Baptiste v. Canada, 2004 FC 653

Date: 20040503

Docket: T-307-96

Citation: 2004 FC 653

Ottawa, Ontario, this 3^rd day of May 2004

Present:           The Honourable Madam Justice Heneghan                                    

BETWEEN:

                        FORMER CHIEF HARVEY BAPTISTE, DAVE BEARSPAW,

                     CHIEF DARCY DIXON, REX DANIELS, JOHN LEFTHAND JR.,

                      KEITH LEFTHAND, MORRIS McLEAN, GORDON WILDMAN,

      FORMER CHIEF KEN SOLDIER, CHIEF AARON YOUNG, FRANK CRAWLER,

            BRUCE LABELLE, MARGERY TWOYOUNGMEN, HOMER HOLLOWAY,

            GERALD KAQUITTS, WOODROW SOLDIER, CHIEF ERNEST WESLEY,

                         IRBY CECIL, WATSON KAQUITTS, CHARLIE ABRAHAM,

                                        TATER HOUSE, CLIFFORD POUCETTE,

                                       JOHN WESLEY suing on their own behalf

                                       and on behalf of all other members of the

                                     STONEY BAND (herein ÎYÂRHE NAKODA),

                                                                           and

                                           FORMER CHIEF HARVEY BAPTISTE,

                                      DAVE BEARSPAW, CHIEF DARCY DIXON,

                        REX DANIELS, JOHN LEFTHAND JR., KEITH LEFTHAND,

                       MORRIS McLEAN, GORDON WILDMAN suing on their own

              behalf and on behalf of all other members of the BEARSPAW BAND,

                                                                           and

          FORMER CHIEF KEN SOLDIER (now deceased), CHIEF AARON YOUNG,

             FRANK CRAWLER, BRUCE LABELLE, MARGERY TWOYOUNGMEN,

                 HOMER HOLLOWAY, GERALD KAQUITTS, WOODROW SOLDIER

suing on their own behalf and on behalf of all other members of the CHINIKI BAND

                                                                           and

                     CHIEF ERNEST WESLEY, IRBY CECIL, WATSON KAQUITTS,

    CHARLIE ABRAHAM, TATER HOUSE, CLIFFORD POUCETTE, JOHN WESLEY

suing on their own behalf and on behalf of all other members of the WESLEY BAND

                                                                           and

                              the said STONEY BAND (herein ÎYÂRHE NAKODA),

                                                                                                                                            Plaintiffs

AND

                     HER MAJESTY THE QUEEN in Right of Canada including the

                     Minister of Indian Affairs and Northern Development and the

               Minister of the Environment in their capacities as representatives of

                             the Crown and as Ministers with particular functions

                                                                                                                                        Defendant

AND

         LESLIE E. BANNERT carrying on business as Cripple Creek Logging and

                CRIPPLE CREEK LOGGING, EVA BAPTISTE, HARVEY BAPTISTE,

   NORMAN BAPTISTE, DAVID BEARSPAW, OLLIE BENJAMIN, JOHN BRENNAN,

   PAT TOTH and LEO MOISIER carrying on business under the name and style of

           Ghost River Forest Products and GHOST RIVER FOREST PRODUCTS;

              CANADIAN FOREST PRODUCTS LTD., CLAN LOGGING (1995) LTD.,

   COLUMBIA RIVER RANCHES LTD., CONRAD CRAWLER, GILBERT CRAWLER,

         STEVE CROMBIE, FLOYD DANIELS and DIANE DANIELS, DARCY DIXON,

         DONALD DIXON, LAWRENCE DIXON, DOWNIE STREET SAWMILLS LTD.,

CURTIS EAR, EAST WEST COMMODITIES LTD., ELITE TRANSPORTATION INC.,

            EMPORIUM INVESTMENTS LTD., ENCAMPMENT CREEK LMBR LTD.,

              EVANS FOREST PRODUCTS LTD., GORMAN BROTHERS LUMBER,

             AUDREY HUNTER, INTERNATIONAL FOREST PRODUCTS LIMITED,

                CURRIE JACKSON, JAFFRAY LOGGING LTD., MARY KOOTENAY,

               RALPH KOOTENAY, RUDY LABELLE, MARDIS LOGGING CO. LTD.,

                                    MILLIGAN BROTHERS CONTRACTING LTD.,

        MURRAY HILLSON LOGGING LTD., PANORAMA TRANSPORTATION INC.,

          POPE & TALBOT LTD., RAQUEL POUCETTE, R & R TRUCKING CO. LTD.,

      VIVIAN RIDER and NORMAN LEONARD (also known as NORMAN COMEAU)

carrying on business as N. Leonard Holdings Ltd. and N. LEONARD HOLDINGS LTD.,

             SALEKIN & ASSOCIATES LTD., SLOCAN FOREST PRODUCTS LTD.,

                TOLKO INDUSTRIES LTD., MERLE VAN LOON, PETER DENARDI,

           RUTH WATRIN and GORDON HAUGER carrying on business under the

    firm name and style of Van Loon Post & Poles and VAN LOON POST & POLES,

GERRY WEIR carrying on business under the firm name and style of Morley Sawmill

    and MORLEY SAWMILL, LAZARUS WESLEY and LENNY WESLEY carrying on

          business under the firm name and style of Buck Mountain Holdings and

     BUCK MOUNTAIN HOLDINGS, LENNY WESLEY, WEST FRASER MILLS LTD.,

                       WESTWOOD FIBRE LTD., WHISKEY JACK LOGGING LTD.,

                     W.M. DIAMOND CONTRACTORS LTD., 2424 HOLDINGS LTD.

