Thomas v. Peace Hills Trust Co., 2001 FCT 443

Date: 20010508

Docket: T-284-01

Neutral Citation: 2001 FCT 443

Ottawa, Ontario, this 8^th day of May 2001

PRESENT: THE HONOURABLE MR. JUSTICE PELLETIER

BETWEEN:

HARVEY THOMAS, WALLACE MOCCASIN,

CONNIE GOPHER, GILBERT NIGHT, CHARLES MARTELL,

CARY GOPHER AND ROY HELMAN, being the Saulteaux Land Entitlement Trustees

Plaintiffs

(Respondents)

- and -

PEACE HILLS TRUST COMPANY and KELLY BITTERNOSE

Defendants

(Applicants)

REASONS FOR ORDER AND ORDER

PELLETIER J.

[1]    This motion raises the tired question of the jurisdiction of the Federal Court in a new context. The trustees of a trust created to administer treaty land entitlement money sue their bankers alleging that the latter have diverted trust funds for purposes not authorized by the trust. The action is brought in Federal Court pursuant to a clause in a related agreement in which the parties who created the trust agree to attorn to the jurisdiction of the Federal Court. The bankers, who are not parties to that agreement, dispute the Federal Court's jurisdiction to hear the action. And so, I must decide if this matter falls within the jurisdiction of the Federal Court.

[2]    At issue in this matter is the use of funds paid pursuant to the Saskatchewan Treaty Land Entitlement process in which the Crown compensated certain Indian Bands for its failure to provide the land base promised to those Bands in the treaties which the Crown concluded with them. The trustees ("the Trustees") of the Saulteaux Trust Agreement, (which will be referred to as "the Trust Agreement" when referring to the agreement and as "the Trust" when referring to the Trust created by the agreement) who are all members of the Saulteaux First Nation, bring action against Peace Hills Trust Company ("Peace Hills"), who are the Trust's bankers. The Statement of Claim alleges that Peace Hills and one of its employees, Kelly Bitternose, breached the terms of the Trust Agreement by using trust funds for purposes not authorized by the Trust Agreement. The Statement of Claim pleads 18 specific instances of diversion of funds from the trust fund to accounts controlled by the Band and Council of the Saulteaux First Nation. The Trust Agreement provides that the corpus of the fund shall be used only for the purchase of land for the benefit of the Saulteaux First Nation. The accounts to which the funds have been transferred are various loan accounts or outstanding liabilities of the Band and Council of the Saulteaux First Nation. In addition to pleading a breach of the Trust Agreement, the Statement of Claim pleads breach of the fiduciary obligation between banker and client, as well as negligence.

[3]                The Trust was constituted by the Saulteaux Trust Agreement between the Saulteaux First Nation, the Trustees and the Bank of Nova Scotia which was signed on April 7, 1993. By agreement dated August 25, 1995 Peace Hills Trust Company ("Peace Hills") was substituted for the Bank of Nova Scotia and accepted all of the obligations imposed by the Trust Agreement. The Trust was established to administer the funds paid to the Saulteaux First Nation to satisfy its Treaty Land Entitlement claim.

[4]                Peace Hills brings this motion to strike the Trustee's action on the ground that the Federal Court lacks jurisdiction to entertain this action. Peace Hills relies upon the decision of the Supreme Court of Canada in ITO - International Terminal Operators Ltd v. Miida Electronics Inc., [1986] 1 S.C.R. 752, (1986) N.R. 241, ("ITO"), in which the Supreme Court of Canada held that the conditions of jurisdiction for the Federal Court were:

a)          a statutory grant of jurisdiction by Parliament;

b)          an existing body of federal law, essential to the disposition of the case, which nourishes the statutory grant of jurisdiction; and

c)          the law on which the case is based must be "a law of Canada" as that phrase is used in section 101 of the Constitution Act, 1867.

[5]                Peace Hills takes the position that this claim meets none of these conditions. It says there is no statutory grant of jurisdiction by Parliament, that there is no existing body of federal law nourishing that grant of jurisdiction and no "law of Canada" underlying the claim.

[6]                Section 24.01 of the Trust Agreement provides as follows:

This Agreement shall in all respects be interpreted and construed under, and governed by, the laws of the Province of Saskatchewan and the laws of Canada applicable therein, and the parties agree that at all times the principal place of administration of the trust created by this Agreement shall be the Province of Saskatchewan.

