Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development)

Supreme Court of Canada – [1995] 4 S.C.R. 344 – “Blueberry”


British Columbia Fiduciary duty
Summary

The Supreme Court confirmed that the Crown’s fiduciary duty is engaged when it manages land for the Indians. This duty requires the Crown to give precedence to the Band’s interests.

Issue

Did the Crown breach its fiduciary duties regarding the 1945 surrender of the Bands’ reserve and the 1940 surrender of their mineral rights?

Decision

Yes, the Crown failed to fill its fiduciary duty – it should have acted with loyalty and care in managing the lands (unanimous decision).

Parties

Between: Joseph Apsassin, Chief of the Blueberry River Indian Band, and Jerry Attachie, Chief of the Doig River Indian Band, on behalf of themselves and all other members of the Doig River Indian Band, the Blueberry River Indian Band and all present descendants of the Beaver Band of Indians

And: Canada

Interveners: The Musqueam Nation and Ermineskin Tribal Council, Chief Abel Bosum et al., Chief Terry Buffalo et al. and the Samson Indian Band and Nation, and the Assembly of First Nations

Facts

In 1916, the Beaver Indian Band, of Cree descent, concluded a treaty with the Crown of Canada. Pursuant to that agreement, the Band was presented with a tract of land in Fort St. John, British Columbia. Given that the Band was nomadic, they made use of the reserve during the summer and traveled north for the winter.

In 1940, the mineral rights of the reserve were ceded to the Crown, in trust, “to lease” for the Band’s advantage. In 1945, the Band consented to forfeit its land to the Crown “to sell or lease” in accordance with its settlement program for World War II veterans. The members ensured their survival with hunting and trapping.

In 1948, the reserve land was signed over from the Department of Indian Affairs (DIA) to the Director of the Veterans’ Land Act (DVLA) for the sum of $70,000. Inadvertently, the DVLA gained the mineral rights of the reserve as well. A portion of that amount was employed by the DIA in 1950 to acquire new lands for the Band nearer to its trap lines.  The veterans were sold the former reserve land until 1956. Later, the presence of gas was discovered near the former reserve.

In 1949, oil and gas companies stated their interest in exploring the land for natural resources. In 1976, oil and gas were discovered and the revenue from this discovery, approximately $300 million, went to the veterans or their assigns under an agreement reached by the former in 1952.

In 1977, the Beaver Band Indians were separated into the Blueberry River and the Doig River Indian Bands. That same year, the Bands were notified that they had lost their mineral rights. A DIA officer decided to investigate the matter by bringing up the issue with the Bands and suggested that they contact a lawyer.

In 1978, the Bands took action against the Crown. They were asking for damages since the Crown had permitted them to make an imprudent cession of the reserve, and had subsequently let go of it under value. Compensation was also claimed for allowing the transmission of the mineral rights to the DVLA, and then to the veterans.

Arguments

The Bands: The Crown has breached its fiduciary duty by selling the reserve under value, which included their mineral rights. The Bands wanted to cede their lands in 1945, but would never have done so under these conditions. The transaction clearly had been against their interests. The Crown has a fiduciary duty towards the Bands, and must always conclude land transactions in their best interest.

Canada: The action was barred by the 30-year limitation provided in the British Columbia Limitation Act.

Decision of the lower courts

Federal Court, Trial Division (1988): The Bands’ claims are set aside, with the exception of the sale of the mineral rights to the DVLA, which were below value. On the other hand, the lawsuit was barred by the 30-year limitation period under the British Columbia Limitation Act.

Federal Court of Appeal (1993): The Bands’ claim is also rejected.

Reasons for Judgement

Jury

La Forest, L’Heureux-Dubé, Sopinka, Gonthier, Cory, McLachlin, Major

Reason

The whole bench came to the conclusion that there was a violation of the Crown’s fiduciary duty in this case. Both groups of justices found that the Bands had the right to seek damages for the monetary losses they had experienced since 1949. As for the limitation period, it was postponed until 1977, the year that they became aware of the DIA’s actions.

