Jewers,
J.:—The
applicant
appeals
from
a
decision
of
the
Board
of
Revision
of
the
respondent
City
of
Thompson
dated
January
24,
1989
which
dismissed
the
complaint
of
the
applicant
and
sustained
the
assessment
for
the
lands
and
premises
known
as
24
Westwood
Drive,
336
Thompson
Drive
and
344
Thompson
Drive
in
the
City
of
Thompson
in
Manitoba.
The
applicant
submits
that
the
lands
are
exempt
from
taxation
pursuant
to
paragraph
2(2)(b)
of
The
Municipal
Assessment
Act,
R.S.M.
1988,
c.
M226
in
that
they
are
lands
held
in
trust
for
a
tribe
or
body
of
Indians.
The
parties
were
able
to
agree
on
the
following
facts:
1.
Keewatin
Tribal
Council
Inc.
(the
"Corporation")
was
incorporated
and
registered
under
the
Corporations
Act
of
Manitoba
on
March
15,
1979.
2.
The
Articles
of
Incorporation
have
not
been
amended
or
changed
since
the
date
of
registration.
3.
Paragraph
7
of
the
Articles
of
Incorporation
indicates
the
members
of
the
Corporation
to
be
the
following
Indian
Bands:
Northlands
Band,
Barren
Lands
Band,
Churchill
Band,
Split
Lake
Band,
York
Factory
Band,
Fox
Lake
Band,
Shamattawa
Band,
Nelson
House
Band,
God's
Narrows
Band,
Cross
Lake
Band,
God's
River
Band,
Norway
House
Band,
Oxford
House
Band.
4.
The
members
of
those
Bands
and
the
War
Lake
Band
are
registered
Indians
and
the
Bands
are
constituted
as
tribes
and
bodies
of
Indians
pursuant
to
the
Indian
Act
(Canada).
5.
The
undertaking
of
the
Corporation
is
restricted,
by
its
Articles
of
Incorporation,
to
providing
resource
and
human
development
among
Indian
people
in
Northern
Manitoba.
6.
By-Law
No.
1
of
the
Corporation
enacted
on
March
5,
1980,
indicates
that
the
members
of
the
Corporation
shall
be
composed
of
the
elected
chiefs
from
each
of
the
following
regions:
(a)
The
Northeast
Region
which
includes
the
following
Bands:
Northlands
Band,
Barren
Lands
Band,
Churchill
Band,
Split
Lake
Band,
York
Factory
Band,
Fox
Lake
Band,
Shamattawa
(b)
The
North
Region
which
region
includes
the
following
Bands:
God's
Narrows
Band,
God's
River
Band,
Oxford
House
Band,
War
Lake
Band,
Cross
Lake
Band,
Nelson
House
Band.
7.
By-Law
No.
1
of
the
Corporation
re-enacted
on
July
5,
1988
(the
“By-Law”),
indicates
the
"Regular
Members"
of
the
Corporation
to
be
the
elected
chiefs
as
representative
of
the
following
Indian
Bands:
Northlands
Band,
Barren
Lands
Band,
Churchill
Band,
Split
Lake
Band,
York
Factory
Band,
Fox
Lake
Band,
Shamattawa
Band,
God's
Narrows
Band,
God's
River
Band,
Oxford
House
Band,
War
Lake
Band.
There
are
no
"Associate
Members".
8.
Article
2.02
of
the
By-Law
indicates
that:
The
Corporation
shall
hold
its
assets
in
trust
for
the
benefits
of
the
members
of
the
Bands
comprising
the
Regular
Members
of
the
Corporation
and
upon
dissolution
or
winding
up
of
the
Corporation
any
funds
and
assets
of
the
Corporation
remaining
after
satisfaction
of
its
debts
and
liabilities
shall
be
distributed
equally
among
its
Regular
Members
at
the
time
of
dissolution.
9.
The
Applicant's
position
is
that
the
membership
provisions
of
the
By-Law
determine
the
members
of
the
Corporation
and
that
the
members
of
the
Corporation
are
the
elected
chiefs
of
the
Bands
listed
in
Article
8.02
of
the
By-Law.
The
Respondents'
position
is
that
the
Articles
of
Incorporation
determines
the
members
of
the
Corporation
and
that
the
members
of
the
Corporation
are
the
Bands
listed
in
the
Articles
of
Incorporation.
To
accommodate
the
differing
positions
of
the
parties
for
the
purposes
of
this
Agreed
Statement
of
Facts,
references
hereinafter
to
the
"members"
of
the
Corporation
shall
be
worded
so
as
to
encompass
both
positions.
10.
The
elected
chiefs
as
representatives
of
Nelson
House
Band
and
Cross
Lake
Band,
or
Nelson
House
Band
and
Cross
Lake
Band,
ceased
to
be
members
of
the
Corporation
on
July
27,
1987
and
July
31,
1987
respectively.
Neither
Norway
House
Band,
nor
its
elected
chief,
though
the
former
is
listed
in
the
Articles
of
Incorporation,
is
or
has
been
a
member
of
the
Corporation.
No
compensation
or
distribution
of
assets
of
any
kind
was
made
to
Nelson
House
Band
or
Cross
Lake
Band
or
their
elected
chiefs
on
the
cessation
of
them
on
their
elected
chiefs
from
membership
in
the
Corporation.
The
elected
chief
of
War
Lake
Band
as
representative
of
War
Lake
Band,
or
the
War
Lake
Band,
became
a
member
of
the
Corporation
in
or
about
1980
to
1981
though
the
exact
date
is
not
known.
11.
Pursuant
to
the
By-Law,
the
Regular
Members
of
the
Corporation
elect
a
Board
of
Directors
consisting
of
not
fewer
than
3
nor
more
than
11
directors
who
must
each
be
a
representative
of
a
“Regular
Member".
The
Board
appoints
an
Executive
Council
of
three
Officers,
which
is
subject
to
the
direction
of
the
Board
of
Directors.
