Smith v. The Queen, [1983] 1 SCR 554

Supreme Court of Canada

Smith v. The Queen, [1983] 1 S.C.R. 554

Date: 1983-05-17

Gilbert A. Smith Appellant;

and

Her Majesty The Queen Respondent;

and

The Attorney General for Ontario and the Attorney General of Quebec Interveners.

File No.: 16383.

1982: February 22, 23; 1983: May 17.

Present: Laskin C.J. and Ritchie, Dickson, Beetz, Estey, McIntyre and Chouinard JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Indians—Lands reserved for Indians—Effects of surrender of lands—Action by the federal Crown for possession of surrendered lands occupied by the appellant—Whether federal Crown retained an interest enabling it to institute proceedings—Constitution Act, 1867, ss. 91(24), 109—Indian Act, R.S.C. 1970, c. I-6, ss. 2(1), 31, 53.

Respondent, in the right of Canada and on behalf of the Red Bank Band of Indians, brought an action for possession of appellant’s parcel of land allegedly located within the Indian reserve. Lands forming part of the reserve, including the disputed lands, were surrendered by the Indians to the Crown in 1895 to be sold with the proceeds therefrom going to the Indian Band. The Crown, however, never disposed of the lands. Appellant, who purchased the land in 1952, supported the validity of his title on the basis of adverse possession. In the Federal Court, the trial judge found that there had been continuous adverse possession from 1838 to 1973 and dismissed respondent’s action. The Court of Appeal reversed the judgment holding that the appellant had not established a possessory title and that his parcel, though surrendered by the Indians, remained land reserved for the Indians within the meaning of s. 91(24)  of the Constitution Act, 1867 . This appeal is to determine whether this release was effective in terminating the operation of s. 91(24) and the attendant rights of the beneficiary Indians.

Held: The appeal should be allowed.

An absolute surrender of lands by Indians for whose benefit the lands were set aside leaves no retained or other interest in the Crown enabling the government of

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Canada to retain the surrendered lands within the federal jurisdiction under s. 91(24). Here, the release was unqualified and absolute. The habendum clause did not have the effect of reducing the express terms employed in the release. Consequently, both before and after 1895, the Province owned the lands in title and by beneficial interest, subject, prior to 1895, to the burden created by s. 91(24). This burden disappeared because of the surrender. The 1958 Agreement between the Province and Canada for the transfer of certain lands surrendered by the Indians from the Province to the federal government did not relate to appellant’s parcel of land. The Queen in right of Canada, therefore, had no enforceable interest in appellant’s parcel of land and was without a legal right to commence the action which gave rise to these proceedings.

St. Catherine’s Milling and Lumber Co. v. The Queen (1888), 14 App. Cas. 46, applied; Mowat v. Casgrain (1897), 6 Que. Q.B. 12; The King v. McMaster, [1926] Ex. C.R. 68; Surrey (Corpn.) v. Peace Arch Enterprises Ltd. (1970), 74 W.W.R. 380 (B.C.C.A.); St. Ann’s Island Shooting and Fishing Club Ltd. v. The King, [1950] S.C.R. 211, distinguished; Ontario Mining Co. v. Seybold, [1903] A.C. 73; Attorney-General for Quebec v. Attorney-General for Canada, [1921] 1 A.C. 401; Goodtitle v. Gibbs (1826), 5 B. & C. 709; Myers v. Marsh (1852), 9 U.C.Q.B. 242, referred to.

APPEAL from a judgment of the Federal Court of Appeal, [1981] 1 F.C. 346, 113 D.L.R. (3d) 522, 34 N.R. 91, [1980] 4 C.N.L.R. 29, setting aside a judgment of the Trial Division, [1978] 1 F.C. 653, [1978] 4 C.N.L.R. 121. Appeal allowed.

B.A. Crane, Q.C., and J. Anderson, for the appellant.

E. Neil McKelvey, Q.C., and Robert R. Anderson, Q.C., for the respondent.

D.W. Mundell, Q.C., for the intervener the Attorney General for Ontario.

William J. Atkinson and René Morin, for the intervener the Attorney General of Quebec.

The judgment of the Court was delivered by

ESTEY J.—These proceedings were commenced under s. 31 of the Indian Act of Canada, R.S.C. 1970, c. I-6, by an action in the Federal Court of

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Canada by the Queen in the right of Canada on behalf of the Red Bank Band of Indians for a declaration of the right to possession and for vacant possession of the lands of the appellant located in the Province of New Brunswick and claimed to be sited within an Indian reservation.

The lands occupied by the appellant, and hereinafter for convenience referred to as “the said lands”, appear to have been included in a grant of occupation made in 1783 to the Micmac Indians then living in the region of the Little South West Miramichi River in the Province of New Brunswick. Subsequently, and while New Brunswick was still a colony, these lands were surveyed and a formal licence of occupation was granted to these Indians, the land then (1808) being referred to as “the Little South West tract” which contained about 10,000 acres straddling the Little South West Miramichi River. By Confederation the area of the Little South West Reserve, as described in the Crown Lands Office in Fredericton, comprised about 8,124 acres. It is agreed by the parties that this tract included the said lands.

The first significant event with respect to the said lands occurred on June 6, 1895 when it is alleged that these lands were formally surrendered by the Indians. In the instrument the land is described as being included in the “Red Bank Reserves” and its release was in these words:

The Indians owning the … Red Bank Reserves … for and acting on behalf of the whole people of our said Band in Council assembled, Do hereby release, remise, surrender, quit claim and yield up unto Our Sovereign Lady the Queen … ALL AND SINGULAR, that certain parcel or tract of land and premises … being composed of Lots … Five, Six … on the North side of the Little South West Miramichi River, all of the above Lots being in the Red Bank Indian Reserve, (so called)…

The release includes the following habendum:

TO HAVE AND TO HOLD the same unto Her said Majesty The Queen, her Heirs and Successors forever,

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in trust to sell the same to such person or persons, and upon such terms as the Government of the Dominion of Canada may deem most conducive to our welfare and that of our people.

