Beattie v. Canada, docket T-1373-99

Date: 20001124

Docket: T-1373-99

BETWEEN:

     BRUCE ALLAN BEATTIE, as the assignee of

     Sicily Candice Aven, on his own behalf and on

     behalf of each of the persons listed on Schedule

     "A" attached hereto

     Plaintiffs

AND:

     HER MAJESTY THE QUEEN

     Defendant

     REASONS FOR ORDER

ROULEAU, J.

[1]      This is an application by the defendant for an Order striking out the plaintiffs' Statement of Claim pursuant to Rule 221 of the Federal Court Rules and for an Order dismissing the action. The grounds for the Motion are that the pleadings do not disclose a reasonable cause of action, are scandalous, frivolous and vexatious and further, that the pleadings are otherwise an abuse of the process of this Court.

[2]      The factual background leading up to this application is as follows. In 1915 and 1916, pursuant to Treaty No. 8, the Fort St. John Band of Beaver Indians selected reserve lands lying north of the Peace River. In 1916, Indian Reserve No. 172 was set apart for the Band's use and benefit. In March of 1948 the Governor General in Council transferred I.R. No. 172 to the director, as defined in the Veterans' Land Act, who subsequently subdivided and conveyed I.R. No. 172 together with the mineral rights to various third parties.

[3]      In 1977, the Blueberry River and Doig River Indian Bands were formed as a result of the division of the Fort St. John Band of Beaver Indians into two bands. All of the right, title and interest held by the Fort St. John Beaver Band of Beaver Indians in Indian Reserve No. 172 were then acquired by way of succession by the Blueberry River Indian Band and the Doig River Indian Band.

[4]      The subdivision and sale of I.R. No. 172, including mineral rights, to third parties was the subject of a lawsuit brought in 1978 by the then Chiefs of the Blueberry River Indian Band and the Doig River Indian Band on behalf of themselves and all other members of those bands and on behalf of all present descendants of the Beaver Band of Indians. The litigation, known as the Apsassin case, was commenced against the Crown for breach of fiduciary duty in respect of the disposition of I.R. No. 172, including the disposition of mineral rights. The trial was dismissed by the Federal Court, Trial Division and an appeal to the Federal Court of Appeal was unsuccessful.

[5]      The matter was then appealed to the Supreme Court of Canada which handed down judgment on December 14, 1995 (revised on May 23, 1996) allowing the appeal. The Supreme Court found that the Crown was in breach of its fiduciary duty in respect of the disposition and failure to reacquire certain mineral rights in I.R. No. 172. As a result, Canada was obliged to pay damages for breach of fiduciary duty with respect to mineral rights in I.R. No. 172 as were conveyed after August 9, 1949.

         

[6]      On March 2, 1998, a settlement which had been negotiated between the Crown and the plaintiffs was approved by Mr. Justice Hugessen of this Court pursuant to an application made under Rule 605 of the Federal Court Rules. Judgment in the amount of $147,000,000.00 was granted against the Crown (the "Apsassin judgment"). The judgement left open the question of entitlement of the "present descendants" to share in the proceeds of judgment and granted liberty to the present descendants of the Beaver Band of Indians to claim entitlement to participate in the proceeds of the Apsassin judgment. At page 3 of the judgement, Hugessen, J. stated:

THIS COURT FURTHER ORDERS that this judgment and the settlement reached do not create any rights in favour of persons described in the style of cause as `present descendants of the Beaver Band of Indians' or in favour of persons described in paragraph 3 of the Statement of Claim as `all descendants of the Beaver Band of Fort St. John and the St. John Beaver Band, ascertained and unascertained and their legal personal representatives', including any right to claim entitlement to share in the Settlement Proceeds.

The question of their entitlement remains to be resolved in accordance with Appendix "A" and upon further order of the Court.

[7]      A process by which those persons would be provided with notice of the judgment and by which they could file Notices of Claim was set out in the Apsassin judgment. Sicily Candice Aven and each of the persons listed in Schedule "A" to the plaintiffs' Statement of Claim in the present application, filed Notices of Claim stating that they each were present descendants of a member of the Beaver Band and were entitled to a share in the Apsassin judgment. They made submissions to the Court as to their entitlement to share in the judgment.