                                                                                                                                    Third Parties

                                            REASONS FOR ORDER AND ORDER

INTRODUCTION

[1]                Canadian Forest Products Ltd., Evans Forest Products Ltd. Slocan Forest Products Ltd., Pope & Talbot Ltd., Downie Street Sawmills Ltd., Gorman Brothers Lumber Ltd., Emporium Investments Ltd., International Forest Products, Norman Baptiste, Floyd Daniels, Darcy Dixon, Lawrence Dixon, Rudy Labelle and Lazarus Welsey (the "Third Parties") move to challenge the jurisdiction of the Federal Court to entertain the third party proceedings commenced against them by the Defendant Her Majesty the Queen in Right of Canada including the Minister of Indian Affairs and Northern Development and the Minister of the Environment in their capacities as representative of the Crown and as Ministers with particular functions ("Her Majesty" or "the Defendant").

[2]                The Third Parties are forest companies, log brokers, sawmill operators and some individual members of the Plaintiff bands. The Third Parties seek an Order setting aside the third party notices that were issued by the Defendant on the grounds that this Court lacks jurisdiction to adjudicate the third party proceedings. Other named Third Parties have filed letters indicating their support for the arguments advanced on this motion.

BACKGROUND

[3]                The context for this motion is the commencement of this action on February 7, 1996 by the Stoney Band, the Bearspaw Band, the Chiniki Band and the Wesley Band, to be called collectively the "Stoney Band", otherwise Îyârhe Nakoda (or the "Plaintiffs"). The claim relates to harvesting of lumber from lands comprising the Stoney Reserve in Alberta. The harvesting followed an assessment by the Crown of timber holdings on the Stoney Reserve when the Crown recommended an annual harvest of 640 timber loads.

[4]                By the end of February 1995, the Plaintiffs estimate that more than 25,000 loads of timber had been wrongfully removed from the Stoney Reserve as the result of illegal logging activities. The original statement of claim alleged multiple breaches of fiduciary duty by the Defendant, including mismanagement of the forested areas, misuse of funds belonging to the Stoney Band for rehabilitation and conflict of interest. By an Amended Statement of Claim that was filed on March 13, 2003, the Plaintiffs claim approximately $9,000,000.00 for unpaid stumpage and royalties, fee and dues for all timber removed from the Nakoda or Stoney Reserves; damages of approximately $73,000,000.00 for damage to the Nakoda or Stoney Reserve lands; damages in the amount of approximately $11,000,000.00 for the clean-up and rehabilitation of the Nakoda or Stoney Reserves; damages of approximately $20,000,000.00 for the costs of reforestation; punitive and aggravated damages, as well as interest and costs on a solicitor-client basis.

[5]                On January 22, 1997, the Defendant brought a motion seeking an Order staying the action, pursuant to the Federal Courts Act, R.S.C. 1985, c. F-7, as amended (the "Act"), section 50.1, on the grounds that it intended to issue third party notices against parties over which the Court may not have jurisdiction. At the same time, the Defendant sought an Order for directions concerning the future conduct of that action.

[6]                The Defendant filed several third party notices on April 4, 1997. The hearing of the Defendant's motion proceeded before Prothonotary Hargrave on April 23, 1997. By Order issued on May 16, 1997, the Prothonotary dismissed the Defendant's motion for a stay pursuant to the Act. He found that there is jurisdiction in this Court on the proposed third party proceedings. The Prothonotary specifically acknowledged the right of the Third Parties to move independently, on their own behalf, to challenge the question of this Court's jurisdiction over the third party proceedings.

[7]                Following service of the Amended Statement of Claim, the Defendant filed an Amended Statement of Defence and Amended third party notices.

SUBMISSIONS

[8]                The Third Parties now challenge the issue of jurisdiction. The arguments of the moving parties are supported by several other Third Parties who indicated their position by letters directed to the Registry, as follows:

Morley Sawmill (Gerry Weir) Jaffray Logging Ltd.

Emporium Investments Ltd.

Westwood Fibre Ltd.

Whiskey Jack Logging Ltd.

Columbia River Ranches Ltd.

Panorama Transportation Inc.

West Fraser Mills

Clan Logging (1995) Ltd.