[7]                On the face of it, one has difficulty finding a statutory grant of jurisdiction to the Federal Court by Parliament which would apply to these facts. The action is one between subject and subject involving personal property located in Saskatchewan held by a trust whose Trustees are all members of the Saulteaux First Nation and may therefore be taken to be residents of Saskatchewan. None of these facts are such as to engage the jurisdiction of the Federal Court.

[8]                ITO requires that there be a body of federal law which nourishes the grant of jurisdiction. The question of what constitutes federal law is more complex than simple legislative competence. As Laskin C.J.C. put it in [1980] 2 S.C.R. 442">Rhine Ltd. v. The Queen, [1980] 2 S.C.R. 442 at p. 447, (1980) 34 N.R. 290:

... It should hardly be necessary to add that "contract" or other legal institutions, such as "tort" cannot be invariably attributed to sole provincial legislative regulation or be deemed to be, as common law, solely matters of provincial law.

In Rhine, supra, the question of federal law was related to the detailed statutory regime which governed the circumstances in which the contract in question was created. The rejection of the claim that contract was purely a matter of provincial law depended upon this detailed statutory framework. The characterization of laws as "federal law" must therefore take account of context.

[9]                Furthermore Roberts v. Canada, [1989] 1 S.C.R. 322, at pages 330-331, (1989), 92 N.R. 241, the Supreme Court recognized that there is often an overlap between the second and third parts of the ITO test:

While there is clearly an overlap between the second and third elements of the test for Federal Court jurisdiction, the second element, as I understand it, requires a general body of federal law covering the area of the dispute, i.e., in this case the law relating to Indians and Indian interests in reserve lands, and the third element requires that the specific law which will be resolutive of the dispute be "a law of Canada" within the meaning of s. 101 of the Constitution Act, 1867. No difficulty arises in meeting the third element of the test if the dispute is to be determined on the basis of an existing federal statute. As [page302] will be seen, problems can, however, arise if the law of Canada which is relied on is not federal legislation but so-called "federal common law" or if federal law is not exclusively applicable to the issue in dispute.

[10]            In so far as federal common law is concerned, the following passage from [1977] 2 S.C.R. 654">R. v. McNamara Construction (Western) Ltd., [1977] 2 S.C.R. 654, (1977), 13 N.R. 181 is enlightening. Laskin C.J.C. first quotes from [1977] 2 S.C.R. 1054">Quebec North Shore Paper Company v. Canadian Pacific Limited, [1977] 2 S.C.R. 1054, (1976) 9 N.R. 471, and then goes on to describe the concept of federal common law:

"... It should be recalled that the law respecting the Crown came into Canada as part of the public or constitutional law of Great Britain, and there can be no pretence that that law is provincial law. In so far as there is a common law associated with the Crown's position as a litigant it is federal law in relation to the Crown in right of Canada, just as it is provincial law in relation to the Crown in right of a Province, and is subject to modification in each case by the competent Parliament or Legislature. Crown law does not enter into the present case."

This passage cannot be taken as saying that it is enough that the Crown is a party to a contract, on which it is suing as a plaintiff, to satisfy the requirement of applicable federal law. The situation is different if Crown liability is involved because in that respect there were existing common law rules respecting Crown liability in contract and immunity in tort, rules which have been considerably modified by legislation. Where it is not the Crown's liability that is involved but that of the other party to a bilateral contract, a different situation prevails as to the right of the Crown to compel that person to answer process issued out of the Federal Court.

[11]            Applying this analysis to the facts of this case as set out above, there would be little reason to find Federal Court jurisdiction. While the dispute involves the interests of Indian bands, over which the Federal Court sometimes has jurisdiction, the dispute is not one which is inextricably linked with Federal law. In fact, to the extent that trust law is in issue, it is in issue in relation to a trust situate in Saskatchewan, whose Trustees are in Saskatchewan and whose subject is personal property i.e. money or accounts. In so far as the law of fiduciaries or the law of negligence are concerned, like the law of trusts, they are not "associated with the Crown's position as a litigant" and therefore, are not Federal law for these purposes. I conclude therefore that there is no body of federal law nourishing a statutory grant of jurisdiction and no law of Canada giving rise to the claim.