The
Executive
Council
is
responsible
for,
inter
alia,
carrying
out
the
policies
and
directives
of
the
members
of
the
Corporation
as
determined
by
resolution
at
any
meeting
of
the
members
of
coordinating
the
day
to
day
operations
of
the
Corporation.
The
Executive
Director
is
directly
responsible
for
the
daily
management
and
operation
of
the
Corporation.
There
are
at
present
11
Directors
and
3
members
of
the
Executive
Council.
They,
the
executive
positions
they
hold,
and
the
bands
they
are
representatives
of
are
as
follows:
Chief
Robert
Wavey,
Chairman,
Fox
Land
Band,
Chief
Eric
Saunders,
Secretary,
York
Factory
Band,
Chief
Larry
Beardy,
Vice-Chairman,
Split
Lake
Band,
Chief
Marcel
Okimaw,
God's
River
Band,
Chief
Philip
Michel,
Barren
Lands
Band,
Chief
Alex
Okemow,
God's
Narrows
Band,
Chief
Sam
Miles,
Shamattawa
Band,
Chief
Ila
Bussidor,
Churchill
Band,
Chief
Arnold
Ouskin,
War
Lake
Band,
Chief
Jerome
Denechezhe,
Northlands
Band,
Chief
Tommy
Weenusk,
Oxford
House
Band.
12.
On
or
about
July
3,
1985,
the
Corporation
became
the
registered
owner
of
the
lands
and
premises
in
the
City
of
Thompson
legally
described
as
follows:
subject
to
all
reservations
contained
in
The
Crowns
Land
Act
and
commonly
known
as
24
Westwood
Drive,
336
and
344
Thompson
Drive
North
(the
"Lands").
Located
on
the
Lands
are
three
apartment
buildings,
the
two
apartment
buildings
on
Thompson
Drive
North
having
17
suites
used
for
student
housing
purposes.
Twenty-four
Westwood
Drive
has
six
suites
rented
for
apartment
purposes
and
six
suites
rented
for
day
care
purposes.
13.
The
Lands
were
purchased
by
the
Corporation
from
Canada
Mortgage
and
Housing
for
consideration
of
$130,000
which
moneys
were
contributed
to
the
Corporation
by
Her
Majesty
the
Queen
in
Right
of
Canada
as
represented
by
the
Regional
Director
General
of
the
Manitoba
region
of
the
Indian
and
Inuit
Affairs
program
on
behalf
of
the
Minister
of
Indian
and
Northern
Development.
14.
The
Corporation
is
a
special
member
of
the
non-share
corporation,
Keewatin
Housing
Association
Inc.
Keewatin
Housing
Association
Inc.
is
the
registered
owner
of
approximately
40
properties,
either
single-family
dwellings
or
duplexes,
located
within
the
City
of
Thompson.
The
Keewatin
Housing
Association
Inc.
has
not
claimed
exemption
from
property
tax
under
The
Municipal
Assessment
Act
for
or
with
respect
to
any
of
these
approximately
40
properties.
The
regular
members
of
the
Keewatin
Housing
Association
are
the
elected
chiefs
of
the
constituent
bands
of
the
Keewatin
Tribal
Council
and
the
directors
of
the
Keewatin
Tribal
Council.
15.
The
Corporation
executed
a
document
entitled
Trust
Indenture
and
dated
as
of
Jul
1,
1985,
between
it
and
Northlands
Band,
Barren
Lands
Band,
Churchill
Band,
Split
Lake
Band,
York
Factory
Band,
Fox
Lake
Band,
Shamat-
tawa
Band,
God's
Narrows
Band,
God's
River
Band,
Norway
House
Band,
Oxford
House
Band
and
War
Lake
Band
(the
"Trust
Indenture").
Some
of
the
Bands
also
have
executed
the
Trust
Indenture.
The
inclusion
of
the
reference
to
the
Norway
House
Band
in
the
Trust
Indenture,
though
it
is
not
a
signatory,
was
an
error.
Norway
House
Band
is
not,
and
has
never
been,
a
beneficial
owner
of
the
Lands
as
referred
to
under
the
Trust
Indenture.
The
Trust
Indenture
was
executed
by
all
those
who
are
signatories
thereto
sometime
in
the
calendar
year
1987.
16.
The
Trust
Indenture
has
not
been
amended
or
revised
in
any
manner.
17.
At
present,
all
the
beneficial
owners
as
referred
to
under
the
Trust
Indenture,
or
their
elected
representatives
are
members
of
the
Corporation
and
there
are
no
other
members.
18.
The
Lands
were
purchased
to
provide
housing
for
students
from
the
various
member
bands
of
the
Corporation
attending
high
school
in
Thompson.
At
present
the
student
housing
requirements
are
met
by
using
336
and
344
Thompson
Drive
North
for
student
residences.
The
Corporation
does
not
charge
rent
to
the
students
or
their
member
Bands
with
regard
to
the
student
residences.
Funding
comes
from
the
student
services
program
of
the
Corporation.
Twenty-four
Westwood
Drive
is
rented
at
commercial
rents
at
this
time.
19.
The
buildings
located
on
the
Lands
are
managed
by
the
Keewatin
Housing
Authority,
a
division
of
the
Corporation.
The
daily
operation
of
the
buildings
is
the
responsibility
of
the
property
manager
employed
by
the
Corporation.
The
three
buildings
are
managed
in
the
same
fashion
except
for
the
amount
of
rent
charged.
20.
A
resolution
passed
by
the
parties
thereto
(the
band,
the
applicant,
the
applicant's
board
of
directors)
asserts
that
the
Trust
Indenture
is
legally
effective
and
binding
among
them,
that
the
Corporation
has
no
beneficial
interest
in
the
lands
and
premises
and
that
since
July,
1985
and,
in
particular,
throughout
1988
and
up
until
the
present
time
the
said
Trust
Indenture
has
been
in
effect
and
operative
and
the
said
lands
and
premises
have
been
held
in
trust
and
administered
in
accordance
with
the
terms
of
the
Trust
Indenture.
