Judgments

Decision Information

Decision Content

A-447-81
Morris Kruger, Emory Gabriel, Joseph Pierre and Louise Eneas (Appellants) (Plaintiffs)
v.
The Queen (Respondent) (Defendant)
Court of Appeal, Heald, Urie and Stone JJ.- Vancouver, November 26 and 27, 1984; Ottawa, March 18, 1985.
Indians - Reserve lands expropriated for airport Expropriation allegedly precluding Indians from exercising right to refuse to sell or to lease on appropriate terms Expropriation valid under Act, s. 48 - No surrender required - Fiduciary duty of Crown - Appeal dismissed as claim statute barred - Indian Act, R.S.C. 1927, c. 98, ss. 19, 48, 50.
Crown - Expropriation by Department of Transport of Indian reserve lands for airport - Fiduciary duty - In-depth discussion of Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335 - Conflict of interest - Crown's duty to Indians vs. Crown's duty to Canadian public - Appeal dismissed.
Limitation of actions - Expropriation by Crown of Indian lands - Causes of action arising in 1941 and 1946 - Action instituted in 1979 - Appellants' damages claim statute barred under provincial legislation - No limitation period under s. 83 Trustee Act where claim (1) based on fraud or (2) to recover trust property - Claim not within either category - Appeal dismissed - Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 38 - Limitation Act, R.S.B.C. 1979, c. 236, ss. 3(3),(4), 6, 8(1), 9(1), 14(3) - Statute of Limitations, R.S.B.C. 1936, c. 159, s. 38 - Trustee Act, R.S.B.C. 1936, c. 292, s. 83.
Expropriation - Indian reserve lands - No surrender before compulsory taking - Whether s. 48 Indian Act of 1927 authorizing expropriation - S. 48 providing for expropriation procedures by federal Crown and by other specified bodies exercising statutory powers of compulsory taking - Aliena tion resulting from expropriation precluded from requirements of surrender or release by virtue of opening words of s. 50 - Indian Act, R.S.C. 1927, c. 98, ss. 19, 48, 50 - Indian Act, R.S.C. 1952, c. 149, s. 18(1) - Expropriation Act, R.S.C. 1927, c. 64, s. 2(g) - The Railway Act, 1868, 31 Vict., c. 68, s. 37 - The Consolidated Railway Act, 1879, 42 Vict., c. 9, s. 37 - The Indian Act, 1880, 43 Vict., c. 28, ss. 31, 36, 37 - The Indian Act, R.S.C. 1886, c. 43, ss. 35, 38, 39 - The Indian Act, R.S.C. 1906, c. 81, s. 46 (rep. and sub. 1-2 Geo. V, c. 14, s. 1).
The facts of this case have been summarized in the Editor's Note infra. The issues are whether section 48 of the Indian Act of 1927 entitles the Crown to expropriate reserve lands; in the
affirmative, whether such jurisdiction was properly exercised; and whether there was a breach of the Crown's fiduciary duty. No appeal was taken by either of the parties from the Trial Judge's finding that the Crown stood as a fiduciary vis-à-vis the appellants.
Section 48 of the 1927 Indian Act provides that no portion of any reserve shall be taken for the purpose of any public work without the consent of the Governor in Council "but any company or municipal or local authority having statutory power ... for taking ... lands ... without the consent of the owner may, with the consent of the Governor in Council as aforesaid ... exercise such ... power". Section 50 prescribes that "Except as in this Part otherwise provided, no reserve or portion of a reserve shall be sold, alienated or leased until it has been released or surrendered to the Crown".
Held, the appeal should be dismissed.
Per Heald J.: The fiduciary obligation and duty discussed in the Supreme Court decision in Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335 is applicable to the instant case, despite the factual differences between the two cases and the difference in the statutory language. What was said by Dickson J. (as he then was) in Guerin with respect to the fiduciary relationship was not seen as authority for the general proposi tion that such a relationship exists only where there is a surrender of Indian lands to the Crown. According to Dickson J. "the standard of conduct which the obligation imports is both more general and more exacting than the terms of any particular surrender". As was said by Mr. Justice Dickson in Guerin in characterizing Indian title: "Their interest ... is a pre-existing legal right not created by Royal Proclamation, by s. 18(1) of the Indian Act, or by any other executive order or legislative provision". On the facts of the present case, the fiduciary duty was a continuing one arising as a consequence of the proposal to take the lands and continuing throughout the dealings with respect to the compensation payable for Parcels A and B.
Bearing in mind that the Crown owes a fiduciary duty to the Indians, the facts of the case clearly raise the issue of conflict of interest. It is evident that two Departments of the Govern ment of Canada were in conflict concerning the manner in which the Indian occupants of Parcel A should be dealt with. The evidence unquestionably established that the officials of the Indian Affairs Branch were diligent in their efforts to represent the best interest of the Indian occupants. On the other hand, the Department of Transport was anxious to acquire the additional lands in the interests of air transport. The law is clear that "one who undertakes a task on behalf of another must act exclusively for the benefit of the other". It is also clear that the onus is on the trustee or fiduciary to establish that the beneficiary was in possession of all the relevant information known to the trustee. Based on those principles, it is impossible to conclude that the federal Crown acted "exclusively for the benefit" of the Indians. The recom mendation by the Indian Affairs officials, that the ten-year lease initially agreed to by the Indians be accepted, was ignored on the ground that the amount of rental asked by the Indians
was unreasonable. The Department of Transport produced no evidence that the rental demanded was unreasonable. Nor were any appraisals produced in support of the final settlement of $115 per acre which deprived the Indians of their total interest in the lands. There was evidence that comparable property had been sold several years earlier at prices of $200 to $300 per acre. It can clearly be inferred from the record that in the final decision-making process by the Governor in Council the views of the Department of Transport prevailed over the views and representations of the Department of Indian Affairs. Whatever good and sufficient reason the former had to require the lands does not relieve the federal Crown of its fiduciary duty to the Indians.
