Jeddore v. The Queen, 2004 DTC 6387, 2003 FCA 323

Date: 20030828

Docket: A-709-01

Citation: 2003 FCA 323

CORAM:        DÉCARY J.A.

EVANS J.A.

SHARLOW J.A.

BETWEEN:

                                                                JOHN N. JEDDORE

                                                                                                                                                       Appellant

                                                                                 and

                                                        HER MAJESTY THE QUEEN

                                                                                                                                                   Respondent

                                 Heard at St. John's, Newfoundland, on June 10 and 11, 2003.

                                  Judgment delivered at Ottawa, Ontario, on August 28, 2003.

REASONS FOR JUDGMENT BY:                                                                               SHARLOW J.A.

CONCURRED IN BY:                                                                                                         DÉCARY J.A.

CONCURRING REASONS BY:                                                                                           EVANS J.A.

Date: 20030828

Docket: A-709-01

Citation: 2003 FCA 323

CORAM:        DÉCARY J.A.

EVANS J.A.

SHARLOW J.A.

BETWEEN:

                                                                JOHN N. JEDDORE

                                                                                                                                                       Appellant

                                                                                 and

                                                        HER MAJESTY THE QUEEN

                                                                                                                                                   Respondent

                                                        REASONS FOR JUDGMENT

SHARLOW J.A.

[1]                 I agree with Evans J.A. that the appeal should be dismissed. I also agree that the argument for Mr. Jeddore with respect to Issue 1 should be rejected, but I would reject it for a different reason.

[2]                 The principal argument for Mr. Jeddore is that if the colonial government of Newfoundland had set apart or reserved, for the use and benefit of the Mi'kmaq people of the Conne River settlement, the area along the Conne River between the two posts planted by Mr. Murray, to a distance of 33 chains, that land should be recognized as a reserve for purposes of the Indian Act (and thus the Income Tax Act), despite the limitations that are now understood to be implicit in the statutory definition of "reserve".

[3]                 Under Issue 1, the theoretical premise of this argument is that the colonial law of Newfoundland in 1872 might have been that it was consistent for the colonial government to set apart the claimed reserve area for the use and benefit of the Conne River Mi'kmaq people, while also granting time-limited conditional rights to certain individuals to acquire fee simple interests in particular lots within the same area (the licences of occupation).

[4]                 What would have become of the reserve if the licences of occupation granted in 1872 had ripened into fee simple interests? That is interesting question, but hypothetical. Any answer would be speculation. It is worth noting, however, that the lots represented by the licences of occupation apparently had no functional significance for anyone who would have been living in the Conne River settlement in 1872, or at any later time. Certainly they do not correspond to the houses in the settlement, or the usable land. Perhaps the rights represented by the licences of occupation were never exercised because they had no practical value. Perhaps there never was any realistic probability that the rights represented by the licences of occupation would be exercised. But that also is speculation.

[5]                 Given the circumstances of this case, I can accept the theoretical possibility that the 1872 colonial law of Newfoundland might have contemplated the creation of a reserve for an identifiable Indian community, with legal characteristics that are not the same as the legal characteristics of reserves within the statutory definition in the Indian Act. After all, there was no single legal theory of Indian reserves in 1872, and our contemporary understanding of the statutory definition has taken decades to develop. Indeed, if the colonial government of Newfoundland had established a reserve on its own terms for the Mi'kmaq people of the Conne River settlement in 1872 or at some later time, I would be reluctant to conclude that the Government of Canada could deny that the Conne River settlement land was a reserve when Newfoundland joined Confederation, even if the land has or once had a legal characteristic that takes it outside the statutory definition of "reserve" in the Indian Act.

[6]                 However, I do not consider it necessary to determine the validity of this theory, because it is not supported by any evidence that colonial Newfoundland ever had any law governing the setting of land apart for the exclusive use of an Indian community, or that the colonial government at any time had contemplated a particular legal theory for Indian reserves. Thus, without expressing any opinion on the validity of the theory upon which Mr. Jeddore's argument on Issue 1 is based, I must conclude that the argument fails for lack of evidence of the relevant legal context. I agree with Evans J.A. that Mr. Jeddore is not entitled to have a new trial to attempt to fill in the evidentiary gap.

                                                                                                                                                  "K. Sharlow"                  

                                                                                                                                                                  J.A.                        

"I agree

      Robert Décary J.A."

EVANS J.A.(concurring reasons)

A.        INTRODUCTION

[7]                 Although not indigenous to Newfoundland, Mi'kmaq people appear to have had a presence there since around the end of the seventeenth century. From the early nineteenth century there has been a permanent Mi'kmaq settlement on the south bank of Conne River in the south-west of Newfoundland, which has been the cultural and spiritual centre of Mi'kmaq life in the Province.

[8]                 In 1987 the Province of Newfoundland conveyed to the Crown in right of Canada land at Conne River that the Mi'kmaq have traditionally regarded as reserved for their use and benefit. In the same year, an order in council declared the land to be a reserve, whose formal name is Samiajij Miawpukek Indian Reserve. In 1993 an order in council was also passed under the Financial Administration Act, R.S.C. 1985, c. F-11, conferring on the Reserve the benefit of the tax provisions relating to reserves, commencing in 1985.

[9]                 The appellant, John N. Jeddore, a Mi'kmaq and an elder of the Miawpukek Band, has resided all his life at Conne River within what is now the Samiajij Miawpukek Indian Reserve. He maintains that the Conne River lands were a reserve in 1984 and that the income generated in that year by his business on the reserve is exempt from income tax as "the personal property of an Indian situated on a reserve" by virtue of paragraph 87(1)(b) of the Indian Act, R.S.C. 1985, c. I-5.

[10]            The Minister of National Revenue has taken the position that Mr. Jeddore's 1984 income is subject to income tax because it was not situated on a reserve. The Minister says that, prior to 1985, the Conne River lands had not been set apart as a reserve to be held by the Crown for the use and benefit of the Conne River Mi'kmaq in accordance with the definition of a "reserve" in subsection 2(1) of the Indian Act. Rather, lots of land were designated for individual Mi'kmaq as settlers with the right to acquire the fee simple. The Crown did not intend to create a reserve in which the Conne River Mi'kmaq had the right to the common use and enjoyment of the land.