The instrument then imposes the following condition:

AND upon the further condition that all moneys received from the sale thereof, shall, after deducting the usual proportion for expenses of management, be placed to our credit and the interest thereon paid to us and our descendants as to the Department of Indian Affairs may seem right.

It is to be observed:

a) The reference to the Queen contains no description as to whether the reference to the Monarch is in the right of the Province of New Brunswick or Canada. The document does refer to the Federal Department of Indian Affairs.

b) The instrument is not executed by either the federal or provincial governments but is witnessed by an authority of the federal department who describes himself as “Indian Agent”.

c) The document bears an endorsement of registration in the Indian Land Registry, Department of Indian Affairs and Northern Development, Ottawa.

d) The regularity of the release as to form and substance is not challenged in these proceedings.

e) It is agreed by all the parties hereto that the lands described in the document of surrender include the said lands.

f) The condition referring to the sale of the lands appears to be a misapprehension of the St. Catherine’s Milling case, infra, as regards the nature of the interest in Indian lands and the effect of surrender thereof.

In 1958 the Province of New Brunswick and Canada entered into an agreement whereby certain lands were transferred from the Province to the Federal Government, which transfer was confirmed by statutes enacted by Parliament and the Legislature respectively: 1958 (N.B.), c. 4; 1959 (Can.), c. 47. The agreement recites that since Confederation, certain lands have been surrendered to the Crown by the Indians “entitled thereto” and that the Crown in the right of Canada had thereafter purported to convey some of these sur-

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rendered lands to individuals. By reason of subsequent decisions in the courts, the parties concluded that the lands in question could only have been lawfully conveyed by the Province with the result that the grantees found themselves holding defective titles. By section 2 of the agreement the parties thereto, including the Province of New Brunswick, “confirmed” all such grants. By section 3 the Province transferred to Canada “all rights and interests of the Province” in certain “Reserve lands” including that Reserve north of the Little South West Miramichi River opposite Red Bank Indian Reserve No. 4. The description in the appendix to the agreement, and as confirmed by the two statutes, does not make reference to lot numbers, surveys or any other documents or instruments whereby a description of the transferred lands can be established. The parties are not in agreement that the 1958 agreement does or does not include the said lands. The Court of Appeal found that the agreement did not deal with the said lands; the trial judge came to the opposite conclusion. The effect of this 1958 agreement will be considered later.

It is common ground that the said lands, which the parties agreed were included in the lands described in the surrender document, have not been sold or conveyed to the appellant or to his predecessors in title by the Crown. Because much argument was made on the question of possessory title, and certain conclusions were reached with reference thereto in the courts below, it is appropriate to summarize the history of the occupation and the limited conveyancing of the said lands. The appellant purchased the said lands, which comprise about 25 acres, in 1952 from one Isaac Mutch. In the 1952 conveyance they are described as being the southwest corner of Lot 6 in a Plan of Survey prepared by William Fish in 1904. There is no question but that the appellant occupied these lands, and some adjoining lands later acquired, from the respective dates of occupation down to the date of trial. His occupation consisted of living on the premises during the summer months, operating thereon a small gravel pit, and the payment of taxes every year to the Province. There is no evidence of any Indian claims to the said lands during the Smith years of occupation until

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immediately prior to the commencement of these proceedings. It is the state of the title prior to purchase by the appellant that gives rise to some difficulty in determining whether title may have been acquired by possession. The earliest known non-Indian occupation of the said lands was by one Ebenezer Travis commencing in 1838. His occupancy can be traced through various reports and surveys until his death in 1871 when his grandson, Allan Travis, continued to live on the land. This occupancy appears to have continued to at least 1898 when the witness to the aforementioned surrender document reported that Lot 5 was “occupied by Stephen Johnson (away) and Ebenezar Travis”. This appears to be a reference to Ebenezer Allan Travis. Stephen Johnson, according to the evidence, was related to the earlier Ebenezer Travis. The land description continues to be “Lot No. 5”. The adjoining Lot No. 6, at least by 1898, was occupied by James Mutch, the grandfather of the appellant’s grantor. The Fish survey of 1904, supra, realigned the lot lines with the result that the said lands appear to have been moved over, at least in part, to Lot 6 in the Fish survey, and this was so found by the Court of Appeal. It would appear that Isaac Mutch, supra, moved on to the said lands about 1904 having received a grant from his father, Edmond, and his grandfather, James. It is certain at least that by 1906 the appellant’s grantor is shown as the owner on the assessment list. The Court of Appeal found that Isaac Mutch occupied these said lands until the early 1920’s and thereafter the lands were occupied by members of his family while he continued to farm and cut wood on the said lands. The Court of Appeal found that Isaac Mutch was not a successor in title to Travis and Johnson but owned the land adjoining their lands, having acquired it from his father, Edmond Mutch.

On February 24, 1919, Isaac Mutch wrote a letter to the Indian Affairs Department which attracted much attention in these proceedings. In this letter he said:

I am living on a piece of Indian land which lies on the North side of the Lyttle South West River the East side

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of Lot No. 6 x 42 Rods in width Bounded on the West by land claimed by Ebenezar Traviss [sic]. And I would like to get the grant of it.

The learned trial judge did not find this letter to be an acknowledgement of title in the Crown. The Court of Appeal, however, found that it was and so adverse possession was not achieved whatever the applicable limitations law may be.

In the result, the learned trial judge found that there had been continuous adverse possession for 135 years from the time of Ebenezer Travis in 1838 to the appellant at the commencement of these proceedings in 1973 and dismissed the action. The Court of Appeal, however, concluded that while the evidence did not support the finding that the occupation by the Travis families was continued by the Mutch families so as to create the necessary period of 60 years continuous adverse possession (according to the New Brunswick statutes), the occupation by Isaac Mutch from 1904 through to the commencement of these proceedings did establish adverse possession for more than 60 years. However, the Court of Appeal also found that the above letter of 1919 constituted an interruption in the period of adverse possession and consequently such right to ownership could not be established under the Limitation of Actions Act of New Brunswick, R.S.N.B. 1973, c. L-8, if applicable. More fundamentally, Le Dain J., on behalf of the Court of Appeal, concluded that the New Brunswick statutes could not operate to erase the federal interest under s. 91(24) and that the provincial limitations statute was excluded by other federal legislation.