The conflict of interest apparent in the dealings with respect to Parcel A is equally apparent with respect to the acquisition of Parcel B. An indication of the lack of concern for the Indian's welfare on the part of the Departments of National Defence and Transport is shown by the initial valuation of the lands, i.e. $55 per acre; by the fact that they had possession for some 18 months without paying the Indians anything on account of compensation; by their rather leisurely approach to negotiations for compensation as compared to their great haste in taking possession and depriving the Indians of their means of livelihood. The Crown cannot be said to have acted exclusively for the benefit of the Indians. Moreover, the Crown failed to fully disclose to the Indians all the relevant facts. The non-dis closure of the opinion of the Deputy Minister of Justice was considered as indicative of the attitude of the Crown's servants outside the Indian Affairs Branch. Had there been evidence in the record to indicate that careful consideration and due weight had been given to the pleas and representations by Indian Affairs on behalf of the Indians and an offer of settlement reflecting those representations been made, the matter would have been viewed differently.
With respect to the limitation of action issue, unlike the Guerin case, the causes of action could have been discovered had the appellants exercised reasonable diligence at the time the causes of action arose. It follows that the limitation period provided for in section 38 of the British Columbia Statute of Limitations in force when the causes of action arose (in the case of Parcel A, January 1941 and in the case of Parcel B, February 1946) would have expired long before this action was commenced in 1979.
However, by virtue of section 83 of the Trustee Act of British Columbia, there is no limitation period for actions by benefici aries against trustees where the claim (1) is based upon any fraud or fraudulent breach of trust or (2) is to recover trust property. The appellants cannot bring themselves within the first category, having abandoned reliance on all pleadings alleging fraudulent conduct. With respect to the second catego ry, the question was considered in McLellan v. Milne & Magee, [1937] 3 D.L.R. 659 (Ont. S.C.) where it was held in relation to a limitation section of the Ontario Act containing almost identical language to section 83, that an action requiring a solicitor to make compensation to his client for a breach of his
duty arising out of a fiduciary relationship was not an action to recover trust property. Such a claim was very similar to the appellants' alternative claim for compensation. The McLellan decision was applicable to the present case.
Furthermore, having regard to the transitional provisions of the Limitation Act of British Columbia of 1975 which was in force in 1979 when the action was commenced, the appellants' claim is statute barred in any event. If subsection 14(3) of the 1975 Act applied, the limitation period would have expired on July 1, 1977, almost two years prior to this claim being filed. Sections 8 and 9 thereof also operate to bar the present action.
Per Urie J.: The issue whether section 48 of the Indian Act of 1927 confers jurisdiction on the Crown to expropriate reserve lands is answered in the affirmative. Subsection 48(1) contem plates two separate expropriation procedures, one where the federal Crown is expropriating, and the second where specific bodies other than the Crown exercise their statutory power of compulsory taking. This is evidenced by the use of the word "but" in subsection 48(1). By introducing that word in 1911, Parliament intended to distinguish the position of those speci fied corporations or authorities from that of the Crown by importing the procedures for expropriation applicable to them by their constituent statutes, into the Indian Act and by enabling terms and conditions to be imposed by the Governor in Council in giving his authority to such bodies to expropriate reserve lands. Since the only body having the power of compul sory taking other than a company, municipal or local authority having such power to expropriate conferred on it by either the Dominion or provincial Crown, was the Crown in right of Canada, the portion of the subsection 48(1) preceding the word "but" must therefore relate to the federal Crown.
Furthermore, section 50 does not require in all cases in which the Crown is to be the transferee of Indian reserve lands that a release or surrender to the Crown be obtained from the Indians. Section 50 clearly applies to cases where reserve lands are to be "sold, alienated or leased". The word "alienated" does not encompass an expropriation of reserve lands by the Crown as argued by the appellants. In its context, the word is neither used in its technical sense nor does it apply to the facts of this case. In any event, the opening words of section 50 "Except as in this Part otherwise provided" preclude an alienation result ing from an expropriation under section 48 from requirements of release or surrender.
The second issue is whether the power to expropriate was properly exercised. The appellants based the Court's jurisdic tion to review the expropriation on the respondent's failure to meet the "predominant purpose" test enunciated in Warne v. The Province of Nova Scotia, Akerley, Jamerson, Henry and Kinsman (1970), 1 N.S.R. (2d) 150 (N.S.S.C.). According to that test, where the predominant purpose of the expropriation is
in furtherance of a tortious conspiracy to injure the owner of the land taken, then the expropriation is subject to review by the Court. In the case at bar, there is no evidence to support the appellants' contention that the Departmental officials deliber ately acquired the Indian lands in preference to those of non-Indians because they could be acquired at lower prices.
With respect to the breach of fiduciary duty by the Crown, it was assumed, without being determined, that the rules applying to conflicts of interest between trustees and cestuis que trust were equally applicable to fiduciaries. On the basis of that assumption, it was found that there was no breach of the fiduciary obligation of the Crown based on an alleged conflict of interest between two of the Crown's Departments—Mines and Resources, Indian Affairs Branch, and Transport. The documentary evidence indicates that the Indian Affairs officials were forceful spokesmen for the Indians. The Transport offi cials, on the other hand, owed a duty to the people of Canada as a whole, including the Indians, not to "improvidently expend their moneys". The fact that the ultimate decision may not have been entirely satisfactory to the Indians does not mean that there was a breach of the fiduciary duty nor that there was a conflict of interest which had to be resolved in their favour.
The Crown's competing obligations precluded it from either acceding in full to the Band's demands or withdrawing from the transactions entirely. The Crown was obliged to ensure that the best interests of all for whom its officials had responsibility were protected. The Governor in Council became the final arbiter. The appellants chose not to resort to the Exchequer Court but accepted the Crown's offers. It was difficult to see how they could successfully attack, after several years, the settlements to which they had agreed.
The appellants further contend that the respondent did not exercise the degree of care expected of a fiduciary when it failed to consider the "peculiar value and importance" to the Indians of Parcels A and B. The record clearly shows that officials at all levels were well aware of their respective obliga tions and discharged them to the best of their abilities.
Finally, the appellants allege failure by the Indian Affairs officials to disclose to the Band the opinion of the Deputy Minister of Justice that Parcel B could not be expropriated. The best evidence available in the absence of viva voce evi dence, was a report prepared by the Indian Agent. It was found that there had been no withholding of information. In any event, since the expropriation was valid, the surrender was superfluous.