[12]            On the face of it then, there is no basis to say that this matter falls within the jurisdiction of the Federal Court. The plaintiffs however, point to the web of agreements between the Her Majesty the Queen in Right of Canada ( "the Federal Crown"), Her Majesty the Queen in Right of Saskatchewan ("the Provincial Crown") and the Saulteaux First Nation, either in its own capacity or in its capacity as one of the Indian Bands in the Province of Saskatchewan who are entitled to be compensated for the failure of Crown to allocate to it the lands promised in Treaties No. 4, 6 and 10 ("the Entitlement Bands"). The plaintiffs say that these agreements provide the necessary nexus with the jurisdiction of the Federal Court. In particular, that nexus is provided by a term of the relevant agreements in which the parties agree that all disputes in the interpretation and enforcement of the agreements will be adjudicated by the Federal Court of Canada - Trial Division.

[13]            The funds which constitute the corpus of the Trust were paid by the Federal Crown and the Provincial Crown to the Trustees to satisfy the Crown's obligation to the Saulteaux First Nation pursuant to two agreements. The original agreement is the Saskatchewan Treaty Land Entitlement Framework Agreement ("the Framework Agreement") which provided a basis on which all subsequent treaty land entitlement agreements between the Federal and Provincial Crowns and individual bands would be concluded. The Framework Agreement, an agreement between the Federal Crown, the Provincial Crown and the Entitlement Bands, was signed on September 22, 1992.

[14]            The overall intent of the Framework Agreement appears from paragraph T of the Recitals to the Framework Agreement which says:

Notwithstanding paragraphs N, Q, R and S aforesaid, [which identify the differences in position on certain issues between the parties] Canada and each of the Entitlement Bands have agreed that, inter alia, Canada's outstanding Treaty land entitlement obligations in respect of the Entitlement Bands shall be fulfilled in accordance with the terms and conditions set out in this Agreement.

[15]            To that end, the parties reached agreement on a wide range of issues. Their agreement was reflected in the Framework Agreement but was also reduced to model agreements to be used in concluding agreements between the Federal and Provincial Crowns and the individual Entitlement Bands, including the Saulteaux First Nation. In particular, the Framework Agreement has appended to it a model Band Specific Agreement and a model Trust Agreement. The Band Specific Agreement is a form of agreement which is intended to incorporate the terms of the Framework Agreement in an agreement between the Federal and Provincial Crowns and an individual Band. The model Trust Agreement is an agreement to be used in conjunction with each Band Specific Agreement to provide a means by which the funds to be paid shall be administered in accordance with the objectives of the two agreements.

[16]            The Framework Agreement contains a definition of the word "Agreement" which reads as follows:

"Agreement", "this Agreement", "hereto", "hereof", "herein", "hereunder", "hereby", and similar expressions, and any reference to "Framework Agreement" refer, unless otherwise expressly stated, to this Agreement, including the recitals, the Schedules, and the Appendices attached hereto, and not to any particular article, section, subsection, subparagraph, or other subdivision hereof or thereof;

[17]            The Framework Agreement also contains the following clauses which are of interest in this dispute:

20.09 This Agreement shall be governed by and construed in accordance with all applicable legislation including, without limitation, the laws of Saskatchewan and the laws of Canada applicable therein.

20.20 Notwithstanding Article 19, save and except for those questions to which arbitration has been agreed to in section 19.02, in the event the parties concerned are unable to agree on any matter, including a question of interpretation of any term, covenant, condition or provision of this Agreement, the determination of any such disagreement, and the enforcement thereof shall be within the exclusive jurisdiction of the Federal Court of Canada.

(referred to hereafter as "the Attornment clause")

[18]            In order to give effect to the Framework Agreement, it was necessary to enact certain legislation. The Federal legislation was the Saskatchewan Treaty Land Entitlement Act, Stat. Canada 1993 c. 11 ("the Act"). The terms of the Act are relevant to the claim of a statutory grant of authority and will therefore be reviewed in some detail. The definition of "Framework Agreement" at section 2 of the Act refers to the Framework Agreement executed September 22, 1992 (i.e. the Framework Agreement in issue in these proceedings) "certain provisions of which are set out in Schedule II". A review of Schedule II shows that it incorporates the terms of the Framework Agreement dealing with environmental and riparian rights and co-management agreements in relation to water bodies. Schedule II does not contain the Attornment clause.

[19]            Section 3 of the Act ratifies amendments to the Natural Resources Transfer Act which were required to give effect to certain parts of the Framework Agreement.    Section 4 of the Act establishes a treaty land entitlement account in the accounts of Canada, and identifies the amounts to be credited to that fund. Section 5 stipulates that payments into or out of the account are not Indian monies within the meaning of the Indian Act. Section 6 deals with amounts received by the Receiver General before entitlement land is set apart.

