Date:
20080619
Docket: A-44-08
Citation:
2008 FCA 221
CORAM: LINDEN J.A.
SHARLOW
J.A.
TRUDEL
J.A.
BETWEEN:
SALT RIVER NATION #195 ALSO KNOWN AS
SALT RIVER INDIAN BAND #759
SALT RIVER FIRST NATION COUNCIL AND
COUNCILLORS CHRIS BIRD, TONI HERON,
SONNY MCDONALD AND MIKE BEAVER
Appellants
and
FRIEDA
MARTSELOS
Respondent
REASONS FOR JUDGMENT
TRUDEL J.A.
[1]
Respondent
Chief Frieda Martselos successfully challenged in Federal Court a decision of
the Salt River First Nation Band’s Council to remove her from office. This
appeal focuses on the propriety of the Council’s decision and the ensuing
resolution it adopted.
Facts
[2]
Salt River
First Nation #195, also known as Salt River Indian Band #759 (SRFN), is an aboriginal
First Nation and a band under the Indian Act, R.S.C. 1985, c. I-5 (the Indian
Act) whose affairs are governed by a Council composed of one Chief and six
councillors.
[3]
On April
23, 2004, the SRFN adopted an election code to improve its governance following
past events surrounding a November 2002 election which lead to the removal and
reinstatement of the majority of a former Council (see Salt River First
Nation 195 (Council) v. Salt River First Nation 195, 2003 FCT 670, affirmed
2003 FCA 385). It is common ground that the election code "stands between
orderly governance of [the] community and chaos" (appellants’ memorandum
of fact and law at paragraph 3; respondent’s memorandum of fact and law at
paragraph 4).
[4]
The code
and the interpretation of its provisions form the basis of this appeal against
the following background:
-
On April
30, 2007, by a majority of 11 votes, the respondent Frieda Martselos (the
Chief) won a by-election and was elected Chief of the SRFN for a term ending in
August 2008.
-
On May 7,
2007, four of the five elected members of the Council (the appellants) adopted
a Band Council Resolution (the BCR) removing the Chief from her office.
[5]
The BCR
listed 21 grounds of removal:
1. Conducting
herself in an autocratic manner without regard for the lawful authority of
Council by arrogating to herself sole authority for the administration of the
affairs of the SRFN contrary to the customs and constitution of the SRFN;
2.
Disregarding
and disowning the customary and constitutional right of the Council to govern
the affairs of the SRFN through regular and democratic processes on the basis
of one vote for each elected member of Council;
3.
Refusing
to contact Council members or call a meeting of Council to conduct the business
of the SRFN;
4.
Breaking
into the office of the sub-chief without authorization of Council;
5.
Terminating
the lawfully appointed Band Auditors without authorization of Council and
contrary to an existing valid Band Council Resolution appointing such Auditors;
6.
Purporting
to appoint a Band auditor without authorization of accreditation by Council and
contrary to an existing valid Band Council Resolution appointing existing Band
Auditors;
7.
Removing
or purporting to authorize the removal from the Band Office to Edmonton, or
other unknown and unauthorized place, essential Band records including
financial records, Band Council Resolutions, electronic files and a computer,
all of which is essential for the due ongoing administration of the SRFN and
due audit of the finances of the SRFN;
8.
Wrongly
informing the Band’s bankers that she has sole responsibility for all
administration and financial matters relating to he Band;
9.
Attempting
to obtain access to funds belonging to the Band and held in the Band’s bank
accounts without the knowledge or authority of the Council;
10.
Wrongly
and without justification threatening the Band’s bankers with legal proceedings
in the event that they continue to honour cheques duly written with the
authority of Council, and thereby attempting to freeze the bank accounts of the
Band;
11.
Terminating
the employment of the Financial Officer of the Band without authorization of
Council;
12.
Changing
the locks of the Band Office and excluding the employees and Councillors of the
SRFN from their offices and from access to their records;
13.
Attempting
through the aforesaid acts to frustrate the SRFN’s responsibility to meet the
payroll due on May 4, 2007 for approximately 15 employees and 30 students;
[14.]
Hiring
two persons as employees of the SRFN without authorization of Council;
[15.]
Demoting
Dave Poitras, Band Administrator, without the authorization of Council;
[16.]
Purporting
to cancel an upcoming by-election without authorization of Council;
[17.]
Calling
a general meeting of members without authorization of Council;
[18.]
Terminating
the employment of SRFN college student or students without authorization of
Council;
[19.]