    

[8]      After the time for filing Notices of Claim had expired, the Blueberry River and Doig River Indian Bands brought a motion for an order that the Court determine a question of law under Rule 220(1)(a) of the Federal Court Rules. On November 19, 1998, Mr. Justice Hugessen issued Reasons on the Notice of Motion stating that "one possible answer to the question will be dispositive of some or all of the issues on the present stage of this action i.e. the determination of entitlement to the proceeds of judgment". He then set down the following question of law for determination:

Are any persons, i.e., present descendants of the Beaver Band of Indians, who are not members of the Doig River Indian Bands and the Blueberry River Indian Band for the time being, entitled individually or as a group to be considered members of the collectivity which has the right to the proceeds of judgment?

[9]      The hearing on the question of law took place on March 3^rd and 4^th, 1999. By order dated April 7^th, 1999, the Court answered the question of law in the negative and ruled that the "present descendants" of the Beaver Band of Indians who are not members of the Doig River Indian Band or the Blueberry River Indian Band for the time being were not entitled individually or as a group to participate in the proceeds of the Apsassin judgment. Hugessen, J. made the following comments in this regard:

The rights of the Beaver Band in Indian Reserve 172 were collective rights enjoyed by the members for the time being of that Band. When that Band ceased to exist those rights passed to the members of the two successor Bands, the Blueberry River and the Doig River Bands. Since those rights were collective and not individual rights, they could neither be exercised by nor transmitted to individuals. The breach of fiduciary duty which has been established in this case was owed to the Beaver Band and the right of action which resulted therefrom was transmitted to the successor Bands. That right was equally a collective right which belonged and still belongs collectively and not individually to the members for the time being to the members of those Bands. It is membership and not ancestry which determines entitlement to reserve lands and, in consequence, to the damages flowing from any breach of fiduciary duty in relation to those lands. Therefore, descendants who are not Band members can have no share in the proceeds of judgment.

[10]      Eleven appeals from the order were launched although the plaintiffs did not file an appeal and the time for them to do so has expired. Neither Sicily Candice Aven nor any of the persons whose name appear on Schedule "A" to the Statement of Claim are members of either the Blueberry River Indian Band or the Doig River Indian Band. In accordance with the April 7, 1999 order therefore, they are not entitled to participate in the proceeds of the Apsassin judgment.

[11]      On September 23, 1999, upon motion brought by the plaintiffs in the Apsassin case, this Court ordered that the question of entitlement of the "present descendants" had been resolved in accordance with the March 2, 1998 order and that the claims of persons who filed Notices of Claim under the order of March 2, 1998 were dismissed. The plaintiffs did not appear on the motion, though duly served, nor have they appealed the order of September 23, 1999. The time for them to appeal has expired.

[12]      On July 29, 1999, the plaintiff, as assignee of Sicily Candice Aven, and on behalf of himself and sixteen other persons listed in Schedule "A", commenced an action in this Court by way of Statement of Claim. The plaintiffs seek declarations as to their personal entitlement to an equal per capita share of the benefits of the disposal of mineral rights of Indian Reserve No. 172. In addition, declarations are sought regarding personal entitlement to receive payment of an equal per capita share of the total fair market value of the mineral rights of I.R. No. 172 and for compound interest payable in regard to the alleged personal entitlement.

[13]      Paragraph 5 of the Statement of Claim alleges that a treaty, Treaty No. 8, was made by adhesion at or near Fort St. John, British Columbia on May 30, 1900 between Her Majesty the Queen and certain aboriginal persons who became known as the Beaver Indians of Fort St. John. The Statement of Claim recites a portion of Treaty No. 8, which is relevant to this application, as follows:

And Her Majesty the Queen hereby agrees and undertakes to lay aside reserves for such bands as desire reserves, the same not to exceed in all one square mile for each family of five for such number of families as may elect to reside on reserves, or in that proportion for larger or smaller families; and for such families or individual Indians as may prefer to live apart from band reserves, Her Majesty undertakes to provide land in severalty to the extent of 160 acres to each Indian, the land to be conveyed with a proviso as to non-alienation without the consent of the Governor-General in Council of Canad, the selection of such reserves, and lands in severalty, to be made in the manner following, namely, the Superintendent General of Indian Affairs shall depute and send a suitable person to determine and set apart of such reserves and lands, after consulting with the Indians concerned s to the locality which may be found suitable and open for selection.