The Court of Appeal, after a comprehensive review of the lengthy record by Le Dain J., concluded that the respondent could not bring this action under the Indian Act, s. 31, but could under the general law relating to the administration by the Government of Canada of its responsibilities under s. 91(24) of the Constitution Act; and that the Crown in the right of Canada was entitled to

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an order for possession as the surrendered lands remained within the constitutional authority of the Parliament of Canada and its enactment, the Indian Act. In leading up to that decision, the Court of Appeal found that the appellant had not established a possessory title either before or after the surrender of 1895 and that that instrument was in law, indeed, an unconditional and effective surrender of title. The principal theme of the reasons for judgment of the Court of Appeal is that this land, though surrendered by the Indians, “remains land reserved for the Indians within the meaning of section 91(24) of the B.N.A. Act” because the land remained unsold “and continues to be held by the Crown for the benefit of the Indians because of their financial interest in it…” For reasons later to be developed it is not in my view necessary, nor indeed advisable, to determine the issue of possessory title in these proceedings. Should the issue of title arise between the appellant and the Province of New Brunswick or others, the legal significance of the history of possession and of the request for grant will no doubt become a central issue.

The consequences of a surrender by the occupying Indians of Indian lands under s. 91(24) of the Constitution Act were examined in St. Catherine’s Milling and Lumber Co. v. The Queen (1888), 14 App. Cas. 46, where Lord Watson said at pp. 58-9:

The Crown has all along had a present proprietary estate in the land, upon which the Indian title was a mere burden. The ceded territory was at the time of the union, land vested in the Crown, subject to “an interest other than that of the Province in the same,” within the meaning of sect. 109; and must now belong to Ontario in terms of that clause, unless its rights have been taken away by some provision of the Act of 1867 other than those already noticed.

His Lordship concluded at p. 59:

Their Lordships are, however, unable to assent to the argument for the Dominion founded on sect. 91(24). There can be no à priori probability that the British Legislature, in a branch of the statute which professes to deal only with the distribution of legislative power, intended to deprive the Provinces of rights which are

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expressly given them in that branch of it which relates to the distribution of revenues and assets. The fact that the power of legislating for Indians, and for lands which are reserved to their use, has been entrusted to the Parliament of the Dominion is not in the least degree inconsistent with the right of the Provinces to a beneficial interest in these lands, available to them as a source of revenue whenever the estate of the Crown is disencumbered of the Indian title.

The authority of that decision has never been challenged or indeed varied by interpretations and application. Neither the parties to that proceeding nor the Privy Council appear to have had any doubt about the efficacy in law of a surrender by the Indians of their interests in a particular part of the land theretofore set aside for their benefit. There had been challenges to the surrender process where the procedure or the evidence of the process had left some doubt as to whether a surrender was indeed intended. The law therefore came to recognize the right and ability of the benefitted Indians to give up their relationship to lands theretofore devoted to their use and occupation, and the result of such a process is the revival or restoration of the complete beneficial ownership in the Province without further burden by reason of s. 91(24).

What then is the effect of the purported document of surrender here executed in 1895? There is no question but that the reference to “Our Sovereign Lady the Queen”, to whom the release and surrender were therein made, was a reference to the Queen in the right of Canada as was the case in the St. Catherine’s proceedings. This creates no difficulty because it is with respect to the legislative interest of the Parliament of Canada that the surrender is related, and consequently the surrender was obtained by the executive branch of the national government. The fact that the title to the lands, both in the registration system and by reason of s. 109 of the Constitution Act, was in the Province and held by the Queen in the right of the Province, is not a complicating factor in the surrender process. What is a complicating factor, however, is the habendum clause, already set out, as well as the succeeding clause relating to the application of funds realised from the sale of the surrendered interests. The authors of the form

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employed in the 1895 surrender no doubt misapprehended (if indeed they were aware of it at all) the St. Catherine’s case. This comment is made by reason of the observation made in a report dated July 9, 1895 by the Superintendent General of Indian Affairs in which reference is made to the surrender, “which lots are occupied by squatters, the object of the surrenders being to enable the Department of Indian Affairs to sell the lots to the parties in occupation”. In the St. Catherine’s case the surrender was made in a Treaty under one term of which the Indians retained rights to hunt and fish on the surrendered lands. This did not qualify or limit the effect of the surrender. Indeed the many possible issues arising through the surrender process and documentation in the quit claiming party are not before the Court in these proceedings. Any such rights which might be advanced can neither be claimed nor disposed of in this proceeding. The same applies, as will be seen shortly, to any possible rights the appellant may have pursuant to New Brunswick legislation or any other laws against the proper authorities in the Government of New Brunswick or of Canada with respect to their interests in law in these lands. Here there is no challenge as to the procedural correctness or substantive efficacy of the surrender nor that the process related to the said lands.

The respondent has contended throughout these proceedings that the surrender was not absolute but rather conditional, and consequently, that the St. Catherine’s decision does not come to the aid of the appellant in his argument that the Indian title has been extinguished and with it any cloud on the provincial ownership of the said lands. The Court of Appeal, as already mentioned, took the view that, while the surrender was complete and included the said lands, the said lands remained under the legislative control of the Federal Parliament “based on the continuing jurisdiction and responsibility of the federal government with respect to such lands under the Indian Act”. Section 53(1) of the Indian Act, supra, does indeed provide for a continuing executive interest in the administration of surrendered lands “in accordance with this Act and the terms of the surrender”. By section 2(1) of the Act as it stood at the

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commencement of these proceedings, “surrendered lands” is defined as:

…a reserve or part of a reserve or any interest therein, the legal title to which remains vested in Her Majesty, that has been released or surrendered by the band for whose use and benefit it was set apart.

