Williams Lake Indian Band v Canada considers [1] an appeal from the Federal Court of Appeal that set aside a decision from the Specific Claims Tribunal. The Supreme Court of Canada (“SCC”) found that Canada was liable for breach of it legal and fiduciary duty under s.14(1)(b), 14(1)(c), and 14(2) pursuant to the Specific Claims Tribunal Act. The SCC found that it was reasonable for the Tribunal to adopt a view that fiduciary obligations may become Canada’s responsibilities under S.14(2) and reflect the continuity of the fiduciary relationship between Indigenous peoples and the Crown.

Background

The Williams Lake Indian Band filed a specific claim against Canada with the Tribunal, pursuant to the federal Specific Claims Tribunal Act.

The claim involves two lots totalling nearly 2,000 acres. Williams Lake alleged that B.C. failed to meet its legal obligation to prevent settlers from pre-empting lands on these two lots. It also claimed and that Canada failed to meet its legal obligations to create reserves once B.C. entered Confederation in 1871. The Crown eventually set aside land for Williams Lake as reserves in 1881. Although the amount of new lands – over 4,000 acres – exceeded the area covered by the two lots, the lands in question were different than those in the original claim.

The Decision

The majority decision allowed the appeal and the Specific Claims Tribunal’s decision was restored. The SCC held that the Imperial Crown and Canada had owed, and breached, fiduciary obligations to Williams Lake Indian Band in relation to the protection of its Village Lands from settlers.

The Standard of Review is Reasonableness

The appeal raised questions of statutory interpretation, questions of fiduciary law, and questions of mixed fact and law arising from the Tribunal’s application of the law to the facts of a specific claim. The Federal Court of Appeal applied the correctness review to some of the questions and reasonableness review to others. The SCC found the standard of review is reasonableness because none of the points of statutory interpretation or common law on which the Tribunal’s decision rests falls into the categories identified in Dunsmuir v New Brunswick. [2]

Canada Breached Fiduciary Duty

The Tribunal found that Canada had to fulfil the fiduciary duties with respect to an interest in the land with which the band had a tangible, practical and cultural connection, and that it had failed to discharge them. The Tribunal did not find that Canada’s obligation as fiduciary was to deliver the allotment of the Village Lands as a reserve.

The SCC found that it was reasonable for the Tribunal to conclude that federal Crown officials with knowledge of the circumstances surrounding the Williams Lake pre‑emptions and the band’s situation did nothing to challenge the settler’s actions. Their inaction and the decision‑making that led to the eventual allotment of a reserve to the band elsewhere fell short of fulfilling the Crown’s fiduciary obligations. While Canada was obliged to consider settler interests, in this case, the only competing interests were those acquired as unlawful pre‑emptions, which the Tribunal did consider.

Validity and Compensation Must Be Considered Separately

The fact that Canada eventually procured a reserve for the band elsewhere cannot undo the breach of fiduciary duty, although the Tribunal reasonably concluded that it may reduce the amount of compensation.

The SCC found that the Specific Claims Tribunal Act recognizes the “distinction between finding a breach of fiduciary obligation and remedying the consequences of that breach”. It does so by “directing the Tribunal to deduct from the amount of compensation the value of any benefit received by the claimant in relation to the subject matter of the specific claim”. [3]

The SCC recognized that the Tribunal reserves the consideration of equitable compensation for loss flowing from a breach of fiduciary duty “during the compensation phase of its proceedings”. [4]

At the Validity stage, the SCC found that the only relevant question is whether “the Crown [has] act[ed] with reference to the Aboriginal group’s best interest in exercising discretionary control over the specific Aboriginal interest at stake”. [5] It does not look at whether the First Nation was properly compensated later on.

The Crown’s Fiduciary Obligations

A fiduciary obligation requires that the Crown’s discretionary control be exercised in accordance with the standard of conduct to which it holds as fiduciary: for example, the fiduciary duties of loyalty, good faith, and full disclosure. The standard of care to which a fiduciary is held in its pursuit of the beneficiary’s interests is that of an ordinary prudence in managing one’s own affairs. The conduct of the fiduciary that comes under scrutiny is its exercise of discretionary control over the Aboriginal interest vulnerable to the exercise of discretion. The Crown fulfils its fiduciary obligation by meeting the prescribed standard of conduct, not by delivering a particular result.

What This Decision Means for First Nations

For First Nations, this decision clarifies the scope of fiduciary obligations owed by the Crown. Being the first major decision to consider the role of the Specific Claims Tribunal, this decision is also important for clarifying the powers and procedure of the Tribunal.

Dissent of Justices Côté and Rowe, in part

This dissent of Justices Côté and Rowe agreed with the Majority that the Imperial Crown owed and breached a fiduciary duty to Williams Lake Indian Band. Further, Justices Côté and Rowe agreed that the Federal Crown owed and breached a sui generis fiduciary to the band following the entry of British Columbia into Confederation. The fiduciary duty was owed in relation to the specific and cognizable interest in land over which the Federal Crown exercised discretionary control.