[14]      The plaintiffs allege that I.R. No. 172, including minerals thereon, was set aside pursuant to Treaty No. 8 and ratified by Order in Council PC 819 dated April 11, 1916 for the use and benefit of the Beaver Indians of Fort St. John. The Statement of Claim asserts that the mineral reserves in or under I.R. No. 172 were inadvertently disposed of and not reacquired by the Crown, giving rise to a breach of fiduciary duty which, the plaintiffs maintain is a duty owed to the surviving treaty adherents and their descendants. As a result of this breach of fiduciary duty by the Crown in regard to the disposal of and failure to reacquire the mineral rights of I.R. No. 172, the plaintiffs allege that they have suffered and continue to suffer a personal loss of rights for which they are entitled to claim damages and the declarations referred to above.

[15]      By way of Statement of Defence filed on August 27, 1999, the Crown specifically denies the allegation contained in the Statement of Claim and further describes the negotiation and ratification of Treaty No. 8 and the adhesion to Treaty No. 8 by the Beaver Indians of Fort St. John.

[16]      The Statement of Defence filed by the Crown further denies any right or cause of action advanced by the Statement of Claim; denies the validity of the assignments pleaded by the plaintiffs; alleges that the plaintiffs are estopped by the principle of res judicata from bringing this action; and, seeks to have the Statement of Claim struck as being scandalous, frivolous, vexatious and an abuse of the process of the Court.

[17]      On September 3, 1999, in response to the Statement of Defence, the plaintiffs filed a Reply in this Court. The Reply alleges, inter alia, that the claims advanced by the plaintiffs in their Statement of Claim are individual rights and not Band rights. The Reply states at paragraph 7 that the proceedings and judgments in the Apsassin case have no relevance except to the extent that it has been judicially decided that:

(a) membership in a First Nation and the enjoyment of any Aboriginal or Treaty rights which flow from such membership, is quite different from membership in a Band and the enjoyment of the rights which flow from that status. The two may and often do overlap but that does not make them the same;

(b) the collective rights to which the Apsassin case pertains were found to derive exclusively from the provisions of the Indian Act and to accrue exclusively to statutory band entities;

(c) the plaintiffs are not part of the collectivity which is entitled to the proceeds of the Apsassin judgment; and

(d) the plaintiffs have suffered no prejudicce by being included in the style of cause in the Apsassin judgment and if they have3 any rights, they are now in a position to assert them.

[18]      Paragraph 8 of the Reply stipulates that the plaintiffs make no claim to any part of the proceeds of the Apsassin judgment and, further, that the assignments referred to in the Statement of Claim do not purport to assign any rights or claims to the proceeds of the judgment nor do the assignments assign any collective rights or any other rights to any existing reserves.

[19]      After careful consideration, I am satisfied that the Statement of Claim should be struck out and the plaintiffs' action dismissed on the grounds that the Statement of Claim fails to disclose a cause of action and that it falls within the principles of estoppel and res judicata and as such, constitutes an abuse of the process of this Court pursuant to Rule 221(f) of the Federal Court Rules.

[20]      The test for striking out pleadings is whether it is plain and obvious that the claim discloses no reasonable cause of action. Here, it is plain and obvious that any rights relating to I.R. No. 172 and any First Nations or aboriginal rights in regard to I.R. No. 172 are collective or communal rights of an Indian band or First Nation. In law, the plaintiffs have no personal entitlement in regard to mineral rights or the disposition of those rights upon which to base a cause of action as advanced by the plaintiffs herein. The statutory right to the use and benefit of reserve lands is a collective right accruing to the Band members as a body rather than to the Band members individually.

[21]      In the Statement of Claim, the cause of action advanced by the individual plaintiffs is a claim for breach of fiduciary duty. The only loss or damage claimed by the plaintiffs as a result of the alleged breach is said to arise from the defendant's dealings with I.R. No. 172. As I.R. No. 172 was set aside under Treaty 8 for an Indian Band, the allegations in the Statement of Claim can only be advanced by the Band as a collectivity and not by individual plaintiffs for their own personal entitlement in this action. Accordingly, there is no cause of action disclosed in the Statement of Claim and it is plain and obvious that it will fail and should therefore be struck out.