[11]            Mr. Jeddore appealed against the Minister's reassessment of his tax liability. The Tax Court of Canada dismissed the appeal: Jeddore v. The Queen, 2001 D.T.C. 1058.

[12]            On appeal to this Court, counsel for Mr. Jeddore argue that, in 1870 or 1872, the Government of Newfoundland set apart the Conne River lands for the exclusive use of the Mi'kmaq people living there. They submit that a reserve was thereby validly created under the pre-Confederation law of Newfoundland and that the status of the land should have been recognized after Newfoundland joined Confederation in 1949, even if, had the grant been made in Canada, it would not have constituted a "reserve" within the meaning of the Indian Act. Alternatively, they say, the grant of land in 1870 or 1872 complied with the requirements of Canadian law for the creation of a reserve under the Indian Act.

B.        FACTUAL BACKGROUND

[13]            The material in this appeal is voluminous and the evidence relates to events occurring between the late 1860s and the early years of the last century. In the interests of simplicity, I shall focus on the facts critical to the legal dispute as presented on the appeal. A fuller account of the evidence is contained in the reasons for judgment below. There is relatively little dispute over the primary facts, but the parties disagree strongly on the inferences to be drawn from them.   

[14]            The Beothuk were the only Aboriginal people indigenous to Newfoundland. The Mi'kmaq, on the other hand, are thought to have come to Newfoundland from Nova Scotia. In Newfoundland, the Mi'kmaq were, in the main, trappers and hunters. In addition, they were engaged as guides to the interior by explorers, geologists and hunters. With the exception of the Conne River settlement, the Mi'kmaq in Newfoundland lived among Europeans and not in distinct Mi'kmaq communities.

[15]            On September 12, 1869 Alexander Murray, the first Director of the Geological Survey of Newfoundland, arrived at Conne River in order to engage Mi'kmaq guides to assist him in mapping the largely empty and unexplored interior of the Island. While at Conne River, he mapped the shoreline, probably with a view to recommending the grant of lands to the Mi'kmaq, who had asked him to assist them in securing rights to the land.

[16]            Presumably with a plan of settlement in mind, Murray planted a post, known as "Murray's post", to mark the western boundary of the land subsequently comprised in the 1872 plan of Indian Settlement. Mi'kmaq oral tradition refers also to a second post planted by Murray at the eastern end of the lands, two and a quarter miles along the shoreline from the western post. As Murray would have been aware from his previous survey work in Upper and Lower Canada, reserve lands in Canada at that time were frequently marked by posts. Both posts at Conne River are marked on a 1900 map, which also shows the land as extending back from the river a distance of 33 chains, or 725 yards.

[17]            Murray recorded in his field book the names of the heads of the 25 principal Mi'kmaq families then living at Conne River and entered numbers against them. Murray spent the latter part of 1869 and the first part of 1870 in St. John's, where he petitioned the Executive Council to grant land to the Mi'kmaq of Conne River. Unfortunately, his applications and letter to the Council have not been discovered and so the precise terms of his request are not known.

[18]            However, an 1870 Minute of the Executive Council, headed "Grant of Lands to Indians Conne River", provided as follows:

His Excellency the Governor laid before the Council a letter from Mr. Murray, the Geologist, in reference to an application made by him to the Government in 1869, and also in 1870, for a grant of land to the Indians of Conn River, Bay of Despair, - the Council concurred in the propriety of the application and referred the matter to the hon. Surveyor General with the view of carrying its objects into effect.

[19]            In the absence of direct evidence of the "objects" of Murray's petition that the Council instructed the Surveyor General to carry into effect, the parties have had to rely on inferences from documentary and oral evidence to establish Council's intent in approving Murray's requests.

[20]            The most important documentary evidence of the intention underlying the 1870 Minute is the grant in 1872 by Henry Renouf, the Surveyor General, of 17 licences of occupation, which covered a good deal of the land that now comprises the Samiajij Miawpukek Indian Reserve at Conne River. In the same year, the land was surveyed and divided into 25 lots. The licences of occupation were numbered consecutively, except that no licences were issued for lots 3 and 6. 12 of the names on the 17 licences are among the 25 names of heads of families recorded in Murray's field book in 1869. In addition, the numbers that Murray entered against the family names correspond closely to the numbers of the individual lots assigned to particular Mi'kmaq under the licences of occupation.

[21]            The terms of the 17 licences of occupation, issued under the Crown Lands Act of 1860, were similar to those issued in Newfoundland to non-Aboriginal settlers. Each licence was for five years and provided that if the land to which it related was occupied and a prescribed portion of it was cultivated at the end of the five years, the licensee could call upon the Crown to transfer the fee simple. In fact, fees to land at Conne River were never granted to Mi'kmaq. Nor was there much correlation between where the Mi'kmaq families actually lived and the lot lines; most of their houses seem to have been located on lot 3.

[22]            Notes in Murray's 1869 field book also refer to a "Geo. Erskins" (later corrected to "Hoskins"), a non-Aboriginal, whose name is not on the list of the 25 family heads. Hoskins had a building on the Conne River lands on lot 6 (incidentally, the site of Mr. Jeddore's business), although he appears not to have lived there. When Murray returned to Conne River in 1870 he surveyed Hoskins' lot, and none other. A licence of occupation for lot 6 was not issued in 1872, and it is unclear whether one was issued subsequently.

[23]            At around the turn of the century, a plan of the lots ("Plan 360"), thought to have originated in Murray's time, was glued into the Register of Special Grants kept in the Newfoundland Crown Lands Registry. However, it was subsequently removed and inserted into the Register of Licences of Occupation.

[24]            Various plans and maps from the late nineteenth and early twentieth centuries describe the Conne River lands as an "Indian reserve" or an "Indian reservation". Secondary sources use similar terms. For example, in an article published in 1913, Archbishop Howley referred to the "considerable settlement of Mic-Mac Indians" at Conne River, where they had "a Government reserve".