[20]            Section 7 of the Act confirms sections 6.04, 6.05 and 6.11 of the Framework Agreement, sections which confirm the authority of the Entitlement Bands to enter into certain types of agreements. Sections 9 and 10 deal with surrenders of Indian land and transfer of mineral rights. Section 11 deals with extending the benefits of the Framework Agreement to certain bands which are not part of the Entitlement Bands.

[21]            It is noteworthy that the Act does not incorporate the Framework Agreement except in relation to the clauses set out in Schedule II and those sections which are confirmed in section 7. As a result, the attornment clause remains contractual only and does not acquire status as legislation.

[22]            Following the enactment of the Saskatchewan Treaty Land Entitlement Act, the Federal and Provincial Crowns entered into the Saulteaux Treaty Land Entitlement Agreement ("the Saulteaux Band Agreement") with the Saulteaux First Nation using the model agreement which was part of the Framework Agreement. That agreement was signed on April 7, 1993. Attached to that agreement was a signed copy of the Saulteaux Trust Agreement dated April 7, 1993. For the purposes of this motion the following provisions of the Saulteaux Band Agreement are relevant:

1.03 The following are the Appendices annexed to and incorporated in this Agreement which contemplate signing by the parties named therein:

1- Trust Agreement ...

20.18 Notwithstanding Article 19, save and except for those questions to which arbitration has been agreed to in section 19.02, in the event the parties concerned are unable to agree on any matter, including a question of interpretation of any term, covenant, condition, or provision of this Agreement, the determination of any such disagreement, and the enforcement thereof shall be within the exclusive jurisdiction of the Federal Court of Canada.

(also referred to as "the attornment clause")

[23]            On the strength of this contractual and legislative framework, the Trustees argue that their claim satisfies the requirements of ITO. They argue that the fact of enacting the Act for the purpose of giving effect to the Framework Agreement must be taken as ratifying the attornment clause and effecting a statutory grant of jurisdiction. I do not find this persuasive. There is nothing in the Saskatchewan Treaty Land Entitlement Act which is capable of being construed as conferring jurisdiction upon the Federal Court in relation to the subject matter of the Act. Jurisdiction over particular subject matter, or over particular parties, might exist apart from the Act, but there is nothing in the Act which would create new or extended jurisdiction on the part of this Court.

[24]            It was argued that the Court had jurisdiction over the parties because it has been held that Indian Band Councils have been held to be a "federal board commission or tribunal" within the meaning of section 18 of the Federal Court Act. While this is true in connection with judicial review proceedings, it does not follow that the Federal Court therefore has jurisdiction over any transaction involving an Indian Band Council. Even if it did, the plaintiffs are not an Indian Band Council but a group of Trustees.

[25]            As a result, the conditions of ITO cannot be met. There is no statutory grant of jurisdiction, nor is there a body of federal law nourishing the grant of jurisdiction. This is particularly so since the federal Crown is not a party to the action. Finally, the cause of action does not arise out of a law of Canada since the Trustee's rights are firmly anchored in the Trust Agreement and not in federal legislation or federal common law.

[26]            However, this is not the end of the story, section 17 of the Federal Court Act, R.S.C. 1985, c. F-7, appears to provide for jurisdiction by agreement in which case the attornment clause might be sufficient to found this Court's jurisdiction to hear this claim.

17. (1) Except as otherwise provided in this Act or any other Act of Parliament, the Trial Division has concurrent original jurisdiction in all cases where relief is claimed against the Crown.

(2) Without restricting the generality of subsection (1), the Trial Division has concurrent original jurisdiction, except as otherwise provided, in all cases in which

(a) the land, goods or money of any person is in the possession of the Crown;

(b) the claim arises out of a contract entered into by or on behalf of the Crown;

(c) there is a claim against the Crown for injurious affection; or

(d) the claim is for damages under the Crown Liability and Proceedings Act.

(3) The Trial Division has exclusive original jurisdiction to hear and determine the following matters:

(a) the amount to be paid where the Crown and any person have agreed in writing that the Crown or that person shall pay an amount to be determined by the Federal Court, the Trial Division or the Exchequer Court of Canada; and

17. (1) Sauf disposition contraire de la présente loi ou de toute autre loi fédérale, la Section de première instance a compétence concurrente, en première instance, dans les cas de demande de réparation contre la Couronne.

