Gladstone v. Canada (Attorney General)

Supreme Court of Canada – [2005] 1 S.C.R. 21


British Columbia Fiduciary duty
Summary

The Court refuses to grant interests to Aboriginals on an amount held for them by the Crown. It states that fiduciary duty does not apply to every situation: “Although the Crown in many instances does owe a fiduciary duty to aboriginal people, it is the nature of the relationship, not the specific category of actor involved, that gives rise to a fiduciary duty. Not every situation involving aboriginal people and the Crown gives rise to a fiduciary relationship.” (para. 53 of the decision).

Issue

Should the Crown have paid the interest to Gladstone for the amount held during litigation in its fiduciary role?

Decision

No, because the Fisheries Act does not says so, and because the Crown’s fiduciary duty does not apply (unanimous decision).

Parties

Between: Attorney General of Canada

And: Donald Gladstone and William Gladstone

Facts

In 1988, Donald and William Gladstone, members of the Heiltsuk Band of British Columbia, were arrested for trying to sell 4,200 lbs. of herring spawn in breach of the Fisheries Act. The case went to the Supreme Court, where a majority allowed Gladstone’s appeal and ordered a new trial in order to assess whether the Crown met conservation objectives that would give it a valid justification for the infringement of the Aboriginal right, since the available evidence did not allow the justices to draw conclusions in that regard. During the proceedings, Gladstone’s profits were held by the Crown.

In 1996, the Department of Fisheries and Oceans paid the net proceeds to Gladstone, according to section 58 (3) of the Fisheries Act, without any interest.

Arguments

The Crown: The Fisheries Act sets out a complete code for returning what was seized pursuant to the Act. The payment of interest is only obligatory when required by contract or statute. Since the Fisheries Act does not foresee the payment of interest, the Crown is not obliged to pay such interest to Gladstone. The parties did not construct the problem as involving Gladstone’s Aboriginal status.

Gladstone: The Fisheries Act does not set out a complete code. Since money is a “special proceed,” the Crown has the discretion to allow the payment of interest. Hence, its fiduciary duty was triggered in this case and an amount is owed to Gladstone because there was an unjust enrichment on the Crown’s part.

Decision of the lower courts

See R. v. Gladstone, [1996] 2 S.C.R. 723.

Provincial Court of British Columbia (2002): Gladstone’s arguments that the Fisheries Act does not set out a complete code for restoring seized amounts are rejected.

Court of Appeal of British Columbia (2004): The trial judge’s decision is reversed. The Crown’s fiduciary duty was triggered, and this compelled the Crown to pay interest on the seized amounts. However, Gladstone’s Aboriginal status is not relevant in the application of the Act.

Reasons for Judgement

Jury

McLachlin, Major, Bastarache, Binnie, Le Bel, Deschamps, Fish, Abella, Charron

Reason

The Fisheries Act creates a complete structure for managing matters that come up in cases of seizure. The law is clear. Despite the appearance of unfairness considering the time elapsed during the proceedings, it is the role of Parliament, not the court, to remedy the predicament caused by the Act.

On the claim that the Crown owed a fiduciary duty to Gladstone, he did not frame his case by invoking his Aboriginal status.  His Aboriginal status would not have changed the end result of the appeal.

The Crown’s fiduciary duty is not owed automatically in situations involving Aboriginal people, but it is rather the nature of the relationship that gives rise to the obligation. The regime of the Fisheries Act is of general application and does not trigger the Crown’s fiduciary duty.

Related Cases

R. v. Gladstone, [1996] 2 S.C.R. 723

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