[25]            On the other hand, when Newfoundland joined Confederation in 1949, the Terms of Union made no mention of the existence of any Indian reserves in Newfoundland. Newfoundland did not transfer any of its land to the federal Crown as land held as an Indian reserve and thus within exclusive legislative competence of Parliament by virtue of section 91(24) of the British North America Act, 1867. Unlike, for example, the maritime provinces, Newfoundland had never enacted legislation respecting Aboriginal lands. The Government of Newfoundland was clearly of the view at the time of Union that it had no Indian reserves.

[26]            Nonetheless, Mr. Jeddore and a Conne River Mi'kmaq Chief, Saqamaw Misel Joe, gave evidence at the hearing before the Tax Court to the effect that it was part of the Band's oral tradition that Murray had told them that the land at Conne River would be set aside for them. This, they said, was supported by the fact that, after 1870, government officials commonly described the land as an "Indian Reserve" or an "Indian Reservation".

[27]            As further evidence that both the Mi'kmaq and the Newfoundland Government considered the land to be a reserve, counsel for Mr. Jeddore relied on a complaint that some of the Conne River Mi'kmaq made in August 1899 to the Premier and the Governor that a Mr. Lake, a non-Aboriginal, was operating a sawmill "on what they considered to be their reservation", to use the Governor's words. As a result of the complaint, a map was prepared by a surveyor in the Department of Agriculture and Mines (the "Balfour Plan"), entitled "Plan of Indian Settlement Conne River Bay Despoir". The Plan, probably prepared in 1900 from an older version, shows the land laid out in 25 lots and locates Lake's mill on the shoreline of one of the lots. Legislation was subsequently enacted to restrict the cutting of timber on ungranted Crown land by the operators of sawmills in Newfoundland.

C.        DECISION OF THE TAX COURT

[28]            In reasons for judgment running to 240 paragraphs, Bell T.C.C.J. set out in great detail the evidence relied on by both sides. However, his conclusions are relatively brief and I shall focus on the parts that are particularly relevant to the way that Mr. Jeddore's appeal was argued before us.

[29]            The nub of the Judge's conclusion is found at paragraph 225 of his reasons, where he said that the Executive Council Minute of 1870 "[o]bviously, ... did not create a Reserve" and that, since "each holder [of a licence of occupation] was entitled, under conditions, to title in fee simple, the issue of such licenses did not form a Reserve."

[30]            Bell T.C.C.J. noted that the fact that one of the 1872 lots within the claimed reserve, Hoskins' lot 6, was occupied by a non-Aboriginal person also supported the conclusion that the Government intended to make individual grants and not to establish a reserve for the common use and benefit of the Conne River Mi'kmaq.

[31]            The Judge adopted the explanation of subsequent events offered by an expert witness for the Crown, Dr. Alexander von Gernet. Thus, for example, Bell T.C.C.J. concluded that the protests over the activities of Lake's sawmill at the turn of the century, and the legislative response to them, probably had more to do with lumbering rights than with a desire on the part of the Government to protect an Indian reserve. Further, the Judge regarded the fact that in 1907 Chief Reuben Leuis petitioned the Government for a grant of 363 acres (lots 1-7) of the land included in the Conne River settlement as inconsistent with a widely held view that the whole of the settlement as shown on the plan constituted a reserve.

[32]            As to the oral history evidence given by Mr. Jeddore and Saqamaw Misel Joe that the Conne River lands had always been understood by the Mi'kmaq as their communal lands, granted to them by the representative of Queen Victoria at the urging of Murray to be the economic base from which they were to support themselves and their way of life, Bell T.C.C.J. said (at para. 234):

I have no doubt about their sincerity and about their belief that a Reserve at Conne River did exist. However, continuous reference to that belief, even including the use of the terms 'Indian Settlement', 'Indian Reservation' and 'Indian Lands' does not, in my judgment, evidence the legal existence of a Reserve as sought by the Appellant.

[33]            Similarly, the Judge concluded that Newfoundland officials' use, over the years, of the terms "Indian Reserve", "Indian Reservation" and "Indian Settlement", especially on maps and plans, was insufficient to establish that the lands at Conne River constituted a reserve. He said (at para. 235):

Their use appears to have evolved as referential rather than as terms sanctioned by appropriate official action.

D.         THE LEGISLATIVE FRAMEWORK

[34]            The statutory provisions of immediate relevance to this appeal are few. The most important are contained in the Indian Act, R.S.C. 1985 c. I-5. Subsection 2(1) provides the following definition.

[35]            Section 36 provides an exception to the requirement that, to fall within the definition of a "reserve", legal title to the land must be vested in Her Majesty.

[36]            Also relevant are the Terms of Union between Newfoundland and Canada, which are set out in the Schedule to the Newfoundland Act, 12 & 13 Geo. VI, c. 22 (U.K.). Term 18, paragraph 2, provides that, on a day to be appointed by Act or proclamation of the Governor in Council, the statutes of the Parliament of Canada then in force shall apply in Newfoundland. A proclamation was duly made on May 28, 1952 and, as a result, the Indian Act has applied in Newfoundland since July 1, 1952.

[37]            The Terms of Union make no mention of Indians or Indian Reserves, or of land set apart and held by Newfoundland for the exclusive use and benefit of Indians, presumably because the Government of Newfoundland did not think that reserves existed in Newfoundland. Term 37 provides that all lands belonging to Newfoundland at the date of Union shall continue to belong to the Province of Newfoundland. No exception is made for any lands set apart and held by Newfoundland for the exclusive use and benefit of Indians.

[38]            The exemption from income tax claimed by Mr. Jeddore is contained in paragraph 87(1)(b) of the Indian Act.

[39]            Section 81 of the Income Tax Act, R.S.C. 1985 (5^th Supp.), c. 1, reinforces paragraph 87(1)(b) by exempting from the computation of a person's income an amount that is exempt from income tax under another federal statute.

E.         ISSUES AND ANALYSIS

Issue 1:          Did the Tax Court Judge err in law when he failed to consider whether a reserve had been validly created at Conne River in accordance with the law of Newfoundland before it joined Confederation?