21.
By
the
City
of
Thompson
Assessment
Roll
No.
188750
the
Lands
are
classified
by
the
respondent
Provincial
Municipal
Assessor
as
liable
for
taxation.
22.
On
November
1,
1988,
pursuant
to
The
Municipal
Assessment
Act
the
Corporation
applied
to
the
Board
of
Revision
for
the
City
of
Thompson
for
revision
of
the
assessment
roll
affecting
the
assessment
of
the
Lands
and
its
liability
to
taxation.
23.
On
January
24,
1989,
the
Corporation
received
a
notice
of
decision
of
the
Board
of
Revision
sustaining
the
assessment
on
the
Lands.
The
foregoing
is
essentially
an
exact
reproduction
of
those
portions
of
the
agreed
statement
which
I
deem
relevant,
omitting
certain
documents
which
were
attached
as
shedules.
The
operative
part
of
the
trust
deed
is:
1.
The
Trustee
hereby
acknowledges
and
declares
that
it
stands
possessed
of
the
Lands
as
bare
Trustee
only
for
and
on
behalf
of
the
Beneficial
Owners
and
the
Trustee
covenants
and
agrees
that
it
shall
at
all
times
obtain
the
consent
of
the
Beneficial
Owners
prior
to
and
in
respect
of
any
and
all
dealings
in
connection
with
the
Lands
and
it
shall
at
all
times
receive
and
stand
possessed
of
any
and
all
monies,
receipts,
incomes
or
other
rights
or
benefits
arising
out
of
the
Lands
on
behalf
of
the
Beneficial
Owners
and
shall
account
to
the
Beneficial
Owners
for
any
and
all
benefits
received
by
it
from
time
to
time
in
connection
with
or
in
any
way
relating
to
the
lands;
PROVIDED
HOWEVER
that
the
Beneficial
Owner
hereby
indemnify
and
save
the
Trustee
harmless
of
and
from
any
and
all
losses,
costs
and
expenses
of
whatsoever
nature
and
kind
that
the
Trustee
may
bear,
suffer
or
incur
by
reason
of
its
Trusteeship
herein
and
any
act
in
good
faith
done
or
omitted
to
be
done
by
virtue
of
the
terms
hereof.
The
“Beneficial
Owners"
referred
to
in
the
deed
are
the
bands.
The
Trustee,
the
applicant,
therefore
holds
the
lands
in
trust
for
the
bands.
The
main
submission
of
the
applicant
is
that
the
lands
are
exempt
from
taxation
as
they
are
lands
held
in
trust
for
a
tribe
or
body
of
Indians
pursuant
to
pararaph
2(2)(b)
of
The
Municipal
Assessment
Act
which
reads:
2(2)
The
following
lands
are
exempt
from
all
taxation
levied
by
the
council
of
a
municipality,
(b)
lands
held
in
trust
for
any
tribe
or
body
of
Indians;
The
submission
of
the
applicant
is
really
quite
simple:
The
applicant
holds
the
lands
as
trustee
for
certain
Indian
bands
under
a
trust
indenture
dated
July
1,
1985;
the
bands
are
within
the
definition
of
a
"tribe
or
body”
of
Indians;
and
therefore
the
lands
are
exempt
from
taxation.
All
of
the
essential
features
of
a
trust
are
present:
a
trustee,
namely
the
applicant;
trust
property,
namely
the
lands
in
question;
and
beneficiaries,
namely
the
In-
dian
bands.
The
applicant’s
argument
appears
prima
facie
correct,
and
the
appeal
must
be
allowed,
unless
effect
can
be
given
to
any
one
or
more
of
the
objections
raised
by
the
respondents.
The
respondents
submit
that
the
lands
are
not
exempt
from
taxation
for
a
number
of
reasons
including:
that
paragraph
2(2)(b)
of
the
Act
was
intended
to
apply
only
to
Indian
reserves
and
that
the
lands
in
question
are
not
such
reserves;
that
the
trust
is
a
sham
device
to
avoid
taxation;
that,
in
any
event,
the
trust
is
void
because
the
trustee
and
the
beneficiaries
are
essentially
the
same;
that
the
trust
is
void
because
the
Indian
bands
as
unincorporated
associations
cannot
be
the
beneficiaries
of
a
trust;
and
that
the
applicant,
by
transferring
its
assets
to
a
trust
naming
its
members
as
beneficiaries,
has
effected
a
distribution
of
its
assets
and
has
caused
its
members
to
receive
a
pecuniary
gain
contrary
to
The
Corporations
Act,
R.S.M.
1987,
c.
C225.
The
respondents
submit
that
the
application
of
paragraph
2(2)(b)
of
the
Act
should
be
confined
to
Indian
reserves.
They
cite
authorities
to
show
that
the
term
"trust"
was
used
in
legislation
dealing
with
Indian
reserves.
In
the
text
Aboriginal
Peoples
and
the
Law:
Indian,
Metis
and
Inuit
Rights
in
Canada
1985
(Morse,
Bradford
W.,
(Ed.)
509
there
is
the
following:
By
1867
it
was
common
to
use
the
term
"trust"
in
legislation
dealing
with
Indian
reserves.
Additionally,
the
idea
of
protection
had
been
established
both
conceptually
and
in
the
language
of
legislation.
As
suggested
earlier,
the
rationale
behind
the
assignment
of
legislative
jurisdiction
over
Indians
and
Indian
lands
to
the
federal
Parliament
in
1867
appears
to
have
been
the
protection
of
Indians
from
local
competing
settler
interests.
While
the
British
North
America
Act
itself
does
not
use
the
term
"trust"
in
relation
to
reserves,
trusteeship
terminology
occurred
in
later
constitutional
documents.