(2) La Section de première instance a notamment compétence concurrente en première instance, sauf disposition contraire, dans les cas de demande motivés par_:

a) la possession par la Couronne de terres, biens ou sommes d'argent appartenant à autrui;

b) un contrat conclu par ou pour la Couronne;

c) un trouble de jouissance dont la Couronne se rend coupable;

d) une demande en dommages-intérêts formée au titre de la Loi sur la responsabilité civile de l'État et le contentieux administratif.

(3) La Section de première instance a compétence exclusive, en première instance, pour les questions suivantes_:

a) le paiement d'une somme dont le montant est à déterminer, aux termes d'une convention écrite à laquelle la Couronne est partie, par la Cour fédérale -- ou l'ancienne Cour de l'Échiquier du Canada -- ou par sa Section de première instance;

[27]            The argument in favour of jurisdiction by consent arises from paragraph 17(3)(b) of the Federal Court Act which refers to jurisdiction being acquired as a result of a written agreement between the Crown and any other person. In this case, the attornment clause in the Saulteaux Band Agreement is a written agreement between the Crown and another person (the individuals in the band as represented by their Band Council) conferring jurisdiction upon the Federal Court in relation to the interpretation and enforcement of the Band Specific Agreement which, in turn, incorporates by reference the Trust Agreement. At first blush, it would appear that, as between the Crown and the Band, such an agreement would be effective to confer jurisdiction upon the Court in relation to the Band Specific Agreement. From there, it is but a short step to inquire whether that agreement is binding upon persons who are not party to the agreement conferring jurisdiction.

[28]            But section 17 of the Act requires closer examination. When one reads subsection 17(1), one notes that it confers concurrent jurisdiction upon the Federal Court in cases where relief is sought against the Crown. When one turns to subsection 17(3), one is struck by the fact that exclusive jurisdiction is granted in those cases where there is a written agreement between the Crown and another person. One concludes that the significance of subsection 17(3) is not that it confers jurisdiction by agreement but that it confers exclusive jurisdiction by agreement. As a result, it would not appear that subsection 17(3) expands the Court's jurisdiction, in the sense of allowing jurisdiction to be enlarged by agreement. The effect of subsection 17(3) is not to expand the Federal Court's jurisdiction but to oust the jurisdiction of the provincial Superior Court.

[29]            Would subsection 17(3) confer exclusive jurisdiction where no jurisdiction existed previously? The authorities appear to be consistently to the effect that jurisdiction cannot be acquired by consent, at least in a court whose jurisdiction is created by statute. For example in Canadian National Railway Company v. Canadian Transport Commission [1988] 2 F.C. 437, (1987), 13 F.T.R. 52, McNair J. held that:

The law is clear that the consent or agreement of the parties cannot confer jurisdiction on a court where none in fact exists. This is especially so in the case of a court like the Federal Court, which is a creature of statute whose jurisdiction is defined and limited by the instrument of its creation.

[30]            In coming to that conclusion, the learned judge relied upon and cited the following authority:

...in my judgment, it is a fundamental principle that no consent can confer on a court or tribunal with limited statutory jurisdiction any power to act beyond that jurisdiction, ...

Essex Incorporated Congregational Church Union v. Essex County Council, [1963] A.C. 808 (H.L.) per Lord Reid at pp. 820-821

Where a court is deprived of jurisdiction over a subject by statute, no acquiescence - not even an express consent - can confer jurisdiction upon it.

[1923] S.C.R. 46">Dominion Canners Ltd v. Costanza, [1923] S.C.R. 46 at pp. 66-67, [1923] 1 D.L.R. 551.

[31]            The conclusion which imposes itself is that the jurisdiction which is acquired by consent in subsection 17(3) of the Act is exclusive jurisdiction over a claim over which the Court would otherwise have concurrent jurisdiction. As noted above, this is not so much a case of acquiring jurisdiction, as it is one of ousting the concurrent jurisdiction of the provincial Superior Court.

[32]            If that conclusion is correct, it means that the Crown and Peace Hills could not confer jurisdiction upon the Court by an agreement in writing because there is nothing in the dispute which is the subject matter of this action which falls within this Court's jurisdiction. It is not a matter in which relief is sought against the Crown. It is not an application for judicial review within the meaning of section 18 of the Federal Court Act. It is not a claim between subject and subject "under or by virtue of the laws of Canada" where no other court has jurisdiction as contemplated by section 25 of the Federal Court Act. Clearly, the Court of Queen's Bench of Saskatchewan has jurisdiction over this dispute even if it were shown that it arose under a law of Canada.