There may be some confusion by reason of the use in the Act of the terms “reserve” and “surrendered” on a defined basis, whereas in some of the documents now before the Court the terms are used in their ordinary sense in the language. The lands ‘reserved’ for the benefit of Indians, on being released by the Indians for whose benefit the lands had been set aside, cease thereby in law to be within the legislative reach of Parliament under the Constitution. The Federal Government never had a proprietary interest in such lands as were set aside for the use of Indians in the circumstances of the said lands. These ‘reserves’ were set up in the earliest days of the colony of New Brunswick and the title has never been transferred to the Government of Canada. The effect of a complete release, therefore, would be the withdrawal of these lands from Indian use within the contemplation of s. 91(24) of the Constitution Act. As found in St. Catherine’s, the title of the Province would be unencumbered by any operation of s. 91(24). Here the effect of the release as a legal instrument was complete, albeit that it was accompanied by a request by the releasing Indian band for a financial credit equal to the proceeds of sale of the released interest, which of course was not, in law, saleable by the Government of Canada. The released interest was but the right of the Indians in question to enjoy the use of the land under federal legislative regulation. This might give rise to differences as between the parties to the release, but does not go either to the validity of the release as a conveyancing instrument or the state of the provincial title. If and when such related, but here extraneous, issues arise, the courts then concerned may find of interest the comment of Street J. in the judgment of the Divisional Court of Ontario in Ontario Mining Co. v. Seybold, [1903] A.C. 73 (at p. 81):

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The surrender was undoubtedly burdened with the obligation imposed by the treaty to select and lay aside special portions of the tract covered by it for the special use and benefit of the Indians. The Provincial Government could not without plain disregard of justice take advantage of the surrender and refuse to perform the condition attached to it; but it is equally plain that its ownership of the tract of land covered by the treaty was so complete as to exclude the Government of the Dominion from exercising any power or authority over it. The act of the Dominion officers, therefore, in purporting to select and set aside out of it certain parts as special reserves for Indians entitled under the treaty, and the act of the Dominion Government afterwards in founding a right to sell these so-called reserves upon the previous acts of their officers, both appear to stand upon no legal foundation whatever. The Dominion Government, in fact, in selling the land in question, was not selling ‘lands reserved for Indians,’ but was selling lands belonging to the province of Ontario.

The authorities cited below and by the parties to this action relating to the consequences in law of releases, do not, on closer analysis, bear upon the question of whether or not the release in the circumstances here present is effective in terminating the operations of s. 91(24) and the attendant rights of the beneficiary Indians. In this connection mention is made in the Court of Appeal of Mowat v. Casgrain (1897), 6 Que. Q.B. 12; The King v. McMaster, [1926] Ex. C.R. 68; and Surrey (Corpn.) v. Peace Arch Enterprises Ltd. (1970), 74 W.W.R. 380 (B.C.C.A.).

In Mowat v. Casgrain there was no suggestion of any surrender of their rights by the Iroquois Band for whose benefit the lands had been set aside. The Court recognized that the title of the reserved lands was in the Province of Quebec subject to the usufructuary rights of the Indians. Similarly, the Court was not faced with any surrender of rights by the Indian occupiers of the lands in The King v. McMaster. The issue there was whether the limited rights of occupancy of the Indians enabled them to grant a valid lease of part of the Reserve for a renewable term of 99 years. The Court found the lease to be void as beyond the rights of the Indians to grant, and therefore the Crown in the right of Canada could recover

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possession. Maclean J. in the Exchequer Court said at p. 73:

The Crown could not itself lease, or ratify any lease, made by the Indians of such lands at any time since the proclamation, save upon a surrender of the same by the Indians to the Crown.

and continued on pp. 74-75, after referring to the St. Catherine’s case and another case:

In the two authorities cited the lands had been surrendered by the Indians to the Crown, and the substantial point in issue in both cases was whether in virtue of secs. 109 and 117 of the British North America Act such lands had passed to the Crown in the right of the province interested. Here there has been no surrender […] The Parliament of Canada, in virtue of sec. 91(24) B.N.A. Act has exclusive legislative authority over “Indians and lands reserved for Indians,” and there never having been any surrender of the lands in question to the Crown, and the control, direction and management of lands reserved for Indians being in the Dominion, I think the Crown is entitled to seek possession of the property in question from the defendants for the benefit of the Indians.

In Peace Arch, supra, the Band, by the instrument then in question, employed the terminology: “Do hereby surrender unto Her Majesty… To Have and To Hold … in trust to lease the same to such person … as the Government of Canada may deem most conducive to our Welfare and that of our people” (pp. 381-82). The Court found this to be “a qualified or conditional surrender”, and speaking through Maclean J.A. stated at p. 385:

Under this form of surrender, “in trust” and for a particular purpose that is “to lease the same” it seems to me that it cannot be said the tribal interest in these lands has been extinguished.

…

In my view the “surrender” under the Indian Act is not a surrender as a conveyancer would understand it.

and concluded on p. 386:

This land was reserved for the Indians in 1887, and the Indians still maintain a reversionary interest in it.

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The Court in British Columbia appeared to take the view that the leasing of the land was but a “use” of the lands by the Indians and that the mechanics of surrender there employed followed the prescribed procedure of the Indian Act so as to facilitate the granting of the lease on behalf of the Indians by the Government of Canada and in its role with reference to ‘Indian Lands’ under s. 91(24).

Support for this approach to the determination of the consequences of the “surrender” there in question is found in St. Ann’s Island Shooting and Fishing Club Ltd. v. The King, [1950] S.C.R. 211, to which I will return shortly. The release and surrender here, however, are, in form and substance, much different. The release was in terms absolute: “Do hereby release, remise, surrender, quit claim and yield up”. The added condition of trust relates to the proceeds of sale and not the profits from any further “use” of the lands or reversionary interest. In St. Ann’s, supra, there had been a history of leasing of lands by the Indians themselves to third parties followed by a procedure under the Indian Act of a “formal surrender” for the purpose of leasing by the Crown pursuant to an order in council promulgated under the Indian Act. The proceedings in question were taken by the third party in order to enforce an asserted right of renewal of a lease entered into subsequently and not authorized by Order in Council. Taschereau J., as he then was, observed (at p. 215):

…there is no doubt that [the lands] could not be originally leased in May, 1881, to the predecessors of the appellant, unless they had been surrendered to the Crown. The effect of a surrender is to make a reserve or part of a reserve, “Indian Lands”, defined in section 2 of the Indian Act, para. (k) as “any reserve or portion of a reserve which has been surrendered to the Crown”.