[40]            As I understand it, the position advanced on behalf of Mr. Jeddore by Mr. O'Flaherty is that the definition of a reserve under the colonial law applicable in Newfoundland before Union was not as narrow as the definition of a reserve created under the law of Canada. He concedes that, if individuals are given proprietary rights in land, including the right to acquire the fee simple, that land has not been "set apart by Her Majesty for the use and benefit of Indians" so as to constitute a reserve within the meaning of subsection 2(1) of the Indian Act as so far interpreted. However, the definition of a reserve contained in the current version of the Indian Act did not apply in pre-Confederation Newfoundland. Consequently, the definition of a "reserve" in the Indian Act should be understood also to include land which, before Newfoundland joined Confederation, was regarded as a reserve under colonial law, regardless of whether it would have met the Indian Act definition if it had been created under Canadian law.

[41]            Since the law of pre-Confederation Newfoundland is "foreign law", it must be proved by evidence. Counsel for Mr. Jeddore candidly conceded that there was little evidence before the Court on this question. Certainly, there is no direct evidence. For example, unlike the maritime provinces, pre-Confederation Newfoundland had no legislation respecting lands reserved for Indians. The reasons of the Tax Court Judge do not address the issue.

[42]            Counsel submitted that, if it was relevant to ascertain the colonial law of Newfoundland in order decide whether Mr. Jeddore's 1984 income was situated on "a reserve" for the purpose of paragraph 87(1)(b) of the Indian Act, but the Court did not think that there was sufficient evidence in the record respecting pre-Confederation law, the appeal should be allowed and the matter remitted for a new trial.

[43]            I do not agree. The burden of proof is on the taxpayer to establish entitlement to a statutory exemption from tax. The failure of a party to adduce evidence to prove facts on an issue crucial to its claim does not normally justify a new trial. Hence, Mr. Jeddore's claim that his 1984 income was exempt from tax stands or falls on the basis of the evidence in the record. Nonetheless, I am prepared to decide this appeal on a view of the circumstantial evidence respecting the relevant pre-Confederation law that is most favourable to the position advanced on behalf of Mr. Jeddore. Accordingly, I shall deal with the argument for the expansive interpretation of "reserve" in the Indian Act urged upon us by counsel, and assume that the evidence before the Tax Court Judge relating to the grant of land at Conne River to the Mi'kmaq establishes on the balance of probabilities that, under colonial law, a reserve could be created by the issue of a bloc of licences of occupation to Indians in respect of land on which a band had established its community.

[44]            This view of colonial law, counsel argued, was also supported by the fact that, over time, various government officials described the land as an Indian reserve, as well as by the traditional Mi'kmaq understanding that the lands had been reserved for them as a result of the activities of Alexander Murray at Conne River in 1869 and the application that he subsequently made on their behalf to the Executive Council. Thus, it is submitted, neither the fact that the form of the grant gave individual licensees the right to acquire the fee simple to their lots, nor that one lot was occupied by a non-Aboriginal person, was necessarily incompatible with the creation of a reserve under the colonial law in force in pre-Confederation Newfoundland.

[45]            In my view, the courts' interpretation of the phrase in subsection 2(1) of the Indian Act, "set apart for the use and benefit of Indians", is not limited to grants of land made under Canadian law. It applies whenever a person claims a benefit or immunity that either the Indian Act or, perhaps, another federal statute, attaches to the reserve status of land, regardless of when or where the lands were originally granted, subject, of course, to any special statutory provisions respecting particular lands.

[46]            Hence, since Mr. Jeddore has claimed a tax exemption for his 1984 income, the only question is whether his income was situated on land which, in that year, satisfied the Indian Act definition of a reserve, as that term has so far been understood. I cannot therefore agree with the suggestion that lands on which members of a First Nation in pre-Confederation Newfoundland had established themselves as a community constitute a reserve under the Indian Act, and give rise to the tax exemptions contained in the Act, simply because the lands in question may have been regarded as a reserve by the colonial law under which they were granted. Nothing in the constitutional instruments, the statutory texts, or the understandings of the Governments involved, lends support to the suggestion that, following Union, the Indian Act definition of a reserve was to be interpreted more broadly so as to include lands that constituted a reserve under the pre-Confederation law of Newfoundland.

[47]            Despite the wide-ranging legal and factual issues that have been imaginatively canvassed by counsel in this appeal, it is important not to lose sight of the fact that the ultimate issue to be determined is Mr. Jeddore's income tax liability in 1984, which depends on the interpretation of subsection 2(1) and paragraph 87(1)(b) of the Indian Act.

[48]            The Supreme Court of Canada has repeatedly warned against the dangers of "judicial innovation and rule making" "in matters of tax law": Ludco Enterprises Ltd. v. Canada, [2001] 2 S.C.R. 1082, 2001 SCC 62">2001 SCC 62 at para. 53. While this dictum may have been directed primarily at the interpretation of taxation statutes, in my opinion it is not altogether inapt when the issue of interpretation concerns a taxing provision in a statute, such as the Indian Act, that deals principally with matters other than taxation.

[49]            In all the circumstances of this case, I see no basis for departing from the well established interpretation of the definition of a reserve in subsection 2(1) of the Indian Act as incompatible with the existence of potentially alienable individual proprietary rights in land. Consequently, I would not read words into it in order to extend the benefit of paragraph 87(1)(b) to lands granted at Conne River to the Mi'kmaq prior to the Union of Newfoundland and Canada that would not have constituted a reserve if the grant had been made in Canada because the grant created individual proprietary rights in the land.

[50]            Accordingly, I have concluded that whether a reserve at Conne River was created under the law of Newfoundland prior to 1985 is irrelevant to the disposition of this appeal. It is therefore unnecessary for me to make any findings about the pre-Confederation law of Newfoundland concerning the creation, definition or legal incidents of a reserve, and whether a "colonial reserve" was created at Conne River.

[51]            In order to succeed in this appeal, Mr. Jeddore must therefore establish that his 1984 income fell within paragraph 87(1)(b) of the Indian Act because it was situated on a "reserve", as the definition of that term in subsection 2(1) has been interpreted by the courts.

Issue 2:           Did the Tax Court Judge err in concluding on the material before him that a "reserve" within the meaning of the Indian Act did not exist at Conne River in1984?