Gonthier (La Forest, L’Heureux-Dubé, Sopinka): the Bands’ right to dispose of their interests in a reserve and the Crown’s obligation to respect the decision. Since the Crown has the obligation to protect the Bands’ interests, it could refuse to approve any transmission of rights that would unduly disadvantage them. There was no evidence that the Bands wanted to go against the DIA policy of reserving the mineral rights for the benefit of the Band after it surrendered its surface rights to the Crown. The Crown breached its fiduciary duty by under-evaluating the value of the mineral rights and selling them for a fraction of their price to the veterans in 1948.

McLachlin (Cory and Major): the transfer to the DVLA did not represent a breach of the Crown’s duty. In fact, the various options and value assessments were analyzed carefully and, at the time, the decision was deemed reasonable. Even though there was no fault committed by the DIA at the time of the surrender of the mineral rights, it still breached its fiduciary duty towards the Band in the end. In 1949, the DIA knew very well that the mineral rights had been sold the year before for a fraction of their value and did nothing to correct the situation. Under section 64 of the Indian Act in force at the time, the DIA had the power to reacquire those mineral rights and to set up a new leasing agreement with the veterans for the benefit of the Bands.

Impact

In March 1998, the federal government settled with the Blueberry River Band and the Doig River Band and they were awarded $147,000,000.00, which included all damages, interests and costs. Their members and the descendants of the former Beaver Band were entitled to receive an indemnity for the Crown’s breach of its fiduciary duty in the conveyance of the mineral rights of the Beaver Indian Band reserve in 1949. $12,000,000 was put in trust for those individual claims, which had to be filed before June 15, 1998.

When the settlement money was awarded, conflicts arose in both communities. Accusations of mismanagement on the Band councils’ part flew. Band members felt that the leadership did not include the population in the decision-making process concerning the distribution of the newly acquired wealth. At first, all adult members received $50,000 each and those from the Doig River Band got an additional $50,000 a few months later. Members of the Blueberry River Indian Band received another payment of $11,000 plus six monthly installments of $1,500. For the balance, the councils set aside a trust fund to provide for future community projects in education, land acquisition, employment and culture. There was also bitterness on the part of former members, mostly women, who had lost their Indian status after their marriage to a non-Indian. Even though they regained their Indian status in 1985 with the amendments to the Indian Act made by Bill C-31, they still had no say in the matter because off-reserve members were not allowed to vote at the time (Inwood, 1998: A18).

After notices of the judgement were published in the newspapers, a large number of claimants (more than 500) applied to receive a portion of the proceeds from the judgement, including descendants of the former Beaver Band who were not current members of the Blueberry River Indian Band or the Doig River Band. To determine which claimants had a right to the indemnity, another action was brought in Federal Court by the two Bands (Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development), 1998 CanLII 8770 (F.C.)).

In 1999, a ruling by the J. Hugessen Trial Division of the Federal Court excluded claimants who were not members of the Blueberry River Indian Band or the Doig River Band; they were therefore not permitted to share in the proceeds from the judgement. The reasoning behind this decision was that the Crown breached the collective rights of the Beaver Indian Band, and compensation was owed to the Beaver Band, not to its individual members. When the Beaver Indian Band was dissolved, the right of action was passed on to the Blueberry River Indian Band and the Doig River Band, and it belongs collectively to those who have an interest to reserve lands, which is established by membership and not by ancestry (Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development), 1999: 26). The descendants of the Beaver Indian Band appealed to the Federal Court of Appeal.

In 2001, the Court of Appeal gave its ruling on the matter (Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development), 2001). No appeal was heard by the Supreme Court.

Related Cases

Guerin v. La Reine, [1984] 2 S.C.R. 335


Sources

Inwood Damian. 1998. Bands bicker over $147 M, in The Province, Dec. 13: A18.

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