It is important to note that the term “surrender” is there employed as defined in the Indian Act and relates to a surrender for the purpose of making use of the lands by the Indians by means of a lease of part of the lands to third parties. The mechanics for so doing were and are provided in the Indian

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Act. Taschereau J., as he then was, at p. 216, observed with reference to the form of surrender therein employed: “The object of the surrender was to legalize what was rightly thought to be illegal, and to ratify what had been done”. The Act then and today follows along the line of the Royal Proclamation of 1763 which required any dealings in the lands set aside for Indians by the public to be carried out through the intermediary of the government of the region in which the lands are situate. Rand J. reaches the same conclusion, and at p. 217 expresses it this way:

Under the Indian Act of 1880, a surrender of the Indian interest was required before an effective lease could be made. On February 6, 1882, as a result of enquiries made by the lessees, at a meeting of the Band, an instrument was signed on its behalf which, after referring to the resolution of March 18, 1880, formally surrendered the lands to Her Majesty “to the end that said described territory may be leased to the applicants for the purpose of shooting and fishing for such term and on such conditions as the Superintendent General of Indian Affairs may consider best for our advantage.”

Later in his reasons Rand J. points out: “Upon the expiration of the holding by the Club, the reversion of the original privileges of the Indians fell into possession” (p. 219). It may be thought that the employment of the technical term “reversion” results in an unfortunate confusion, but surely all that was intended by His Lordship was a reference to the reality that the lessor, having put his interest to use by leasing, will, on the expiration of the term of the lease, resume sole occupancy as another form of his continued use of the land.

In these proceedings, however, the Court is not called upon to decide if such a leasing arrangement or leasing mechanics amount to another form of “use” or “benefit” to the Indians. Here the release of the right of occupancy is unfettered and absolute. The provisions of s. 53(1) are not here applicable. The consequence in law of the surrender of 1895 is that described in the St. Catherine’s case. The rights of the surrendering party were thereby terminated.

The right of the Indians to the lands in question was described by Lord Watson in St. Catherine’s

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at p. 54 as “a personal and usufructuary right”. The latter term is defined as follows:

Usufruct

1. Law. The right of temporary possession, use, or enjoyment of the advantages of property belonging to another, so far as may be had without causing damage or prejudice to it.

2. Use, enjoyment, or profitable possession (of something) 1811.

Usufructuary

1. Law. One who enjoys the usufruct of a property, etc.

(The Shorter Oxford English Dictionary, 1959, at p. 2326.)

The release, therefore, is of a personal right which by law must disappear upon surrender by the person holding it; such an ephemeral right cannot be transferred to a grantee, be it the Crown or an individual. The right disappears in the process of the release, and a release couched in terms inferring a transfer cannot operate effectively in law on the personal right any more than an express transfer could. In either process the right disappears. This is a surrender of rights in the broad sense of the common law. Whatever ‘surrender’ may mean in the Indian Act, a surrender in law has the immediate result of extinguishing the personal right of the Indians to which federal jurisdiction attaches under s. 91(24). Nevertheless, it may be asserted that the release was rendered conditional, or something less than absolute, by reason of the habendum attached. In addition to the other applicable considerations already mentioned, it should be noted that the release in the St. Catherine’s case was conditional but in a more direct sense. The releasors, the several Indian tribes who joined in the agreement, retained the right “to hunt and fish throughout the surrendered territory”. Nevertheless, it was determined that the release was absolute and relieved the provincial title of the burden of the Indian rights under s. 91(24). It follows necessarily that a claim for the proceeds of any sale of the disappearing right does not vitiate the surrender of that right under the terms of the surrender in these proceedings. I respectfully share the view held by the Court of

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Appeal on this point. Other consequences could arguably flow from such a transaction but we are here concerned only with the surrender and its consequences in law in relation to the title to the said lands. It is not entirely without relevance in assessing the circumstances of this case that not for almost 80 years after the release does the record reveal any interest in or any concern with these lands on the part of those who surrendered this right to possession of them.

In any case, the effect of the habendum, supra, cannot be, as a tail, to wag the dog, the grant. The learned authors of Canadian Law of Real Property, Anger & Honsberger, 1959, state [at p. 16]:

The general rule is that the habendum may explain, qualify, lessen or even enlarge an estate granted by the operative words but it cannot contradict or be repugnant to them.

In the old authority, Goodtitle v. Gibbs (1826), 5 B. & C. 709, Abbott C.J. said at p. 717:

…if an estate and interest be mentioned in the premises, the intention of the parties is shewn, and the deed may be effectual without any habendum, and if an habendum follow which is repugnant to the premises, or contrary to the rules of law, and incapable of a construction consistent with either, the habendum shall be rejected, and the deed stand good upon the premises.

In Myers v. Marsh (1852), 9 U.C.Q.B. 242, the court decided that, where the operative words grant an unqualified estate in fee simple and the habendum purports to reduce that grant, it must fail in law to have that effect, and being repugnant to the unqualified grant, is inoperative. Here the release is unqualified and absolute and hence the following clause in the form traditionally described as a habendum must be read as being independent of the release and so as not to attribute to it the effect of reducing the express and absolute terms employed in the release.

The Privy Council returned to the St. Catherine’s issue in Attorney-General for Quebec v. Attorney-General for Canada, [1921] 1 A.C. 401.