(i)        Is it fatal to Mr. Jeddore's appeal that the lands in question were not vested in the federal Crown in 1984?

[52]            An easy answer to this question might be that, since title to the lands at Conne River were at all relevant times prior to 1987 vested in either Newfoundland or the Province of Newfoundland, they could not constitute a reserve as defined by subsection 2(1) of the Indian Act, which requires that legal title to reserved lands be vested in Her Majesty who, since this is a federal statute, is presumptively Her Majesty in right of Canada.

[53]            Counsel for Mr. Jeddore responded by pointing to the exception in section 36 of the Indian Act, which says that the Act applies to lands set apart for the use and benefit of a Band as though the land were a reserve, even if "legal title thereto is not vested in Her Majesty". The Crown answers by saying that this provision only applies in very limited situations, namely, where title to the land is held by some non-governmental body, such as a religious organization or some other charity.

[54]            There is considerable doubt about the precise scope of section 36: see, in particular, Musqueam Holdings Ltd. v. British Columbia (Assessor of Area No. 09 - Vancouver) (1998), 62 B.C.L.R. (3d) 93 (B.C. S.C), affirmed (2000), 187 D.L.R. (4^th) 510, 2000 BCCA 299. However, since counsel did not fully argue the issue, I am prepared to assume for the purpose of this appeal that the fact that legal title was not vested in Her Majesty in right of Canada in 1951 would not in itself preclude the lands at Conne River from being a reserve in 1984.

(ii)      Standard of review

[55]            Counsel for Mr. Jeddore conceded that Bell T.C.C.J. applied the correct legal test for determining whether an Indian Act reserve had been created at Conne River prior to 1985. It was agreed that the most authoritative statement of the law is now to be found in 2002 SCC 54">Ross River Dena Council Band v. Canada, 2002 SCC 54 ("Ross River"). The Supreme Court of Canada's decision in Ross River was handed down after the Tax Court Judge rendered his decision in this case. However, he did rely on the reasons in Ross River of the Yukon Court of Appeal, whose decision the Supreme Court upheld.

[56]            The dispute in this appeal is whether the Tax Court Judge applied the relevant legal test correctly to the facts. In particular, can it be inferred from the evidence that the Government of Newfoundland intended to create a reserve, as that term is understood in the context of the Indian Act, when, in 1870, the Executive Council agreed to act on Murray's petition with respect to the grant of lands at Conne River or, in 1872, when Newfoundland granted 17 licences of occupation to Mi'kmaq living at Conne River? As counsel for Mr. Jeddore rightly observed, the resolution of this issue turns essentially on the facts. The applicable law is relatively clear.

[57]            Since this is an appeal from a trial judge, the standard of review to be applied is governed by Housen v. Nikolaisen, [2002] 2 S.C.R. 235, 2002 SCC 33">2002 SCC 33. To the extent that Bell T.C.C.J.'s conclusions involve either factual inferences or the application of the correct law to the facts, then, absent some error of law, the standard of review is that of palpable and overriding error: Housen at paras. 25 and 36.

(iii) The legal tests for determining if an Indian Act reserve has been created

[58]            Although counsel for Mr. Jeddore do not dispute that the Tax Court Judge applied the right legal tests for determining if an Indian Act reserve has been created, it is nonetheless useful to identify at this point the aspects of the legal tests whose application is in dispute in this appeal.

[59]            Ross River confirms that, in the absence of legislation, reserves are created by an exercise of the royal prerogative setting aside land for the use and benefit of an Indian band. The prerogative may be exercised in several ways. While an order in council may be the "best and clearest procedure used to create a reserve" (para. 67), a representation by an agent of the Crown that land has been set aside for a First Nation may also suffice, provided that the agent "had authority to bind the Crown or was reasonably so seen by the First Nation" (para 69). However, LeBel J. also stated (at para. 58) that the prerogative is constrained by the Indian Act which precludes the creation of a reserve by "the transfer of title by sale, grant or gift to a First Nation or some of its members."

[60]            Thus, on the facts of our case, if the 1870 Minute, or the grant of licences of occupation in 1872, set apart land to be held by the Crown for the common use and benefit of the Conne River Mi'kmaq, a reserve was created by an exercise of the royal prerogative. In order to determine the intention of the Crown contained in the Minute, it is necessary to consider all relevant documentary and oral evidence. However, if Mr. Jeddore cannot prove that the Crown set apart land as a reserve in 1870 or 1872, he might rely on evidence, including oral tradition evidence, to prove that the prerogative to create a reserve was exercised by the representations of officials who had actual or apparent authority to bind the Crown in this respect.

[61]            Bell T.C.C.J. correctly identified the relevant legal tests. Thus, while he considered that the 1870 Minute did not create a reserve, he based his conclusion on the entirety of the evidence respecting the intention of the Crown expressed in the Minute. He was not of the view that a reserve could not in law be created by a Minute of the Executive Council, which, for present purposes, is agreed to be the equivalent of an order in council, in the sense that it authoritatively evidences an exercise of the royal prerogative.

[62]            The Tax Court Judge also admitted evidence of both the long-standing Mi'kmaq belief that the Conne River land had been set aside for them, and the evidence supporting that belief. It is not altogether clear whether the oral tradition evidence was admitted in support of counsel's submission on the intention expressed in the 1870 Minute, or as proof that, even if the 1870 Minute did not create a reserve, the prerogative to create a reserve was exercised by officials with the requisite authority who represented to the Mi'kmaq that land at Conne River was set apart for their exclusive use and benefit, and thus constituted a reserve.

[63]            In either event, the Judge correctly regarded the evidence as potentially capable of proving that a reserve had been created, but concluded that, when considered with the other evidence, the oral history evidence was insufficient to discharge Mr. Jeddore's burden of proof.

[64]            I should note that, at the hearing of the appeal, I understood counsel for Mr. Jeddore to be submitting that a reserve was created by the Minute of 1870 or, possibly, by the issue of the licences of occupation implementing the Executive Council's order setting apart lands at Conne River for the Mi'kmaq. Thus, the oral evidence was relevant only to support the meaning that counsel argued should be attributed to the 1870 Minute. He did not argue that, if a reserve was not created by the Minute of 1870 or, possibly, in 1872, it was created at some other time by representations made by government officials to the Mi'kmaq. However, in written submissions on the oral history evidence made in response to a request by the Court at the close of the hearing, counsel said that the evidence was relevant to establishing the creation of a colonial reserve at Conne River prior to 1949.