With respect to the limitation of action issue, the appellants, relying on Guerin, argued that the breach of duty arising from the failure to disclose the opinion of the Deputy Minister of Justice constituted an equitable fraud. This allegation was rejected. The record disclosed several instances of the complete candour of the Indian Affairs officials with the Indians throughout the years.
CASES JUDICIALLY CONSIDERED
APPLIED:
Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335; McLellan v. Milne & Magee, [1937] 3 D.L.R. 659 (Ont. S.C.); Point v. Dibblee Construction Co. Ltd., et al., [1934] O.R. 142 (H.C.).
REFERRED TO:
Meek v. Parsons et al. (1900), 31 O.R. 529 (Div. Ct.); Masters v. Madison County Mutual Ins. Co. (1852), 11 Barb. 624 (N.Y. App. Div.); Warne v. The Province of Nova Scotia, Akerley, Jamerson, Henry and Kinsman (1970), 1 N.S.R. (2d) 150 (N.S.S.C.); Kitchen v. Royal Air Force Association, [1958] 1 W.L.R. 563 (C.A.); Buttle v. Saunders, [1950] 2 All E.R. 193 (Ch. D.); Calder et al. v. Attorney-General of British Columbia, [1973] S.C.R. 313; City of Edmonton v. Hawrelak and Sun-Alta Builders Ltd. et al., [1972] 2 W.W.R. 561, affirmed [1973] 1 W.W.R. 79 (Alta. S.C.).
COUNSEL:
W. J. Worrall and K. S. Campbell for appel lants (plaintiffs).
W. B. Scarth, Q.C. and T. B. Marsh for respondent (defendant).
SOLICITORS:
Worrall, Scott & Page, Vancouver, for appel lants (plaintiffs).
Deputy Attorney General of Canada for respondent (defendant).
EDITOR'S NOTE
The three judgments herein total 104 pages of manuscript. The Editor has decided to report this case in an abridged format. Abridgments of the following portions of the reasons for judgment have been prepared: the facts as set out by Urie J.; the review by Urie J. of the evidence as to awareness of the Indian Affairs officials of the "peculiar value and importance" of Parcels A and B to the Indians; the reasons for judgment of Stone J.; the review of the evidence with respect to the acquisition of Parcels A and B in the reasons for judgment of Heald J.
The following are the reasons for judgment rendered in English by
HEALD J.: I have had the advantage of reading the draft reasons for judgment prepared by my brother, Urie J. I agree with him that section 48 of the Indian Act, R.S.C. 1927, c. 98, enables the respondent to expropriate lands from an Indian reserve. I also agree that section 50 of the Act which imposes a requirement for a release or surrender to the Crown in respect of portions "sold, alienated or leased" does not apply to expro priations under section 48 because of the opening words of section 50 which read: "Except as in this Part otherwise provided". Because sections 48 and 50 are both found in Part I of the Act, it is clear, in my view, that the requirements of section 50 do not here apply. Were it not so, I would have had difficulty in concluding that the word "alienated" as used in section 50 would not encompass an expropriation of reserve lands by the Crown. How ever, for the reasons expressed infra, it is unneces sary to finally decide that matter.
One of the central issues in this appeal, as I see it, is the nature of the fiduciary duty owed by the respondent Crown to the appellants and whether the facts in this case demonstrate a breach of that fiduciary duty.
As noted by Mr. Justice Urie, the learned Trial Judge [(1981), 125 D.L.R. (3d) 513 (F.C.T.D.)] held that the Crown stood as a fiduciary vis-à-vis the appellants and no appeal was taken from this finding by either of the parties. Given the existence of such a duty, it is necessary to consider the nature and the parameters of that duty. I agree with my brother, Urie J. that the recent decision (November 1, 1984) of the Supreme Court of Canada in the Guerin case [Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335] is highly relevant and requires careful consideration. The headnote summarizes the reasons of Dickson J. (as he then was), speaking for himself, and Beetz, Chouinard and Lamer JJ. as follows [at pages 336-337]:
The Indians' interest in their land is a pre-existing legal right not created by the Royal Proclamation of 1763, by s. 18(1) of the Indian Act, or by any other executive order or legislative
provision. The nature of the Indians' interest is best character ized by its inalienability, coupled with the fact that the Crown is under an obligation to deal with the land on the Indians' behalf when the interest is surrendered.
The nature of Indian title and the framework of the statutory scheme established for disposing of Indian land place upon the Crown an equitable obligation, enforceable by the courts, to deal with the land for the benefit of the Indians. Successive federal statutes including the present Indian Act provide for the general inalienability of Indian reserve land, except upon sur render to the Crown. The purpose of the surrender requirement is to interpose the Crown between the Indians and prospective purchasers or lessees of their land so as to prevent the Indians from being exploited. Through the confirmation in s. 18(1) of the Indian Act of the Crown's historic responsibility to protect the interests of the Indians in transactions with third parties, Parliament has conferred upon the Crown a discretion to decide for itself where the Indians' best interests lie. Where by statute, by agreement or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another, and that obligation carries with it a discretionary power, the party thus empowered becomes a fiduciary. Equity will then supervise the relationship by holding him to the fiduciary's strict standard of conduct.
Section 18(1) of the Indian Act confers upon the Crown a broad discretion in dealing with the surrendered land. In the present case, the document of surrender confirms this discretion in the clause conveying the land to the Crown. When, as here, an Indian Band surrenders its interest to the Crown, a fiduciary obligation takes hold to regulate the manner in which the Crown exercises its discretion in dealing with the land on the Indians' behalf. The Crown's agents promised the Band to lease the land in question on certain specified terms and then, after surrender, obtained a lease on different terms which was much less valuable. The Crown was not empowered by the surrender document to ignore the oral terms which the Band understood would be embodied in the lease. After the Crown's agents had induced the Band to surrender its land on the understanding that the land would be leased on certain terms, it would be unconscionable to permit the Crown simply to ignore these terms. Equity will not countenance unconscionable behaviour in a fiduciary whose duty is that of utmost loyalty to his principal. In obtaining without consultation a much less valuable lease than that promised, the Crown breached the fiduciary obliga tion it owed to the Band and it must make good the loss suffered in consequence.