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The question there raised was whether lands set aside for use by Indians in a pre‑Confederation statute (1853) and surrendered to the Crown in 1882, resulted in the title being in the Crown in the right of the Dominion or in the right of the Province of Quebec. Applying St. Catherine’s the Court found that the lands passed, by virtue of s. 109 of the Constitution Act, to the Province. The conveyancing was again complicated by the Dominion Government, upon receipt of the surrender in 1882, granting the lands by Letters Patent to non-Indians. Duff J., as he then was, speaking for the Privy Council, observed [at p. 408]:

…their Lordships think the contention of the Province to be well founded to this extent, that the right recognized by the statute is a usufructuary right only and a personal right in the sense that it is in its nature inalienable except by surrender to the Crown.

In commenting upon the effect of the earlier decision of the Privy Council in St. Catherine’s, Duff J. continued at pp. 411-12 by stating that the effect of the pre-Confederation statute was not to:

…create an equitable estate in lands set apart for an Indian tribe of which the Commissioner is made the recipient for the benefit of the Indians, but that the title remains in the Crown and that the Commissioner is given such an interest as will enable him to exercise the powers of management and administration committed to him by the statute.

The Dominion Government had, of course, full authority to accept the surrender on behalf of the Crown from the Indians, but, to quote once more the judgment of the Board in the St. Catherine’s Milling Co.’s Case [supra], it had “neither authority nor power to take away from Quebec the interest which had been assigned to that Province by the Imperial statute of 1867.”

The relationship between the two Crowns and lands set aside for the use of Indians is further illustrated by the decision of the Privy Council in Ontario Mining Co. v. Seybold, supra. Lands set aside for Indians by pre-Confederation arrangements had been surrendered by treaty in 1873. Thereupon the Dominion Government, without the approval of the Province, purported to set aside part of the surrendered lands as a reserve for

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Indians in accordance with the Treaty of Surrender. It was there found that the federal authority was limited by s. 91(24) which provided no proprietary rights in such lands and that accordingly, the action taken by the federal authority was ultra vires. Lord Davey, on behalf of the Judicial Committee, stated, after reviewing the disposition made by the Judicial Committee in the St. Catherine’s case (at p. 79):

Their Lordships think that it should be added that the right of disposing of the land can only be exercised by the Crown under the advice of the Ministers of the Dominion or province, as the case may be, to which the beneficial use of the land or its proceeds has been appropriated, and by an instrument under the seal of the Dominion or the province.

The practical application of this principle is found in the Seybold case per Lord Davey at p. 80:

On October 8, 1886, the Rat Portage band surrendered a portion of Reserve 38 B, comprising the land in question, to the Crown, in trust to sell the same and invest the proceeds and pay the interest from such investment to the Indians and their descendants for ever. This surrender was made in accordance with the provisions of a Dominion Act known as the Indian Act, 1880. But it was not suggested that this Act purports, either expressly or by implication, to authorize the Dominion Government to dispose of the public lands of Ontario without the consent of the Provincial Government. No question as to its being within the legislative jurisdiction of the Dominion therefore arises.

It should be noted that the terms of surrender in that case parallelled the surrender now before the Court. It is clear that the consequence of such a surrender on terms requiring sale and the use of proceeds received therefrom for the benefit of Indians, may give rise to other contests but no doubt remains that the consequences of such a surrender do not include the accession by the federal authority to any power of disposition over the surrendered lands.

Indian Act

This statute, which was first enacted in 1868 (Can.), c. XLII, provides extensive arrangements for the discharge of Parliament’s legislative function under s. 91(24). Amongst its principal provisions was the prohibition against the sale or leasing of land set aside for the benefit of Indians “until

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they have been released or surrendered to the Crown for the purposes of this Act”. Detailed provisions were made for the procedure to be followed upon the release or surrender of lands reserved for the use of Indians, and any surrender of such lands to any party other than the Crown was prohibited. In this, the Act is following the pattern of the Royal Proclamation of 1763. It is interesting to note that in s. 11 of this first statute, provision is made for disposition of the proceeds “arising from sales of Indian Lands”. There is in the 1868 Act, no express definition of ‘reserved lands’ but s. 6 provides:

6. All lands reserved for Indians or for any tribe, band or body of Indians, or held in trust for their benefit, shall be deemed to be reserved and held for the same purposes as before the passing of this Act, but subject to its provisions;

In the Act of 1876 (Can.), c. XVIII, the term “reserve” is defined by subs. 6 of s. 3 as:

…any tract or tracts of land set apart by treaty or otherwise for the use or benefit of or granted to a particular band of Indians, of which the legal title is in the Crown, but which is unsurrendered, and includes all the trees, wood, timber, soil, stone, minerals, metals, or other valuables thereon or therein.

By subsection 8 of s. 3 the term “Indian lands” is defined as:

…any reserve or portion of a reserve which has been surrendered to the Crown.

The difficulties encountered throughout the judgments which ensued perhaps originate in the concept introduced by subs. 8 because in the result, those cases, from and including the St. Catherine’s case, actually bring about the reverse result from that prescribed by Parliament in subs. 8 in that land ceased to be lands set aside for the use of Indians and thereby under the legislative control of the Parliament of Canada upon being surrendered to the Crown. There was no change in these provisions of the Indian Act until the 1886 version where the term “reserve” was defined as follows:

(k.) The expression “reserve” means any tract or tracts of land set apart by treaty or otherwise for the use or benefit of or granted to a particular band of Indians,

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of which the legal title is in the Crown, and which remains a portion of the said reserve, and includes all the trees, wood, timber, soil, stone, minerals, metals and other valuables thereon or therein.

(R.S.C. 1886, c. 43, s. 2)

It will be noted that the definition, while not excluding surrendered lands, limits the extent of the reserve to those lands remaining a portion thereof which presumably would exclude surrendered lands. In any case, the version of the Act found in R.S.C. 1906, c. 81, s. 2(i) restores the express exclusion as follows:

(i) ‘reserve’ means any tract or tracts of land set apart by treaty or otherwise for the use or benefit of or granted to a particular band of Indians, of which the legal title is in the Crown, and which remains so set apart and has not been surrendered to the Crown, and includes all the trees, wood, timber, soil, stone, minerals, metals and other valuables thereon or therein.

