Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development) 2018 SCC 4

On February 2nd, 2018, the Supreme Court of Canada released its decision in Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development) . In essence, the Court determined that Canada can be liable for breach of a fiduciary duty both before and after Confederation.

The Williams Lake Indian Band (“band”) filed a claim with the Specific Claims Tribunal (“Tribunal”) arising from the loss of parts of its traditional territory referred to as the “Village Lands”. The Village Lands were taken up by settlers prior to confederation, after the British colony (“Imperial Crown”) issued the Proclamation relating to the acquisition of Land, 1860 ( “Proclamation No. 15” ) under which “Indian settlements” were not available for pre-emption. After BC joined Confederation, federal Crown officials acknowledged that the pre-emption of the Village Lands had been a mistake, but took no steps to protect the Village Lands. Instead, they allocated to the band another tract of land as a reserve. The Tribunal’s finding that the band had a valid claim under the Specific Claims Tribunal Act (“Act”) was overturned at the Federal Court of Appeal. The 5-2-2 majority of the Supreme Court (“Court”) allowed the appeal and restored the decision of the Tribunal.

The majority held that the standard of review for all questions was reasonableness. In deciding whether the Tribunal’s findings were reasonable, the majority emphasized the need for deference due to the Tribunal’s distinctive task of applying fiduciary law to the historical setting of specific claims.

Pre-confederation sui generis fiduciary obligation
The Tribunal’s finding that prior to Confederation the Imperial Crown owed, and breached, a legal obligation in relation to the Village Lands was confirmed as reasonable by a unanimous court. The decision confirmed that a sui generis fiduciary obligation will exist where the Crown takes discretionary control over a specific and cognizable Aboriginal interest.

The Court found that the Imperial Crown took discretionary control over the band’s interest in the Village Lands through Proclamation No. 15. The Court confirmed that the band’s specific and cognizable interest was not created by Proclamation No. 15, rather, it already existed and was recognized by enactments and policies as an independent interest in land anchored in collective use and occupation. The band’s interest was capable of grounding a fiduciary duty because it was sufficiently independent of any executive or legislative function.

The decision confirmed that the Imperial Crown’s failure to protect the Village Lands fell below the prescribed standard of care which required it to act with reference to the band’s best interest and in accordance with the fiduciary duties of loyalty, good faith, and full disclosure.

The finding that this breach constitutes a valid ground for a specific claim rested on the majority’s decision that the extended definition of the “Crown” under the Act includes a breach by the Imperial Crown (see discussion below).

Post-Confederation sui generis fiduciary obligation
The court split 7-2 in confirming the reasonableness of the Tribunal’s decision that post-Confederation, the federal Crown (“Canada”) owed, and breached, a fiduciary obligation in relation to the Village Lands. The Tribunal found that Canada’s role in the reserve creation process constituted a continuation of discretionary control over the band’s tangible, practical and cultural connection to the Village Lands. This was not a general fiduciary obligation but one solely in relation the Village Lands. The Tribunal (and court) took issue with the process by which Canada resolved the conflicting interests, not the result at which it arrived. Canada’s knowledge of the illegal pre-emptions followed by its failure to challenge them and the allotment of a reserve elsewhere fell short of the prescribed standard of care which required Canada to act with good faith and ordinary prudence.

The Crown as a single, continuous and indivisible entity
To establish a valid ground for a specific claim on the basis of a pre-Confederation legal obligation, the Imperial Crown upon whom the obligation rested must fall within the extended definition of the “Crown” under s.14(2) of the Act. In order to satisfy the definition, the legal obligation (or any liability relating to its breach) must have “bec[ome]…the responsibility of the Crown in right of Canada.” The majority confirmed that this took place when the legal obligation became an obligation of Canada on Confederation, and for which “Canada would, if in the place of the colony, have been in breach”.

The majority found that Canada’s legal obligation under s. 14(2) does not require identifying a constitutional obligation, rather that s.14(2) may be used (in some cases) as a freestanding basis on which the Tribunal can hold Canada responsible for the Imperial Crown’s failure to meet certain legal obligations. The majority held that this “backward-looking projection” of Crown liability is consistent with the Indigenous perspective of continuity in the relationship between Indigenous peoples and the Crown before and after Confederation.

Key issues not decided
Although this decision confirms that the band has a valid specific claim, the extent of damages against
Canada has yet to be determined by the Tribunal.

Canada’s apportionment of liability
Compensation will only be awarded to the band to the extent that the breach by the Crown in issue – as opposed to acts and omissions of third parties –caused the loss In its decision, the court confirmed that Canada was not bound to deliver the Village Lands as a reserve but was in breach of its fiduciary duty because of the process by which it resolved conflicting interests. The fact that Canada eventually procured a reserve for the band elsewhere may reduce the amount of compensation awarded. The extent to which the claimed loss may be attributable to actions of the province also raises questions of causation that will be determined at the compensation stage.

Provincial responsibility
The Tribunal openly acknowledged that Canada’s discretionary power to assign reserves was limited by the need for provincial cooperation. Though the question of provincial responsibility was not explicitly addressed, the majority confirmed the Tribunal’s finding that the Province would have been bound by the honour of the Crown which includes the possibility that the Provincial Crown may have also owed a fiduciary obligation to the band.