Restoule v. Canada (Attorney General), 2020 ONSC 3932

 

The Inapplicability of Ontario Limitations and Crown Immunity Defenses to Claims for Compensation for Treaty Annuity Payment Shortfalls

On June 26, 2020, Ontario Superior Court Justice Patricia Hennessy released her decision for “Stage Two” of the Restoule v. Canada Treaty rights litigation on Treaty annuity payments.

The Court addressed motions raised by the First Nation plaintiffs (beneficiaries of the 1850 Robinson Huron and Superior Treaties) in response to Ontario’s defense arguments on limitation periods and Crown immunity. The Court found in favour of the plaintiffs, granting declarations that their claims for relief for annuity payment shortfalls are not barred by Ontario’s limitations legislation and that Ontario cannot benefit from Crown immunity.

Stage One had also concluded with a favourable judgement for the plaintiffs: The Court recognized Crown obligations and duties to increase Treaty annuity payments in line with the promise of the Treaties’ augmentation clauses, which tie the value of annuity payments to the resource wealth generated from Treaty lands (See Restoule v. Canada, 2018 ONSC 7701).

In its Stage Two decision, Justice Hennessy found that Ontario cannot rely on limitations or Crown immunity defenses to escape liability for any breaches of its obligations or duties under the Treaties.

For limitations, it found that the relevant limitations legislation only applies to certain enumerated causes of action, like actions in contract law, which do not capture the plaintiffs’ actions on Treaties (since a Treaty is not a contract).

For Crown immunity, Justice Hennessy found that the relevant legislation does not preclude the plaintiffs from making its claims against the Crown, since the legislation only precludes claims based on facts in existence prior to 1963 that were not possible prior to the introduction of the legislation in 1963. The plaintiffs’ claims, as a form of claim for equitable compensation (for breach of Crown fiduciary duty), were possible by way of the old “petition of right” system prior to 1963, and are therefore not precluded by the legislation.

This Stage Two judgement leads the Parties into Stage Three, which will address questions of remedies and other outstanding issues, such as the quantification of Crown resource revenue and the determination of a “fair share” for Treaty annuity payments. Stage Three should provide further clarity on Crown obligations and duties to share the wealth of Treaty lands with First Nation rights-holders.

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