Date: 20030120
Docket: T-1060-02
Neutral citation: 2003 FCT 50
BETWEEN:
RYAN EARL WILLIAMS
Applicant
- and -
SQUAMISH INDIAN BAND COUNCIL
a.k.a. SQUAMISH NATION COUNCIL
Respondents
REASONS FOR ORDER
ROULEAU J.
[1] This is an application for judicial review of a decision of the Squamish Indian Band Council, a.k.a. Squamish National Council (the "Council"), dated July 3, 2002, whereby the Chief and the Council determined that no funds were owed by the Council to the applicant.
[2] The applicant has been a member of the Squamish Nation since he was five years old. His mother was unable to care for him when he was an infant and he has lived in the care of his grandmother, Cheryl Williams, from the age of three until he reached the age of majority. As the applicant's caregiver, Mrs. Williams collected Guardian Financial Assistance ("GFA") funds on his behalf to assist with his maintenance and upbringing.
[3] In 1993, Cheryl Williams attended at the Band Registrar's office to collect on behalf of the applicant his distribution share of an income fund that was dispersed annually to all Band members: $100 at Easter time, $100 on Labour Day and $200 at Christmas time. The Registrar's file indicated that Mrs. Williams told the Registrar that she was the applicant's sole caregiver and that he would benefit from her receiving his distribution. As a result, it was paid to his grandmother for his benefit.
[4] In or about 1996, when Mrs. Monica Jacobs took over as Band Registrar, she had a discussion with Cheryl Williams regarding the payments of the applicant's distribution. Mrs. Williams told Mrs. Jacobs that the previous Registrar had always paid the applicant's distribution to her, that she had been the applicant's caregiver since he was 3 years-old, and that she always spent his distribution for his benefit. Accordingly, she collected the distribution on the applicant's behalf until he reached the age of majority. Since then, the applicant has received distribution monies in his own mane.
[5] The applicant alleges that, prior to reaching the age of majority, he asked for and was given information by the Department of Indian Affairs and Northern Development ("DIAND") that there was a trust account in his name containing trust funds for the Squamish Nation. However, shortly after his nineteenth birthday, he made enquiries at DIAND and was informed that there was no such trust account. He had never been informed of this before and, as a result, believed his distribution monies were being directed into a trust account in his name at DIAND and that these funds would be received when he reached the age of majority.
[6] On or about April 23, 2002, the applicant and his counsel appeared before the Squamish Nation Council to ask that the latter pay the applicant the amount of $5,050.00 as compensation for distribution monies that had been paid to his grandmother while he was a child in his grandmother's care.
[7] By letter dated July 3, 2002, the Council advised the applicant of its decision to reject his request as follows:
The Chiefs and council have reviewed the information you have provided and what materials are available to us in our files concerning this matter. We have also sought legal advice concerning the issue you have raised. Based on the above, Chiefs and Council have determined that no funds are owed by the Squamish Nation to you. Your annual distributions funds were paid to your grandmother, Cheryl Williams, whose care you were in while you were a minor and these funds were used for your maintenance and benefit. Chiefs and Council have obligations to all members of the Squamish Nation and it would be inequitable for you to benefit twice from your annual distributions by receiving a second payment now.
[8] The applicant now seeks to set aside that decision. In his Notice of Application, he sought the following relief:
a) A declaration that the Council has a fiduciary trust responsibility to minor members of the Squamish Nation that includes putting minors' monies into trust accounts until they reach the age of majority;
b) a declaration that the Council had a trust duty to place any and all distribution cheques for the applicant as a minor in an interest-bearing trust account until the applicant became of majority age;
c) a declaration that the Council acted without legal authority in releasing the applicant's distribution cheques when he was a minor to his grandmother, Cheryl Williams;
d) a declaration that the Administrator of the Council breached the Squamish Nation policy that required him/her to place the minor applicant's distribution cheques in a trust account until the applicant became of majority age; in the alternative, a declaration that it breached its fiduciary duty by failing to put in place a policy and practice dealing with infant trust monies;
e) a writ of mandamus requiring the Administrator for the Council to issue distribution cheques withheld to the applicant as a minor in the amount of $5,050.00 with interest forthwith.
[9] The sole issue in this application is whether the Council's decision dated July 3, 2002, declining the applicant's request for payment of a sum of money equal to the distribution that was paid to his grandmother while he was a minor is reasonable. This raises the question of whether the Council had a fiduciary trust responsibility and/or trust duty to the applicant while he was a minor that included putting all his monies into a trust account until he reached the age of majority.
[10] The applicant submits that since he was a GFA child under the care of a third party, the respondent Council had a fiduciary obligation to make decisions for him in his best interest. This included investing his monies into an interest-bearing trust fund until he reached the age of majority.