[33]            An analogous situation arose in Armeco Construction Ltd. v. Canada, [1995] F.C.J. No. 473 (T.D.), aff'd [1995] F.C.J. No. 1561 (C.A.) which was a dispute between the Crown and a contractor. As a result of delay in the completion of the project, the contractor commenced an action against the Crown seeking damages, including damages owing by the contractor to its subcontractors which the contractor was seeking to recover from the Crown. The issue was whether the Federal Court had jurisdiction to decide the claims between contractor and subcontractor in the context of a claim between the Crown and the contractor. The Court held that:

... Section 17 of the Federal Court Act, as it was before the amendments in February 1992 and at the time the main action in this case was commenced, conferred exclusive jurisdiction to the Federal Court in all cases where relief was claimed against the Crown. The jurisprudence concerning the jurisdictional issue of the Federal Court has in fact limited its jurisdiction with respect to litigation between the Crown and third parties. As such, only parties to the contract with the Crown are able to claim compensation in the Federal Court. In the Western Caissons case [See Note 8 below], the then Chief Justice of the Federal Court, sitting in appeal, determined that this Court's jurisdiction did not extend to proceedings involving subcontractors and the prime contractor. (emphasis added).

Armeco, supra at para. 19 (emphasis added)

[34]            In my view, the principle in Armeco, does not turn upon the question of privity of contract but upon the fact that the grant of jurisdiction to the Federal Court in section 17 of the Federal Court Act is limited to those who have contracted with the Crown, and does not extend to those who claim through the contracting party. That principle applies whether the Federal Court's jurisdiction is exclusive or concurrent, so the subsequent amendments to section 17, which are referred to by the learned Trial Judge, do not affect the result.

[35]            In the end result, I am of the view that the Federal Court lacks jurisdiction to entertain this action. It is an action between subject and subject arising out of a trust agreement made in the Province of Saskatchewan by parties resident in Saskatchewan with respect to a trust whose situs is Saskatchewan. The only link to the jurisdiction of this Court is the attornment clause but it is not sufficient to confer jurisdiction because neither the clause nor subsection 17(3) of the Act can confer jurisdiction beyond that granted to the Court in the Federal Court Act. Even if the attornment clause were capable of conferring jurisdiction, it could only be in favour of persons who had contracted with the Crown, which neither party to this action can claim to have done.

[36]            This result is not inconsistent with some of the policy arguments which the plaintiffs raised as grounds for finding jurisdiction on the part of the Federal Court. The plaintiffs claim that since the Federal Court has jurisdiction to deal with the Framework Agreement and the Band Specific Agreement, it should assume jurisdiction to deal with the Trust Agreement so that there is a consistent interpretation of all agreements. It is not to be taken for granted that the Federal Court will have jurisdiction over all matters arising out of the Framework Agreement and the Band Specific Agreement. For example, one of the matters arising out of those agreements is the issue of public utility easements. To the extent that certain public utilities are provincial crown corporations operating under laws of general application in the Province of Saskatchewan, the link to Federal Court jurisdiction may have to be shown. As for consistency between interpretations of this Trust Agreement and the Trust Agreements involving various other Bands, the Court of Queen's Bench is as able to achieve internal consistency as this Court.

[37]            It was suggested in argument that there may be a counterclaim against the Trustees and that such a counterclaim could only be heard by the Federal Court. Should it arise, that question will be decided on its merits but, like the question raised above, the link to Federal Court jurisdiction in such a case may well have to be shown. Certainly, the presence or absence of Federal Court jurisdiction with respect to this action does not, in any way, determine jurisdiction with respect to a counterclaim against the Trustees. It was also suggested that Peace Hills might claim the benefit of set-off of the trust funds which have allegedly been diverted against the indebtedness of the Band and Council to Peace Hills. This was said to be a ground which supported the assumption of jurisdiction by the Federal Court. Once again, all that can be said at this point is that the link between such a claim and the jurisdiction of this Court would perhaps have to be shown as it may not be self-evident to some.

[38]            Counsel for the plaintiffs requested leave to amend his pleadings in the event that it was found that the failure to plead the Framework Agreement or the Band Specific Agreement were factors in the disposition of this motion. In my view, the jurisdictional problem is a substantive one and not one which can be repaired by amendments to the pleadings.

ORDER

For the reasons set out above, the motion is granted and the Statement of Claim is dismissed for want of jurisdiction. Given that the issue is one of jurisdiction, a matter of equal importance to both parties, it is appropriate that each party bear their own costs.

      "J.D. Denis Pelletier"         

   Judge