Terminating
the position of sub-chief without authorization of Council;
[20.]
Terminating
the services of […] attorneys Jerome Slavic and Gary Laboucan without
authorization of Council;
[21.]
Swearing
herself into the office of Chief without prior authorization of Council and
with the intention of governing the SRFN in an autocratic manner contrary to
the democratic principles of the constitution of the SRFN.
[6]
The Chief
sought to have the BCR quashed pursuant to subsection 18.1(3) of the Federal
Courts Act, R.S.C. 1985, c. F-7.
[7]
In
response, the appellants requested a writ of Quo Warranto affirming
their decision to remove her as the newly elected Chief of SRFN.
Decision of the Federal Court
[8]
In a
judgment dated January 8, 2008, Beaudry J. (the Judge) quashed the Band
Council’s resolution (the BCR) removing the Chief from office and dismissed the
application for a writ of Quo Warranto (judgment cited as 2008 FC 8). Hence
the within appeal.
[9]
At the hearing
in front of the Federal Court, the parties agreed on the issues (at paragraph 2
of the amended reasons for judgment).
[10]
Procedural
fairness best sums up the first issue regarding the convening of the May 7,
2007 meeting. The Chief submitted that the meeting was not duly convened in
accordance with the principle mentioned in paragraph 2(3)(b) of the Indian
Act. She raised three arguments to sustain her position, all of which were
dismissed by the Judge on a standard of correctness. They were :
1. Failure to give notice to the
Chief of the meeting and provide her with the opportunity to make
representations on her own behalf;
2. Failure to proceed with the
meeting in the absence of an agenda prepared by the Chief;
3. Failure to give notice to
Councillor Joline Beaver.
[11]
On the
first argument, the Judge held that there was no requirement in the code or the
Indian Act for the notice to take any specific form. He found that the
Chief did receive both oral and written notice of the meeting and that she knew
that the general purpose of the meeting was to discuss the issues the
appellants had with her conduct (at paragraph 23 of the amended reasons for
judgment).
[12]
On the
second argument, he held that the code allowed Council, in cases where the
interests and priorities of Council may differ from those of the Chief, to make
appropriate changes to the agenda in order to reflect the disparity. Beaudry J.
concluded that “it would be antithetical to the democratic intent of the [code]
for the Chief to be able to frustrate the attempts of the Council to meet by
simply refusing to prepare and provide an agenda” (at paragraph 25 of the
amended reasons for judgment).
[13]
Finally,
on the last one, the Judge held that “the presumption of regularity of process
applies in this case [and that] it was open to the [Chief] to present evidence
which might rebut the presumption” (at paragraphs 27-28 of the amended reasons
for judgment). He found that such evidence had not been presented to the Court
(at paragraph 28 of the amended reasons for judgment).
[14]
Again
before this Court, the Chief raises the question of procedural fairness, but
abandons her third and last ground of complaint.
[15]
In turn,
the legal interpretation of the code and its application to the facts of the
case summarize the second issue framed by the parties as follows: “Were there
any grounds for the removal of the Chief” (at paragraph 2 of the amended
reasons for judgment)? At the hearing on appeal, the appellants reformulated
the question at bar asking this Court to determine “whether the decision
recorded in the BCR was one that the Council was empowered to make”.
[16]
In the
Court below, the Chief submitted that none of the grounds listed in the
impugned BCR were contemplated by section 19.1 of the code, which lists the
grounds upon which a Chief or Councillor may be removed from office.
[17]
The
relevant sections read:
19.
REMOVAL FROM OFFICE
19.1
Grounds
for Removal
The removal
of a Chief or Councillor from office may be determined by the Council on the
following grounds:
19.1.1 The are absent
for three (3) consecutive meetings of the First Nation or the Council for which
they have been given verbal and/or written notice and for which no valid reason
for their absence is provided in writing to the Council; or
19.1.2 The engage in
drunk, drug related, disorderly, violent or other irresponsible conduct at
Council meetings, community meetings, or in other public forums or functions
which interferes with the conduct of business or brings the reputation of the
Council or the First Nation into disrepute; or
19.1.3 They fail to
perform duties and obligations as set out in Schedule “B” or breach the
Conflict of Interest Guidelines for Chief and Council as set out in Schedules
“C”; or
19.1.4 They have
been charged with or convicted of an indictable offence under the Criminal
Code; or
19.1.5 They had
engaged in Corrupt Election practices, the evidence of which were discovered
and proven after the Appeal Period; or
19.1.6 They failed
to reside in the vicinity of Fort Smith during their term of
office; or
19.1.7 They have
been suspended three (3) times pursuant to s. 18 during his term of office; or
19.1.8 They have
failed to resign or resume their duties after a sixty (60) day leave of absence
as required, pursuant to s.16.3.
