Medeiros v. Echum, 2001 FCT 1318

Date: 20011130

Docket: T-935-99

Neutral citation: 2001 FCT 1318

BETWEEN:

LAURA MEDEIROS, KATHY AUDETTE, ESTHER CARISEE, CAROLINE CHARLEBOIS, FLORENCE GODON, LUCIA KOSTER, SAPHIRA LEVESQUE, MARTHA MALAIGRANDA, DONNA MARTIN, ROBERT MAYHEW, ALFREDO MEDEIROS, LAURA MEDEIROS JR, NOAH MEDEIROS,

PETER MILLER, ALICE PEEVER, AMBROZINA POST, MARY SUTHERLAND, SOPHIE TARDIF, ADELINE TAYLOR, ALEX. TAYLOR, BONNIE TAYLOR,

DAVID B. TAYLOR, DAVID TAYLOR, DONALD TAYLOR, GILBERT TAYLOR, LAWRENCE TAYLOR, LLOYD TAYLOR, LORETTA TAYLOR, MINNIE TAYLOR, SIMEON TAYLOR, THERESA TAYLOR, WILLIAM TAYLOR, EVA WESLEY,

STELLA (ZACHARIE) WRIGHT, LOWLA ZACHARIE, RICHARD ZACHARIE, LIN ZACHARIE and PETER ZACHARIE

                                                                                                                                                   Applicants

                                                                             - and -

GABRIEL ECHUM (Chief of Ginoogaming First Nation) in his personal and in his representative capacity, BRUCE MENDOWEGAN (Band Councillor of Ginoogaming First Nation) in his personal and in his representative capacity,

JOHN MENDOWEGAN (Band Councillor of Ginoogaming First Nation) in his personal and in his representative capacity, ELZEAR TAYLOR (Band Councillor of Ginoogaming First Nation) in his personal and in his representative capacity, CALVIN TAYLOR (Band Councillor of Ginoogaming First Nation) in his personal and in his representative capacity, KEN CHARLES (Band Councillor of Ginoogaming First Nation) in his personal and in his representative capacity,

THE CHIEF AND COUNCIL OF GINOOGAMING FIRST NATION FROM TIME TO TIME, and GINOOGAMING FIRST NATION and

ONTARIO POWER GENERATION INC.

                                                                                                                                            Respondents

                                                            REASONS FOR ORDER

LEMIEUX J.:

A.        INTRODUCTION

[1]                 The applicants in this judicial review proceeding are members of the Ginoogaming First Nation (the "First Nation" or the "band") who live off-reserve in the Town of Hornepayne, some 140 kilometres from the band's reserve situated at the upper end of the northeastern shore of Long Lake (Longlac) in Northwestern Ontario north of Lake Superior. The reserve was established in 1906 following the negotiation of the James Bay Treaty (Treaty No. 9) in 1905-06. In 1995, 236 band members lived on-reserve and 374 lived off-reserve. The First Nation was formerly known as Long Lake Band No. 77.

[2]                 The applicants attack, on administrative law grounds only, not having engaged the Canadian Charter of Rights and Freedoms, two decisions made on August 4, 1998 by the Chief and Council of the band related to the use of proceeds of a Settlement Agreement for the benefit of the on-reserve members of the First Nation, thus excluding the applicants. The Settlement Agreement was negotiated with Ontario Hydro (now Ontario Power Generation Inc.). It settled claims advanced by the First Nation as a result of damages suffered by flooding after Ontario Hydro constructed, in 1938, a dam on the Kenogami River, an outlet to the waters of Long Lake.

[3]                 The first decision attacked is Band Council Resolution 1998-99-254 made on August 4, 1998, authorizing the Chief and Council to enter into a trust agreement, contemplated by the Settlement Agreement, in the capital amount of $2,295,131.98, part of the settlement proceeds, to finance on-reserve projects from the interest generated from the capital account of the trust.

[4]                 The second impugned resolution made the same day is Band Council Resolution 1998-99-257 providing for a $3,000 per year payment for five years to each eligible Elder ordinary resident on the reserve, ostensibly for their participation in the negotiations.

[5]                 The challenged decisions were made before the Supreme Court of Canada had heard on October 13, 1998, and had decided on May 20, 1999, the case of Corbiere v. Canada (Minister of Indian and Northern Affairs), [1999] 2 S.C.R. 203.

[6]                 In Corbiere, supra, the Supreme Court of Canada invalidated, as inconsistent with section 15 of the Canadian Charter of Rights and Freedoms, subsection 77(1) of the Indian Act which excluded off-reserve members of an Indian band from the right to vote in band council elections.

[7]                 Here, the evidence shows the applicants were not given notice of the meeting for the August 4, 1998 meeting of band members when the ratification vote was held in which they were not allowed to participate.

[8]                 Counsel for the First Nation justifies the exclusion of the applicants from the benefits of the trust agreement, part of the Settlement Agreement with Ontario Hydro, because its purpose and effect was to compensate for flooding damages at Long Lake and because the vast majority of the proceeds were to be allocated to on-reserve community projects. In terms of the payment to the Elders living on-reserve, counsel for the First Nation says it was an attempt to target this benefit to those who had suffered the most from the damages caused by the operation of the dam.

[9]                 More importantly, the exclusion of the applicants from benefits under the trust agreement or the Elders in Hornepayne from cash distributions is justified because, it is urged: (1) historically it can be shown the ancestors of the applicants were not part of the community which formed the Long Lake Reserve and Band since their ancestors were part of a different community with a different traditional land base outside the area affected by the flooding for which compensation was being paid; (2) the applicants and others were members of a de facto separate First Nation, the Hornepayne First Nation; and (3) the formal stance of non interference in the negotiations taken by the Chief of the Hornepayne First Nation at the time the Settlement Agreement was being negotiated. These views are said to be consistent with:

(a)        the common knowledge in the Ginoogaming community;

(b)        the advice of Elders of the band;

(c)        the long-standing political position and expressed goals of the Hornepayne First Nation;

(d)        the specific statements made by the Chief of the Hornepayne First Nation at a meeting considering the negotiations with Hydro;

(e)        the political recognition of the Hornepayne First Nation by other Aboriginal groups; and

(f)         the political and practical effects of this recognition.

[10]            The scope of this judicial review application was defined by the May 19, 1999 order of Justice Sharlow, then of the Trial Division, who, on an application before her:

(1)        denied the applicants' application for an order extending the time to challenge the decision of the band council of the Ginoogaming First Nation to enter into the Final Settlement Agreement with Ontario Hydro;

(2)        allowed the applicants' application for an extension of time to challenge the decision of the Council of the Ginoogaming First Nation "to use the proceeds of the Final Settlement Agreement to benefit members of the Ginoogaming First Nation other than the applicants";

(3)        issued an interim injunction for the use of the proceeds of the Final Settlement Agreement in an amount of $300,000.00. This amount was ordered to be held in trust by the council of the band pending the resolution of this application for judicial review;

(4)        ruled the costs of the application before her were deferred for consideration at the hearing of the application.