[22]      Furthermore, it is clear that the principle of res judicata applies here. In 1916, I.R. No. 172 was set aside for the Fort St. John Band of the Beaver Indians in furtherance of the terms and provisions of Treaty No. 8. Subsequently, there was an alienation of the mineral rights of I.R. No. 172 to third parties. As outlined above and as settled in numerous decisions of this Court, culminating in the decision of the Supreme Court of Canada in the Apsassin case, it has been determined that the Crown was liable to pay damages as a result of the alienation of the mineral rights of I.R. No. 172. As a result, an order of this Court was entered fixing damages at $147,000,000.00. Furthermore, a process for determining entitlement to share in the judgment by all claimants, including the plaintiffs, was fixed by this Court. Later, a question of law to determine whether personal claimants were entitled to share in the proceeds of judgment was placed before the Court. In the proceeding on the question of law, the plaintiffs placed for determination before this Court, the question of their personal entitlement to share monies paid as a result of the alienation of the mineral rights of Indian Reserve No. 172.

[23]      Also, in that proceeding, these same plaintiffs urged, as they do in paragraph 10 and 11 of the impugned Statement of Claim, that I.R. No. 172 was set aside for the use and benefit of the individual members of the Beaver Band and that the Apsassin case was brought for their personal benefit in regard to their personal rights relating to I.R. No. 172. The plaintiffs made extensive written and oral submissions as to the individual entitlement of the "natural descendants of the original adherents to Treaty No. 8" and filed written submissions to the effect that it was the descendants of the Beaver Indians who had entered into Treaty No. 8 who were entitled to bring a claim for breach of fiduciary duty. They argued that it was to this group and not to an Indian Act band that the duty was owed. In conclusion, the plaintiffs argued that:

For all of the above reasons, the claimant Plaintiffs submit that the proper conclusion to be draw [sic] from the true facts and the applicable law, is that the living natural descendants, from time to time, of the Indian adherents to Treaty No. 8, for whom Indian Reserve #172 was exclusively set aside, are the only persons who ever had a lawful cause of action against the Defendant with respect to the disposal of mineral rights of that reserve and therefore they are the only persons who have a legal right to benefit from judgment.

[24]      On April 7, 1999, this Court answered the question of law in the negative. Hugessen, J. held that the claimants, including the plaintiffs herein, had no entitlement to any portion of the proceeds of the Apsassin judgment. In making the order, the Court held as follows:

25. Indian Reserve 172 was set apart for the Beaver Band. A Band is a creature of statute under the Indian Act. It is a body of Indians for whom lands had been set aside by the Crown and for whose benefit such lands are held. A Band is not the same thing as a First Nation. Its membership is not determined by inheritance or descendancy but by the law itself. A Band is a collectivity and the rights which a Band has in reserves which are set aside for it are collective and not individual rights. While such rights may include aboriginal or treaty rights, they are vested only in the Band. They are transmissible by inheritance; a descendant of a Band member does not acquire any of the latter's rights in the collectivity unless such descendant is, or becomes, him or herself a member of the Band.

26. The rights of the Beaver Band in Indian reserve 172 were collective rights enjoyed by the members of the Band for the time being of that Band. When that Band ceased to exist, those rights passed to the members of the two successor Bands, the Blueberry River and Doig River Bands. Since those rights were collective and not individual rights, they could neither be exercised by nor transmitted to individuals. The breach of fiduciary duty which has been established in this case was owed to the Beaver Band and the right of action which resulted therefrom was transmitted to the successor Bands. That right was equally a collective right which belonged and still belongs collectively and not individually to the members for the time being of those Bands. It is membership and not ancestry which determines entitlement to reserve lands and, in consequence, to the damages flowing from any breach of fiduciary duty in relation to those lands. Therefore, the descendants who are not Band members can have no share in the proceeds of judgment.

(emphasis added)

[25]      It is clear that in this proceeding the plaintiffs are seeking to litigate a subject matter which has already been determined by this Court. In this proceeding, the same subject matter is raised, that is, the alleged breach of the defendant in regard to I.R. No. 172. The subject of the alienation of the mineral rights of I.R. 172 has been exhaustively determined by the courts. This proceeding does not disclose a cause of action that has not already been adjudicated and accordingly, the plaintiffs' Statement of Claim is struck and their action is dismissed.

[26]      I agree with the Crown's allegation that this action is scandalous, frivolous and vexatious. There is no doubt that the defendant-applicant herein is entitled to costs and because of the many instances in which this issue has already been determined by this Court, I am hereby allowing the defendant costs on a solicitor-client basis.

                                 JUDGE

OTTAWA, Ontario

November 24, 2000