In
1871
the
Terms
of
Union
of
British
Columbia
and
Canada
provided:
"The
charge
of
the
Indians,
and
the
trusteeship
and
management
of
the
lands
reserved
for
their
use
and
benefit,
shall
be
assumed
by
the
Dominion
Government
.
.
."
In
1912
lands
were
added
to
both
the
provinces
of
Quebec
and
Ontario.
The
transfers
were
effected
by
joint
federal-provincial
legislation.
In
each
case
the
legislation
provided:
"That
the
trusteeship
of
the
Indians
in
the
said
territory,
and
the
management
of
any
lands
now
or
hereafter
reserved
for
their
use,
shall
remain
in
the
Government
of
Canada
subject
to
the
control
of
Parliament.”
For
example,
section
6
of
An
Act
providing
for
the
organisation
of
the
Department
of
the
Secretary
of
State
of
Canada
and
for
the
management
of
Indian
and
Ordnance
Lands,
S.C.
1868,
42
stated:
6.
All
lands
reserved
for
Indians
or
for
any
tribe,
band
or
body
of
Indians,
or
held
in
trust
for
their
benefit,
shall
be
deemed
to
be
reserved
and
held
for
the
same
purposes
as
before
the
passing
of
this
Act,
but
subject
to
its
provisions;
and
no
such
lands
shall
be
sold,
alienated
or
leased
until
they
have
been
released
or
surrendered
to
the
Crown
for
the
purposes
of
this
Act.
In
the
Indian
Act,
S.C.
1951,
c.
29
"reserve"
was
defined
as
follows:
"Reserve"
means
a
tract
of
land,
the
legal
title
to
which
is
vested
in
His
Majesty,
that
has
been
set
apart
by
His
Majesty
for
the
use
and
benefit
of
a
band;
(See
s.
2(1)(0).)
In
subsection
18(1)
of
the
same
Act
it
was
stated
that
"reserves
shall
be
held
by
His
Majesty
for
the
use
and
benefits
of
the
respective
bands
for
which
they
were
set
apart”.
The
Indian
Act,
R.S.C.
1970,
c.
1-6
is
in
the
same
terms.
It
will
be
seen
that
in
these
latter
Acts
the
use
of
the
word
"trust"
is
no
longer
employed.
The
words
“for
the
use
and
benefit
of”
do
suggest
the
notion
of
a
trust,
but
it
has
been
held
that
the
relationship
of
the
Crown
and
Indian
bands
with
respect
to
reserve
lands
does
not
amount
to
a
"trust"
in
the
private
law
sense,
although
it
does
give
rise
to
certain
fiduciary
obligations
on
the
part
of
the
Crown.
See
R.
v.
Guerin,
[1984]
2
S.C.R.
335;
[1984]
6
W.W.R.
481
(S.C.C.),
particularly
the
remarks
of
Dickson,
J.
(as
he
then
was)
at
494.
The
respondents
traced
the
legislative
history
in
Manitoba
with
respect
to
the
tax
exemption
of
tribes
or
bodies
of
Indians.
The
Land
Tax
Act,
1873
S.M.
37
Vic.
c.
42,
paragraph
1(c)
exempted
from
a
land
tax
"land
held
for
the
benefit
of
any
tribe
or
body
of
Indians”.
The
Municipalities
Act,
S.M.
1875
38
Vic.,
c.
31,
subsection
20(3)
exempted
from
taxation
"real
estate
vested
in
or
held
in
trust
for
any
tribe
or
body
of
Indians”.
The
County
Municipalities
Act
S.M.
1875
38
Vic.,
c.
41
subparagraph
52(b)(i)
exempted
from
taxation
"real
estate
vested
in
or
held
in
trust
for
any
tribe
or
body
of
Indians”.
Finally,
reference
should
be
made
to
section
87
of
the
Indians
Act,
R.S.C.
1985,
c.
1-5
which
exempts
reserves
from
taxation
and
reads
in
part:
87.
(1)
Notwithstanding
any
other
Act
of
Parliament
or
any
Act
of
the
Legislature
of
a
province,
but
subject
to
section
83,
the
following
property
is
exempt
from
taxation,
namely,
(a)
the
interest
of
an
Indian
or
a
band
in
reserve
lands
or
surrendered
lands;
and
(2)
No
Indian
or
band
is
subject
to
taxation
in
respect
of
the
ownership,
occupation,
possession
or
use
of
any
property
mentioned
in
paragraph
(1)(a)
or
(b)
or
is
otherwise
subject
to
taxation
in
respect
of
any
such
property.
The
respondents
submit
that
as
it
was
common
for
legislatures
to
use
the
word
"trust"
in
relation
to
reserve
lands,
particularly
in
the
earlier
statutes,
therefore
the
Manitoba
Legislature
must
have
had
reserve
lands
in
mind
when
they
enacted
that
lands
held
in
trust
for
any
tribe
or
body
of
Indians
should
be
exempt
from
taxation.
They
further
point
out
that
the
exemption
was
originally
enacted
at
a
time
when
the
federal
legislation
did
not
provide
such
an
exemption.
I
cannot
agree
with
this
submission.
It
may
very
well
be
that
the
legislature
did
contemplate
that
the
exemption
would
cover
Indian
reserves,
but,
in
my
opinion,
it
cannot
be
said
that
they
intended
the
exemption
to
apply
only
to
reserves
and
not
to
be
extended
to
other
lands
held
in
trust
for
a
tribe
or
body
of
Indians.
As
the
applicant
points
out
if
the
legislature
had
intended
the
exemption
to
refer
to
Indian
reserves—and
Indian
reserves
only—they
could
have
said
so
either
by
using
the
word
"reserve",
or
some
phrase
incorporating
that
word,
or
by
incorporating
by
reference
the
definition
of
"reserve"
contained
in
the
Indian
Act.
It
may
be
that
when
the
earlier
legislation
was
enacted
there
was
no
land
tax
exemption
for
reserves
contained
in
the
federal
legislation,
but
it
was
introduced
subsequently
and
there
is
now
no
need
to
deal
with
the
matter
provincially.