[11]            Justice Sharlow denied the applicants' application for an extension of time to challenge the decision of the band council of the First Nation to enter into the Final Settlement Agreement with Ontario Hydro because she found the applicants had not demonstrated an arguable case. She expressed herself in the following manner:

[22]     As I understand it, the applicants' argument with respect to the decision to enter into the settlement agreement is that Council acted beyond its powers in purporting to foreclose any future actions by members of Ginoogaming First Nation who will not be sharing in the proceeds of the settlement agreement. There are waiver and release provisions in the settlement agreement that appear to have that effect.

[23]    I start from the proposition that a band council has a legal obligation to exercise its powers fairly and with an even hand, and is not entitled to make arbitrary decisions that benefit one group of members to the exclusion of another group. It is arguable that any decision to treat the applicants differently from other members of Ginoogaming First Nation is subject to being quashed on judicial review unless the difference in treatment can be justified.

[24]    There are several clauses in the settlement agreement that refer to "members". However, there is nothing in the agreement that gives some members more benefits than others, or requires some members to give up more than others. I conclude that there is nothing in the settlement agreement itself that is capable of supporting the applicants' claim that the Council has improperly preferred one group of members over another. I conclude that the applicants have not demonstrated an arguable case with respect to the decision to enter into the settlement agreement.

[25]    I cannot say the same of the Council's decision as to the use of the proceeds of the settlement agreement. In that regard, there is clear evidence of a decision to treat different members of Ginoogaming First Nation differently depending on their residence and their membership in Hornepayne First Nation. [emphasis mine]

B.        SOME OTHER BACKGROUND AND FACTS

(1)       The affidavit of the applicants

[12]            Laura Medeiros, in her affidavit in support of this application, recites she is a member of the First Nation as were her father (Peter Taylor) and her mother (Frances Taylor) ((Shaganash)). Her father hunted and trapped seasonally in the Longlac area. She lived with her parents. The reserve was unable to sustain them twelve months of the year. Her aunt and uncle James and Lottie Wynne also lived on the reserve. Her late brother Sandy Taylor was a member of the band and resided on the reserve. His wife and children reside on the reserve as do certain cousins. She deposes the only Indian band she has any connection with is the First Nation.

[13]            She acknowledges in her affidavit she was recently elected Chief of the Hornepayne First Nation. She adds the Hornepayne First Nation is not an Indian band recognized by the Government of Canada but is a voluntary association of status Indians living in and around Hornepayne, each of whom is a member of some Indian band. Many but by no means all of the members of the association (the Hornepayne First Nation) are members of the First Nation living in and around Hornepayne.

[14]            Her affidavit also attests to the following events.

[15]            On October 15, 1996, she wrote to the Chief and Council of the First Nation concerning a presentation to Ontario Hydro regarding the elements of a possible settlement. She wanted to know what this meant and requested that "we be kept informed of the process and of possible compensation that we be included". She added:

We also know that Hornepayne Band office is not recognized officially by the Federal government this means that we are still registered under Ginoogaming First Nation reserve. This letter represents forty (40) of Ginoogaming First Nation Band registered members.

[16]            On October 25, 1996, Chief Gabriel Echum of the First Nation wrote to Laura Medeiros advising while good progress was being made, it was not certain that an agreement between the First Nation and Hydro would be possible. He added:

If an agreement is possible, however, it will not include cash payouts to individuals. Experience has shown that such payments are generally not very effective in bringing about long-term economic development opportunities for the present and future benefit of the community as a whole.

Any agreement with Hydro will be without prejudice to the Aboriginal and Treaty rights of all people who are registered members of the Ginoogaming First Nation, whether or not they live on-Reserve or off-Reserve, and without prejudice to the Aboriginal and Treaty rights of all other First Nations. Therefore, if an agreement can be reached with Hydro, it will not prejudice the interests of the people you represent. [emphasis mine]

[17]            On the fax cover sheet of his October 25, 1996 letter to Laura Medeiros, Chief Echum said he would only be dealing with the Chief and Council of the Hornepayne First Nation.

[18]              During the relevant period from October 1996 to August 1998, the Chief of the Hornepayne First Nation was Judy Mayhew. Chief Echum had previously written to Judy Mayhew on October 12, 1996 in terms similar to the letter which he later sent to Laura Medeiros. He indicated the negotiating team had been instructed to target any settlement package on long-term economic development opportunities for the benefit of the community as a whole, present and future, rather than to individuals within the community.

[19]            Laura Medeiros' group retained legal counsel who, on December 3, 1996, advised Chief Echum his clients wished to have separate representation regarding the negotiations with Ontario Hydro to which Chief Echum responded on December 10, 1996, advising:

It is both necessary and appropriate for negotiations such as these to be conducted under the direction of the duly-elected Chief and Council of Ginoogaming First Nation. If an agreement can be reached with Hydro that is satisfactory to the Chief and Council, of course members will have an opportunity to participate in the ratification process.

In the meantime, it would not be acceptable to the Chief and Council of Ginoogaming First Nation, nor would it be helpful to the negotiations with Hydro, for the people you represent to have any direct involvement.

The Chief of Hornepayne First Nation and I are in regular contact about a number of matters and I keep her generally informed about the Hydro negotiations. I understand that this is completely satisfactory to the Chief and Council of Hornepayne First Nation. [emphasis mine]

[20]            On December 10, 1996, Chief Mayhew of Hornepayne First Nation also wrote to the solicitor retained by Laura Medeiros' group. The pertinent parts of that letter are:

... please be advised that many of the members of the Hornepayne First Nation are wrongly considered by Indian Affairs to be part of Ginoogaming First Nation. This confusion goes back to the time when our people collected Treaty payments at Long Lac. Hornepayne First Nation is actively working towards full recognition, and in the meantime acts as independently as possible.

The Chief and Council of Hornepayne First Nation are aware of the negotiations between Hydro and Ginoogaming. Even though we are on Ginoogaming's band list, however, these negotiations have nothing to do with us. Therefore, the Chief and Council of Hornepayne First Nation have officially adopted a stance of "non-interference".

With this background, I am sure you will understand why the Chief and Council of Hornepayne First Nation will not, and indeed cannot, provide information to you about the negotiations between Ginoogaming and Hydro. The Chief and Council will not support any of our members who appear to want to interfere in the affairs of another First Nation.

Chief Echum and I are in regular contact about many matters. The general information about the negotiations provided through this arrangement is completely satisfactory to the duly elected Chief and Council of Hornepayne First Nation. [emphasis mine]

[21]            A copy of Chief Mayhew's letter to the solicitor retained by Laura Medeiros' group was sent to Mr. A. May of Ontario Hydro. He was Ontario Hydro's negotiator on this file.

