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T-5229-80
Raymond-Viateur Beauvais (Plaintiff) v.
The Queen and le conseil de la bande indienne Mohawk de Kanawake (The Mohawk Council of Kanawake) (Defendants)
Trial Division, Walsh J.—Montreal, February 11; Vancouver, February 26, 1981.
Jurisdiction — Motion by plaintiff to add as defendant Minister of Indian Affairs and Northern Development — Motion by defendant to strike plaintiff's declaration on the ground that this Court lacks jurisdiction ratione personae and ratione materiae — Plaintiff authorized by Mohawk Council of Kanawake to operate quarry on reserve — Plaintiff ordered by newly-elected Band Council to cease operations — Interim injunction sought by plaintiff in Superior Court of Quebec denied — Plaintiff seeking in its declaration an injunction against defendants and damages resulting from a loss of profit — Whether this Court has jurisdiction over the injunctive relief and the damages claim — Whether Mohawk Council of Kanawake can be sued — Indian Act, R.S.C. 1970, c. I-6, ss. 2(1), 58(4)(b) — Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 18.
Plaintiff seeks an order to add as a defendant the Minister of Indian Affairs and Northern Development so that the injunc tion sought by plaintiff be granted. Defendant, the Mohawk Council of Kanawake, seeks an order to strike plaintiffs decla ration on the ground that this Court lacks jurisdiction ratione materiae and ratione personae. In 1975, the defendant, the Mohawk Council of Kanawake, adopted a resolution whereby it authorized plaintiff to operate a quarry on the reserve. The Department of Indian Affairs and Northern Development subsequently issued a permit. A newly-elected Band Council ordered the plaintiff, in 1980, to cease all quarry operations pending the granting, by it, of a permit to plaintiff. Plaintiff thereupon filed before the Superior Court of Quebec a motion for interlocutory injunction which was denied. Plaintiff now seeks, in his declaration, damages resulting from a loss of profit and an injunction against defendants, alleging a threat by the Minister to revoke his permit if injunctive relief was sought. The issues are whether this Court has jurisdiction with respect to the injunctive relief and the damages claim and whether the Mohawk Council of Kanawake can be sued.
Held, the plaintiffs motion is granted and the defendant's (Mohawk Council of Kanawake) motion is dismissed. While no claim for damages would lie against the Minister of Indian Affairs and Northern Development personally if he committed any actionable tort in the performance of his duties, an injunc tion might conceivably lie against him if he cancelled, as
threatened, plaintiff's permit to operate the quarry. The refusal by the Superior Court of Quebec to grant an interlocutory injunction would not prevent this Court from granting one if this Court has jurisdiction over the proceedings. It would be contrary to natural justice to conclude that no court has jurisdiction to grant an injunction, if on the facts such an injunction is justified and necessary. However, there is no applicable federal law to justify the institution of a claim in damages in this Court against the Mohawk Council of Kana- wake so that such a claim would have to be processed in the Superior Court. Neither can the fact that this Court has jurisdiction over a damages claim against the Queen give it jurisdiction over the co-defendant. The question of the capacity of defendant, the Mohawk Council of Kanawake, to be sued in this Court appears to be in some doubt although the better opinion now appears to be that it can with respect to section 18 remedies. The Band Council can be presumed to govern the conduct of Band members and if it should be found that they are acting illegally in interrupting the quarrying operations, it is at least arguable that it can properly be enjoined to oblige them to desist, without naming or serving individual members of the Band. With respect to the damages claim, however, no judgment for damages could be rendered against it any more than a judgment against a city council rather than against the city, or the board of directors of a company rather than against the company itself would be effective.
Canatonquin v. Gabriel [1980] 2 F.C. 792, referred to. McNamara Construction (Western) Ltd. v. The Queen [1977] 2 S.C.R. 654, referred to. Quebec North Shore Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054, referred to. R. v. Thomas Fuller Construction Co. (1958) Ltd. [1980] 1 S.C.R. 695, referred to. Union Oil Co. of Canada Ltd. v. The Queen [1974] 2 F.C. 452, referred to. Beauvais v. Delisle [1977] 1 F.C. 622, referred to. Attor ney General of Canada v. Lavell [1974] S.C.R. 1349, referred to. Gabriel v. Canatonquin [1978] 1 F.C. 124, referred to. The "Sparrows Point" v. Greater Vancouver Water District [1951] S.C.R. 396, distinguished. Francis v. Canada Labour Relations Board [1981] 1 F.C. 225, considered.