19.2
Upon
satisfactory confirmation of the grounds for removal, the Council by Resolution
which states the grounds for removal may remove the Chief or Councillor from
their Office.
[18]
In
response, the appellants argued that the grounds for removal fell more
specifically under section 19.1.3 of the code, which refers to the duties and
obligations of the Chief and Council as set out in Schedule “B” of the same
code, more particularly section 5 entitled “Administration” and its paragraph
(a), which reads:
5. ADMINISTRATION
(a)
The Council shall ensure the stable, competent, and efficient administration of
the First Nation.
[19]
Once
again, reviewing the Council’s decision on a standard of correctness, the Judge
noted the severity of the conflict between the parties, and opined that it
could not “be said that the Chief failed in her duty to ‘ensure a stable,
competent and efficient administration of the First Nation’ within one week of
her election, although she surely misinterpreted her functions as Chief” (at
paragraph 31 of the amended reasons for judgment). He agreed with the
appellants that the Chief’s misapprehension of her duties and obligations
“created confusion, tension, and stress” but found, “in the end, [that] the
Band did not suffer financial losses and [that] there was no misappropriation
of funds” (at paragraph 31 of the amended reasons).
[20]
The Judge
concluded “that there were insufficient grounds for removing the [Chief]
from the office of the Chief so soon following her election” [Emphasis added]
(at paragraph 37 of the amended reasons).
[21]
Therefore,
as mentioned earlier, Beaudry J. granted the Chief’s application and quashed
the BCR without costs. The Judge’s decision not to award costs to her is
challenged by way of a cross-appeal (respondent’s memorandum of fact and law at
paragraphs 84-94), which will be discussed later.
[22]
Finally, the
Judge refused to issue the writ of Quo warranto sought by the
appellants. They do not appeal that part of his judgment.
Issues
[23]
The
following issues are before this Court:
1. What are the
proper standards of review?
2. Was the
convening and holding of the May 7, 2007 meeting procedurally fair?
3. Based on a
correct interpretation of the election code and the facts of this case, was it
reasonable for the Council to remove Ms. Martselos from her office as Chief of
the SRFN?
Analysis
Standards of
review
[24]
As this is
an appeal from a decision of the Federal Court, the teachings of Housen v.
Nikolaisen, 2002 SCC 33 apply. Determining the proper standard of review is
a question of law, and if this Court identifies an error at this stage of the
judge’s analysis, it will become necessary to substitute the appropriate
standard of review and to assess or remit the Council’s decision on that basis
(Dr Q v. College of Physicians and Surgeons of
British Columbia, 2003 SCC 19 at paragraph
43; Nagalingam v. Minister of Citizenship and Immigration, 2008 FCA 153
at paragraph 30).
[25]
In
choosing his standard of review, the Judge approached both issues agreed upon
by the parties as one general question asking himself “whether the Council
acted beyond its powers” (at paragraph 16 of the amended reasons for judgment).
[26]
Having
defined the issues as questions of jurisdiction and procedural fairness, he
chose to review the Council’s decision on a standard of correctness (Canada
(Attorney General) v. Clegg, 2008 FCA 189 at paragraph 19; Canadian
Union of Public Employees v. Ontario (Minister of Labour), 2003 SCC 29). However, I disagree, in
part, with the judge’s characterization of the questions at bar.
[27]
I am of
the opinion that the question of whether there were grounds for removal is a
mixed question of fact and law. It is not a pure question of jurisdiction as
found by the Judge (at paragraph 18 of the amended reasons for judgment).
[28]
Based on
the standard of review analysis (Dunsmuir v. New-Brunswick, 2008 SCC 9,
[Dunsmuir]), using the four well-known factors, I conclude that the
Council’s interpretation of the code attracts a standard of correctness while
its examination of the facts and action taken pursuant to it call for a review
on a standard of reasonableness.
[29]
I note,
first of all, the absence of a privative clause in the election code, which
implies neither deference nor enhanced scrutiny.
[30]
Secondly,
although the Council has a greater expertise on matters such as knowledge of the Band's
customs and factual determinations (see Vollant v.