[9]                The Third Parties seek to strike out the third party notices on the grounds that this Court lacks jurisdiction over the claim asserted. A third party notice is to be assessed as an independent action between the Defendant and the Third Parties and the existence of jurisdiction over the main claim between the Plaintiff and the Defendant is not determinative of jurisdiction over the third party claim; see R. v. Thomas Fuller Construction Co. (1958) Ltd., [1980] 1 S.C.R. 695">[1980] 1 S.C.R. 695.

[10]            The test for assessing whether the Federal Court has jurisdiction in a particular matter has been set out by the Supreme Court of Canada in ITO-International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752 where the Court said at p. 766:

The general extent of the jurisdiction of the Federal Court has been the subject of much judicial consideration in recent years. In [1977] 2 S.C.R. 1054">Quebec North Shore Paper Co. v. Canadian Pacific Ltd., [1977] 2 S.C.R. 1054, and in [1977] 2 S.C.R. 654">McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654, the essential requirements to support a finding of jurisdiction in the Federal Court were established. They are:

1. There must be a statutory grant of jurisdiction by the federal Parliament.

2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.

3. The law on which the case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867.

[11]            The third party notices affecting the moving parties raised claims in conversion, conspiracy and negligence. The Third Parties submit that these are clearly causes of action arising under provincial common law. Claims in trespass, advanced against Evans Forest Products Ltd., International Forest Products Ltd., Pope and Talbot Ltd. and the individual Third Parties, are also grounded in provincial common law. The heart of the challenge raised by the Third Parties is the assertion that the Defendant's claim for indemnity and contribution is grounded in common law causes of action that do not meet the requirements of the ITO test of being "federal law" within the meaning of section 101 of the Constitution Act.

[12]            The Third Parties argue that reliance upon various provisions of the Indian Act, supra, is insufficient to meet the test set out in ITO, supra. Relying on Arsenault v. Canada (1995), 131 D.L.R. (4^th) 105 (F.C.T.D.), the Third Parties argue that breach of a statutory provision does not give rise to a civil cause of action.

[13]            The Third Parties submit that the federal legislation, including the Regulations, have only an incidental affect upon the common law, in this case, and that the "pith and substance" of the Defendant's claim is firmly grounded in provincial common law, not federal common law. This is contrary to the situation addressed in Mueller (Karl) Construction Ltd. v. Canada (1992), 59 F.T.R. 161 (T.D.) at 165. As well, they argue that there is no basis for a claim in contributory negligence since negligence is not advanced as a cause of action by the Plaintiff against the Defendant.

[14]            The Plaintiffs argue that the Court lacks jurisdiction over the third party claims and basically, endorses the submissions of the third parties. This is contrary to the arguments advanced in 1997 when the Plaintiffs took the position that the Court did have jurisdiction. The Plaintiffs attributed this alteration to the fact that new counsel were engaged and the Statement of Claim was amended.

[15]            The Defendant, on the other hand, submitted that it was bound by the decision of the Prothonotary. In the event that the Third Parties are successful on the motion to strike the third party notices, the Defendant requests the opportunity to bring forward a motion for a stay pursuant to section 50.1 of the Federal Courts Act, supra.

DISPOSITION

[16]            Notwithstanding the submissions of the Third Parties concerning the lack of jurisdiction over them, in particular the Defendant's alleged failure to meet the second and third branches of the ITO test, I conclude that this motion should be dismissed.

[17]            The decision of Prothonotary Hargrave, in adjudicating the Defendant's motion for a stay pursuant to section 50.1 of the Federal Courts Act, supra is, in my opinion, a bar to the relief now sought by the Third Parties. I acknowledge that the earlier decision was an interlocutory decision and that the Third Parties were not privy to the Defendant's motion. Further, I acknowledge that, pursuant to Rule 221, a party may move to strike a pleading at any time and that the Third Parties were entitled to bring their motion to strike on jurisdictional grounds.

[18]            Notwithstanding these factors, in my opinion, this motion by the Third Parties should be dismissed because the very same issues were raised before the Prothonotary and considered by him. The decision of the Prothonotary on the question of jurisdiction, not having been appealed, is final. In my opinion, I am bound to follow that decision; see Joli-Coeur v. Canada, [2000] 4 C.T.C. 95.

[19]            Accordingly, the motion of the Third Parties is dismissed. If the parties cannot agree as to costs, they may be separately spoken to.

                                               ORDER

The motion of the Third Parties is dismissed. If the parties cannot agree as to costs, they may be separately spoken to.

                                                                                      "E. Heneghan"

                                                                                                   J.F.C.

                                     FEDERAL COURT

    NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET:                                                       T-307-96

STYLE OF CAUSE: Former Chief Harvey Baptiste et al. v. Her Majesty the Queen

PLACE OF HEARING:                                             Vancouver, BC

DATE OF HEARING:                                               October 21, 2003

REASONS FOR JUDGMENT:                                Heneghan, J.

DATED:                                                          May 3, 2004

APPEARANCES:

SOLICITORS OF RECORD: