[1995] 3 F.C. 165
T-2243-93
Edward Anderson, Garnet Woodhouse, Marshall Woodhouse, Robert McLean, Patrick Anderson, Ormand Stagg and George Traverse on their own behalf and on behalf of all members of the Fairford First Nation, a body of Indians described as the Fairford Band and declared to be a band for the purposes of the Indian Act P.C. 1973-3571 (Plaintiffs)
v.
The Attorney General of Canada on behalf of Her Majesty the Queen in Right of Canada (Defendant)
Indexed as: Fairford Band v. Canada (Attorney General) (T.D.)
Trial Division, Rouleau J.—Halifax, May 9; Ottawa, May 25, 1995.
Federal Court jurisdiction — Trial Division — Application to stay action alleging breach of fiduciary duty, violation of aboriginal rights, as Crown wishing to commence third-party proceedings over which Federal Court said to lack jurisdiction — Manitoba, with financial assistance of federal government, constructing water control structure, partly on Indian reserve — Structure having adverse impact on Reserve — Federal Court Act, s. 19 and The Federal Courts Jurisdiction Act, s. 1 of Manitoba conferring jurisdiction on Federal Court — Essence of dispute involving lands reserved for Indians within meaning of Indian Act, Constitution Act, 1867 — That provincial law also involved not precluding Court’s jurisdiction.
Native peoples — Lands — Band suing federal Crown for adverse effects on Reserve due to provincially built, federally funded water control structure — Federal Crown’s position province to blame, wishing to commence third-party proceedings — Arguing for stay on ground Federal Court lacking jurisdiction — Stay denied — Federal, provincial legislation giving Federal Court jurisdiction — Essence of dispute lands reserved for Indians — No matter that provincial law also involved.
This was an application pursuant to Federal Court Act, section 50.1 to stay the action on the ground that the federal Crown wished to commence third-party proceedings against the Government of Manitoba, in respect of which this Court lacked jurisdiction.
The Government of Manitoba, with the consent and financial assistance of the Government of Canada, had constructed a water control structure and highway partly on the Fairford Reserve. The plaintiffs allege that the construction and operation of this structure has had adverse impacts on the Reserve and the Fairford First Nation. An action was commenced alleging breach of the defendant’s fiduciary duty to protect the reserve, and violation of aboriginal rights. The defendant’s position is that the Crown in right of Canada was not the proper party to the action, and that the Province of Manitoba was responsible for the loss or injury.
Federal Court Act, section 19 provides that where a provincial legislature has passed an Act agreeing that the Court, whether referred to by its present or former name, has jurisdiction in controversies between that province and Canada, the Court has jurisdiction to determine such controversies. The Province of Manitoba enacted The Federal Courts Jurisdiction Act, section 1 of which provides that the Federal Court has jurisdiction in controversies between Manitoba and Canada.
The defendant submitted that the third-party proceedings involved purely matters of property and civil rights which were within the realm of provincial jurisdiction. The issue was whether the Court had jurisdiction over the third-party proceedings.
Held, the application should be dismissed.
Federal Court Act, section 19 and The Federal Courts Jurisdiction Act of Manitoba confer jurisdiction on this Court to entertain the intended third-party proceedings. The third-party proceedings represented a controversy between Canada and a province as envisaged by the aforementioned legislation. The plaintiffs’ main cause of action was for breach of fiduciary duty in failing to protect and administer the Fairford Reserve for the use and benefit of the plaintiffs and in failing to protect the hunting, fishing and trapping rights of the plaintiffs both on and off reserve land. Plaintiffs submit that these rights arose by virtue of the common law of aboriginal title, treaty, and the Constitution Act, 1930. Thus the very essence of the dispute involved lands reserved for Indians within the meaning of the Indian Act and Constitution Act, 1867, subsection 91(24). That provincial law may also be involved did not preclude Federal Court jurisdiction.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 91(24).
Constitution Act, 1930, 20 & 21 Geo. V, c. 26 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 16) [R.S.C., 1985, Appendix II, No. 26].
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 35.
Federal Court Act, R.S.C., 1985, c. F-7, ss. 19, 50.1 (as enacted by S.C. 1990, c. 8, s. 16).
Federal Courts Jurisdiction Act (The), C.C.S.M. c. C270, s. 1.
Indian Act, R.S.C., 1985, c. I-5.
CASES JUDICIALLY CONSIDERED
APPLIED:
Montana Indian Band v. Canada, [1993] 2 C.N.L.R. 134 (F.C.A.).
DISTINGUISHED:
Union Oil of Canada Ltd. v. The Queen, [1974] 2 F.C. 452 (1974), 52 D.L.R. (3d) 388 (T.D.); affd [1976] 1 F.C. 74 (1975), 72 D.L.R. (3d) 81 (C.A.); affd [1976] 2 S.C.R. v.
CONSIDERED:
R. (Canada) v. The Queen (P.E.I.), [1978] 1 F.C. 533 (1977), 83 D.L.R. (3d) 492; 33 A.P.R. 477; 20 N.R. 91 (C.A.).
APPLICATION pursuant to Federal Court Act, section 50.1 to stay the action. Application dismissed.
COUNSEL:
E. Anthony Ross and Brian J. Hébert for plaintiffs.
Craig J. Henderson and Sidney R. Restall for defendant.
SOLICITORS:
Ross Barrett & Scott, Halifax, for plaintiffs.
Deputy Attorney General of Canada for defendant.
The following are the reasons for order rendered in English by
Rouleau J.: This is an application by the Attorney General of Canada for an order pursuant to section 50.1 of the Federal Court Act [R.S.C., 1985, c. F-7 (as enacted by S.C. 1990, c. 8, s. 16)] staying the within action.
In 1960 the Government of Manitoba, with the consent and financial assistance of the Government of Canada, constructed the Fairford River Water Control Structure in an effort to regulate water levels in the Assiniboine River, the Red River and Lake Manitoba. The province later built a highway over the structure. Part of the water control structure and the provincial highway were built on the Fairford Reserve, lands which had been set aside for the use and benefit of the Fairford First Nation. The plaintiffs allege the construction and operation of the water structure has had adverse impacts on the Fairford Reserve and the Fairford First Nation. Over the years they have made numerous requests of the federal government to take steps to resolve the outstanding grievances relating to the structure.
The plaintiffs finally commenced an action in this Court by way of statement of claim dated September 15, 1993, alleging the defendant to be in breach of its fiduciary duty to protect the Fairford Reserve. The plaintiffs further allege that the Attorney General of Canada has violated their aboriginal rights. The defendant filed a statement of defence on January 21, 1994, claiming, inter alia, that it was not the proper party to the action and that the province of Manitoba was responsible for the loss or injury caused to the plaintiffs from the operation of the water control structure. Paragraph 9 of the statement of defence read as follows:
9. As to paragraph 10 of the Statement of Claim, he [Deputy Attorney General of Canada] admits that the Government of Manitoba, with some assistance from the Government of Canada, constructed the Fairford Water Control Structure but denies that this was wrongful, as alleged, and states that, as the facts are, Her Majesty the Queen in Right of Canada took all reasonable steps under the circumstances to ensure that any adverse effects from the said water control structure would be compensated for by the Province of Manitoba through the people adversely affected by the operation of the water control structure. He further states that, as the facts are, compensation was provided to the reserve residents and compensation lands have been provided to the residents of the Fairford First Nation and the individuals adversely affected by the operation of the Fairford Control Structure. He further states that, as the facts are, that if the compensation is inadequate, which is not admitted, then the proper party to whom which compensation should be looked to under the circumstances and facts of this case is the Province of Manitoba and that the Fairford First Nation Plaintiff, through its representatives has been in and continues to negotiate with the Province of Manitoba for compensation to losses of Indian land. He further states that, as the facts are, the Fairford First Nation has accepted 6,000 acres of unoccupied and occupied Crown land as compensation and part of the operations of the project aforementioned.
The Attorney General of Canada now applies to this Court for an order pursuant to section 50.1 of the Federal Court Act staying the proceedings, on the ground that it wishes to commence third-party proceedings against the Government of Manitoba, in respect of which this Court lacks jurisdiction. That legislative provision reads as follows:
50.1 (1) The Court shall, on application of the Attorney General of Canada, stay proceedings in any cause or matter in respect of a claim against the Crown where the Crown desires to institute a counter-claim or third-party proceedings in respect of which the Court lacks jurisdiction.
The sole issue on this application is whether the Court has jurisdiction over the third-party proceedings which the defendant says it wants to pursue against the province of Manitoba.
The plaintiffs submit that section 19 of the Federal Court Act provides for the jurisdiction of the Federal Court in matters of controversy between Canada and a province.
19. Where the legislature of a province has passed an Act agreeing that the Court, whether referred to in that Act by its present name or by its former name of the Exchequer Court of Canada, has jurisdiction in cases of controversies
(a) between Canada and that province, or
(b) between that province and any other province or provinces that have passed a like Act,
the Court has jurisdiction to determine such controversies and the Trial Division shall deal with any such matter in the first instance.
The Province of Manitoba has enacted The Federal Courts Jurisdiction Act, C.C.S.M., c. C270, section 1 of which provides as follows:
1. The Supreme Court of Canada and the Federal Court of Canada, or the Supreme Court of Canada alone, according to the provisions of the Acts of the Parliament of Canada known as the Supreme Court Act and the Federal Court Act shall have jurisdiction in cases of
(a) controversies between Canada and the Province of Manitoba;
(b) controversies between any other province of Canada, that may have passed an Act similar to this Act, and the Province of Manitoba.
The plaintiffs submit that the term “controversy” has been defined by the Federal Court of Appeal in R. (Canada) v. The Queen (P.E.I.), [1978] 1 F.C. 533 as being broad enough to encompass any kind of legal right, obligation or liability that may exist between governments. Accordingly, it is argued, a third-party claim brought by the Attorney General of Canada against a province would fall within this Court’s jurisdiction pursuant to section 19 of the Federal Court Act and whatever claim Canada may have against Manitoba in the present case can be entertained by this Court.
The defendant submits this Court must grant its application for a stay unless it is satisfied the Attorney General has no intention of issuing a third-party notice against Manitoba or, the Court has jurisdiction to join the Attorney General of Manitoba as a third party. It relies on the decision in Union Oil of Canada Ltd. v. The Queen, [1974] 2 F.C. 452(T.D.); affirmed [1976] 1 F.C. 74(C.A.); which was affirmed [1976] 2 S.C.R. v, in support of its position that jurisdiction under section 19 may only be invoked by Canada or by a province and not by a private citizen.
It further submits that the third-party proceedings by Canada against the province of Manitoba would involve claims for indemnity and possibly a claim for contribution under provincial joint tortfeasor legislation. Accordingly, the crown’s case against Manitoba is based on the common law and provincial legislation providing for joint liability in the case of joint tortfeasors. Furthermore, it is argued that the question of damages to the hunting, fishing and traditional pursuits of the plaintiffs is a matter of property and civil rights which is clearly provincial in nature and accordingly, not within this Court’s jurisdiction.
I am not prepared to grant the defendant’s application for a number of reasons. To begin with, I am not at all persuaded by the sincerity of the defendant’s “desire” to commence the third-party proceedings in question. The pleadings in this matter were closed on January 21, 1994, the date on which the defendant filed its statement of defence wherein it denies liability and blames Manitoba for any losses suffered by the plaintiff as a result of the construction and operation of the water control structure. However, no steps were taken by the Attorney General to initiate a third-party proceeding or a section 50.1 application at that time or at any time prior to December 7, 1994. In addition, the defendant’s present application is extremely vague; it does not contain any particulars of the intended third-party claim. Indeed, the defendant’s position appears to be that this Court must grant the relief sought as of right. It would be improper however to deny the plaintiffs their right to a trial and possible remedy when there is no evidence before this Court to indicate the Attorney General is in fact going to commence third-party proceedings against Manitoba.
