transportation purposes, such as an existing portage, and never referred to transportation as his reason for excluding Lot 113. It was therefore open to the Tribunal to find that Lot 113 had not been excluded for public transportation purposes.

Canada also raised the issue of whether the Tribunal erred in finding it solely liable for the losses of the Kitselas, and argued that British Columbia also assumes a liability in this case. Section 20 of the Act contemplates that if the Tribunal finds that a third party caused or contributed to the loss of the First Nation, then an award of compensation would be limited to the extent that the Crown is at fault. Mainville J.A. noted that there had been a bifurcation order in this proceeding, and only the issue of liability has been determined at this stage. Any potential liability of British Columbia, that would reduce the compensation owing by Canada, would be determined at the compensation stage. Mainville J.A. commented:

The Judge notes at paragraphs 192 and 193 of his Reasons that Canada assumed the primary role in the relationship between aboriginal peoples and the Crown, and further assumed sole responsibility over Aboriginal land interests in British Columbia under Article 13 of the British Columbia Terms of Union. However, those findings are in themselves uncontroversial and largely echo the findings of Binnie J. at paragraphs 93 and 97 of Wewaykum. They cannot form alone the basis for a finding with respect to the potential contribution of British Columbia (if any) to the breach which could affect the compensation owed by Canada. Rather, this is a matter to be dealt with at the compensation stage of the hearing pursuant to the Judge’s bifurcation order.

The judicial review application was therefore dismissed with costs.


Scott Kerwin


Aboriginal Law