The
Manitoba
Legislature
could
have
amended
the
municipal
tax
laws
at
any
time
to
reflect
this,
and
to
delete
the
exemption
if
it
had
been
intended
that
it
should
apply
only
to
Indian
reserves.
The
legislature
has
not
done
so,
and,
as
noted
by
the
applicant,
The
Municipal
Assessment
Act,
C.C.S.M.
c.
M226
was
enacted
in
1970,
after
the
use
of
the
term
"trust"
in
the
federal
legislation
was
discontinued
and
when
there
was
a
clear
exemption
of
reserve
land
from
taxation
contained
in
the
current
Indian
Act.
The
respondents
submit
that
one
principle
of
construction
is
that
before
extending
the
interpretation
or
the
meaning
of
a
certain
passage
or
phrase
in
a
statute,
one
ought
to
look
at
the
effects
or
consequences
which
might
flow
from
it
for
they
often
point
out
the
real
meaning
of
the
words,
citing
Medical
Centre
Apartments
Limited
v.
City
of
Winnipeg
(1969),
3
D.L.R.
(3d)
525
at
542.
They
submit
that
under
the
Indian
Act
subsection
83(1)
a
band
may
assess
and
tax
reserve
land,
but
there
is
no
provision
for
a
bank
to
assess
and
tax
non-reserve
land,
and
that
to
grant
an
exemption
to
nonreserve
land
would
result
in
an
inconsistency.
I
am
not
able
to
follow
this
submission.
Reserve
land
is
exempt
from
taxation
under
the
Indian
Act
and
there
is
no
inconsistency
in
making
non-reserve
land
equally
exempt.
Nor
is
there
an
inconsistency
in
restricting
the
taxing
power
to
the
reserve
land
where
the
aboriginals
essentially
reside
and
the
title
to
which
is
held
by
the
Federal
Crown.
The
respondents
also
submit
that
through
the
device
of
a
trust,
any
tribe
or
group
of
Indians
could
hold
and
develop
land
tax
free
for
commercial
purposes
for
a
profit,
and
that,
in
fact,
is
what
is
occurring
with
respect
to
at
least
one
of
the
three
properties
in
question.
That
may
be
so
but
it
may
reasonably
have
been
in
the
contemplation
of
the
legislature
that,
as
aboriginals,
the
tribes
or
groups
of
Indians
should
be
treated
in
this
special
way.
Treaties
and
statutes
relating
to
Indians
should
be
liberally
construed.
In
Nowegijick
v.
The
Queen,
[1983]
1
S.C.R.
29;
[1983]
C.T.C.
20;
144
D.L.R.
(3d)
193,
the
Supreme
Court
stated
per
Dickson,
J.
(as
he
then
was)
[at
page
23]:
It
is
legal
lore
that,
to
be
valid,
exemptions
to
tax
laws
should
be
clearly
expressed.
It
seems
to
me,
however,
that
treaties
and
statutes
relating
to
Indians
should
be
liberally
construed
and
doubtful
expressions
resolved
in
favour
of
the
Indian.
If
the
statute
contains
language
which
can
reasonably
be
construed
to
confer
tax
exemption
that
construction,
in
my
view,
is
to
be
favoured
over
a
more
technical
construction
which
might
be
available
to
deny
exemption.
In
Jones
v.
Meehan
(1899),
175
U.S.
1,
it
was
held
that:
Indian
treaties
must
be
construed,
not
according
to
the
technical
meaning
of
their
words,
but
in
the
sense
in
which
they
would
naturally
be
understood
by
the
Indians.
I
would
apply
that
principle
here.
In
the
absence
of
clear
words
absolutely
requiring
the
exemption
to
be
restricted
to
reserves,
in
my
opinion,
the
use
of
the
word
"trust"
should
be
liberally
construed
to
apply
to
lands
off
the
reserve.
(In
a
sense
it
is
curious
that
the
statute
should
have
exempted
lands
held
in
trust
for
a
tribe
or
group
of
Indians
and
not
also
lands
owned
outright
by
such
bodies.
However,
it
may
be
that
those
drafting
the
statute
realized
that
in
the
normal
case,
a
tribe
or
group
of
Indians
as
such,
might
not
be
legally
capable
of
holding
legal
title
to
lands.
See
R.
v.
Cochrane,
[1977]
3
W.W.R.
660
and
Afton
Band
of
Indians
v.
A.G.
N.S.
(1978),
85
D.L.R.
(3d)
454;
29
N.S.R.
(2d)
226.
Theoretically,
a
tribe
or
group
of
Indians
could
be
incorporated,
but,
for
all
practical
purposes,
it
would
seem
that
virtually
any
lands
used
or
enjoyed
by
a
tribe
or
group
of
Indians
would
likely
have
to
be
held
in
trust
for
them.)
The
respondents
submit
that
the
trustee
and
the
beneficiaries
of
the
trust
are
really
the
same
individuals,
and
that
no
real
trust
was
created.
I
disagree.
I
do
not
think
it
can
be
said
that
the
trustee
and
the
beneficiaries
are
one
and
the
same.
The
trustee
is
a
distinct
corporate
body,
and
the
beneficiaries
are
the
member
shareholders
of
that
body.
It
is
trite
law
that
they
have
a
legal
existence,
quite
apart
and
distinct
from
the
corporation
of
which
they
are
shareholders.
The
respondents
submit
that
the
trust
was
a
"sham".
Again,
I
am
in
disagreement.
The
Supreme
Court
of
Canada
has
suggested
this
definition
of
a
sham
transaction
in
Stubart
Investments
Limited
v.
The
Queen,
[1984]
C.T.C.
294;
84
D.T.C.
6305
per
Estey,
J.
at
298
(D.T.C.
6308):
1.