In any event, I am satisfied that section 19 of the Federal Court Act together with The Federal Courts Jurisdiction Act of Manitoba confers jurisdiction on this Court to entertain the intended third-party proceedings. Section 19 is part of a co-operative scheme under which the provinces may enact legislation conferring jurisdiction on the Federal Court to provide a forum for the resolution of all types of controversies. It is a unique procedural provision permitting intergovernmental disputes to be adjudicated in the Federal Court. A prerequisite to its operation, which has been met in the present case, is that the Legislature of the province involved has passed legislation conferring jurisdiction on the Federal Court or Exchequer Court.
The defendant relies on Union Oil in support of its position that the plaintiffs cannot invoke section 19. In that case, the plaintiff sold diesel oil to the province of British Columbia for a number of years but failed to collect excise tax from the province and to remit it to the federal Crown on the basis of the province’s assertion that it was exempt from tax. The federal Crown disputed that assertion and demanded payment from the plaintiff, which paid the tax under protest and brought an action in this Court seeking to reclaim the monies from the federal Crown. It further sought to be reimbursed by the provincial Crown for the amount of the tax. Collier J. stated, at page 459:
In my opinion section 19 has no application to this case. There is no doubt there is a dispute or disagreement between Canada and British Columbia as to whether the diesel fuel was exempt from tax. Assuming that dispute or disagreement to be a “controversy”, it seems to me that the jurisdiction of the Federal Court can only be invoked by Canada or by the Province, and not by the commencement of legal proceedings by a private citizen.
The Federal Court of Appeal agreed with that finding, stating, at page 75 of its decision that:
The jurisdiction of the Federal Court is entirely statutory and, accepting that it lies within the powers of the Parliament of Canada, when legislating in a field within its competence, to give the Federal Court jurisdiction to implead the Crown in right of a Province, we do not think any of the statutory provisions to which we were referred, or any others of which we are aware, authorize the Court to entertain a proceeding at the suit of a subject against the Crown in right of a province.
However, the facts in Union Oil are clearly distinguishable from those before the Court in the present application. This is not a situation where a private citizen wishes to proceed against a province. It is the Attorney General of Canada himself, as evinced by the statement of defence, who is alleging a claim against the Manitoba government and accordingly, who wishes to commence third-party proceedings. Those proceedings clearly represent a controversy between Canada and a province as envisaged by paragraph 19(a) of the Federal Court Act and section 1 of The Federal Courts Jurisdiction Act, and accordingly this Court has jurisdiction over the matter.
Nor do I agree with the defendant’s submission that the intended third-party proceedings involve purely matters of property and civil rights which fall within the realm of provincial jurisdiction. The plaintiffs’ main cause of action against the defendant is for breach of fiduciary duty in failing to protect and administer the Fairford Reserve for the use and benefit of the plaintiffs and in failing to protect the hunting, fishing and trapping rights of the plaintiffs both on and off reserve land. The plaintiffs claim that these rights arise by virtue of the common law of Aboriginal title, Treaty No. 2 and the Constitution Act, 1930 [20 & 21 Geo. V, c. 26 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982 Item 16) [R.S.C., 1985, Appendix II, No. 26]], as entrenched in section 35 of the Constitution Act, 1982 [Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]].
The very essence of the dispute here involves lands reserved for Indians within the meaning of the Indian Act [R.S.C., 1985, c. I-5] and subsection 91(24) of the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item I) [R.S.C., 1985, Appendix II, No. 5]]. The fact that provincial law may also be involved in the dispute does not preclude the jurisdiction of this Court. In Montana Indian Band v. Canada, [1993] 2 C.N.L.R. 134, the Federal Court of Appeal stated at page 135:
It cannot be presumed that the cause of action advanced by the Crown lies in provincial tort law and engages pure common law concepts. As mentioned above, the very special body of law governing the relationship between Aboriginal people, the Indian bands and the federal authorities is directly implicated.
For these reasons, the application is dismissed. I am ordering the defendant to commence its third-party proceeding against the province of Manitoba within three weeks of the date of this order. In the event it fails to do so, the plaintiffs may apply to the Court for an order striking out the statement of defence. Costs to the plaintiffs in any event of the cause.