Hofer v. Canada, 2002 FCT 16

Date: 20020108

Docket: T-224-99

Neutral citation: 2002 FCT 16

BETWEEN:

                                                                     JAMES HOFER

                                                                                                                                                          Plaintiff

                                                                              - and -

                                            THE QUEEN IN RIGHT OF CANADA and

                             THE MINISTER OF INDIAN AFFAIRS AND NORTHERN

                                 DEVELOPMENT (as represented by the Department of

                                    Indian Affairs and hereinafter referred to as DIAND)

                                                                              - and -

                              THE BLOOD TRIBE CHIEF AND COUNCIL representing

                                all members of the Blood Band of Indians (as represented

                                               by the Blood Tribe Department of Lands

                                                       hereinafter referred to as BTLD)

                                                                              - and -

                                                               LEVI BLACKWATER

                                                                                                                                                    Defendants

                                               REASONS FOR ORDER AND ORDER

HUGESSEN J.

[1]                 Both defendants move for summary judgment dismissing the plaintiff's action with costs. That action is described in the plaintiff's Memorandum of Fact and Law in the following terms:

In February 1996 James Hofer, a non-Native farmer, had entered into a Conditional Agreement with the Blood Tribe Chief and Council and the BTLD that would inter alia extend his Permits to farm Blood lands to 5 years from the standard 3 year Permits for waiving their right to money paid to the Permittees through the Western Grain Transition Payment Program ("WGTPP") and so the money would be paid directly to the Blood Tribe. The Agreement was negotiated at a meeting where many Blood Tribe Councillors and BTLD supervisors and employees attended as well as representation from the federal government (DIAND) including the Permittees.

The Agreement allowed the Blood Tribe to have the WGTPP subsidy payments given directly to the Blood Tribe which would have been paid directly to the Permittees. In exchange the Permittees were granted 5 year Permits to lease Blood farmlands rather than the usual 3 year periods.

Mr. Hofer had been leasing farmland on the Blood reserve since the early 1980's without any problems until April 1998. At that time he was informed by the Blood Tribe Lands Department ("BTLD") that his federal Agricultural Permits ("Permits") issued under s. 28 of the Indian Act had expired. Mr. Hofer alleges he had 3 more years remaining on all of those permits. The Blood Tribe and the Federal Government disagrees.

As a result of the cancellation of the permits Hofer was unable to make his loan payments to the Bank. They forced him to sign off as a shareholder and Director of Western Farms Inc.. Hofer lost all equity and good will he acquired for the company. As Hofer still had valid Permits he advanced $40,000.00 to the Occupants. Now Hofer brings this action seeking damages against the Defendants for:

(a)             breach of contract;

(b)            crop loss due to oil companies;

(c)             intrusion and loss of equity in forced sale of farm equipment.

[2]                 The material before me indicates that the plaintiff has farmed on land that is situated within the Blood Reserve since the early 1980's. He attests that he has always obtained federal agriculture permits to farm these lands since the outset. The permits, he says, were normally negotiated by the BTLD and later signed by the regional agent for the Department of Indian and Northern Affairs ("DIAND"). At some point, the plaintiff became entitled to benefits from the Western Grain Transition Payments Program ; however it would appear that the Blood Tribe Chief and Council sought to have those benefits assigned directly to them. The plaintiff, therefore, attended a meeting along with Blood Tribe Councillors, BTLD members and DIAND officials on February 19, 1996.

[3]                 The plaintiff alleges that a "Conditional Agreement" was reached at that meeting. A text of that "Conditional Agreement" was later drafted by the BTLD and signed by the plaintiff on February 28, 1996. The first part of that text reads as follows:

I James Hofer, Permittee, and Blood Tribe Lands Management Department, representing Chief and Council, in reference to the Western Grain Transitional Payment Program, agree to terms and conditions as set forth in this agreement. Said terms and conditions are:

1.              (5) five year contracts

2.              three equal payments

3.              No loss of leases

4.              Established rates to remain the same

5.                                   

This agreement is conditional upon any final agreement set forth by Chief and Council and Permittees.

With these conditions I agree to relinquish, release and quit any claim, disputes and challenges to the disbursements of monies attached to the Western Grain Transition Payment Program...