[11] It is argued that by failing to do so and by redirecting the applicant's monies to a third party caregiver while he was a minor without consulting him, the respondent failed to exercise loyalty and fidelity to the applicant as a minor and breached its fiduciary duty towards him. Consequently, the applicant seeks to be put in the position he should have been in had the respondent invested his monies in an interest-bearing trust account while he was a minor.
[12] It is argued that the respondent also owed a duty of care to the applicant because of the trust relationship that existed between them. This included investing his share of the distributions of funds or any other distribution of Squamish funds into an interest-bearing trust account until he reached the age of majority and not to release the monies to a third party, whether a relative or not. It is argued that as a trustee, the respondent was required to act with reasonable diligence in protecting the trust monies of the applicant. However, its failure to do so constitutes a breach of its trust responsibilities to deal with the applicant's funds in his best interest while he was a minor.
[13] The applicant initially argued that the monies he was entitled to as a minor were Squamish capital funds which were transferred by DIAND to the Squamish Nation in trust for distribution to individual Band members. This argument was set aside since the parties agreed that the money being distributed was not from a capital fund transferred from DIAND, and that therefore the provisions of s. 52 of the Indian Act as to the handling of the distribution of capital funds did not apply.
[14] Further, the applicant contends that the Council adopted a policy to place infant trust monies into DIAND-held trust accounts where the minor was a GFA child living with a person other than a parent. Mrs. Debbie Baggot, an employee of the respondent Council, had informed the applicant through his counsel, Mr. Jason Nahanee, that the GFA policy on handling minor trust monies had not been followed in his case. By doing so, it is submitted that the respondent breached the Squamish Nation's social welfare policy as it relates to distribution funds of minors.
[15] Finally, in the event that the Court found that there was no such policy, the respondent breached its fiduciary and trust duties towards the applicant by failing to put in place a policy and practice dealing with the placement of minor trust monies.
[16] The respondent first submits that the Band Council was acting within its jurisdiction and that its decisions are entitled to a considerable degree of deference and must be reviewed on a standard of patent unreasonableness.
[17] It is submitted that the respondent Council's decision not to pay the applicant again for past distributions was both reasonable and correct. It was based on the fact that the applicant's distribution monies were paid to his grandmother who was his primary caregiver and who spent the funds on his maintenance and upbringing. This was admitted by the applicant himself in a statement he signed and presented to the Council as part of his submissions and supported by the undisputed evidence of Mrs. Jacobs who, as the Band Registrar, was responsible for the payment of distribution cheques.
[18] The respondent contends that the distribution monies at issue in the case at bar were derived from the revenue earned by the Squamish Nation and not from the Band's capital account. It was thus appropriate for the respondent to allow the applicant's grandmother to use the applicant's share of that income for his maintenance. On that basis, the respondent's decision not to repay the monies to the applicant was reasonable.
[19] It is further argued that the applicant is seeking to have the distribution monies paid to him twice. While it is acknowledged that the respondent Council owed fiduciary duties to the applicant to manage his monies in his best interest, it is submitted that it also has fiduciary obligations to manage the assets of the Band in the best interests of all its members. It would thus be contrary to those obligations to pay one member's distribution twice.
[20] It is important to bear in mind that the proceedings before the Court are not an action in damages associated with the Squamish Nation's management of the applicant's distribution funds. Nor are they an action brought by the applicant against his grandmother for wrongfully appropriating his funds. This is an application for judicial review of the respondent's decision not to pay the applicant distribution monies he was entitled to and that were paid out to his grandmother for his maintenance and upbringing. To that extent, whether or not his grandmother breached her obligations of a guardian and whether it was appropriate for her to use the monies for these purposes is irrelevant to the disposition. It is the reasonableness of the Council's decision that shall be the focus of this debate.
[21] As I see it, the sole question that needs to be addressed is whether the respondent owed a fiduciary and/or trust duty to the applicant as a minor to make decisions for him in his best interest and, if so, whether the payment of his distribution funds to his grandmother to be spent on his maintenance and care was consistent with its fiduciary and trust obligations.
[22] First, there is no doubt in my mind that the respondent had a fiduciary responsibility towards the applicant as a minor to make decisions regarding the expenditure of his distribution monies in his best interest. Applying the criteria set out by the Supreme Court of Canada in Frame v. Smith (1987), 42 D.L.R. (4th) 81 (S.C.C.) to the present case, it is clear that the respondent holds all power over the distribution of monies belonging to minor members of the Squamish Nation; that it exercises these powers in a way that directly impacts on them since they have no voice in the matter; and finally, that minors - like the applicant at the time - are particularly vulnerable to the respondent's discretionary power. This was in fact acknowledged by the respondent itself.
[23] The question remains however whether this fiduciary duty extended to the investing of the applicant's distribution funds in an interest-bearing trust account to be held for his benefit until he reached the age of majority. In other words, did the respondent's failure to place the applicant's distribution funds in an interest-bearing trust account until he reached the age of majority constitute a breach of its fiduciary obligations?