(iv) Applying the tests

[65]            A single question lies at the heart of this case. In making grants of land at Conne River, did the Crown intend to set apart and hold the lands for the use and benefit of the Mi'kmaq? Or did it intend to create individual proprietary interests in defined parcels of the land? In other words, was the grant of the Conne River lands to the Mi'kmaq made to them as Indians or as settlers who happened to be Indians?

[66]            Ascertaining a person's intention is an essentially factual question. However, to the extent that this appeal turns on the intention underlying the Executive Council Minute of 1870 it may also have a legal aspect. Nonetheless, in the absence of any general legal principle that can be extrapolated from the Judge's conclusion respecting the intention of the Crown, and since the principles of statutory interpretation would be an inappropriately narrow basis for determining the meaning of the Minute, I am satisfied that we are in the realm of factual inferences or, possibly, questions of mixed fact and law that lie at the factual end of the spectrum.

[67]            Consequently, as an appellate court, we may allow the appeal only if satisfied that the Tax Court Judge made some palpable and overriding error in reaching his conclusions, or committed some legal error in his approach to the evidence.

(a) the 1870 Minute and licences of occupation

[68]            On appeal, counsel for Mr. Jeddore submitted that the Executive Council Minute of 1870 was the critical item of evidence of the Crown's intention to create a reserve. In its terms, he argued, the Minute set aside the land at Conne River for the use and benefit of the Mi'kmaq living there, thereby creating a reserve. The Surveyor General's function was simply to implement the Crown's intention as expressed in the Minute.

[69]            Counsel submitted that the Judge made a fatal mistake in his assessment of the evidence. Instead of focussing on the Minute as the equivalent of an exercise of the royal prerogative to create a reserve, the Judge appeared to regard the licences of occupation as the key documents. Since the licences conferred on individuals a right to acquire the fee simple to the lot assigned to them if they occupied it and cultivated part of it, the Judge reasoned that the intention evidenced by the Minute must similarly have been that the grant was intended to take the form of the creation of individual proprietary interests in the lots into which the land was divided.

[70]            I agree that, as an authoritative statement of the intention of the Crown, the 1870 Minute is the critical document in this case. However, while the Minute evidences a general intention on the part of the Crown to make a grant of land to the Mi'kmaq at Conne River, its terms do not reveal the intended form of the grant. As I have already noted, Murray's letter and applications, which might well have settled matters, have not been discovered. In these circumstances, it was perfectly appropriate for the Tax Court Judge to consider the other evidence before him, including the licences of occupation, to see what light they shed on the intention of the Crown as expressed in the 1870 Minute.

[71]            In my view, there was ample evidence before the Tax Court Judge to support the conclusion that, on the balance of probabilities, the 1870 Minute was not the expression of an intention by the Crown to create an Indian Act reserve, as that term has been interpreted. The question for an appellate court is not whether other inferences might reasonably have been drawn from the evidence, but whether the trial judge made a palpable and overriding error in drawing the inferences from the evidence that he did. As Iacobucci and Major JJ. said in Housen (at para. 22):

In making a factual inference, the trial judge must sift through the relevant facts, decide on their weight, and draw a factual conclusion. Thus, where evidence exists which supports this conclusion, interference with this conclusion entails interference with the weight assigned by the trial judge to the pieces of evidence.   

[72]            In my opinion, the issue of the 17 five-year licences of occupation with respect to most of the land claimed to be a reserve, two years after the 1870 Minute, suggests that the Crown had not intended to create a reserve in 1870, because the licences granted proprietary interests in particular lots to individuals. I should add that it is irrelevant for present purposes that the Government of Newfoundland could not then have foreseen the legal consequences that would subsequently be attached to the particular form in which they gave effect to their general intention to grant land at Conne River to the Mi'kmaq.

[73]            The licences of occupation were issued by the Surveyor General, and it is a reasonable inference from the known facts that he did so pursuant to the Executive Council's direction that he carry into effect the objects of Murray's applications. That the Executive Council had not intended in 1870 to create a reserve in the Indian Act sense is also supported by the fact that the licences contain the signatures of three of the members of the Executive Council who were present at the meeting of the Council on April 27, 1870, to which the Minute related. It is unlikely that they would have agreed to the issue of the licences of occupation (the usual form of land grant to settlers) if, in 1870, the Executive Council had intended the grant to take the unusual form of communal rights over all the land, rather than of individual proprietary rights with respect to particular lots.

[74]            It is also significant that, although we have no direct evidence of the precise nature of Murray's recommendation to the Executive Council, the numbers that Murray wrote in his field book against the names of the 25 families are certainly compatible with an intention that the land should be divided into lots and the lots assigned to particular families. Indeed, another page of his field book contains what appears to be his calculations of the acreage of individual lots. Further, as I have already noted, there is a substantial correlation between the names of the heads of families that Murray recorded in his field book and those on the licences, and between the numbers that Murray wrote against those names and the numbers of the licences of occupation assigning lots to them. It is a reasonable inference from the lot lines drawn on the plan and the assignment of individual licences in 1872 in respect of 17 of them, that the Surveyor General was thereby giving effect to Murray's recommendation.

[75]            The fact that one of the lots within the area claimed as a reserve was occupied by a non-Aboriginal person, George Hoskins, further supports the view that the Executive Council intended to grant lands at Conne River to the residents as settlers, not as Indians. It is also relevant to recall in this context that the Government was well aware that the Mi'kmaq were not indigenous to Newfoundland.

[76]            No doubt other explanations of the Minute are possible. Different inferences might be drawn from the evidence, such as, for example, the absence of evidence that the Mi'kmaq at Conne River were aware that licences of occupation had been issued, the fact that their patterns of occupation bore little relationship to the lot lines drawn on the map, and that no one exercised the option of calling for the fee simple.