MOTIONS. COUNSEL:
P. Le Page for plaintiff.
Herbert C. Salmon for defendant Mohawk Council of Kanawake.
J. C. Ruelland, Q.C. for defendant the Queen.
SOLICITORS:
Viau, Bédanger & Associés, Montreal, for plaintiff.
Cerini, Salmon, Watson, Souaid & Harris, Montreal, for defendant Mohawk Council of Kanawake.
Deputy Attorney General of Canada for defendant the Queen.
The following are the reasons for order ren dered in English by
WALSH J.: Two motions came on for hearing in Montreal:
(1) Plaintiff's application to amend the title of cause by adding the Honourable Minister of Indian Affairs and Northern Development in his quality as a defendant in order that the permanent injunction sought by plaintiff in his declaration can be granted, and that permission be given to produce an amended declaration to give effect to this.
(2) Defendant the Mohawk Council of Kana- wake's application to strike plaintiff's declaration on the grounds that
(a) This Court lacks jurisdiction ratione mate- riae and ratione personae;
(b) Plaintiff prior to the institution of the present action acquiesced to the jurisdiction of the Superior Court of the Province of Quebec to try the issues raised in its declaration;
(c) Res judicata applies against plaintiff with respect to his claim for injunctive relief;
(d) Said co-defendant does not have the juridi cal personality, status or capacity to sue or be sued;
(e) Plaintiff's declaration when read together with the Exhibits mentioned therein does not indi cate any right of action against said co-defendant.
The first motion should be granted. It is common ground that no injunction can be issued against Her Majesty the Queen as defendant but that this Court has jurisdiction over any claim for damages which might be against her by virtue of
the Crown Liability Act (R.S.C. 1970, c. C-38) if any such damages can be proved. Conversely, while no claim for damages would lie against the Minister of Indian Affairs and Northern Develop ment personally if he committed any actionable tort in the performance of his duties, an injunction might conceivably lie against him if he cancelled, as was threatened, plaintiff's permit to operate the quarry.
It is proper, therefore, to add the Minister as a co-defendant and counsel for the Crown did not seriously dispute this, although it will be argued on the merits that there is a distinction between the granting of a permit which is an administrative act and the cancelling of it, if the Minister were to do this, because of acquired rights.
The second motion raises a number of difficult questions. It is trite law to state that on a motion to strike, the Court must merely reach a conclu sion as to whether, assuming all the facts alleged in the statement of claim are true, a cause of action would lie, and if there is any doubt about this or evidence is necessary to reach such a con clusion, then the motion should be dismissed leav ing the matter for decision by the Trial Judge. This is not to say, however, that if it is concluded that this Court does not have jurisdiction, if res judicata applies, or if there is lack of capacity on the part of one of the parties, the motion to strike should not be granted.
Defendant, the Mohawk Council of Kanawake's counsel insists that it must not be confused with the "band" which is defined in section 2(1) of the Indian Act (R.S.C. 1970, c. I-6) as follows:
2. (1) In this Act
"band" means a body of Indians
(a) for whose use and benefit in common, lands, the legal title to which is vested in Her Majesty, have been set apart before, on or after the 4th day of September 1951,
(b) for whose use and benefit in common, moneys are held by Her Majesty, or
(c) declared by the Governor in Council to be a band for the purposes of this Act;
In the case of Canatonquin v. Gabriel [1980] 2 F.C. 792, the Court of Appeal held [at page 793]:
We are all of the view that the judgment below [[1978] 1 F.C. 124] correctly held that the council of an Indian band is a "federal board" within the meaning of section 2 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, and that, as a consequence, section 18 of that Act gave to the Trial Division jurisdiction in the matter.
That decision does not mean that this Court has jurisdiction to deal with the injunction sought against the said defendant, however, nor to deal with the claim for damages against it unless the Band Council can be sued as a person.