[24] A cursory review of the authorities cited by the applicant reveals that they do not stand for the proposition advanced by him that a Band Council owes a fiduciary duty to minors to place their monies in a trust account until they reach the age of majority. They do, however, stand for the broader proposition that where a fiduciary relationship has been found to exist, the fiduciary is impressed with a duty to act with "utmost good faith" towards the beneficiary. This requires that the fiduciary act with a heightened sense of loyalty and fidelity and that it act in a manner consistent with the best interests of the beneficiary in all matters related to the undertaking of trust and confidence: Assu v. Chickite, [1999] 1 C.N.L.R. 14 (B.C.S.Ct.) at para. 32.
[25] In the case at bar, the evidence clearly shows that the respondent did act in good faith and in the best interest of the applicant by releasing his distribution monies to his grandmother, his primary caregiver, on his behalf and for his maintenance and upbringing. The evidence that the applicant's grandmother used the distribution monies for these purposes and that he benefited from this arrangement is clear, uncontested and admitted by the applicant himself. This is not a case where the Council used its powers to obtain money at the applicant's expense or where it diverted funds to a third party to the applicant's detriment. The respondent had no duty over and above the obligation to make decisions regarding the distribution of the applicant's funds in his best interest, which it clearly did.
[26] The applicant initially contended that the distribution monies he was entitled to as a minor were Squamish capital funds (or "capital monies") transferred by DIAND to the Band in trust for distribution to Band members. This was incorrect and abandoned at the hearing.
[27] As the respondent pointed out, the distributions at issue in the present case are distributions of Band income generated from the Squamish Nation assets, not distributions of capital derived from the Band's capital account. As mentioned earlier, sections 52.1 and 64(1)(a) of the Act do not apply to these distributions and, consequently, the respondent had full discretion in the management of the applicant's funds in his best interests.
[28] Whether or not the Band had established a policy dealing with minor's funds and whether or not it was under an obligation to do so has nothing to do with the distribution of funds and is irrelevant.
[29] Since the distribution monies to which the applicant was entitled as a minor were "revenue funds", I have no difficulty finding that the respondent's decision to release the funds to the applicant's grandmother for his maintenance and upbringing was not only a valid exercise of discretion in the applicant's best interest, but an entirely appropriate course of action. Indeed, in Director of Maintenance Recovery v. Snow, [1983] 3 C.N.L.R. 65 at 73 (Alta. Prov. Ct.), a case relied upon by the applicant but for the wrong reasons, the Court said in obiter that it would be improper to keep a child's distribution money in trust until he reaches the age of majority if public monies are otherwise being spent on the upkeep of the child: see also Find v. British Columbia (Public Guardian and Trustee), [2002] B.C.J. No. 676 (B.C.S. Ct.). Thus, the respondent's refusal in the case at bar to pay the applicant's distribution monies a second time was reasonable and correct.
[30] The applicant did not adduce any evidence showing that, by releasing his distribution monies to his grandmother, the respondent failed to make a decision that was not in the applicant's best interests. On the contrary, the applicant himself acknowledges that he benefited from this arrangement.
[31] Finally, and perhaps most importantly, the present application fails, in my view, to disclose a reasonable cause of action. Indeed, in his Notice of Application, the applicant alleges a breach of fiduciary and trust duties owed to him by the respondent and seeks relief in the form of mandamus to recover an amount of $5,050.50 as compensation for distribution monies that had been paid to his grandmother while he was a child in his grandmother's care. However, he completely omitted to plead any prejudice or damage he suffered as a result of the respondent's decision not to pay him the funds. This omission, coupled with the fact that he actually benefited from the respondent's decision to release his distribution funds to his grandmother for his maintenance and upbringing, clearly shows that the applicant has no arguable case.
[32] Despite knowing this, the applicant decided nevertheless to bring the present application for judicial review in an attempt to benefit twice at the expense of other members of the Squamish Nation Band and retained the services of counsel. This course of conduct has wasted this Court's time and resources and clearly results in an abuse of process.
[33] Accordingly I dismiss this application with costs.
(Sgd.) "P. Rouleau"
Judge
Vancouver, B.C.
January 20, 2003
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1060-02
STYLE OF CAUSE: RYAN EARL WILLIAMS v. SQUAMISH INDIAN
BAND COUNCIL a.k.a. SQUAMISH NATION
COUNCIL
PLACE OF HEARING: Vancouver, B.C.
DATE OF HEARING: January 14, 2003
REASONS FOR ORDER: ROULEAU J.
DATED: January 20, 2003
APPEARANCES:
Ms. Teressa Nahanee for Applicant
Mr. F. Matthew Kirchner
Ms. Heather Smillie for Respondents
SOLICITORS OF RECORD:
McIvor Nahanee Law for Applicant
Merritt, B.C.
Ratcliff & Company for Respondents
North Vancouver, B.C.
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