Sioui, 2006 FC 487 at paragraph
31; Giroux v. Salt River First Nation, 2006 FC 285 at paragraph 54,
varied on other grounds in 2007 FCA 108 [Giroux]), the Councillors, who are
elected by the members of the SRFN, have no particular expertise in
interpreting the election code (see Grand Rapids First Nation v. Nasikapow,
[2000] F.C.J. No. 1896 (F.C.) (QL) at paragraph 62, [Grand Rapids]; Okeymow
v. Samson Cree Nation, 2003 FCT 737 at paragraphs 27-28, [Okeymow]),
and certainly no more than this Court.
[31]
As for the third factor, I accept that the
adoption of the Code is an exercise, by the SRFN, of its statutory rights. The Band has adopted
provisions regulating its election procedures but the purpose of the election
code does not require a careful balancing of a variety of interests. This
evokes a lower standard of deference (see Okeymow, supra at
paragraphs 30-31; Grand Rapids, supra at paragraph 63) but to the extent that the Council was
adjudicating upon the Chief’s rights to hold office, greater scrutiny is
required (Giroux,
supra at paragraph 54).
[32]
Finally,
the main issues require a proper interpretation of the code in order for the
Council to act within its jurisdiction. This interpretation must be correct in
law and no deference is warranted. Once such interpretation is found to be
correct in law, its application to the facts and the exercise of its discretion
by the Council suggest more deference, attracting a standard of reasonableness.
[33]
Having
said this, I now turn to the remaining issues in appeal.
Was the
convening and holding of the May 7, 2007 meeting procedurally fair?
[34]
The record
shows that on May 4, 2007, the appellants signed a document entitled “Notice to
Frieda Martselos, Chief Elect” by which she was advised that Council was “considering
her immediate removal from the office of Chief Elect on the grounds set out in
the articles of impeachment below” (Appeal Book, vol. 2 at page 252). Those
articles of impeachment set out the 21 grounds listed above at paragraph 5 of
the present reasons for judgment. The appellants attempted twice to deliver the
document through the RCMP and subsequently through an official from Indian and
Northern Affairs Canada, but the Chief refused delivery and later refused to
open the envelope.
[35]
I agree
with Beaudry J. when he states that “[t]he facts that [the Chief] refused to
attend, or refused to accept service of the envelope containing the relevant
information cannot subsequently be used to allow [her] to argue that her right
to procedural fairness was not respected” (at paragraph 23 of the amended
reasons for judgment).
[36]
Had she
opened the envelope, she would have been accurately informed of the Council’s
intentions. The content of the notice was complete and eloquent. Willful
blindness estopped the Chief from pleading lack of notice.
[37]
As for the
Chief’s argument that the meeting was not properly convened because she had not
prepared an agenda, pursuant to paragraph 3(a) of the election code, I
agree with Beaudry J. that it cannot succeed (see paragraph 25 of the amended
reasons for judgment). The Chief correctly points out that the purpose of the
agenda is to give advance notice to the Councillors to allow them to prepare.
This is exactly what the notice enclosed in the unopened envelope purported to
achieve.
[38]
At the
hearing, the Chief expanded on that argument, adding that as a logical
consequence of paragraph 3(a) of the code, which imposes on the Chief
the duty to prepare the agenda, only the Chief could call a meeting of the
Council. I disagree.
[39]
The Chief
is asking this Court to find in the election code an unexpressed legislative
intention. The code is silent on who holds the authority to convene a meeting
of the Council (except for a “special meeting”, see section 2.17 of the code).
Therefore, she has not convinced me that Beaudry J. erred in his conclusion.
Based on a
correct interpretation of the election code and the facts of this case, was it
reasonable for the Council to remove Ms. Martselos from her office as Chief of
the SRFN?
[40]
It is
common ground that a main objective of the election code is to effectively
manage and administer the SRFN’s financial and natural resources in a stable
and responsible way with a strong “foundation of laws for good governance”
(Notice to electors, Appeal Book, vol. 1 at page 109).
[41]
The code
clearly states in its preamble that it is in the SRFN’s best interest to be
guided by the values of democracy and that the customs and traditions of the
band require democratic, fair and open Elections for Chief and Council.
[42]
While I
recognize that deference shall be afforded to findings of facts of the Band’s
Council, it must, nonetheless, operate according to the rule of law and for the
protection of the Band (see Long Lake Cree Nation v. Canada (Minister of
Northern and Indian Affairs), [1995] F.C.J. No. 1020 (F.C.) (QL) at
paragraph 21; Qualicum First Nation v. Recalma-Clutesi, 2006 FC 854 at
paragraph 28). Governing in an orderly fashion is part of the rule of law. This
implies that when the Council exercises its authority, it must explain to the
persons directly affected by its decisions, as well as to the Band members to
whom it answers as an elected body, the rationale behind those decisions.