A brief review of the facts is necessary in order to understand the issue. On September 15, 1975 the Caughnawaga * Band Council authorized plaintiff, himself an Indian, to operate a quarry on his land on the reserve for a period of "at least fifteen years". He was to pay a royalty per ton to be established "by means of negotiations between the said Raymond-Viateur Beauvais and the Council of Caughnawaga Band of Indians".
On October 3, 1975 in a letter to Mr. Beauvais written by G. A. Poupore, Director, Lands and Membership Branch, Department of Indian Affairs and Northern Development, reference was made to the resolution and pursuant to section 58(4)(b) of the Indian Act authority was given to operate a quarry for 15 years from the date of the letter on payment of a royalty "at a rate per ton to be negotiated on each anniversary date of this authority between yourself and the Department of Indian Affairs and Northern Development in con sultation with the Council of the -Caughnawaga Band of Indians." Provision was made for payment of the royalties annually and a statutory statement as to the quantity of stone quarried each year. This was accepted by Mr. Beauvais on October 7. Sec-
* This designation seems to be used interchangeably with the designation Mohawk Council of Kanawake.
tion 58(4)(b) of the Indian Act to which reference is made reads as follows:
58....
(4) Notwithstanding anything in this Act, the Minister may, without a surrender
(b) with the consent of the council of the band, dispose of sand, gravel, clay and other non-metallic substances upon or under lands in a reserve, or, where such consent cannot be obtained without undue difficulty or delay, may issue tempo rary permits for the taking of sand, gravel, clay and other non-metallic substances upon or under lands in a reserve, renewable only with the consent of the council of the band,
and the proceeds of such transactions shall be credited to band funds or shall be divided between the band and the individual Indians in lawful possession of the lands in such shares as the Minister may determine.
On January 9, 1976, Chief Ronald Kirby on behalf of the Mohawk Council of Kanawake, issued a statement stating that Mr. Beauvais has been authorized by the Caughnawaga Band Coun cil to operate the quarry on paying 6 cents per ton for the first 3 years and 10 cents a ton for the remaining 12-year term of the lease.
On June 7, 1979, a new Band Council having been elected, it adopted the following resolution:
Therefore, it is hereby ordered by the Mohawk Council of Kanawake that the quarrying operations shall cease until such time as the operation is transferred to the Mohawks of Kanawake.
That the Certificate of possession is revoked and the lands are placed back into the possession of the Mohawks of Kanawake as administered by the Mohawk Council of Kanawake.
That the Mohawks of Kanawake have the use of the said lands and stone extracted.
That the Kanawake Mohawk Police close the said quarry immediately, June 7th, 1979.
On June 11 and 12 access to the quarry was blocked by the Indian Band.
Plaintiff instituted proceedings for injunction and damages against the Band Council and its members as individuals in the Superior Court for the District of Montreal and obtained an interim injunction valid for 10 days on June 14, 1979. This was renewed from time to time for 10-day periods until February 4, 1980 when the Court refused to renew it again, in view of the numerous renewals.
In the interval the Minister, with the consent of the Band Council and plaintiff, appointed Fred Kelly as a Royal Commissioner to make his recommendations. His report, dated December 14, 1979, concluded that there was some doubt as to the validity of the permit because the process set out is in some conflict with the Council resolution which had provided that royalties were to be estab lished between Beauvais and the Band Council while the permit of October 3, 1975 had provided that they were to be established by negotiations between Beauvais and the Department in consulta tion with the Band Council. He commented that it is arguable that the permit is not valid until royal ties are established by negotiation.
With respect to Chief Kirby's letter of January 9, 1976 addressed "To Whom it May Concern" (supra) the report points out that the Band Coun cil resolution of September 15, 1975 did not dele gate authority to Chief Kirby to negotiate royal ties, so that it is without effect and does not bind the Band Council.
Nonetheless it is stated in paragraph 21 of the statement of claim that the report also said:
It is recommended that R.V. Beauvais be permitted to continue his operations.
Despite this, on March 24, 1980 the Band Council sent the following order to Mr. Beauvais:
The Mohawk Council of Kanawake orders that you cease operations effective 7 a.m., March 25, 1980, until such time as a legitimate acceptable permit has been granted to you by the Mohawk Council.