[22]            The respondents record for the First Nation contains another letter which Judy Mayhew sent to the solicitor representing the Hornepayne group. That letter, copied to Mr. May, is dated January 20, 1997 and is in terms similar to the December 10 letter she had previously sent.

[23]            Laura Medeiros, as well as her solicitor in a letter dated December 19, 1996, to Chief Echum, complained about not being informed by Judy Mayhew on the negotiations and in particular that such negotiations involved the resolution of a claim by the First Nation for cultural and other unquantifiable losses and for economic losses. She says, in her affidavit, Judy Mayhew thought the First Nation's claim involved simply a claim for damages to reserve land proper and she did not understand the claim covered damages to traditional lands and waters not within the boundaries of the reserve.

[24]            Laura Medeiros was elected Chief of the Hornepayne First Nation after the Ginoogaming First Nation had concluded its arrangements with Ontario Hydro and had implemented the Settlement Agreement. She said she began to review the files of the association, that is of the Hornepayne First Nation, and discovered undistributed issues of Ginoogaming First Nation newsletters entitled "Ontario Hydro's Past Grievance" and deposed there was much in those newsletters of interest to Ginoogaming band members living at Hornepayne.

[25]            She notes the July/August 1996 newsletter where it is stated, prior to settling of the Ginoogaming First Nation into permanent communities, people lived much of the year on their traditional lands in small family-based settlements. Mention was made of graves, not only within reserve boundaries or at community graveyards, but throughout the traditional lands.

[26]            The Ginoogaming's newsletter of July/August 1996 described, she asserts, its negotiating attempts to reach a settlement which would contain elements covering compensation for reserve lands and waters affected by the flooding and diversion, compensation for traditional lands and waters affected by the same causes, compensation for past damages and impacts on the reserve and traditional lands, such compensation to include an allowance for loss of economic use of lands and waters and compensation for impacts on culture, religion and community.

[27]            The July/August 96 issue also contains, she deposed, Ontario Hydro's negotiating stance as well as a summary of the research conducted on the impacts of Ontario Hydro's Long Lake (Longlac) flooding and diversion noting families living along the impacted area moved because of loss of wild life.

[28]            Laura Medeiros accuses Celia Echum, Chief Echum's wife and one of the negotiators to the Settlement Agreement of not negotiating in good faith on behalf of all of the members of Ginoogaming First Nation and believes she prejudiced the interests of members of the First Nation living at Hornepayne.

[29]            Laura Medeiros complains about members of the Hornepayne First Nation not receiving the Agreement In Principle for review, not being invited at a workshop about this agreement and of being excluded from the ratification process.

[30]            Laura Medeiros' affidavit, as appendix G, deposes a commentary on the Hornepayne First Nation efforts to obtain band status and a reserve under the Indian Act.

(2)        The affidavits of the respondent First Nation

[31]            The Ginoogaming First Nation responded principally through the affidavits of Trevor Falk, of Heather Ross and of Wally McKay. Trevor Falk assisted the First Nation in the negotiations with Ontario Hydro. Heather Ross is a planner who also assisted the First Nation in reaching a settlement with Ontario Hydro. Wally McKay was retained by the First Nation as a facilitator in their negotiations. He has extensive experience in aboriginal governance at the community, regional and provincial levels including three years as Grand Chief of a First Nation and two years as Ontario Regional Chief of the Assembly of First Nations.

(a)        Mr. Falk's affidavit

[32]            Trevor Falk's affidavit covered much of the documentation provided by Laura Medeiros in her affidavit but he went beyond. He gave context to the December 10, 1996 letters sent to the solicitor of Laura Medeiros' group which he had prepared drafts of: one for Chief Echum and one for Chief Mayhew.

[33]            Mr. Falk deposed about a meeting on December 9, 1996, between Chief Mayhew of the Hornepayne First Nation and Chief Echum. Paragraphs 14 and 15 of Trevor Falk's affidavit read:

14) About half a dozen representatives of Hornepayne arrived at Ginoogaming in the early evening of December 9, 1996, including Chief Judy Mayhew... .

15) Chief Mayhew and the Hornepayne representatives said that Hornepayne First Nation is separate and distinct from Ginoogaming First Nation, and that they did not wish to interfere in the negotiations between Ginoogaming and Hydro. Since I was the person at the meeting perceived as most adept at technical-type matters, and would be preparing a draft letter to Mr. Hugill from Chief Echum, I was asked by Chief Mayhew and agreed to draft a letter for her consideration, setting out my understanding of what had been said at the meeting. [emphasis mine]

[34]            Mr. Falk notes in May, 1998, the First Nation reached an Agreement in Principle with Ontario Hydro which was signed on June 11, 1998. Negotiations between the First Nation and Ontario Hydro continued, and, in July 1998, a draft Settlement Agreement was ready for ratification.

[35]            He says there was a meeting of Elders at the reserve on July 23, 1998, who advised the Chief and Council only residents of the reserve should be entitled to attend the ratification meetings and make decisions about the Settlement Agreement with Ontario Hydro. Mr. Falk says he was not advised of the decision until July 25, 1998 when he arrived at the reserve to be available to answer questions at the community meeting planned for that evening.

[36]            He does not recall any discussions at the community meeting on July 25, 1998, about who could vote or who could not vote on the proposed settlement but recalls there was discussion about whether there should be payments to Elders, residents of the reserve. This was the first time he was aware cash payments to individuals were contemplated.

[37]            A written notice was issued stating a vote of Ginoogaming First Nation's members for the ratification of the Final Settlement Agreement would be taken at a meeting to be held on August 4, 1998. The notice provided the vote would be by a show of hands of those band members on the reserve eligible to vote. The applicants were not permitted to vote.

[38]            Trevor Falk refers to an August 12, 1998 letter from Judy Mayhew to Chief Echum enclosing a copy of an Elders' meeting of the Hornepayne First Nation held in Hornepayne who were members of the First Nation (as distinguished from the Elders of the First Nation living on the reserve) indicating they wanted to meet with Chief Echum as soon as possible. The Elders at Hornepayne wanted to be included in compensation of $3,000 to Elders over 55 in December 1998, because they had been asked and had come to Ginoogaming to tell Ontario Hydro how they remembered the reserve before it had been flooded. The Elders at Hornepayne said they contributed to the Ontario Hydro grievance process and should be compensated as were the Elders on the reserve. The Elders at Hornepayne remember going to Ginoogaming during the summer, clearing the land and building houses to help develop the reserve. They left Ginoogaming in the fall of 1932 to go back to their traditional trapping areas around Hornepayne to feed their families.

[39]            Chief Echum did not agree to meet. Rather, he forwarded a letter to Chief Judy Mayhew on August 12, 1998 writing:

The direction that we have been given is to provide for members and elders that have membership and permanent residence within Ginoogaming First Nation. They will be entitled to any existing and future claims for the Ginoogaming First Nation. You as Chief must respect this decision as we respect you and the people you represent as Hornepayne First Nation.