This definition continued until the adoption of the Act found in R.S.C. 1970, c. I-6, which is the statute which was in effect at the time of the commencement of these proceedings. Section 2(1) thereof defines these terms as follows:

“reserve” means a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band;

“surrendered lands” means a reserve or part of a reserve or any interest therein, the legal title to which remains vested in Her Majesty, that has been released or surrendered by the band for whose use and benefit it was set apart.

The result of all this legislative activity is that at the time of the commencement of these proceedings, Parliament distinguished between “reserve lands” and “surrendered lands”. There is no question but that the said lands are in the category of surrendered lands. Some confusion results in the inclusion of surrendered lands in the reserve by reason of the above definition of surrendered lands. The question, therefore, is whether Parliament, by adopting such a definition, may have sought thereby to retain legislative control of the

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use of such surrendered lands as being Indian lands under s. 91(24), in the face of its constitutional position as settled in the St. Catherine’s and subsequent decisions.

The reference from the first Indian Act onwards in the definition of “reserve lands”, and in later statutes in the definition of “surrendered lands”, to the requirement that “title [be] vested in Her Majesty” is also a source of confusion in that the right of the Crown in respect of which the land is held remains unspecified. The definition of “Her Majesty” in the Interpretation Act of Canada, R.S.C. 1970, c. I-23, s. 28, is of no assistance in determining on whose behalf, federal or provincial, the lands so defined are held.

By reason of the strictures placed upon disposition of the Indians’ interest in these lands, it is not surprising to find, from the earliest version of the Indian Act down to the provisions of that statute as it existed at the time of the commencement of these proceedings in 1973, a detailed procedure for the surrender of these lands by the Indians. The surrender procedures are found in ss. 37 et seq. and expressly require that a surrender may only be to Her Majesty together with an express prohibition against the sale of lands in a reserve. Section 37 provides:

37. Except where this Act otherwise provides, lands in a reserve shall not be sold, alienated, leased or otherwise disposed of until they have been surrendered to Her Majesty by the band for whose use and benefit in common the reserve was set apart.

The comparable term in the Royal Proclamation of 1763 stated:

And We do hereby strictly forbid, on Pain of our Displeasure, all our loving Subjects from making any Purchases or Settlements whatever, or taking Possession of any of the Lands above reserved, without our especial leave and Licence for that Purpose first obtained.

Section 37, of course, in the light of the aforementioned cases, must be read as meaning that the right of the Indians may not be sold or otherwise dealt with prior to surrender to Her Majesty in the

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manner prescribed by the statute, but cannot be read as establishing a right in Her Majesty in the right of Canada to sell or otherwise dispose of the fee in these lands either before or after surrender. The inferential power to lease by the Crown after surrender relates, in my view, as can be seen in some of the cases already reviewed, to leasing as one of the ways in which the lands may be made use of by the Indians in whom reposes the possessory title. Section 37, therefore, is but an exercise of the legislative authority under s. 91(24). Because there is no question here but that the procedure for surrender has been fully complied with, it is not necessary to examine these detailed provisions.

A later segment of the statute under the heading “Management of Reserves and Surrendered Lands”, commencing with s. 53, deals with the power of the Minister to sell, lease or otherwise dispose of surrendered lands. Section 53 (1) of the present Indian Act provides:

53. (1) The Minister or a person appointed by him for the purpose may manage, sell, lease or otherwise dispose of surrendered lands in accordance with this Act and the terms of the surrender.

If these lands are indeed held by Her Majesty in the right of the Province, as has long since been determined, then the question immediately arises as to what further legislative interest Parliament may have in such lands. The confusion continues in subs. (2) of s. 53 where provision is made for a confirming grant of surrendered lands to the heirs and devisees of the original purchaser of these lands from the Crown. It may be that reference is here made to lands where, as we have seen in the case of New Brunswick lands covered in the 1958 agreement, the title is held by the Crown in the right of Canada. Otherwise the power of disposition purported to be granted by s. 53 offends the rights of the provinces in these lands after their surrender. The reference to leasing the lands is of course capable of innocent interpretation, namely that the Crown in the right of Canada pursuant to authority granted to Parliament under s. 91(24) may manage the Indians’ interest in these lands by the leasing thereof for the benefit of the Indians.

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Examples of this we have seen in some of the cases already reviewed. Other sections of the currently applicable statute provide for the possession of lands in reserves by Indians (s. 20); for the transfer of possessory rights by Indians (s. 24); and for the enforcement of the possessory right in s. 31, which is the section under which these proceedings were launched.

It is interesting to note that in s. 35 provision is made for the expropriation of the Indian interest by either level of government with the proceeds received therefrom being held by the Receiver General of Canada for the benefit of the Indians whose possessory title has been removed. This procedure is of course consistent with the constitutional position of the Government of Canada and the provinces under the authorities. Similarly, provisions relating to the management of Indian moneys (defined as “all moneys collected, received or held by Her Majesty for the use and benefit of Indians or Bands”) are found in the statute as an exercise of the supervisory authority under the federal constitutional powers (see ss. 61 et seq.).

Section 53(1), supra, would therefore appear to have been based upon an assumption that after the surrender of lands set aside for Indians under s. 91(24), some interest therein remains in the Government of Canada; or alternatively, that a facilitative surrender has been taken so as to enable the Crown to manage the lands for the continued use and benefit by and of the Indians. The St. Catherine’s case, of course, has long since decided otherwise when the surrender of the usufructuary interest is complete. It may be that s. 53 and like provisions in the Indian Act are predicated upon the assumption that lands comprised in the Indian Reserves have been conveyed by the Province to the Federal Government. Since these lands would then become public lands of the Government of Canada, Parliament could validly make provision for their continued use under s. 91(1A). However, insofar as s. 53(1) purports to affect lands held by the province, it would be ultra vires. It should be noted that under s. 2 of the Public Lands Grants Act, R.S.C. 1970, c. P-29,

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“public lands” is defined as meaning “land belonging to Her Majesty in right of Canada and includes lands of which the Government of Canada has power to dispose”. Such legislation has of course no application here because the lands in question have never been in the name of the Government of Canada, and administrative and legislative rights under s. 91(24) do not give the Government of Canada “power to dispose” of these lands.