[4]                 In due course, the plaintiff received 15 duly completed permits for his occupation of reserve lands. The permits were issued by the Crown and approved by a resolution of the Band Council. They were all for a term of three years from 1 April 1995 to 31 March 1998. While all permits bear the plaintiff's signature, he asserts that when he signed, on February 20, 1996, i.e. prior to the date of the "Conditional Agreement", the pages containing the lease terms were either in blank or were not shown to him. However, he admits that he received completed copies of the permits in May or June of 1996 and that he took no action but simply continued in occupation and to farm the lands in question during that and the following year.

[5]                 The principal argument advanced by the defendants in support of their motions for summary judgment is that the "Conditional Agreement" is void for failure to comply with sections 2 and 28 of the Indian Act, R.S.C. 1985, c. I-5. The relevant part of those sections read:

[6]                 In my view, this argument is clearly well founded. While there is no doubt that the 15 permits issued to the plaintiff were approved by both the Minister and the Band Council, the plaintiff does not seek to enforce them and indeed contends that they are at variance with the "Conditional Agreement", which foresaw a term of five rather than three years and it is this latter agreement which he claims has been breached so as to cause him damage. Since there is no evidence whatsoever that the "Conditional Agreement" was ever approved by a resolution of the Band Council or by a majority of electors or by the Minister, it is void and unenforceable. The plaintiff's allegations of fraud or misrepresentation by the representatives of the Crown and the Band to the effect that they had full authority to bind the Band Council, even if they could be proven, cannot avail against the requirements of the statute.

[7]                 But there is more. By its terms, the contract which the plaintiff is seeking to enforce is "conditional" and is expressly stated to be subject to "any final agreement set forth by Chief and Council and Permittees." Thus, if the term of the 15 permits was in fact inserted or altered after the plaintiff had signed them, as the plaintiff asserts, that seems to have been what was contemplated in the agreement itself. The plaintiff, by accepting and continuing in occupation under those permits even after he had admittedly received them in completed form showing a term of three rather than five years, must be held to have accepted that term.

[8]                 That is not the end of the matter, however. The plaintiff ceased farming the lands in question after the 1997 crop year. That was, of course, in accordance with the three year term of the 15 permits which he held. But he also held two other permits with terms extending beyond March 31, 1998, one covering the period from April 1, 1996 to March 31, 1999 (permit 240530) and the other (permit 256502) for the period from April 1, 1997 to March 31, 2000. While it is clear that the plaintiff ceased his occupation of all reserve lands in April of 1998, the reasons for his doing so are obscure and cannot properly be resolved on these summary judgment motions. The plaintiff says that the Band refused to accept his rental payment while the defendants assert that the plaintiff was in breach and that the permits were cancelled. The situation is further confused by the fact that the plaintiff was wrongly claiming a further period of occupation in the lands covered by the 15 expired permits and that the breach alleged by the defendants (that the plaintiff had made unauthorized advances to aboriginal land holders) had apparently been approved, or at least tolerated, by the Band in the past. These questions are proper issues for trial.

[9]                 The upshot is that while the plaintiff's action, which sounds only in contract, cannot succeed in so far as it is based on the "Conditional Agreement" to the extent that the latter was not followed up by permits duly issued pursuant to section 28 of the Indian Act, there may be a proper claim for damages resulting from breaches of permits 240530 and 256502, which appear to comply with that provision . The motions will therefore be allowed in part only and the action will be allowed to continue but only with regard to claims for alleged breaches of the contracts evidenced by those permits. Leave will be granted to the plaintiff to make the necessary amendments to his Statement of Claim.

[10]            On the matter of costs, while the defendants enjoy partial success, the action is still viable; I would award each defendant a lump sum for costs in the amount of $1,000 plus allowable disbursements.

                                                  ORDER

The motions for summary judgment are allowed in part ; the plaintiff's claim is limited to alleged breaches of permits 240530 and 256502. The plaintiff has leave to amend his Statement of Claim in consequence. Each of the moving defendants, the Crown and the Band, is entitled to a lump sum for costs in the amount of $1,000 plus disbursements payable forthwith and in any event of the cause.

                                                                                                           Judge                      

Ottawa, Ontario

January 8, 2002