A
sham
transaction:
This
expression
comes
to
us
from
decisions
in
the
United
Kingdom,
and
it
has
been
generally
taken
to
mean
(but
not
without
ambiguity)
a
transaction
conducted
with
an
element
of
deceit
so
as
to
create
an
illusion
calculated
to
lead
the
tax
collector
away
from
the
taxpayer
or
the
true
nature
of
the
transaction;
or,
simple
deception
whereby
the
taxpayer
creates
a
facade
of
reality
quite
different
from
the
disguised
reality.
If
a
"sham"
is
to
contain
an
element
of
deceit
or
deception,
I
cannot
see
any
such
features
in
the
instant
case.
The
transaction
was
completely
above
board,
open
and
fully
documented.
Any
person
looking
at
the
transaction
and
the
supporting
documents
would
be
able
to
see
exactly
what
occurred.
There
may
be
room
for
disagreement
as
to
the
legal
effect
and
consequences
of
the
transaction,
but,
in
my
view,
it
contained
no
elements
of
deceit
or
deception.
There
was
a
duly
executed
trust
document
which,
on
the
face
of
it,
constituted
the
applicant
as
a
trustee
for
certain
properties
for
certain
Indian
bands.
The
document
was
there
for
all
to
see,
and
the
facts
were
there
for
all
to
know.
In
fairness,
I
think
it
should
be
said
that
I
did
not
understand
the
respondents
to
be
stating,
or
even
implying,
that
the
applicant,
or
its
various
members,
were
guilty
of
any
deceit
or
deception.
They
did,
however,
submit
that
the
trust
was
a
simulacrum.
"Simulacrum"
is
defined
by
the
Oxford
English
Dictionary
as,
inter
alia,
"something
having
merely
the
form
or
appearance
of
a
certain
thing,
without
possessing
its
substance
or
proper
qualities.”
See
the
discussion
of
this
in
Durnford,
John
W.
"The
Corporate
Veil
and
Tax
Law",
Canadian
Tax
Journal,
1979
Vol.
23
#3
281
at
305.
In
my
opinion,
it
cannot
be
said
that
the
trust
was
a
mere
"empty
shell”.
It
is
true
that
perhaps
in
the
broad
sense,
there
has
not
been
much
changed
as
a
result
of
the
trust.
The
applicant
was
bound
to
hold
and
use
the
lands
for
the
benefit
of
its
shareholder
members
in
any
event,
and
indeed,
by-law
#1
states
just
that.
However,
in
the
legal
sense
there
has
been
a
significant
and
real
change
in
that
all
dealings
with
the
land
will
now
be
governed
substantially,
if
not
wholly,
by
the
law
of
trusts;
and,
for
example,
will
be
subject
to
The
Trustee
Act
regarding
sale
or
other
disposition,
variation,
etc.
It
is
difficult
to
see
any
reason
for
the
creation
of
the
trust,
other
than
to
take
advantage
of
the
tax
exemption.
However,
it
is
axiomatic
in
taxation
law
that
one
may
arrange
one's
affairs
as
one
sees
fit
in
order
to
minimize
the
impact
of
tax.
The
Supreme
Court
of
Canada
has
now
made
it
clear
that
lack
of
any
business
purpose
for
a
transaction
is
not
enough
to
attract
tax
that
otherwise
would
not
be
payable,
and
that
even
if
the
only
reason
for
a
transaction
is
to
avoid
tax,
that
is
no
reason
to
disregard
the
arrangement,
and
view
it
as
a
mere
sham.
See
Stubart,
supra.
The
respondents
submit
that
the
Indian
bands
are
unincorporated
associations;
that
they
are
not
legal
entities;
and
that,
in
law,
they
are
incapable
of
being
the
beneficiaries
of
the
trust.
They
cite
the
following
from
Waters:
Law
of
Trusts
In
Canada
(1974),
page
97:
Trust
beneficiaries
are
persons,
but
the
objects
of
a
trust
may
not
be
persons.
They
may
be
purposes.
Purposes
do
not
give
rise
to
the
question
of
capacity
to
receive,
but
they
do
give
rise
to
the
issue
of
whether
trust
objects
may
take
the
form
of
purposes.
For
instance,
a
testator
may
leave
money
on
trust
for
the
upkeep
of
his
grave,
or
for
the
provision
of
toys
at
Christmas
for
deprived
children.
There
are
two
problems
here,
despite
the
apparent
innocence
or
merit
in
the
purposes
chosen.
First,
how
is
a
trust
in
favour
of
a
purpose
to
be
enforced?
A
purpose
is
inanimate,
abstract,
and
without
legal
personality.
Secondly,
how
definite
or
certain
have
such
purposes
to
be,
even
if
they
are
to
be
accepted
as
legally
possible?
It
must
be
possible
for
a
court
to
determine
the
confines
of
the
purpose
the
trustee
is
to
carry
out.
These
are
questions
that
will
be
pursued
later,
but
in
the
meantime
it
should
be
noted
that
an
unincorporated
association,
like
a
golf
club
or
playreading
society
cannot
itself
be
the
recipient
of
a
property
interest
under
a
trust.
Having
no
legal
personality,
the
unincorporated
association
has
no
capacity
to
receive
property.
It
is
only
the
sum
of
its
members.
They
are
the
recipients
of
the
beneficial
interest
under
the
trust,
and
unless
it
is
clear
that
the
trust
interest
is
for
the
members
as
persons,
the
trust
for
the
association
will
be
void.
However,
if
the
trust
interest
is
for
the
members
of
the
association,
then
the
issue
is
as
to
the
certainty
of
the
class.
If
the
court
discovers
that
the
gift
is
for
future
as
well
as
present
members,
then
the
trust
will
fail
for
uncertainty
of
objects,
but
this
is
a
different
issue
from
capacity.
[Emphasis
added.]
At
page
425
of
his
text,
Prof.
Waters
elaborates
the
following
principles
respecting
trust
gifts
to
unincorporated
associations:
(1)
If
the
gift
is
for
a
non-charitable
purpose,
the
gift
is
void.
(2)
If
the
gift
is
to
the
present
members
of
the
association
and
they
can
expend
capital
as
well
as
income
when
they
will,
this
is
an
absolute
and
immediate
gift
to
persons,
and
is
valid.
(3)
If
the
gift
is
for
present
and
future
members
so
that
the
present
members
must
hold
it
on
trust,
then
the
gift
is
void,
both
for
uncertainty
of
beneficiaries
and
for
perpetuity.
(It
is
to
be
noted
charitable
purpose
gifts
are
an
exception,
and
are
perfectly
valid
on
the
principle
that
they
will
be
enforced
by
the
Attorney-
General.)
No
doubt,
the
Indian
bands
are
unincorporated
associations,
but,
with
rather
special
features.
They
are
not
like
an
ordinary
club
or
association,
existing
by
consent
of
its
members,
but
are
creatures
of
statute,
namely
the
Indian
Act.
Indian
band
councils
have
been
likened
to
municipal
councils.
See
the
discussion
of
Cameron,
J.A.
in
Whitebear
Band
Council
v.
Carpenters
Provincial
Council
of
Saskatchewan
and
Labour
Relations
Board
of
Saskatchewan,
[1982]
3
W.W.R.
554;
135
D.L.R.
(3d)
128
at
559-561
[W.W.R.]
as
follows:
As
municipal
councils
are
"creatures"
of
the
legislatures
of
the
Provinces,
so
Indian
band
councils
are
the
"creatures"
of
the
Parliament
of
Canada.
Parliament,
in
exercising
exclusive
jurisdiction
conferred
upon
it
by
s.
91(24)
of
the
B.N.A.
Act
to
legislate
in
relation
to
"Indians",
an
act
of
the
Indian
Act,
R.S.C.
1970,
c.
1-6,
which
provides
.
.
.
for
the
election
of
a
chief
and
12
councillors
.
.
.
More
specifically,
section
81
of
the
Act
clothes
Indian
band
councils
with
such
powers
and
duties
in
relation
to
an
Indian
reserve
and
its
inhabitants
[as]
are
usually
associated
with
a
rural
municipality
and
its
council
.
.
.
Hence
a
bank
council
exercises
—by
way
of
delegation
from
parliament—these
and
other
munie-
ipal
and
governmental
powers
in
relation
to
the
reserve
whose
inhabitants
have
elected
it.
In
summary,
an
Indian
bank
council
is
an
elected
public
authority,
dependant
on
parliament
for
its
existence,
powers
and
responsibilities,
whose
essential
function
is
to
exercise
municipal
and
government
power—delegated
to
it
by
parliament—in
relation
to
the
Indian
reserve
whose
inhabitants
have
elected
it
.
.
.
Counsel
for
the
applicant
points
out
that
in
paragraphs
8
and
11
of
Interpretation
Bulletin
IT-62,
issued
by
Revenue
Canada,
an
Indian
band
council
has
been
likened
to
a
“municipality”
(municipal
authorities
are
exempt
from
income
tax
under
subsection
149(1)
of
the
Income
Tax
Act.
I
do
not
believe
that
the
gift
can
be
interpreted
as
being
in
favour
of
the
individual
members
of
the
bands,
either
for
the
present,
or
for
the
present
and
future.
For
one
thing,
the
trust
deed
just
did
not
say
that.
The
gift
was
to
the
bands.
Furthermore,
the
number
of
people
involved
is
very
large
and
it
could
hardly
have
been
the
intention
of
the
settlor
to
give
an
interest
in
these
properties
to
such
a
great
number
of
individuals
so
that
they
could
each
hold
respective
shares
as
tenants
in
common.
In
my
opinion,
the
gift
must
be
viewed
as
one
to
be
used
for
the
purposes
of
the
individual
bands:
In
other
words,
a
purpose
trust.
Normally,
such
a
trust
might
be
void
as
a
perpetuity
and
also
for
want
of
a
beneficiary
or
beneficiaries.
However,
in
Manitoba
the
situation
is
unique
in
that
our
legislature
has
abolished
the
rule
against
perpetuities,
and
so
that
is
no
longer
a
problem
here.
The
only
question
is
whether
there
is
in
this
case,
a
want
of
beneficiaries.
As
to
this
last
point,
the
case
of
Re
Denley's
Trust
Deed,
[1968]
3
All
E.R.
65
is
instructive.
There,
land
has
been
donated
to
trustees
as
a
recreation
ground
for
the
employees
of
a
certain
company.
This
was
a
non-charitable
purpose
trust,
although
the
trust
was
limited
to
the
perpetuity
period
so
it
was
not
void
as
a
perpetuity.
There
was,
however,
a
problem
of
enforceability.
Goff,
J.
stated,
at
page
69:
Counsel
for
the
first
defendant
has
argued
that
the
trust
in
cl.
2(c)
in
the
present
case
is
either
a
trust
for
the
benefit
of
individuals,
in
which
case
he
argues
that
they
are
an
unascertainable
class
and
therefore
the
trust
is
void
for
uncertainty,
or
it
is
a
purpose
trust,
that
is
a
trust
for
providing
recreation,
which
he
submits
is
void
on
the
beneficiary
principle,
or
alternatively
it
is
something
of
a
hybrid
having
the
vices
of
both
kinds.
I
think
that
there
may
be
a
purpose
or
object
trust,
the
carrying
out
of
which
would
benefit
an
individual
or
individuals,
where
that
benefit
is
so
indirect
or
intangible
or
which
is
otherwise
so
framed
as
not
to
give
those
persons
any
locus
standi
to
apply
to
the
court
to
enforce
the
trust,
in
which
case
the
beneficiary
principle
would,
as
it
seems
to
me,
apply
to
invalidate
the
trust,
quite
apart
from
any
question
of
uncertainty
or
perpetuity.
Such
cases
can
be
considered
if
and
when
they
arise.
The
present
is
not,
in
my
judgment,
of
that
character,
and
it
will
be
seen
that
cl.
2(d)
of
the
trust
deed
expressly
states
that,
subject
to
any
rules
and
regulations
made
by
the
trustees,
the
employees
of
the
company
shall
be
entitled
to
the
use
and
enjoyment
of
the
land.
The
court
went
on
to
hold
that
the
trust
did
not
offend
the
beneficiary
principle.
In
the
case
at
bar,
the
ultimate,
albeit
indirect,
beneficiaries
of
the
trust,
are
the
individual
members
of
the
bands;
indeed,
ther
are
potentially
very
real
benefits
in
that
the
children
are
entitled
to
use
the
properties
free
of
charge
as
accommodation
while
attending
school
in
Thompson.
Even
if
this
were
not
enough
to
give
individual
band
members
locus
standi,
surely
the
trust
could,
and
would
be
enforced
by
the
band
councils,
or
any
one
or
more
of
them,
or
failing
that,
the
chiefs,
or
any
one
or
more
of
them.
If
the
band
councils
have
a
status
similar
to
that
of
municipalities,
surely
they
have
the
necessary
standing
to
enforce
the
trust.
The
real
question
is
one
of
enforceability
and
nothing
else.
There
is
absolutely
no
problem
with
a
charitable
purpose
trust,
which
will
be
enforced
by
the
Attorney-General,
however
impersonal
its
objects;
similarly,
there
should
be
no
problem
with
a
non-charitable
purpose
trust
where
there
are
any
number
of
persons
with
standing
to
enforce
it.
Finally,
I
note
that
under
Queen's
Bench
Rules
8.09
to
8.12
special
recognition
is
given
to
an
unincorporated
association,
and
the
rules
provide
for
proceedings
to
be
brought
by
or
against
an
association
in
the
name
of
the
association
(8.10);
that
an
order
against
an
association
may
be
enforced
against
the
property
of
the
association,
including
property
held
in
trust
for
the
association
(8.11(1));
and
that
an
association
shall,
for
the
purposes
of
the
rules,
"be
deemed
to
be
a
corporation”.
These
rules
are
surely
wide
enough
to
enable
the
bands
to
sue
in
their
own
names.
It
follows
that
in
Manitoba,
at
least,
the
type
of
trust
in
question
is
perfectly
valid
as
a
non-charitable
purpose
trust
which
neither
contravenes
the
rule
against
perpetuities,
for
there
is
no
such
rule
here,
nor
fails
for
want
of
beneficiaries
having
standing
to
enforce
the
trust.
The
applicant
is
a
corporation
without
share
capital,
incorporated
under
Part
XXII
of
The
Corporation
Act,
R.S.M.
1987,
c.
C225.
The
respondents
submit
that
section
268
of
the
Act
provides
that
such
a
corporation
shall
be
carried
on
without
pecuniary
gain
to
its
members,
that
all
profits
and
accretions
to
the
corporation
shall
be
used
in
furthering
its
undertaking
and
that
the
applicant,
by
purporting
to
make
its
members
beneficiaries
of
a
trust
of
the
corporate
property,
has,
in
effect,
conferred
a
pecuniary
gain
upon
the
members
in
contravention
of
the
Act.
Section
268
of
The
Corporation
Act
is
as
follows:
268
The
articles
shall
be
in
the
prescribed
form
and
in
addition
shall
state
(a)
the
restrictions
on
the
undertaking
that
the
corportion
may
carry
on;
(b)
that
the
corporation
has
no
authorized
share
capital
and
shall
be
carried
on
without
pecuniary
gain
to
its
members,
and
that
any
profits
or
other
accretions
to
the
corporation
shall
be
used
in
furthering
its
undertaking;
.
.
.
[Emphasis
added.]
The
above
section
does
require
that
the
articles
of
incorporation
shall
state
that
the
corporation
shall
be
carried
on
without
pecuniary
gain
to
its
members.
Clause
9
of
the
Articles
complies
with
the
section.
I
take
the
undertaking
to
carry
on
without
pecuniary
gain
to
its
members
to
mean
that
the
corporation
will
not
engage
in
enterprises
or
activities
which
would
result
in
its
members
receiving
some
profit
or
commercial
advantage.
Generally
speaking,
the
applicant
was
not
carrying
on
business
for
the
profit
or
commercial
advantage
of
its
members,
and
I
do
not
think
that
an
isolated
transfer
of
assets
would
change
this.
The
members
were
entitled
to
a
distribution
of
assets
on
dissolution
anyway.
The
respondents
also
submit
that
the
applicant,
by
transferring
its
assets
to
a
trust
naming
its
members
as
beneficiaries,
has
effected
a
distribution
of
its
assets
contrary
to
subsection
277(1)
of
the
Act.
Subsection
277(1)
reads
as
follows:
277(1)
The
articles
of
incorporation
may
provide
that
upon
dissolution,
the
remaining
property
may
be
distributed
among
all
the
members
or
among
the
members
of
a
class
or
classes
of
members
or
to
one
designated
organization
or
more,
or
any
combination
thereof.
By-law
No.
1(s.
2.02)
provides
that
upon
dissolution
of
the
corporation,
any
funds
and
assets
of
the
corporation
remaining
after
satisfaction
of
its
debts
and
liabilities
shall
be
distributed
equally
among
its
regular
members
at
the
time
of
dissolution.
I
see
nothing
in
the
Act,
the
Articles
of
Incorporation
or
the
by-laws
which
would
prevent
the
corporation
from
disposing
of,
or
dealing
with
its
assets—even
in
favour
of
its
members
—at
any
time
during
its
existence
and
prior
to
dissolution.
Subsection
277(1)
référés
to
the
“remaining
assets"
and,
by
its
very
terms,
contemplates
that
there
may
be
cases
where
the
corporation
will
have
disposed
of
assets
prior
to
dissolution.
In
my
view,
the
applicant
did
not
breach
The
Corporations
Act
by
entering
into
the
trust.
The
appeal
is
allowed
with
costs.
Appeal
allowed.
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