I must with all deference therefore conclude, contrary to the Court of Appeal, that an absolute surrender of lands by Indians for whose benefit the lands were set aside, leaves no retained or other interest in the Crown enabling the Government of Canada to retain the surrendered lands within the federal jurisdiction under s. 91(24), and therefore “under the Indian Act until finally disposed of”. To conclude otherwise would be to allow the federal authority to extend its limited relationship to these lands at the expense of the provincial title in fee simple by the simple device of an ‘absolute surrender’ coupled with a ‘directive’ to sell the lands and to hold the proceeds of sale for the benefit of he who has surrendered his personal possessory right to these lands.

This would not be so, of course, if these lands had not been surrendered and if thereafter the fee in the lands had been conveyed by the Province to Canada. It was argued that this was the effect of the 1958 agreement of which mention has already been made. Although not strictly necessary by reason of the conclusion reached as to the effect in law of the surrender of 1895, the earlier discussion of this agreement should be completed. What then is the effect in law of the 1958 agreement approved legislatively, as has been seen, by both Canada and New Brunswick? The recited purpose of the agreement was to make good defective titles created by grants made of those Indian lands by the Government of Canada after surrender by the Indians, but only with reference to surrendered lands which had been set aside in the Province of New Brunswick and where the title has remained

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in the Province. Indeed the recitals refer to decisions of the Privy Council which no doubt is a reference to the St. Catherine’s case which indicated that the title remained in the Province and that the only effect of the surrender was to remove from the title to those lands the burden arising under s. 91(24) upon the lands being set aside for Indian purposes. The agreement then goes on to establish that the parties had entered into it with a view:

a) to settling “all outstanding problems relating to Indian reserves in the Province of New Brunswick; and,

b) “to enabl[ing] Canada to deal effectively in future with lands forming part of the said reserves”.

It follows from both the recitals and the asserted purpose of the entry into the agreement that the agreement does not relate to the said lands:

a) because they were surrendered without any subsequent patent being issued to the defendant or to anyone else, and hence no defective paper title had been created; and

b) since these lands had been surrendered, they were not comprised in “Indian reserves in the Province” so as to require any future dealing therein by Canada.

Section 2 of the agreement is a joint confirmation by the federal and provincial governments of grants theretofore made by Canada. This section of course does not relate to the said lands. Section 3 of the agreement “hereby transfers to Canada all rights and interests of the Province in reserve lands…”. By section 1(b), Reserve lands are defined as those Reserves in the Province referred to in the appendix to the agreement. The appendix refers to Red Bank Reserves Nos. 4 and 7. The said lands are clearly not included in those Reserves, and in any event could not be included in Reserve lands because all parties have agreed that the said lands had been surrendered and no longer formed part of the lands set aside for the benefit of Indians under s. 91(24). The balance of the agreement relates to the surrender of lands which in 1958 formed part of the Indian Reserves in New Brunswick conveyed under the agreement to

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Canada, and of course has no bearing on the ownership of the said lands. It is therefore clear that the agreement and the implementing statutes of 1958 do not control the outcome of the issue of ownership of the said lands.

In the result, therefore, the said lands were a part of those lands in New Brunswick which historically had been set aside for use by the Indians prior to Confederation and which continued to be so dedicated after Confederation. Therefore, both before and after 1895, the said lands were at law, both in title and by beneficial interest, owned by the Province of New Brunswick and held by that Province as public lands as a result of s. 109 of the Constitution Act. The legal and beneficial interest of the Province in the said lands was of course subject to the “burden”, to use the expression of the Privy Council, created by s. 91(24) of the Constitution Act. By reason of the surrender of these lands in 1895 the burden of s. 91(24) disappeared and the legal and beneficial interest, unencumbered thereby, continued in the Province of New Brunswick. The Federal Government thereafter had no interest in the said lands legislatively under s. 91(24), and of course the Crown in the right of Canada at no time had a beneficial interest in the ownership of the said lands, nor did that government hold any right to dispose of the said lands. The ownership of the Province in these lands was in no way affected by the agreement of 1958, nor did the Federal Government acquire any interest therein under that agreement.

It therefore follows that in 1973 Her Majesty the Queen in right of Canada had no enforceable interest in or in relation to the said lands and had no connection therewith which afforded a status to commence the action which gave rise to these proceedings. Whether or not any such status might exist to raise the question, the answer must be that the action should be dismissed. It is therefore unnecessary to determine whether any prescriptive legislation, either federal or provincial, can operate against the usufructuary rights under s. 91(24). Unless the surrender document of 1895 is ineffective, the courts are not concerned with the opera-

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tion of provincial statutes prescribing the rights of prescription and limitation periods for the bringing of actions. It may well be that s. 38 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, has incorporated by reference the applicable provincial limitation statutes, but again this need not be here decided. It may of course be that the appellant has acquired prescriptive rights under the applicable New Brunswick statutes, but again this question must remain for decision in any action which might be brought against the Province, and/or others, under the appropriate legislation. In any such action the issues raised by the voluminous evidence in the record in these proceedings concerning the occupation and possession of the said lands from 1838 onwards will become germane and hence are not subjected to any determinative review here. In such an action one would be necessarily concerned with any consequences in law of the letter of 1919 written by the person then in possession of the said lands but none of these matters are related to the disposition of the present appeal and I make no comment upon them.

I therefore conclude, for the reasons aforesaid, that the appeal should be allowed with costs in this Court and in the courts below.

Appeal allowed with costs.

Solicitors for the appellant: Anderson, Savoie & Dewitt, Moncton.

Solicitor for the respondent: Roger Tassé, Ottawa.

Solicitor for the intervener the Attorney General for Ontario: A. Rendall Dick.

Solicitors for the intervener the Attorney General of Quebec: William J. Atkinson and René Morin, Ste-Foy.