The conditions of the Permit will be based on 10% of gross sales of (sic) $2,000.00 per week for the first three (3) years with an increase of $1,000.00 per week for each successive three (3) year period, plus all conditions relating to environment, opera tions, employee conditions, payroll, etc.
The Mohawk Peacekeepers have been ordered to enforce this order.
(This would be completely at variance with the method of payment at so much a ton set out in Chief Kirby's letter of January 9, 1976 on the basis of which royalties had previously been cal culated and does not appear to have resulted from any negotiations nor to have been approved by the Department of Indian Affairs and Northern Development.)
On March 25, 1980 the Peacekeepers of the Indian Band stopped the operations of the quarry on orders of the Band Council.
It is alleged in paragraph 28 in the statement of claim that the Minister through his officers direct ed Beauvais to negotiate with the Band Council and that the quarry remain closed during the negotiations and that the Deputy Minister, J. D. Nicholson, advised Beauvais that the Minister would unilaterally revoke his permit if he attempt ed to obtain an injunction ordering the reopening of the quarry. This threat, if it were in fact made, (and for the purposes of this motion all the allega tions must be dealt with as if true) would be entirely unacceptable conduct in supporting one side of the conflict and setting aside Court intervention.
No agreement was reached in negotiations during 1980 and the quarry has remained closed. Meanwhile a competing quarry on the reservation, operated by non-Indians, with whom no agreement as to royalties has been reached, has been permit ted by the Band Council and the Minister to continue operating, this discrimination aggravat ing the damages claimed by plaintiff who has lost a long term contract which would allegedly have resulted in $5,700,000 profit. A capital loan by the National Bank of Canada in the amount of $1,463,800 and $185,000 owed to it on plaintiff's line of credit has been called by the Bank, and plaintiff has $919,540 of accounts payable which
he cannot pay as the result of closure of his quarry. Total damages claimed are $7,163,800.
On March 6, 1980 plaintiff submitted a motion for interlocutory injunction to the Superior Court, which was dismissed, although unfortunately no reasons are given. The dismissal was without costs, however, and reserved unto plaintiff his further rights and recourses. It was argued by defendant the Mohawk Council of Kanawake that the allega tions in the application for interlocutory injunction are nearly identical to those in the statement of claim herein and that that decision constitutes res judicata. The action in the Superior Court has not come to trial on the merits, and the refusal to grant an interlocutory injunction there, which may well have resulted from some doubt in that Court as to its jurisdiction which defendant's counsel suggests was argued before it, would not prevent this Court from granting an injunction if this Court has jurisdiction over the present proceed ings. Moreover it is inconsistent for defendant's counsel to argue in proceedings before the Supe rior Court that it has no jurisdiction to grant an injunction, and then to renew the same argument here with respect to the jurisdiction of this Court. It would be manifestly contrary to natural justice to conclude that no court has jurisdiction to grant an injunction against the Band Council, if on the facts such an injunction is justified and necessary.
A more serious question arises, however, with respect to the argument that plaintiff in proceed ing before the Superior Court chose its forum. It would appear that there is no applicable federal law to justify the institution of a claim in damages in this Court against defendant the Mohawk Council of Kanawake so that such a claim would have to be processed in the Superior Court (see McNamara Construction (Western) Limited v. The Queen [1977] 2 S.C.R. 654 and Quebec North Shore Paper Company v. Canadian Pacific
Limited [1977] 2 S.C.R. 1054). Neither can the fact that this Court has jurisdiction over a damage claim against Her Majesty the Queen give it juris diction over the co-defendant (see The Queen v. Thomas Fuller Construction Co. (1958) Limited [1980] 1 S.C.R. 695). Jurisprudence has changed substantially since the case of The `Sparrows Point" v. Greater Vancouver Water District [1951] S.C.R. 396, dealing with jurisdiction of the then Exchequer Court over damages caused by a ship and whether proceedings against a co-defend ant should have been brought in the British Columbia courts in which Kellock J. stated at page 404:
On the other hand, all claims arising out of the damage occasioned by the ship should be disposed of in one action so as to avoid the scandal of possible different results if more than one action were tried separately.
The fact that proceedings may have to be instituted in two Courts arising out of the same cause of action when, as a result of limitations on their jurisdiction only some part of the relief may be obtained in each Court, is no longer a bar to such unfortunate duplication of proceedings (see Union Oil Company of Canada Limited v. The Queen [ 1974] 2 F.C. 452).
A serious difficulty arises, however, as to wheth er defendant the Mohawk Council of Kanawake can be sued at all. In the case Francis v. Canada Labour Relations Board [19811 1 F.C. 225, Chief Justice Thurlow stated [at page 228]:
In my view the St. Regis Indian Band Council is not a person within the meaning of section 118(p) [of the Canada Labour Code]. Neither the council nor the Band itself is a body corporate. Neither has capacity, apart from the capacity of its members as individuals, to become or to be an employer of employees.
Justice Heald states [at page 244]:
Thus it is clear that the Band Council itself is not a person but is rather a collection of natural persons. I can find nothing in the context of the Act which is evidence of any intention to confer upon the Band Council itself the status of a legal person.
In dissent Justice Le Damn stated [at page 248]:
If the Council cannot be treated as the employer on the ground that it lacks corporate status or explicit authority to make contracts of employment then the same must be said of the Band.
and later [at page 248]:
In effect it is not clear who, on strict legal tests, could be considered to be the employer, having regard to the question of legal personality and the question of authority to make con tracts on someone else's behalf. Yet there is clearly a situation in which persons have the status of employees. In these circum stances, I think the Board should be held to have jurisdiction to treat the Band Council as the employer for purposes of the Code.
In the present case the injunction is sought against the defendants, their agents, officers, man- dataries and employees and all other persons acting under their orders or with their tolerance, acceptance or consent. It is not necessary to decide at this stage of proceedings whether an injunction could be granted on such broad terms against said defendants. Even admitting that the Band Council has no corporate personality as such, it is clear that it adopted the initial resolution granting quar rying rights to plaintiff, was accepted by him and by the Minister as the other contracting party, adopted the resolutions ordering the cessation of operations and attempting to enforce unilateral terms of payment, and ordered the Peacekeepers to terminate plaintiffs operations. In doing so it was presumably acting on behalf of the Mohawk of Kanawake Band. Certainly even if the Court had jurisdiction over the damage claim against it, which it does not, no judgment for damages could be rendered against it any more than a judgment against a city council rather than against the city, or the board of directors of a company rather than against the company itself would be effective. With respect to the injunction conclusions, how ever, the situation may well be different. The Band Council can be presumed to govern the conduct of Band members and if it should be found that they are acting illegally in interrupting the quarrying operations, it is at least arguable that it can prop erly be enjoined to oblige them to desist, without naming or serving individually all the members of
the Band. A further problem arises in that the individual members of the Band Council cannot be sued in this Court (see the decision of Dubé J. in Beauvais v. Delisle [1977] 1 F.C. 622 in which he stated [at page 622]:
Applicant has not shown that the Trial Division has jurisdic tion to issue an injunction against the members of an Indian band council, as section 18 of the Federal Court Act provides for this extraordinary remedy to be issued against "any federal board, commission or other tribunal" and not against individuals.
While he gave other reasons for dismissing the injunction sought against members of the Council personally and as members, this finding is valid.
In the case of Attorney General of Canada v. Lavell [1974] S.C.R. 1349, Chief Justice Laskin at page 1379 expressed doubt as to whether a Band Council is the type of tribunal contemplated by section 2(g) of the Federal Court Act or wheth er private authorities are contemplated by section 18, but found it unnecessary to come to a definite conclusion as to whether jurisdiction should have been ceded to the Federal Court to entertain a declaratory action against members of a Band Council.
In two cases in the Superior Court in Quebec, a judgment of Justice Bisaillon in Clifford Rice v. Caughnawaga Iroquois Band, judgment dated February 13, 1975, S.C.M. 500-05-015993-742 and a judgment of Justice Aronovitch in Diabo v. Mohawk Council of Kanawake, judgment dated October 3, 1975, S.C.M. 500-05-013331-754, it was held that the Band came within the definition of section 2 of the Federal Court Act and that the Federal Court alone could issue an injunction or grant declaratory relief pursuant to section 18. Neither judgment seems to have considered the Lavell case (supra).
It was in this context and after examining these three cases that Associate Chief Justice Thurlow (as he then was) rendered the judgment of the Court of Appeal in another Canatonquin case, Gabriel v. Canatonquin [1978] 1 F.C. 124 at page 130, stating in reference to the Lavell judgment:
With due respect for the doubt expressed and the reason given therefor, but bearing in mind that the point was left open and that the Superior Court of Quebec has declined jurisdiction because of its view that exclusive jurisdiction in a case such as this resides in this Court, I think that until the point has been resolved at a higher level the proper course is to adopt that view and rule that the council of a band is a "federal board, commission or other tribunal" within the meaning of the defini tion. It follows that this Court has jurisdiction to entertain the proceeding in so far as it is brought for a declaration that the defendants have been illegally elected and are illegally acting as the council of the band.
These decisions, as well as one of Justice Decary of this Court, refusing to grant a motion seeking the issue of a writ of prohibition and for declarato- ry relief to set aside a by-law of the Band Council by virtue of which Rice had been prosecuted (judgment dated December 9, 1977, unreported, Court No. T-4371-77) were considered in detail by Justice Marc Beauregard in the case of Terrance Rice v. Mohawk Council of Kanawake, judgment dated July 14, 1978, S.C.M. 500-36-000411-790, which concluded that in the criminal appeal before him he had the jurisdiction to consider and set aside, as he did, the said by-law as being ultra vires the powers of the Band Council.
The appeal from this judgment was dismissed by the Quebec Court of Appeal, judgment dated Sep- tember 5, 1980, No. 500-10-000303-782. At page 8 of that judgment Justice Mayrand, in comment ing on the remarks of Chief Justice Laskin in the Lavell case states:
[TRANSLATION] ... however, with deference to the simple doubt expressed as to the precise meaning of the words " ... board ... exercising powers conferred by an Act of the Parlia ment of Canada" it seems to me sufficiently clear that they include a public board such as the appellant Indian Band.
He agrees with Associate Chief Justice Thurlow's conclusion to this effect in the Canatonquin case, and with the Superior Court judgments in the Diabo and Clifford Rice cases but concludes that
the fact that this jurisdiction rests with the Federal Court by virtue of section 18 does not prevent the invoking of the invalidity of the by-law as a defence in criminal proceedings.
It is evident that the matters referred to in the statement of claim herein are extremely complex including serious issues of fact and of law. The very existence of the permit to operate the quarry is in doubt since there is a question as to whether the consideration to be paid was ever validly estab lished and an agreement without a fixed or deter minable consideration is void. On the other hand, plaintiff operated the quarry for several years on the basis of this permit and may well have acquired rights of which he cannot unilaterally be deprived. It would appear that only part of plain tiff's claim can be dealt with in this Court, the rest being within the jurisdiction of the Quebec Supe rior Court. The question of the capacity of defend ant the Mohawk Council of Kanawake to be sued in this Court appears to be in some doubt although the better opinion now appears to be that it can with respect to section 18 remedies.
Plaintiff has suffered serious damage as a result of what well may have been improper acts of the Band Council and to grant said defendant's motion to strike might deprive him of any recourse by way of injunctive or declaratory relief.
Although the motion must therefore be dis missed the issues raised are serious so no costs will be allowed to plaintiff. I cannot refrain from expressing the evident desirability of avoiding fur ther increase in damages by permitting the quarry to be reopened for the summer quarrying season of 1981 while awaiting some settlement of the royalty to be paid, whether by Court judgment, arbitration or otherwise and that the terms of payment should not be discriminatory in favour of the competing quarry being permitted to operate on the reservation.
In the affidavit supporting the motion it is set out by Chief Andrew T. Delisle that the defendant has very limited financial resources. It is apparent that it is in the interest of the Indian Band that the operation of the quarry should be permitted to continue pending determination of the terms of payment which cannot be determined unilaterally by either party. On the present motion the Court can make no such order but it is to be hoped that common sense and goodwill will prevail so that the issue of the amount to be paid for the gravel removed may be settled without further interrup tion of the quarry's operations.
ORDER
Defendant, the Mohawk Council of Kanawake's motion to strike plaintiff's declaration is dismissed without costs.
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