The dissent of Justices Côté and Rowe departed with the reasons of the majority on the point that the Imperial Crown failed to redress the unlawful pre-emption of the band’s Village Lands by settlers. Specifically, Justices Côté and Rowe departed from the majority with respect to s.14(2) of the Specific Claims Tribunal Act on this point to the extent that the obligation or liability underlying a claim became an obligation or liability of the Federal Crown upon Confederation.

Justices Côté and Rowe departed from the majority and dissent of Chief Justice McLachlin and Justice Brown on the matter of interpreting s.14(2) of the Specific Claims Tribunal Act. Justices Côté and Rowe departed from the majority due to the absence of reasons on the operation of S.14(2). For liability under S.14(2) to exist, the Tribunal “must find that such an obligation or liability “became” (or “would . . . have become”) the obligation of the federal Crown”.[6] S.14(2) is not a stand-alone source of liability that may be imposed upon Canada.

The Tribunal did not err in rejecting the submissions of the Federal Crown relative to the 1881 allotment of the Bates Estate as a reserve. The 1881 allotment may have mitigated the damage suffered by the band; this is potentially significant at the compensation stage.

Justices Côté and Rowe held that the standard of review is reasonableness. However, the British Columbia Terms of Union should be reviewed upon the standard of correctness because it is part of the Constitution Act, 1982.

When supplementing decisions, the power of reviewing court decisions to supplement deficient reasons is not limitless. There must be a sufficient basis in the reasons themselves to which can be added supplementary justification by a reviewing court.

The Tribunal chose to bifurcate its proceedings into two stages, but was not required to do so. The Tribunal did so as “a matter of convenience”. [7]

Justices Côté and Rowe would remit the matter back to the Tribunal for further consideration on whether, and how, the obligations and liabilities under S.14(2) became those of the Federal Crown.

Dissent of Chief Justice McLachlin and Justice Brown

Chief Justice McLachlin and Justice Brown agreed with the Majority that the Crown Colony of British Columbia, prior to Union with Canada, breached its fiduciary duty to William Lake Indian Band. However, they departed from the majority and dissent of Justices Côté and Rowe in that the Tribunal’s decision was not reasonable in that Canada breached its fiduciary duty with Canada.

Chief Justice McLachlin and Justice Brown held the standard of review is reasonableness. However, the British Columbia Terms of Union should be reviewed upon the standard of correctness because it is part of the Constitution Act, 1982.

Chief Justice McLachlin and Justice Brown found the findings by the Tribunal that Canada’s conduct after Union amounted to breaches of ad hoc and sui generis fiduciary duties were unreasonable. The Tribunal’s finding that an ad hoc fiduciary duty of utmost loyalty was owed to the band by operation of Article 13 is contrary to binding authority and is unsustainable. [8] Chief Justice McLachlin and Justice Brown held Tribunal’s finding that the best interest could lie only in securing the Village Lands reserve is misguided. Particularly, they found sui generis fiduciary duties cannot exist because:

(1) the evidentiary records does not support that the band’s best interest lay in the allotment of the Village Lands as a reserve,

(2) Canada’s failure to deliver the Village Land to the band is not a breach of fiduciary duty since Canada’s responsibilities are limited under the Terms of Union, and

(3) the band’s best interest is not limited to a single outcome but must take into account flexibility, grounded in the historical context of the matter. [9]

S.14(2) is an enforcement mechanism which compels Canada to answer for the Imperial Crown where Canada has, by some other means, acquired responsibility for an obligation or a liability relating to Indians or lands reserved for Indians. A reading of S.14(2) does not make Canada “the automatic successor to all colonial actions that could ground a specific claim.” [10] From the time of Union, Canada owed a fiduciary obligation to the band in relation to the reservation of land. A legal obligation of the Imperial Crown may form the subject of a claim against the Crown to the extent that such obligation or liability became the responsibility of the Crown.

Chief Justice McLachlin and Justice Brown believe there is no support for the Majority’s ‘backward-looking projection’ theory for the purpose of identifying fiduciary obligations falling within S.14(2) and they have gone well-beyond supplementing the reasons of the Tribunal. [11]

Chief Justice McLachlin and Justice Brown would dismiss the band’s claim under s.14(1)(c). The matter for determining 14(2) would be remitted back to the Tribunal, which would then determine the validity of s.14(1)(b). If the band succeeds on either question, the matter may proceed to the compensation stage.

[1] Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4.

[2] Ibid at 27.

[3] Ibid at 49.

[4] Ibid at 50.

[5] Ibid at 51.

[6] Ibid at 148.

[7] Ibid at 158.

[8] Ibid at 164.

[9] Ibid at 167.

[10] Ibid at 188.

[11] Ibid at 206.