[43]
The May 7,
2007 BCR states only that the Chief has engaged in conduct “contrary to the
customs, constitution and orderly administration of the SRFN which comprises
grounds for removal from office”, i.e. the 21 grounds mentioned above (Appeal
Book, vol. 1 at page 92).
[44]
Most facts
supporting the grounds for removal were strongly contested by the Chief and the
record is unclear as to what really happened. What comes out clearly from the
evidence, however, is the tension between the appellants and the Chief and her
decision, after the by-election, to postpone meeting with the Council, formally
or informally, until an independent audit was completed and a general meeting,
convened for May 15, 2007, held (see the transcript of the May 3, 2007 meeting
in Appeal Book, vol. 5 at page 807).
[45]
I fail to
see how the Council’s decision, in this case, amounts to a reasonable exercise
of its discretion. Based on the exact same grounds, the election code allowed
the Council to either suspend (section 18) or remove (section 19) the Chief
from her office.
[46]
The BCR is
completely silent on the Council’s decision-making process. Neither the Chief,
nor the membership knows from the BCR, how the Council determined what the
accepted facts were, as opposed to the alleged facts and on what basis it chose
the remedy it did. Neither the Chief, nor the membership could verify “the
existence of justification, transparency and intelligibility within the
decision-making process”, which lead to the adoption of the impugned BCR (Dunsmuir,
supra at paragraph 47). This is what reasonableness is mostly concerned
with in the context of a judicial review (Ibid.). I therefore conclude
that the Council’s decision is unreasonable as it lacks justification,
transparency and intelligibility.
[47]
Under
these circumstances, I find that it is unnecessary and inappropriate for this
Court to comment on the merits of the grounds upon which the Council made its
decision. I hasten to add that I do not endorse Beaudry J.’s findings on the
sufficiency of the grounds for removal and the severity of the sanction imposed
by the Council.
[48]
I simply
reiterate that the Council must exercise its authority respecting the rule of
law, keeping in mind the primacy of the Band’s interests. With respect, a more
elaborate election code construed and applied in a fair and transparent manner
would go a long way in achieving this noble goal and in avoiding, one would
hope, situations like the present, which are counter-productive and extremely
disturbing for all concerned.
[49]
I would
therefore dismiss the appeal with costs.
[50]
I now turn
to the cross-appeal.
Cross-Appeal:
costs before the Federal Court
[51]
The Chief (appellant on cross-appeal) contends that Beaudry J. erred in
ignoring her claim for costs on a solicitor-and-client basis, which she sought
arguing that the questions raised in her application were of “critical public
importance” for the members of the SRFN. Alternatively, she submits that as a
result of her success in the proceedings below she is, at least, entitled to
costs on a party to party basis. I disagree.
[52]
Pursuant to Rule 400 of the Federal Courts Rules, S.O.R./98-106,
the matter of costs is left entirely to the Court’s full discretion.
[53]
The intervention of this Court is limited to those circumstances where
the applications judge has clearly “failed to give sufficient weight to all
relevant considerations, erred in law or misapprehended the facts” (Little
Sisters Book and Art Emporium v. Canada, 2007 SCC 2 at paragraph 49). The
Judge noted that the Chief had herself contributed some degree of “confusion,
tension, and stress” to the situation at hand and declined to make an award of
costs in her favour in spite of her success on her application (at paragraph
31 of the amended reasons for judgment). Having so decided, it was unnecessary,
for Beaudry J., to examine the Chief’s claim for costs on a solicitor-and-client
basis. The Judge committed no error in concluding as he did.
[54]
As far as the within appeal and cross-appeal go, the Chief renews her
claim for costs on a solicitor-and-client basis. An award of costs on that
scale is the exception rather than the rule (Mackin v. New-Brunswick
(Minister of Finance); Rice v. New-Brunswick, 2002 SCC 13 at paragraph 86).
Moreover, the Chief did not show that this case raised a point of public
interest and importance. Both the nature of the litigation and the conduct of
the Chief, as described by the Judge, militate against the conclusion sought.
[55]
I would therefore dismiss the cross-appeal, with costs.
"Johanne
Trudel"
“I
agree,
A. Linden J.A.”
“I
agree,
K. Sharlow J.A.”
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