You mention August and December 1996 that elders were asked to come and provide information. Very little was offered by them. They were provided a fee for their services.

Unfortunately I do not have much more to offer to you and your members of Hornepayne. [emphasis mine]

(b)       The affidavit of Wally McKay

[40]            Wally McKay expressed the view the Hornepayne First Nation was an aboriginal community which is recognized as an independent First Nation by other First Nations and aboriginal organizations, and is seeking recognition from Canada as a "band" within the Indian Act but has not yet been so recognized by Canada.

[41]            He then lists the following organizations which have accorded Hornepayne First Nation recognition:

(1)        The Nishnawbe-Aski Nation ("N.A.N.") recognized Ginoogaming First Nation as a "full voting member" in February 1987. N.A.N. is an organization which represents 45 First Nations in Northern Ontario. The Ginoogaming First Nation is also a member of N.A.N. and it was the Chief of that band who moved recognition for Hornepayne First Nation.

(2)        In July 1993, the Matawa First Nations Chiefs Council recognized the Chief and Council of the Hornepayne First Nation as "the official representatives of the Hornepayne native community", and asked all other relevant bodies to recognize the Hornepayne Chief and Council as "the official First Nation Government". The Matawa First Nations Chiefs Council, according to Mr. McKay, is the political body of the Matawa Tribal Council which represents eleven First Nations in Central Northern Ontario. Both the Ginoogaming First Nation and the Hornepayne First Nation belong to the Matawa Tribal Council;

(3)        In March of 1994, the Chiefs of Ontario recognized Hornepayne as a distinct First Nation community in its own right.

[42]            In his opinion, the recognitions which he cites would be noticed and respected by any other aboriginal organization which had business with the Hornepayne First Nation. Hornepayne would be treated as an independent First Nation by all aboriginal governments and organizations with which it would come into contact. Other First Nations, according to Mr. McKay, would treat Hornepayne First Nation as an equal, and this First Nation would have full rights in assemblies and meetings of the First Nations he referred to.

[43]            Mr. McKay says the Hornepayne First Nation is recognized as such in an indirect way by the Province of Ontario because Hornepayne First Nation qualifies for a share in the Casino Rama revenues.

[44]            There are a number of other aboriginal communities which have recently sought separate band and reserve status, he indicates. In the mid 1990s, six new bands in the N.A.N. territory were recognized and provided with reserve land. These new bands were made up of persons who had previously been listed on the Band Lists of other First Nations, but who in fact made up separate communities.

[45]            This was the case of the Aroland Band. Many of the Aroland Band members were formerly listed as Ginoogaming members. He also adds in none of the six cases where the bands from whose list the members of the new bands were drawn were required to surrender any of their lands or other assets in order for the new bands to be created and provided with reserves.

[46]            He concludes by expressing his opinion, after the recognitions of the Hornepayne First Nation he cited, other First Nations would feel obligated to deal with Hornepayne First Nation on a government-government basis.

(c)        Mary Candline's affidavit

[47]            Mary Candline also deposed an affidavit in support of the Ginoogaming First Nation. She is its Chief Executive Officer. She states, except for a program called "non-insured health benefits", all government program funding provided to the Ginoogaming First Nation is determined on the basis of the on-reserve population of Ginoogaming First Nation. The program called "non-insured health benefits" is available to the band members resident at Hornepayne.

(d)        Heather Ross' affidavit

[48]            The purpose of Heather Ross' affidavit was to explain how the various monetary components in the Settlement Agreement were arrived at. Those monetary figures were negotiated amounts and were based on different rationales, she asserts. These payments are outlined in paragraph 7 of the Settlement Agreement.

[49]            Pursuant to paragraph 7 of the Settlement Agreement, Ontario Hydro was obligated to pay the First Nation the sum of $4,011,517.68, part of which was to be put in trust, calculated as follows:

(a)        $595,131.68 in compensation for past damage to 384.3 acres of reserve land;

(b)        $1,700,000.00 in compensation for individual economic losses;

(c)        $750,000.00 in compensation for cultural and other unquantifiable losses, to a fund established to construct a community cultural centre;

(d)        $836,386.00 to a fund established for purposes of shoreline protection against erosion;

(e)        $10,000.00 as the first of sixteen (16) annual payments of $10,000.00 to an education scholarship fund;

(f)         $10,000.00 as the first of fifteen (15) equal annual payments for environmental monitoring;

(g)        $100,000.00 to the deceased grandfathers' fund;

(h)        $10,000.00 as the first of sixteen (16) equal annual payments of $10,000.00 each to a fund for a post-secondary education, in recognition of sixteen (16) grave sites affected by Ontario Hydro's operations.

[50]            In addition to those amounts, Hydro also agreed to make, under section 8 of the Settlement Agreement, annual payments of $23,800.00 per year for an easement in respect of 384.3 acres of reserve land to be granted by Canada pursuant to the provisions of the Indian Act.

[51]            She described how the calculations of the various monetary amounts set out above were arrived at:

(1)        compensation for past damage to reserve land (section 7(a)) was intended to be as accurate as possible an assessment of the actual value of the land damaged;

(2)        the annual rental payment for the easement over reserve land (section 8) was also intended to be as accurate as possible an assessment of the actual market value of the easement. The final figure was based on calculations made with input from professional surveyors and appraisers;

(3)        the payment for erosion protection work (section 7(d)) was based on estimates of the actual cost of specific erosion protection works;

(4)        the payments provided for in respect of the grandfathers' fund (sections 7(g) and (h)) were made in view of the damage to or destruction of grave sites on the shores of Long Lake caused by Ontario Hydro's flooding. These figures were symbolic amounts but were arrived at after considering a detailed archeological study identifying the grave sites damaged or destroyed;

(5)        the payments designated for educational scholarships were amounts arrived at by simple agreement;

(6)        the payment for environmental monitoring provided for in paragraph 7(f) was arrived at by simple agreement.

[52]            Heather Ross spent considerable time explaining how the payment for economic loss was calculated under subsection 7(d) of the Settlement Agreement. She said this payment was intended to compensate for actual individual economic losses caused by the flooding.

[53]            An economic model was developed to estimate the loss of income from traditional activities attributable to the flooding on an individual basis. The compensation model only included Ginoogaming members residing at Longlac Reserve and she explains how the population figures in the model for those residents at the reserve were determined:

(1)        The first population figures for the purpose of that economic model started with the 1938-1939 treaty pay lists. Those residents at Longlac were identified by consultations with Genevieve Echum, an Elder who was 54 years old when she provided her input. She marked with an "H" on those lists those whom she believed were resident at Hornepayne then and with an "A" those who were resident at Aroland in 1938. The same methodology was used to calculate the population figures for 1948 to 1951.