[77]            On the other hand, it is relevant to note in this context that, in a report prepared in 1908 for the Secretary of State, the Governor said that, even though the Mi'kmaq had not satisfied the conditions in the licences for a grant of the fee, they had occupied the land for many years and, for this reason,

there is no probability whatever that the Government of Newfoundland would withhold from them grants, as a matter of grace, if they only applied for them and could show how they could use the land.

The fact that it was envisaged in 1908 that fees would still be granted to individual Mi'kmaq at Conne River indicates that the Government did not then think that a reserve existed within the meaning of the Indian Act.

[78]            However this may be, it is not the role of this Court to decide which inferences it would have drawn from the evidence if it had been the trier of fact, but to focus on the trial judge's inferences: 2003 SCC 19">Dr. Q v. College Physicians ands Surgeons of British Columbia, 2003 SCC 19, para. 41. For the reasons that I have given, I am not satisfied that the Tax Court Judge made a palpable and overriding error in the inferences that he drew from the licences of occupation and other contemporary events about the intention underlying the 1870 Minute.

(b) subsequent events

[79]            Before the Tax Court, counsel for Mr. Jeddore had relied to a considerable extent on events occurring after 1872. On appeal, however, counsel indicated that he was placing less weight on these items. Nonetheless, I should mention some of the post-1872 events to which he referred to support his contention that the Crown had intended to create a reserve in 1870 or 1872. In my opinion, however, the facts on which counsel relied are highly equivocal and fall far short of demonstrating that the Judge made some palpable and overriding error in drawing the inferences that he did from the facts and in adopting the explanation of them offered by the Crown's expert witness, Dr. von Gernet.

[80]            For example, counsel referred to the protests in 1900 about the encroachment of Lake's sawmill on Mi'kmaq land at Conne River, and the resulting legislation restricting the activities of sawmills in Newfoundland. However, it is also reasonable to conclude that these events do not go very far at all in proving an intention to create a reserve. After all, the Crown concedes that the land at Conne River was Mi'kmaq land, in the sense that licences of occupation had been granted to individual Mi'kmaq people. Even if an Indian Act reserve had not been created, one might have expected members of the community to protest about activities that they believed encroached on their proprietary rights over the land comprised in the licences of occupation, especially since Lake refused to employ the Mi'kmaq in his logging business. Moreover, as I have already noted, there was expert evidence from Dr. von Gernet to the effect that the Government's concern in the Lake affair was probably directed more towards the protection of logging and, perhaps, the Crown's shoreline rights, than the rights of the Mi'kmaq at Conne River.

[81]            Counsel also referred to the fact that the Chief's permission was obtained before a person who had been hired as a schoolteacher could take up residence on lot 25, within the area of the claimed reserve. He submitted that this indicated that the land was held for the benefit of the Conne River Mi'kmaq as a whole and that the Chief had the authority to regulate the occupation of land by persons who were not members of the community, even when the land in question was not included in the original 17 licences of occupation.

[82]            However, the cogency of this evidence is diminished by the fact that, without consulting the Chief, the Crown in 1897 granted the fee to another piece of land within the area of the claimed reserve to a non-Aboriginal person, a Mr. Collier. Nor was there evidence that the permission of the Chief had been sought before land was granted to the Roman Catholic Church on lot 3. In addition, Chief Reuben Leuis' petition in 1907 to be granted the lands comprising lots 1-7 is difficult to reconcile with the notion that the land included in lots 1-25 (with the exception of Hoskins' lot) was already held as a reserve for the collective benefit and use of the community.

[83]            Finally, the fact that Plan 360 of the Conne River land grants had originally been included in a register of special grants, rather than in a register of licences of occupation, may indicate that the land was not regarded as held under ordinary licences of occupation. On the other hand, the Plan's subsequent removal from the special grants register to the licences of occupation register strongly suggests that the view that prevailed was that the Plan's initial inclusion with the special grants was erroneous, because, like other land granted by the Crown to settlers in Newfoundland, it was held under licences of occupation.

(c) oral history evidence

[84]            The hearing of this appeal ended on the day that the Court released its decision in The Queen v. Benoit, 2003 FCA 236. In the context of the proper approach to oral tradition evidence, the parties had referred to the Trial Judge's reasons for decision in Benoit, which this Court reversed on appeal. Consequently, counsel were invited to make written submissions on what effect, if any, this Court's decision in Benoit had on the question of the propriety of the Tax Court's treatment of the oral tradition evidence given by Mr. Jeddore and Saqamaw Misel Joe.

[85]            In Benoit, the Court applied the established law respecting oral history evidence. While recognizing the unique difficulties of proof raised by many Aboriginal claims, a court may not give a weight to evidence of oral tradition that disregards the fundamental principles of the law of evidence. Rather, the court must assess the reliability and relevance of the oral tradition evidence in light of the entirety of the evidence before it.

[86]            Counsel submitted that the Tax Court Judge committed reversible error by devaluing the evidence of the Mi'kmaq belief that a reserve had been created for them. The witnesses had referred, not only to what they had been told by Elders and relatives, but also to officials' use of the terms "Indian Reserve", "Indian Settlement" and "Indian Reservation" on maps, plans and other documents.

[87]            Counsel said that, by characterizing this evidence as merely expressing the witnesses' sincere belief about the status of the lands, the Tax Court Judge revealed that he had misapprehended the nature of oral history. The witnesses were not just telling the Court about their personal beliefs. Rather, they were explaining the Band's traditional beliefs, passed down by Conne River Mi'kmaq elders, about an important aspect of the Band's identity and history, as well as providing the evidential basis of those beliefs.

[88]            I agree that the Tax Court Judge's characterization of the oral history evidence may be thought to have understated the importance of oral tradition evidence. However, looking at the whole of the evidence in this case, I cannot conclude that the oral history evidence was sufficiently cogent as to render the Judge's overall conclusion that the Crown did not intend to create an Indian Act reserve "clearly wrong" or "contrary to the overwhelming weight of the evidence", phrases that are synonymous with palpable and overriding error: Rich v. Canada, 2003 D.T.C. 5115, 2003 FCA 38 at para. 26 (per Rothstein J.A.).

[89]            And, even if the Judge's characterization of the evidence constituted an error of law, which I do not think it did, the error was not material in view of the strength of the other evidence and the relatively peripheral relevance of the oral history evidence to the issues as counsel presented them to us in argument. Nor, in the circumstances of this case, can the Judge be said to have erred because he did not set out in detail his reasons for finding the evidence unpersuasive.

[90]            This case has been argued principally on the documentary evidence respecting the intention of the Crown embodied in the 1870 Minute, especially the licences of occupation and the circumstances surrounding them, Murray's field book, and the Crown's unilateral grant of interests in the land to non-Aboriginal people. In my opinion, this is strong evidence in support of the Judge's conclusions.

[91]            In order to justify intervention by this Court on the ground that the Judge committed a reviewable error by attaching so little weight to the oral history evidence as to amount to reversible error, that evidence would, in my opinion, have to be sufficiently clear and compelling as to throw into real doubt the propriety of the Judge's conclusions.

[92]            For the most part, the oral history evidence is very vague about identifying the government officials who represented to the Mi'kmaq that land would be or had been set aside for them at Conne River. In Dr. von Gernet's opinion, which the Judge apparently accepted, the oral history evidence lacked specificity and temporal depth.

[93]            As for the evidence supporting the traditional Mi'kmaq belief that the Conne River lands constituted a reserve, the use of the words "Indian Reserve" on maps on various times is far from being a recognition by the Government that the Crown held lands for the common use and benefit of the Mi'kmaq. The words "Reserve", "Reservation", and "Settlement" may well have been used in Newfoundland at that time, both on maps and in other contexts, in a more generic sense, simply to indicate the site of the Mi'kmaq settlement or village, without connoting the legal nature of their title to the land.

[94]            The most specific aspect of the evidence was that it was part of Mi'kmaq oral history that Murray had told them that the land at Conne River would be or had been set aside for them and that he planted posts to mark its western and eastern boundaries. The Mi'kmaq belief that Murray had told them that land had been or would be set aside for them is supported by a report written in 1872 by Henry Camp, the Warden of River Fisheries, who said of those living at "Conn River, Indian Settlement":

they are very saucy the past three or four years; someone has been telling them they have exclusive right both to land and water in Conn, in fact they have a license to hold the South side of Conn, about two and a quarter miles in length and thirty-three chains deep.

[95]            Neither witness traced the source of the Mi'kmaq belief to a person who was alive in 1869. What Murray actually told the Mi'kmaq we cannot, of course, know, particularly in the absence of his communications to the Executive Council in 1869 and 1870. However, the entries in his field book, and the 1872 licences, strongly suggest that he envisaged the division of the land into lots to be held under individual licences of occupation.

[96]            Since Murray was familiar with the creation of reserves in Canada, it might be thought that he would have used the word "reserve" to mean land set apart by the Crown and held for the collective use and benefit of members of a First Nation, rather than for individuals. However, there is no documentary record of the use of the words "reserve" or "reservation" in relation to the Conne River lands by either Murray or Howley, his assistant and, eventually, his successor as Director of the Geological Survey of Newfoundland. Further, although Murray made many recommendations respecting the adoption in Newfoundland of the patterns of land tenure developed in Canada, there is no record that he made similar recommendations concerning the establishment of a system of tenure that took account of the Aboriginal presence.

[97]            Finally, I should also note the degree to which the oral tradition evidence is relevant to the legal issues as they have been presented by Mr. Jeddore's counsel on the appeal. First, to the extent that the oral tradition evidence is said to support the creation of a reserve under colonial law, the evidence is irrelevant. In my view, taxpayers are only entitled to the benefit of paragraph 87(1)(b) if they prove that their income was situated on a reserve, as that term has been interpreted with respect to reserves created in Canada.

[98]            Second, to the extent that the oral tradition evidence was tendered to prove the intention underlying the 1870 Minute, it is of limited relevance. Unlike, say, the interpretation of a treaty, determining what the Government intended in 1870 when it unilaterally granted the Conne River lands, does not require a finding about the intention of the Mi'kmaq at that time. While evidence of what Murray and other government officials told the Mi'kmaq has some relevance in determining the Government's intention in 1870 or 1872, the strength of the documentary evidence inevitably diminishes the weight to be given to the oral tradition evidence pn this point.

[99]            Thus, in my opinion, the oral history evidence falls far short of what would be required to demonstrate that, in a case where documentary evidence is very significant, the inferences drawn by the Tax Court Judge from the evidence as a whole are clearly wrong or against the overwhelming weight of the evidence, including the oral tradition evidence. In short, I am not persuaded that his treatment of the oral history evidence constituted an error of law or that, on the evidence before him, he committed a palpable and overriding error in reaching his conclusions.

F.          CONCLUSIONS

[100]        For these reasons I would dismiss the appeal, and award the costs of the appeal to the Crown.

                                                                                       "John M. Evans"                

                                                                                                              J.A.                        

                          FEDERAL COURT OF APPEAL

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                          A-709-01

STYLE OF CAUSE:         JOHN N. JEDDORE v. HER MAJESTY THE QUEEN

PLACE OF HEARING: ST. JOHN'S, NEWFOUNDLAND AND LABRADOR

DATE OF HEARING:     JUNE 10 AND 11, 2003

REASONS FOR JUDGMENT BY:              SHARLOW J.A.

CONCURRED IN BY:    DÉCARY J.A.

CONCURRING REASONS BY:                   EVANS J.A.

DATED:                              AUGUST 28, 2003

APPEARANCES:

PETER A. O'FLAHERTY                                  FOR THE APPELLANT

JUDY A. WHITE                                                FOR THE APPELLANT

TERRENCE JOYCE AND                                              FOR THE RESPONDENT

PATRICK VEZINA

SOLICITORS OF RECORD:

GOODLAND O'FLAHERTY                                        FOR THE APPELLANT

JUDY A. WHITE                                                FOR THE APPELLANT

CONNE RIVER RESERVE,

NEWFOUNDLAND AND LABRADOR

MORRIS ROSENBERG,                                   FOR THE RESPONDENT

DEPUTY ATTORNEY GENERAL OF CANADA