(2)        For the years 1940 to 1947 and from 1952 to 1960, no reserve population data was available so straight line interpolations were done between known population figures before and after those dates, to arrive at the total population. The on-reserve population figures were estimated. These same estimates were also used for the 1963 to 1973 years since only total population figures were available.

(3)        For the years 1974 to 1995, population statistics were taken from the Indian Register. These give a breakdown of on-reserve and off-reserve populations. For 1996, a Band List was used and only those known to reside on-reserve were counted.

[54]            Lastly, Heather Ross turned to paragraph 7(c) of the Settlement Agreement which provides for an amount for "cultural and other unquantifiable losses". She states, of necessity, this amount is a symbolic and token figure but was chosen with a view to the impact of flooding on the social fabric of the community. She states it was understood the community was made up of those directly affected by the flooding, namely those residents at Long Lac.

(e)        Other material in the respondents' record

[55]            The respondents' record contains other materials derived from undertakings on cross-examination of Laura Medeiros. I mention two of these productions.

[56]            The first production was a series of affidavits, sworn in 1993, in support of an application to the Governor in Council for the recognition of the Hornepayne First Nation as a band under the Indian Act. Three of the deponents are applicants in these proceedings.

[57]            Generally, the deponents who were Elders identified they and their parents as living at Nagagamisis Lake and Morrison River where their traplines were. They state, although being on the Band List for the Ginoogaming First Nation, they have no connection with the First Nation, only going there to obtain their treaty money. One deponent mentions in 1931, Indian Affairs built houses on the reserve at Longlac and wanted people living at Morrison River to move there. Most never stayed at the Longlac Reserve.

[58]            The younger deponents, who were also on the Band's List, say they were born in Hornepayne and trace their heritage to Nagagamisis Lake, Morrison River or other areas.

[59]            The Nagagamisis Lake area became a provincial park in the 1960s.

[60]            The second document produced as an undertaking, is the Hornepayne Research Report prepared by Joan Holmes & Associates, apparently at the request of N.A.N. This report outlines the Hornepayne First Nation community's history in support of that community's goal of achieving a separate and distinct reserve. The report was conveyed to Chief Laura Medeiros of the Hornepayne First Nation and Chief Roy Meaniss of the Beaverhouse First Nation on April 27, 2000 by the Nishnawbe-Aski Nation.

[61]            The only other necessary reference to the record is to the Settlement Agreement itself which contains an extensive release and indemnity clause. Under paragraph 14, the First Nation confirmed and agreed on behalf of itself and its members to release and forever discharge Hydro from any and all claims, demands, actions and causes of actions which they or any of them now has or, subject to this Agreement, thereafter may have by reason of the grievances which arose from the construction and operation of the dam.

[62]            By section 18, the Settlement Agreement does not release or is construed to release any claims of any kind the First Nation or any member has against the federal, provincial or municipal governments, other than Ontario Hydro, who may jointly and/or severally be liable with Ontario Hydro in respect of any of the grievances.

C.        THE ISSUES

[63]            The principal issue in this judicial review application is whether the band council decisions under review should be struck down because they discriminate against the applicant members of the First Nation who live in Hornepayne and not on the reserve.

[64]            Counsel for the applicants argues these decisions are discriminatory because there is no rational basis to treat the members of the First Nation living in Hornepayne differently than those living on the reserve. He also argues they breach the band council's fiduciary duty to its members.

[65]            He advanced several reasons for his first point. His arguments were principally centered on the lack of sufficient research for the existence of the various aboriginal communities in and about Long Lake at the time of taking Treaty No. 9 which he says negates the notion the applicants' ancestors were placed on the Band List by error. He argues the available historical evidence is not conclusive on the point, a position which the Government of Canada seems to accept because it has not recognized the Hornepayne First Nation as a band under the Indian Act.

[66]            This uncertainty is compounded, it is argued, by the fact the band council purports to bind all of its members including those living in Hornepayne through the release and indemnity provisions of the Settlement Agreement exacerbated by the faulty methodology used to calculate the economic loss portion suffered by individuals. This methodology was limited to identifying a population base living on the reserve in 1938 and does not reach back to the identification of ancestors living in traditional areas around the reserve at the time of Treaty-taking.

[67]            He adds the reason for the lack of bonding by some of the members of the First Nation living in Hornepayne with those living on the reserve is because those in Hornepayne have lost their aboriginal culture and identity.

[68]            Counsel for the respondent First Nation argues the exclusion of the applicants from benefits is justified for the reasons set out in paragraphs 8 and 9 of these reasons and that, in all the circumstances, the decisions were reasonable ones. He adds the Chief and Council were entitled to rely on the lack of linkage between the two communities, i.e. those in Hornepayne and those on the reserve. There was an apparent mixing of different communities and families at the time of taking treaty in 1906 and this for the Federal Government's administrative convenience. Counsel for the First Nation said it was entitled to rely upon the non-interference stance taken by Chief Judy Mayhew and the recognition of the Hornepayne First Nation by other aboriginal groups.

[69]            Counsel for the respondent Ontario Power Generation Inc. was only concerned with one of the declarations sought by the applicants, a declaration which he said only appeared in the applicants' memorandum of fact and law but was not identified in its judicial review application.

[70]            The declaration sought and objected to was that the Settlement Agreement release provisions do not apply to the applicants. He said I could not and should not make such a declaration because it would be doing indirectly what Justice Sharlow said could not be done directly, that is, challenge the Settlement Agreement.

D.        ANALYSIS

           (a)        The standard of review

[71]            Counsel for the respondent First Nation proposed the impugned decisions be reviewed on the basis of reasonableness although he pointed to the Supreme Court of Canada's decision in Nanaimo (City) v. Rascal Trucking Ltd., [2000] 1 S.C.R. 342, for the proposition intra vires municipal decisions should only be reviewed on the basis of patent unreasonableness because, in such cases, the courts were dealing with decisions which are within the authorization granted by provincial legislatures and are exercised by elected municipal councillors who are accountable to the electorate, a circumstance applicable to band council resolutions.

[72]            The Federal Court of Appeal in Simon Smith et al. v. The Minister of Indian Affairs and Northern Development [docket A-568-98, November 17, 1999] dealt with the standard of review of a decision by the Minister to lease Indian lands under subsection 58(3) of the Indian Act.

[73]            Justice Décary applied the analysis established by Justice Bastarache in Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982 as endorsed in Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817. He concluded, taking all of the factors established by the Supreme Court, considerable deference should be accorded the band council and the appropriate standard of review was reasonableness.

[74]            If the case before me simply involved a challenge to the impugned band council resolutions as an expression of the band council's policy-making functions, the standard of review should be, as suggested by the Supreme Court of Canada in Nanaimo (City), supra, that of patent unreasonableness. (See, News v. Wahta Mohawks, [2000] F.C.J. No. 637 (F.C.T.D.).) However, Nanaimo (City), supra, was premised on the resolutions being intra vires and on the existence of elected political municipal councils.

[75]            The situation before me is different than Nanaimo (City), supra. The band council resolutions are being challenged on grounds of discrimination -- a question of law which must be appreciated in a specific factual context. Such an element calls for a lower standard of deference which is enhanced by taking into account another factor -- the lack of a privative clause.

[76]            Also, the impugned band council decisions were made pre-Corbiere when off-reserve band members could not vote for band council elections, another distinguishing factor related to the significance of the electoral process.

[77]            In this context, I do not see how the First Nation's Band Council's expertise is engaged although I recognize that such a decision may involved some element of polycentricity - a delicate balancing of constituencies.

[78]            In the circumstances, I adopt for the review of the First Nation's Band Council resolution under scrutiny here, the standard of reasonableness.

b)         The impact of Corbiere, supra

[79]            As noted, the Supreme Court of Canada in Corbiere invalidated, as contrary to section 15 of the Charter, the provisions of subsection 77(1) of the Indian Act which provided that, to be entitled to vote, a band member had to be at least 18 years old and an ordinary resident of the reserve.

[80]            The Supreme Court of Canada found:

(1)       The distinction between on-reserve and off-reserve members of an Aboriginal band, in terms of voting, made a distinction that denied equal benefit or imposed unequal burden. Such a distinction constituted differential treatment;

(2)        Off-reserve band member status was recognized as constituting an analogous ground of discrimination, that is, a "constant marker of potential legislative discrimination, whether the challenge is to a governmental tax credit, a voting right, or a pension scheme". (See paragraph 10 of the joint reasons of the Chief Justice and Bastarache J.).

(3)        The distinction between on-reserve and off-reserve members of a band goes to a personal characteristic essential to a band member's personal identity "which is no less constructively immutable than religion or citizenship. Off-reserve Aboriginal band members can change their status to on-reserve band members only at great cost, if at all". (See paragraph 14 of the joint reasons of the Chief Justice and Bastarache J. at page 220);

(4)        Such a distinction is discriminatory. The Chief Justice and Bastarache J. express themselves in this way at paragraphs 17 and 18 (page 221 of the reported case).

The impugned distinction perpetuates the historic disadvantage experienced by off-reserve band members by denying them the right to vote and to participate in their band's governance. Off-reserve band members have important interests in band governance which the distinction denies. They are co-owners of the band's assets. The reserve, whether they live on or off it, is their and their children's land. The band council represents them as band members to the community at large, in negotiations with the government, and with Aboriginal organizations. Although there are some matters of purely local interest, which do not as directly affect the interests of off-reserve band members, the complete denial to off-reserve members of the right to vote and participate in band governance treats them as less worthy and entitled, not on the merits of their situation, but simply because they live off-reserve.

(5)        They then referred to the Royal Commission on Aboriginal Peoples and quoted the following extracts from it:

(a)            (at page 521 of the report): Throughout the Commission's hearings, Aboriginal people stressed the fundamental importance of retaining and enhancing their cultural identity while living in urban areas. Aboriginal identity lies at the heart of Aboriginal peoples' existence; maintaining that identity is an essential and self-validating pursuit for Aboriginal people in cities;

(b)           (at page 525 of the report): Cultural identity for urban Aboriginal people is also tied to a land base or ancestral territory. For many, the two concepts are inseparable... . Identification with an ancestral place is important to urban people because of the associated ritual, ceremony and traditions, as well as the people who remain there, the sense of belonging, the bond to an ancestral community, and the accessibility of family, community and elders.

[81]       Justice L'Heureux-Dubé wrote extensive concurring reasons which were subscribed by Justices Gonthier, Iacobucci and Binnie. She expanded on her analysis of what might be matters of purely local interest not directly affecting the interest of off-reserve members after having previously found, at paragraph 71:

. . . band members living off-reserve form part of a "discrete and insular minority", defined by both race and residence, which is vulnerable and has at times not been given equal consideration or respect by the government or by others in Canadian or Aboriginal society. Decision-makers have not always considered the perspectives and needs of Aboriginal people living off-reserves, particularly their Aboriginal identity and their desire for their connection to their heritage and cultural roots.

[81]            Justice L'Heureux-Dubé turned to the by-law making powers granted to band councils under the Indian Act and noted several provisions which affected all band members, irrespective of on-reserve residency. She identified to the following, as examples:

(a)        Paragraph 81(1)(i) which allows a band council to allot land on the reserve;

(b)        Paragraphs 81(1)(p) and 81(1)(p.1) which allow by-laws relating to residence and trespass on the reserve "which may affect the ability of non-residents to use the facilities and land on the reserve, and return to live there. The ability to live on the reserve, or to participate in activities on reserve lands if they desire, has been shown to be important to non-residents, and these functions of the band council affect their circumstances and needs directly and in a fundamental way" (paragraph 75);

(c)        Section 83 which gives the band council power to make money by-laws, powers which, in her opinion, were a mixture of functions that not only affect residents on the reserve but also all members of the band;

(d)        Section 64(1) which allows the expenditure by the Minister, with the band council's consent, of the band's capital monies for various purposes, including distribution per capita to band members and construction of new houses, capital monies which come from the sale of surrendered reserve lands or capital assets, assets that belong, collectively, to all members of the band;

(e)        Section 66(1) where the Minister, with the approval of a band council, can make orders appropriating the band council's revenue monies. Here, Justice L'Heureux-Dubé wrote:

Expenditures by the band council may include matters like education, creation of new housing, creation of facilities on reserves, and other matters that may affect off-reserve band members' economic interest in its assets and the infrastructure that will be available to help them return to the reserve if they wish;

(f)         Section 39(1)(b) which requires the consent of the majority of electors of the band for the surrender of band lands.

c)         Indian bands analogous to municipal councils

[82]            The Federal Court of Appeal in Canadian Pacific Ltd. v. Matsqui Indian Band, [2000] 1 F.C. 325, accepted, as appropriate, the analogy of band councils to municipal councils when reviewing whether a taxation by-law enacted by the Matsqui Band was invalid on the grounds of unauthorized discrimination. The Federal Court of Appeal invalidated that by-law. (See, Desjardins J.A. and Robertson J.A. at paragraphs 62 through 76 and paragraphs 183 and 184). Justice Desjardins, while referring to case law approving the analogy, went further to hold, as a fundamental principle of administrative law, based upon the Supreme Court of Canada's decision in Montreal (City) v. Arcade Amusements Inc. et al., [1985] 1 S.C.R. 368, the principle that the power to make band council by-laws does not include that of enacting discriminatory provisions unless the authorizing legislation permitted it. She wrote at paragraph 76:

. . . band councils are a sui generis type of subordinate statutory bodies. As such, I fail to see, however, how they could escape the principles of administrative law which govern subordinate statutory bodies.

(d)       Unauthorized discrimination

[83]            Justice Beetz in Arcade Amusement Inc., supra, provided an extensive analysis for the proposition the power to make municipal by-laws did not include that of enacting discriminatory provisions was fundamental in Canadian administrative law. He said this principle had been observed "from time immemorial in British and Canadian public law" (page 404). At page 413 he wrote:

It must be held that, in the absence of express provisions to the contrary or implicit delegation by necessary inference, the sovereign legislator has reserved to itself the important power of limiting the rights and freedoms of individuals in accordance with such fine distinctions. The principle transcends the limits of administrative and municipal law. It is a principle of fundamental freedom. [emphasis mine]

[84]            Justice Beetz quoted extensively from Lord Russell of Killowen's judgment in Kruse v. Johnson, [1898] 2 Q.B. 91, for the notion of a by-law being ultra vires because it was unreasonable. He quoted from Lord Russell's majority opinion (page 404 in Arcade, supra):

But unreasonable in what sense? If, for instance, they were found to be partial and unequal in their operation as between different classes; if they were manifestly unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with the rights of those subject to them as could find no justification in the minds of reasonable men, the Court might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires". But it is in this sense, and in this sense only, as I conceive, that the question of unreasonableness can properly be regarded. A by-law is not unreasonable merely because particular judges may think that it goes further than is prudent or necessary or convenient, or because it is not accompanied by a qualification or an exception which some judges may think ought to be there. Surely it is not too much to say that in matters which directly and mainly concern the people of the country, who have the right to choose those whom they think best fitted to represent them in their local government bodies, such representatives may be trusted to understand their own requirements better than judges.

[85]            Justice Beetz emphasized from Lord Russell's decision the distinction between a by-law's political opportunity which spawned the concept of reasonableness in a narrow sense, where considerable deference is owed, and the concept of reasonableness in the wide or legal sense, leading to ultra vires if, for example, the decision was partial and unequal in operation between different classes etc. Justice Beetz concluded, at page 406, as follows:

It is important to note that the first category of by-laws unreasonable in the legal sense mentioned by Lord Russell of Killowen is that of by-laws which are discriminatory in the non-pejorative but most neutral sense of the word, and which are rendered invalid even though the distinction on which they are based is perfectly rational or reasonable in the narrow or political sense, and was conceived and imposed in good faith, without favouritism or malice.

e)          The concept of discrimination

[86]            Although in a Charter context, the following definition of discrimination taken from Justice McIntyre's reasons for judgment in The Law Society of British Columbia v. Andrews, [1989] 1 S.C.R. 143 at 174 is appropriate in the case before me:

There are many other statements which have aimed at a short definition of the term discrimination. In general, they are in accord with the statements referred to above. I would say then that discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society. Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination, while those based on an individual's merits and capacities will rarely be so classed. [emphasis mine]

E.        CONCLUSIONS

[87]            On the principal question, I have no difficulty in concluding the two impugned band council resolutions passed on August 4, 1998, must be set aside as being unreasonable and therefore ultra vires in the sense identified by Justice Beetz in Arcade Amusement, supra, relying on Lord Russell's decision in Kruse, supra. At the very start, I do not see any provisions of the Indian Act which would authorize a band council to discriminate between on-reserve and off-reserve members of a band.

[88]            There are several bases for so finding.

[89]            First and foremost, there is no doubt the exclusion of the First Nation's off-reserve members in the impugned band council resolutions from all the benefits of the settlement agreement, whose purpose was to extinguish all past claims of the First Nation of all of its members and to compensate on account of several heads of damages arising out of the 1938 construction of the dam and diversion, a matter related to land which all of the members of the band have an interest, as distinct from a purely local reserve matter, as defined by Justice L'Heureux-Dubé in Corbiere, supra, was discriminatory.

[90]            This is not a case of adverse effect discrimination but rather one of direct and intended differential treatment by the band council to its off-reserve members. The treatment of the off-reserve members received in this case is similar to the underpinning relied upon in Corbiere, supra: it is an illustration of the off-reserve Aboriginal peoples' vulnerability and in the way their needs and perspectives have been cast aside. They were marginalised.

[91]            There are two aspects to this finding of discrimination: one which is procedural and the other which is substantive.

[92]            It was procedurally wrong for the Chief and Council of the First Nation to have excluded its off-reserve members living in Hornepayne from participating in the Settlement Agreement ratification process, the source of the trust agreement which is contemplated by it. It was also wrong for the band council to pass the resolution conferring benefits only to on-reserve band Elders.

[93]            The reason for this finding is obvious. Chief Echum in his letter of October 25, 1996, to Laura Medeiros, assured her no individual cash distributions were contemplated if a settlement was arrived at. More importantly, Chief Echum later said to the legal adviser of the Hornepayne group that, although they would not be involved in the negotiations, they would be able to participate in the ratification process.

[94]            Those two promises were broken by the procedure adopted at the August 4, 1998 meeting. Procedurally, the Hornepayne members of the First Nation had a legitimate expectation they would be able to participate in the final approval process -- a participation vital to the interest which off-reserve members have in the common assets of the reserve and the settlement funds compensating for the loss of capital assets collectively held by all members.

[95]            The substantive element of discrimination has been identified -- the exclusion of all benefits, an exclusion which is compounded and made worse by the fact the settlement is equally binding on all of its members whether off-reserve and on-reserve. I have in mind, however, that in some aspects certain on-reserve projects could have benefits for off-reserve members. It is a matter of balance which on the whole leads to a conclusion of unjustified differential treatment.

[96]            The respondent First Nation advanced several justifications to show the treatment accorded to their off-reserve members was not discriminatory. I find these justifications largely irrelevant.

[97]            In large measure, the principal justification of no discrimination to its off-reserve members rested on the proposition, while legally its members in Hornepayne were members of the band, they could be excluded from sharing in the benefits of the extinguishment of a past claim because their ancestors were really not members of the First Nation from the very start, before 1906, when the reserve was formed. They were members of separate and distinct communities whose traditional lands were not close to the traditional area occupied by the Long Lac community.

[98]            Membership was meaningless because their ancestors became members by mistake being added to the First Nation's Band List merely because of bureaucratic administrative convenience and not because of community relationship.

[99]            The justifications advanced by the First Nation either that its off-reserve members at Hornepayne were members simply by inadvertence or were part of a separate Hornepayne First Nation cannot be accepted because to do so would subvert the membership band process and band recognition provisions provided for in the Indian Act.

[100]        Under section 2 of the Indian Act a "member of a band" means a person whose name appears on a Band List or is entitled to have his name appear on a Band List. By subsection 9(2) of the Act, the names on a Band List of a band immediately prior to April 17, 1985, constitute the Band List of that band on April 17, 1985 (when major amendments to the Indian Act were put into place by Parliament to provide for Charter conformity).

[101]        Sections 9 through 14 of the Act contain provisions relating to Band Lists, their maintenance, additions and deletions thereto and reviews or appeals from additions or deletions, depending upon whether a Band List is maintained by the Registrar or is controlled by a band.

[102]        This statutory scheme constitutes the legislative framework for dealing with issues related to band membership and confer upon persons affected rights of review and appeal, as the case may be, should their names be considered for deletion.

[103]        The clear intention of Parliament and the provisions of the Indian Act as a whole forecloses, in my view, de facto exclusion of a band member on the grounds it is believed he/she should not be on the Band List. If a band council believes a person's name should not be on its Band List, Parliament has provided the mechanism for deletion and the remedies for persons affected.

[104]        It follows the first and appropriate place to scrutinize a person's entitlement to continued band membership which involves a consideration of that person's individual ancestry through specific genealogical evidence is either the Registrar if the Department controls the Band List or the mechanism adopted by the band if it controls the Band List. They are the initial decision-makers and their decisions are subject to review. (See, for example, News, supra, and Scrimbitt v. Sakimay Indian Band Council, [2000] 1 F.C. 513 (F.C.T.D.).)

[105]        It is clear, for the purposes of the Indian Act, a person is either a member of a band or is not and so long as that person's name is on a Band List, he or she is a member of that band for the purposes of the Indian Act. To hold otherwise would destroy the integrity of the entire Act whose operative provisions are keyed to band membership.

[106]        The same can be said about the creation of new bands by the Minister pursuant to section 17 of the Act. Under paragraph 17(1)(b), the Minister may, whenever he considers it desirable, constitute new bands and establish Band Lists in respect thereto from existing Band Lists or from the Indian Register, if requested to do so by persons proposing to form the new band. I note by subsection 17(2) where a new band has been established from an existing band or any part thereof, such portions of the reserve lands and funds of the existing band, as the Minister determines, shall be held for the use and benefit of the new band.

[107]        I recognize the record in this proceeding shows some persons, including some of the applicants, as members of the Hornepayne First Nation had approached, in 1993, Canada for recognition as a new band but, at this point in time, that recognition by Canada has not happened and may not happen in the future.

[108]        Until such time as a new band is created under section 17 of the Act and new Band Lists have been established, membership in a previous band continues. Subsection 17(2) of the Act underlines the importance of the exercise of the Minister's power in creating a new band and altering existing Band Lists. It provides, if the Minister does so, no challenge in the Band List change (protest) can be made under section 14.2. This provision once again emphasizes Parliament's view of the needed certainty in Band List membership in order to operate the Act effectively.

[109]        The First Nation's Band Council cannot de facto arrogate to itself a power vested in the Minister and act as if the members of the First Nation in Hornepayne had legal recognition from the Minister as band members in the Hornepayne First Nation and, as a consequence, were no longer members of their band.

[110]        I now turn to the justification related to the political recognition of the Hornepayne First Nation by other Aboriginal groups including the First Nation. I appreciate that other Aboriginal groups have given recognition to the Hornepayne First Nation and I respect the importance of intra-Aboriginal organizational relationships and recognitions and that such may have influenced the dealings between the First Nation and the Hornepayne First Nation, which I will say more about later. However, these facts cannot override the legislative structure governing membership on Band Lists and the creation of new bands from existing Band Lists and, as a result, cannot justify discriminatory treatment between on-reserve and off-reserve members.

[111]        Counsel for the First Nation insisted the Chief and Band Council could rely on the non-interference stance taken by Chief Mayhew in the First Nation's negotiations with Ontario Hydro.

[112]        I do not place much weight on such reliance, to the extent there was one, in the face of an explicit statement by Chief Echum that off-reserve members would participate in the ratification process if the negotiations were successful. In addition, the applicants had signalled to the First Nation the reasons why they were interested in those negotiations, because of the historical and cultural claims which they and their ancestors had.

[113]        As a result, I find none of the justifications advanced by the First Nation can serve to condone the discriminatory treatment accorded by the First Nation to its off-reserve members living at Hornepayne.

[114]        I do not propose to comment to any extent on the sufficiency of the evidence advanced by counsel for the First Nation because of my finding such evidence was largely irrelevant.

[115]        Much reliance was placed on the Hornepayne Research Report prepared by Joan Holmes and Associates. However valuable that report may be in the future, it cannot buttress the impugned band council resolutions because it is dated April 2000 and was not available to the band council when it made the impugned decisions.

[116]        This case has some similarities to the case which was before the Ontario Court of Appeal in Barry et al. v. Chief and Council of the Garden River Band of Ojibways, [1997] O.R. (3d) 783, where settlement funds were paid by the Federal Government into the band's revenue account from which the band council resolved to make a per capita distribution to its members.

[117]        While the Court held the Federal Government settlement payment was not a trust fund because it was paid into the band's revenue account, it found that a trust was created when the band council resolved to make a per capita distribution which imposed a specific duty to determine and ascertain the class that was to benefit from the distribution and to identify and locate the members of that class.

[118]        The similarity which arises is that the funds derive from the settlement of claims related to land -- a matter, as previously noted, of interest to all band members. Where the similarity ends is that in the case before me, no capita distribution is proposed but the benefits are confined to on-reserve projects which may well be to the benefit of off-reserve members depending on the circumstances and about which I do not propose to say anything because it will be up to the First Nation to achieve the proper balance in project selection which cannot be limited to on-reserve projects when administering the trust fund, being attentive to the needs of all of its members both on and off-reserve. It cannot be limited to on-reserve individual members as it was with the Elders living in Hornepayne. It is this exclusion which has the badge of discrimination.

[119]        As to the issue raised by counsel for Ontario Power Generation, I am in agreement with his submissions. As noted by Justice Sharlow, the Settlement Agreement covers the membership at large of the First Nation including its off-reserve members. To declare the provisions of paragraphs 14 and 15 of the Settlement Agreement void and of no effect insofar as the applicants are concerned would constitute an impermissible attack on that agreement which Justice Sharlow refused an extension of time to attack.

F.         DISPOSITION

[120]        Counsel for the First Nation recognized the applicants were authorized by Justice Sharlow's May 19, 1999 order to challenge "the decision of the Council of Ginoogaming First Nation to the use of the proceeds of the final settlement agreement to benefit members of the Ginoogaming First Nation other than the applicants" had two elements. First, the decision to execute the trust indenture made by Band Council Resolution 1998-99-254, dated August 4, 1999, and second the decision to establish the Keemeshomnishmanak fund was made by Band Council Resolution 1998-99-257.

[121]        For reasons given, these two decisions were unreasonable on the basis they were discriminatory and are therefore ultra vires.

[122]        As a result, these decisions are set aside but the matter of the use of the proceeds of the Settlement Agreement is remitted back to the Chief and Council of the First Nation for redetermination without discrimination on the basis of residency on or off-reserve and in accordance with these reasons. The applicants are entitled to their costs as well as the costs of the application for interim injunction payable by the First Nation's Band Council.

                                                                                                                           "François Lemieux"

                                                                                                                                          J U D G E

OTTAWA, ONTARIO

NOVEMBER 30, 2001