There are some factual differences between Guerin and the case at bar which should be men tioned. In Guerin, the Band had surrendered reserve lands to the Crown for lease to a golf club. The terms of the lease signed by the Crown were much less favourable than those approved by the
Band at the surrender meeting. In the case at bar, the lands referred to in these proceedings as Parcel A, containing some 154.3 acres was expropriated by the Crown. No surrender was obtained from the Indians prior to that expropriation or at all. The lands referred to in these proceedings as Parcel B containing an additional 120 acres was also expropriated by the Crown at a later date. A surrender was obtained from the Indians with respect to a Parcel B after the expropriation. Addi tionally, there are some differences between sub section 18(1) of the Indian Act, R.S.C. 1952, which was applicable in Guerin and section 19 of the Indian Act, R.S.C. 1927, which is the relevant legislation in so far as the case at bar is concerned. Subsection 18(1) of the Indian Act, R.S.C. 1952, c. 149 as amended, reads:
18. (1) Subject to the provisions of this Act, reserves shall be held by Her Majesty for the use and benefit of the respective bands for which they were set apart; and subject to this Act and to the terms of any treaty or surrender, the Governor in Council may determine whether any purpose for which lands in a reserve are used or are to be used is for the use and benefit of the band.
Section 19 of the Indian Act, R.S.C. 1927, c. 98, reads:
19. All reserves for Indians, or for any band of Indians, or held in trust for their benefit, shall be deemed to be reserved and held for the same purposes as they were held heretofore, but shall be subject to the provisions of this Part.
It will be observed that the terms of section 18 of the 1952 Act are more specific than section 19 of the 1927 Act. However, I think such a differ ence cannot effect the applicability of what was said in Guerin to the instant case. I agree with the statement of Hall J. in the case of Calder et al. v. Attorney-General of British Columbia, [1973] S.C.R. 313, at page 390, where he said that: "aboriginal Indian title does not depend on treaty, executive order or legislative enactment". This view is confirmed by Mr. Justice Dickson in Guerin at page 379 of his reasons where, in cha racterizing Indian title, he said: "Their interest in their lands is a pre-existing legal right not created by Royal Proclamation, by s. 18(1) of the Indian Act, or by any other executive order or legislative
provision." Accordingly, I conclude that the differ ence in the statutory language applicable to Guerin and to the case at bar does not impair in any way the applicability, of the reasons and deci sion in Guerin to the instant case.
Likewise, I am of the view that the factual differences in the two cases do not detract from the persuasive value of the Guerin reasons when applied to the case at bar. In the case at bar, there were two expropriations. In one expropriation there was no surrender. In the other, the expro priation was followed by the execution of a surren der. I do not think, however, that what was said by Mr. Justice Dickson relative to the fiduciary rela tionship existing between the Crown and the Indi- ans can be construed in such a way as to be authority for the proposition generally that the fiduciary relationship arises only where there is a surrender of Indian lands to the Crown. It is correct to note, as did Mr. Justice Urie, that those comments were made by the learned Justice in the context of the facts of that case which involved a surrender of Indian lands to the Crown upon cer tain terms. However, Mr. Justice Dickson made the following comments at page 389:
While the existence of the fiduciary obligation which the Crown owes to the Indians is dependent on the nature of the surrender process, the standard of conduct which the obligation imports is both more general and more exacting than the terms of any particular surrender. In the present case the relevant aspect of the required standard of conduct is defined by a principle analogous to that which underlies the doctrine of promissory or equitable estoppel. The Crown cannot promise the Band that it will obtain a lease of the latter's land on certain stated terms, thereby inducing the Band to alter its legal position by surrendering the land, and then simply ignore that promise to the Bands detriment. See. e.g. Central London Property Trust Ltd. v. High Trees House Ltd., [1947] K.B. 130; Robertson v. Minister of Pensions, [1949] 1 K.B. 227 (C A.)
In obtaining without consultation a much less valuable lease than that promised, the Crown breached the fiduciary obliga tion it owed the Band. It must make good the loss suffered in consequence.
Accordingly, I think it clear that the fiduciary obligation and duty being discussed in Guerin would also apply to a case such as this as well and that on the facts in this case, such a fiduciary obligation and duty was a continuing one—that is, it arose as a consequence of the proposal to take Indian lands and continued throughout the negotiations leading to the expropriations and thereafter including the dealings between the Crown and the Indians with respect to the pay ment of the compensation to the Indians in respect of Parcels A and B.
What then are the parameters of this fiduciary relationship? Bearing in mind that equity will supervise the relationship by holding a fiduciary to the fiduciary's strict standard of conduct and "will not countenance unconscionable behaviour in a fiduciary, whose duty is that of utmost loyalty to his principal" (see reasons of Dickson J. at pages 388-389), I proceed now to the factual situation in this case.
THE ACQUISITION OF PARCEL A
By Order in Council 1036 dated July 29, 1938, the Province of British Columbia conveyed to the federal Crown, Penticton Indian Reserve No. 1 (of which Parcels A and B herein formed a part) "in trust for the use and benefit of the Indians". In September of 1938, the Municipality of Penticton approached the Indians for a lease of some 72.56 acres of land on the Penticton Reserve No. 1 for use as a municipal airport. The Indian Agent signed a form of lease on behalf of the Indian occupants of the land in question. The Indian occupants signed for themselves as well. The Mu nicipality also signed the form of lease. The aver age rent was $6.50 per acre per annum together with other benefits which will be detailed later herein. The term for each lease was for five years renewable for further five-year terms at the option of the Municipality to a maximum of twenty-five years in total. These leases were not approved by the Indian Affairs Branch in Ottawa because of the intervening requirement of the Department of Transport to acquire the land for airport purposes. By letter dated December 6, 1939, the Deputy Minister of Transport advised the Director of Indian Affairs, Ottawa, that additional land would be needed because a larger airport involving longer
runways was envisaged by Transport. This larger parcel, eventually comprising 154.3 acres is known as Parcel A.
Heald J. reviewed the evidence concerning Parcel A. This evidence consisted for the most part in correspondence of the Indian Agent, the Indian Commissioner for British Columbia and the Director, Indian Affairs. His Lordship made refer ence to a recommendation to Council from the Minister of Munitions and Supply containing the following statement: "the negotiations have not been successful owing to the excessive rental asked by the Indians, and on the advice of the Deputy Minister of Justice, it is now proposed to take proceedings to expropriate the said lands". In a report sent to Ottawa by the Indian Commis sioner for British Columbia, facts were set out in support of an opinion that "the $10.00 per acre rate asked by them could not be considered excessive".
On November 16, 1940, Order in Council, P.C. 6594 was passed expropriating .52 of an acre, being the balance of Parcel A not previously expropriated.
On January 26, 1941, Order in Council, P.C. 659, and subsequent amending Orders in Council authorized payment to the Indians of compensa tion for the land contained in Parcel A at the rate of $115 per acre. The recommendation to Council said to be by the Acting Minister of Munitions and Supply, on the advice of the Director of Air Ser vices, concurred in by the Assistant Deputy Minis ter of Transport, recites that the Indians concerned have agreed to accept compensation at that rate.
As noted by Mr. Justice Urie, the viva voce evidence at the trial was not of much assistance in establishing the factual context of the taking of Parcels A and B. I agree that the relevant facts must be obtained largely from the documentary evidence. I have related the documentary evidence relating to the acquisition of Parcel A which I consider to be relevant. From that evidence, I
make the following deductions and draw the fol lowing inferences:
1. The original negotiations between the Indians and Penticton in 1938 were for a lease of 72.56 acres for a maximum of 25 years.
2. When the Department of Transport became interested in December of 1939, they contemplated acquisition either by lease or purchase. They also contemplated a larger parcel (153.8 acres).
3. During negotiations conducted with the Indi- ans by Agent Barber, it was assumed by Barber and his B.C. superior, Major MacKay, that the Department of Transport wished to lease subject property.
4. In July 1940, the Indians reluctantly agreed to a lease of the subject 153.8 acres (Parcel A) for a term of ten years at an annual rental of $10 per acre and signed a surrender on this basis. In recommending that the Department of Transport agree to this proposal, Major MacKay, the Direc tor of Indian Affairs for British Columbia, said, inter alla: "I do not consider the rental required as excessive".
5. On August 13, 1940, an Order in Council was passed granting authority to expropriate Parcel A on the recommendation of the Minister of Muni tions and Supply, concurred in by the Deputy Minister of Transport. That Order in Council stated, inter alla: "That negotiations have been carried on with the assistance of Indian Affairs Branch of the Department of Mines and Resources for the lease of the lands required, but the negotia tions have not been successful owing to the exces sive rental asked by the Indians".
6. On about August 22, 1940, the Department of Transport, through the Department of Indian Affairs, offered $100 per acre for Parcel A, but suggesting at the same time as a possible alterna tive, a 21-year lease with an annual rental of $5 per acre.
7. On August 27, 1940, Agent Barber presented this proposal to the Indians concerned. Of the eight Indians at the meeting, only one agreed to
accept the offer of $100 per acre. All of the others were adamant in their refusal to accept this pro posal. The alternative lease proposal does not appear to have been canvassed at the meeting.
8. On August 28, 1940, Major MacKay present ed the Indians' case to his superiors in Ottawa. In his letter he made the following points:
(a) Under the proposed lease to the Municipality of Penticton at $6.50 per acre, the Municipality undertook to clear, level and seed the land to suitable hay and allowed the Indians to crop the land as well. This represented a very substantial benefit to the Indians in addition to the annual rental to be paid.
(b) The expropriation is for 153 acres whereas the Penticton lease was only for 72 acres, leaving the hay meadows of the Indian cattlemen. The 153 acres of Parcel A expropriated by the Department of Transport almost covers the entire useful por tion of the land of some of the Indian occupants, thereby seriously impairing their means of livelihood.
(c) As to valuations for Parcel A—In 1920, Indian Agent Ball valued it at $200 per acre; in 1932 the Kettle Valley Railroad paid $300 per acre for similar land in the vicinity; the Provincial Depart ment of Public Works took inferior land for the highway contiguous to Parcel A for $250 per acre in 1929 and for a higher price in 1932.
(d) While Parcel A was originally thought to comprise mostly sandy soil, it was later established that the sand was a superficial layer of about three or four inches underlaid by very good soil, mostly sub-irrigated sufficiently to grow good hay crops.
(e) Proximity to the City of Penticton has given Parcel A an added value to that of mere farm land.
9. In October of 1940, as a result of further negotiations with the Indians, Agent Barber
reported that some of them would now settle at $100 per acre and he recommended that an offer of $110 per acre be made to them.
10. The January 26, 1941 Order in Council and subsequent Orders in Council authorized settle ment for Parcel A at $115 per acre.
Bearing in mind that it is the Crown which owes the fiduciary duty to the Indians, the facts of this case clearly raise the issue of conflict of interest, in my view. It seems evident that two Departments of the Government of Canada were in conflict con cerning the manner in which the Indian occupants of Parcel A should be dealt with. The evidence seems to unquestionably establish that the officials of the Indian Affairs Branch were diligent in their efforts to represent the best interests of the Indian occupants. On the other hand, the Department of Transport was anxious to acquire the additional lands in the interests of air transport. This situa tion resulted' in competing considerations. Accord ingly, the federal Crown was in a conflict of interest in respect of its fiduciary relationship with the Indians. The law is clear that "one who under takes a task on behalf of another must act exclu sively for the benefit of the other, putting his own interests completely aside" and that "Equity fash ioned the rule that no man may allow his duty to conflict with his interest." On this basis, the federal Crown cannot default on its fiduciary obli gation to the Indians through a plea of competing considerations by different departments of Govern ment.
It also seems clear that "provided the trust beneficiary acts with full knowledge of the trust affairs, a sale by him of his interest to a trustee is a valid contract". However, in these circumstances "the onus of proof is on the trustee or fiduciary to show that the beneficiary did indeed have all the
' The above quotations are to be found on pp. 618 and 619 of the Law of Trusts in Canada, Waters, 1974. To the same effect is the case of City of Edmonton v. Hawrelak and Sun-Alta Builders Ltd. et al., [1972] 2 W.W.R. 561 per Kirby J. at pp. 583-592 inclusive (affirmed [1973] 1 W.W.R. 179 (Alta. S.C.)).
relevant information known to the trustee", (if there is relevant information known to neither the trustee nor the beneficiary, presumably this is of no significance) "and the courts are scrupulous in ensuring that no advantage could have been taken of the beneficiary". 2
Based on the above-stated principles, and apply ing them to the facts in this case, I am unable to conclude that the federal Crown acted "exclusively for the benefit" of the Indians in the acquisition of Parcel A. The Indians were unwilling to part with any of their land, other than the 72 acres which they had originally agreed to lease to the Munici pality of Penticton. Their reasons were logical and reasonable. However, they finally and reluctantly agreed to a ten-year lease. The officials in Indian Affairs recommended this lease. This advice was ignored. The reason given was that the amount of rental being asked by the Indians was unreason able. The Department of Transport produced no evidence that the annual rental was unreasonable. As a matter of fact, all of the evidence on the record is to the contrary. The situation is the same with respect to the final settlement at $115 per acre which deprived the Indians of their total interest in these lands. No appraisals were pro duced to support this figure. On the other hand, there was evidence of sales of comparable property many years earlier at prices of $200 to $300 per acre.
In my view, the unmistakable inference to be. drawn from this record is that, in the final deci- sion-making process by the Governor in Council, the views of the Department of Transport pre vailed over the views and representations of the Department of Indian Affairs. Undoubtedly, the Department of Transport had good and sufficient reason for requiring subject lands at an early date for its purposes but that circumstance did not relieve the federal Crown of its fiduciary duty to the Indians. Accordingly, I have no difficulty in concluding that the federal Crown has not dis charged the onus cast upon it to show that no
2 The above quotations are taken from p. 636 of the Law of Trusts in Canada, Waters, 1974.
advantage was taken of the Indians in the transaction.
It follows, in my view, that there was a breach of fiduciary duty in respect of the acquisition of Parcel A.
THE ACQUISITION OF PARCEL B
Heald J. proceeded to exhaustively review the evidence as to Parcel B. Reference was made to the "independent" appraisals in the amounts of $6,831 and $6,810 obtained by the Deputy Minis ter of Transport and that of $16,958 obtained by Indian Affairs. In a letter to the Department of Transport, Indian Affairs submitted that "they [the Indians] are entitled to compensation, in our judg ment, for the complete disruption of this Indian community's way of life and for the cost of re establishing the group where the complete resumption of that way of life may be effected. Owing to their race some opposition to receiving them into available white communities will be encountered and that opposition will be reflected in the price they will have to pay for lands or properties as valuable and as useful to them as those they have been compelled to vacate and give up." In view of those considerations, it was suggested that "the original compensation asked by our informed and competent Indian Agent, Mr. A.H. Barber, and which he fixed at $28,328.00, is not in our judgment excessive". The letter con cluded that if Transport was prepared to raise its bid to about $25,000, "we will try to obtain the concurrence of the Indians". The Deputy Minister of Transport replied that an expenditure of $25,000 could not be justified and that Council's authority to expropriate would be sought.
On January 20, 1944, the Indian Agent reported to the Commissioner that these "people have been very patient and appear to have trusted me to make a settlement that would be fair to them ... they want this money and would accept a ridiculously low price if they were offered cheques in immediate settlement and this is hardly a fair situation for an official to be placed in". The
Agent noted the possibility of having to pay costs if the Indians were unsuccessful in arbitration or Court proceedings.
On January 28, 1944, the Commissioner in a letter to Indian Affairs, Ottawa, inquired whether the claim could be settled at $15,000 plus 10% or $16,500. "These suggestions are born of sheer desperation, the Indians having been deprived of their livelihood for the past year while the Depart ment of Transport by threat of long delayed arbi tration proceedings tied up any possibility of set tlement other than on their terms. No one, including the C.P.R., West Kootenay Power & Light Company, Dominion and Provincial Depart ments of Public Works, had previously questioned valuations of this property amounting in some cases as high as $400.00 per acre, $250.00 to $300.00 being a common price."
On February 24, 1945, Indian Affairs wrote to the Agent suggesting that "we can get $15,000.00 for an amicable settlement" and urging him to call a meeting of the Indians in an attempt to agree on a settlement proposal which would avoid the matter being dealt with by the Exchequer Court. The Agent replied that it was impossible to get these people together at a meeting and that it was unlikely that a satisfactory understanding could be arrived at. But on January 9, 1946, the Agent wrote to his Ottawa Headquar ters that he had met with the Indians and they would accept $15,000 for an immediate settle ment. Transport accepted this offer. The Agent accordingly met with the Indians on February 1, 1946. The vote was: 18 for surrender with 9 opposed. 18 were absent, 10 of these being in the United States. The Agent's report to Indian Affairs contained the following opinion: "I would advise that this meeting was a very difficult one and I have not the least doubt but that, if all members of the Band had been present, or should the surrender be re-submitted to the Band, it will be defeated." An Order in Council was immediately made requiring the surrender and fixing the compensation at $15,000.
Based on the documentary evidence relating to the acquisition of Parcel B, I draw the following inferences and reach the following conclusions:
1. In July of 1942, the Department of National Defence decided to expand the Penticton Airport thus enabling it to serve as an emergency landing field for the West Coast defence system. For this purpose, it was decided to take an additional 120 acres (Parcel B) from the Penticton Indians. The land acquisition cost for Parcel B was estimated at $50 per acre by National Defence.
2. National Defence and/or Transport asked the Department of Indian Affairs to approach the Indians with respect to the acquisition of Parcel B. Indian Affairs agreed to offer "the fullest co-oper ation possible" while at the same time giving full consideration to the interests of the Indians.
3. Without expropriation procedures being instituted and without a surrender of any kind and without any authority from the Indians, Transport commenced work on Parcel B in September of 1942. Meanwhile the officials of Indian Affairs were systematically inquiring of Transport as to when the Indians could expect a settlement in respect of Parcel B. Inquiries were made of Trans port in November of 1942 to no avail. In Decem- ber of 1942, the Indians were anxious to receive at least an advance for Christmas. This request like wise fell on deaf ears.
4. Finally in May of 1943, Transport submitted two appraisals concerning Parcel B. These apprais als both valued Parcel B at approximately $6,800.
5. In November of 1943, Indian Affairs obtained an appraisal of Parcel B which valued it at $16,958.75. However, the officials of Indian Affairs were not prepared to accept this figure. They pointed out that the Indians were entitled to compensation for complete disruption of their way of life and for the cost of re-establishing the group elsewhere. On this basis, Agent Barber fixed a valuation of Parcel B at $28,328 with the senior officials suggesting a compromise offer of $25,000.
6. The proposal was summarily dismissed on December 4, 1943, by Transport with the com ment: "As we cannot justify this expenditure a recommendation is being made to Council for authority to expropriate the land in question and if we are not able to arrive at an amicable settlement for the matter to be referred to arbitration." The Order in Council authorizing expropriation was passed on December 20, 1943.
7. On January 28, 1944, the Indian Commis sioner for British Columbia, in reporting to his Ottawa Headquarters, suggested possible settle ment in the area of from $16,000 to $18,000. He went on to add: "These suggestions are born of sheer desperation, the Indians having been deprived of their livelihood for the past year while the Department of Transport by threat of long delayed arbitration proceedings tied up any possi bility of settlement other than on their terms." He went on to observe that: "No one, including C.P.R., West Kootenay Power & Light Company, Dominion and Provincial Departments of Public Works, had previously questioned valuations of this property amounting in some cases as high as $400.00 per acre, $250.00 to $300.00 being a common price." He also makes reference to "the niggardly attitude of the Department of Trans port". He also observes that the situation with respect to Parcel B clearly illustrates the value of obtaining a firm agreement on price before allow ing the taking party the right of entry and use.
8. On March 9, 1944, some 18 months after Transport took possession of Parcel B and com menced construction thereon, an advance on com pensation in the sum of $6,500 was finally paid.
9. On May 4, 1944, Agent Barber held a meet ing with the Indians where the Indians were very critical of Barber and the Indian Affairs Depart ment for "allowing the lands to be taken before a settlement as to compensation was made".
10. On February 24, 1945, Indian Affairs, Ottawa, wrote to Agent Barber expressing the
view that Transport would likely pay $15,000 for an amicable settlement but if the matter was referred to the Exchequer Court they (Transport) would not offer any such sum "but will offer something in the neighbourhood of $7,000.00 to $8,000.00". Barber was asked to ascertain the Indians' reaction to a $15,000 settlement.
11. Barber replied under date of March 14, 1945, after meeting with the Indians. He reported that seven of the Indian occupants had retained a Vancouver lawyer and they were depending on him to obtain a larger compensation figure as a result of the pending proceedings in the Exchequer Court. Mr. Kruger, the eighth claimant, advised he was prepared to settle on the basis of a total figure of $15,000 for Parcel B.
12. On January 7, 1946, the Indians, at a meet ing on the Reserve, after "a long and at times heated discussion", agreed to settle for $15,000 provided settlement was made expeditiously.
13. Thereupon, Transport agreed and requested Indian Affairs to arrange for the necessary surren der from the Indian Band.
14. Accordingly, a further meeting was held by Barber with the Band on February 1, 1946, to obtain such a surrender. After much discussion and dissent, 18 members voted in favour and 9 members voted against the execution of a surren der. Mr. Barber observed that while a majority of the members present at the meeting voted in favour of surrender, it still did not constitute a majority of the voting strength of the Band since 46 members were eligible to vote. He observed further that if all members of the Band had been present at the meeting, he had "not the least doubt" that the surrender would have been defeat ed. According to Barber, much of the Indians' dissatisfaction arose because they did not under stand why a surrender was necessary in respect of Parcel B when it had not been required in respect of Parcel A. Also they could not understand why
any surrenders were necessary when they had been dispossessed for the past 3 years and repeatedly advised that the Government had expropriated the land.
15. On February 5, 1946, an Order in Council was passed requiring the surrender and fixing the compensation. In that Order in Council, it was for the first time mentioned that the Deputy Minister of Justice gave advice to the effect that the Indi- ans' land could not be taken under the Expropria tion Act [R.S.C. 1927, c. 64] but that transfer could only be effected by a duly-executed surrender.
It is clear, in my view, that the conflict of interest between two Departments of the Govern ment of Canada which was so apparent in the dealings with respect to Parcel A is equally appar ent when the dealings concerning the acquisition of Parcel B are scrutinized. Indian Affairs attempted valiantly to represent the Indians' best interests. On the other hand, National Defence and Trans port were anxious to acquire Parcel B and enlarge the airport. An indication of their seeming indif ference to the plight of the Indians is shown by the initial valuation—only $50 per acre; by the fact that they had possession for some 18 months with out paying the Indians anything on account of compensation; by their rather leisurely approach to negotiations for compensation as compared to their great haste in taking possession and depriving the Indians of their means of livelihood. It seems clear from the evidence that Transport chose to ignore the considered opinions of officials of the Department of Indian Affairs as to value and made little effort to seriously negotiate a settle ment. Their only answer was to expropriate first and then negotiate thereafter. Commissioner MacKay described their tactics most eloquently when he said that his suggestions for settlement were "born of sheer desperation" because of Transport's tactics of delay which frustrated a fair settlement. He also characterized Transport's atti tude as "niggardly". Thus, after being out of possession of Parcel B for more than 3 1 / 2 years, being deprived of their living therefrom, and having received only $6,500 on account of compen-
sation, a minority of the Indians entitled to vote approved the surrender.
On these facts, can it be concluded that, in these negotiations culminating with the acquisition of Parcel B, and settlement of compensation therefor, the federal Crown can be said to have been acting exclusively for the benefit of the Indians? I think not. Likewise, I am not satisfied that there was full disclosure to the Indians of all relevant facts. The evidence establishes that they were kept in the dark for very large periods of time. Their land was taken from them, no offers of compensation were forthcoming in a timely fashion. One can under stand their confusion at the way these matters were being handled. They were told that their land was expropriated, then they were told that, not withstanding the expropriation, they would have to execute a surrender in respect of Parcel B but not in respect of Parcel A. Bearing in mind that the onus is on the Crown to establish that the Indians were in possession of all the relevant information known to it, I have no hesitation in concluding that the Crown has not discharged that onus on these facts. Characteristic of a lack of disclosure, in my view, is the non-disclosure of the opinion of the Deputy Minister of Justice referred to supra given to other officials of the Crown that the Indians' interest in the land could be taken only by surren der and not by expropriation. In view of my agree ment with my brother Urie J. that the expropria tions were legally correct, I do not cite this non-disclosure as a legal impediment to the Crown's actions per se but I think it indicative of the attitude of the Crown's servants outside the Indian Affairs Branch. Their attitude seemed to be that they were not concerned in any way with the welfare of the Indians and were leaving protection of the Indians' interests to the Department of Indian Affairs. That may have been a defensible posture for the officials of other departments to adopt, given their own urgent priorities in wartime. However, the Governor in Council is not able to default in its fiduciary relationship to the Indians on the basis of other priorities and other consider ations. If there was evidence in the record to indicate that careful consideration and due weight had been given to the pleas and representations by
Indian Affairs on behalf of the Indians and, there after, an offer of settlement reflecting those representations had been made, I would have viewed the matter differently. Absent such evi dence, I conclude that, as in the case of Parcel A, there was also a breach of fiduciary duty in respect of the acquisition of Parcel B.
LIMITATION OF ACTION AND LACHES
In my view the breach of fiduciary duty occurred in respect of Parcel A, at the very latest, in approximately January of 1941, when the Orders in Council were passed authorizing settle ment for Parcel A at $115 per acre. In respect of Parcel B, the breach of fiduciary duty occurred, at the very latest, in approximately March and April of 1946, when the compensation of $15,000 for Parcel B was paid to the Indians. The within statement of claim was filed on March 23, 1979, 38 years and 33 years respectively after the causes of action arose.
Subsection 38(1) of the Federal Court Act [R.S.C. 1970 (2nd Supp.), c. 10] provides that: "the laws relating to ... the limitation of actions in force in any province ... apply to any proceed ings in the Court in respect of any cause of action arising in such province". Subsection 38(2) pro vides that: "the laws relating to ... the limitation of actions referred to in subsection (1) apply to any proceedings brought by or against the Crown".
Accordingly, it is necessary to consider the law of British Columbia respecting limitation of actions, at the relevant times. The applicable Stat ute of Limitations in 1941 and 1946, when these causes of action arose, was c. 159, R.S.B.C. 1936. Under that statute, the limitation period for actions relating to real property was stated to be twenty years. However section 38 of that Act provides: "In every case of a concealed fraud, the right of any person to bring a suit in equity for the recovery of any land or rent of which he, or any person through whom he claims, may have been deprived by such fraud shall be deemed to have
first accrued at and not before the time at which such fraud shall or with reasonable diligence might have been first known or discovered". Unlike the Guerin case, the causes of action in the instant case could have been discovered if the appellants had exercised reasonable diligence at the same time the causes of action arose. Putting the appel lants' case at its very highest, the effective dates under this section would be, in the case of Parcel A, January of 1941, and in the case of Parcel B, February of 1946. In both cases then, the limita tion period would have expired long before this action was commenced, if the British Columbia Statute of Limitations of 1936 is applied.
However, there is a restriction placed upon the operation of the 1936 Statute of Limitations by section 83 of the Trustee Act, R.S.B.C. 1936, c. 292. 3 The effect of that section, and the common law is to provide that in cases where the claim (1) is founded upon any fraud or fraudulent breach of trust or (2) is to recover trust property, there is no limitation period for actions by beneficiaries against trustees.
3 Said section 83 reads:
83. (1.) In any action or other proceeding against a trustee or any person claiming through him, except where the claim is founded upon any fraud or fraudulent breach of trust to which the trustee was party or privy, or is to recover trust property, or the proceeds thereof still retained by the trustee, or previously received by the trustee and converted to his use, the following provisions shall apply:—
(a.) All rights and privileges conferred by any Statute of Limitations shall be enjoyed in the like manner and to the like extent as they would have been enjoyed in such action or other proceeding if the trustee or person claiming through him had not been a trustee or person claiming through him:
(b.) If the action or other proceeding is brought to recover money or other property, and is one to which no existing Statute of Limitations applies, the trustee or person claiming through him shall be entitled to the benefit of and be at liberty to plead the lapse of time as a bar to such action or other proceeding, in the like manner and to the like extent as if the claim had been
(Continued on next page)
There may be some doubt as to whether the British Columbia Trustee Act applies to the feder al Crown in light of the views expressed in Guerin that the federal Government was not a trustee but that it had fiduciary obligations which imposed trust-like duties. However, in Guerin the question of a constructive trust did not arise since there was no unjust enrichment in so far as the Crown was concerned. In the case at bar, on my view of the facts, there was unjust enrichment to another ema nation of the federal Crown which might well give rise to a constructive trust in this case. As con structive trustees are defined as trustees in the British Côlumbia Act, I assume, for the purposes of this discussion, that the federal Crown can be considered as a "trustee" within the meaning of section 83. The next question to be answered is whether the appellants' claim comes within either of the two classes noted supra. In so far as the first category is concerned, the Trial Judge said in his reasons (at page 519) that: "The plaintiffs, at trial, expressly abandoned reliance on all pleadings alleging fraudulent conduct." Accordingly, the appellants are not able to bring themselves within the first category referred to supra. The second category relates to actions to recover trust prop erty. In their statement of claim, the appellants have asked for recovery of the property, and, in the alternative, compensation for breach of a fiduciary duty. Since, as noted supra, I have the view that the validity of the expropriation procedures herein are beyond question, the appellants have no basis for an action to recover possession of the trust property itself. That leaves the question as to
(Continued from previous page)
against him in an action of debt for money had and received, but so nevertheless that the Statute shall run against a married woman entitled in possession for her separate use, whether with or without a restraint upon anticipation, but shall not begin to run against any beneficiary unless and until the interest of such benefici ary shall be an interest in possession.
(2.) No beneficiary, as against whom there would be a good defence by virtue of this section, shall derive any greater or other benefit from a judgment or order obtained by another beneficiary than he could have obtained if he had brought such action or other proceeding and this section had been pleaded.
(3.) This section shall apply only to actions or other proceed ings commenced after the first day of January, 1906, and shall not deprive any executor or administrator of any right or defence to which he is entitled under any existing Statute of Limitations.
whether the appellants' alternative claim for com pensation can be said to be an action for "the recovery of trust property" within the meaning of section 83. This question was considered by the Supreme Court of Ontario in the case of McLellan v. Milne & Magee 4 where it was held in relation to a limitation section of the Ontario Act containing almost identical language to section 83, that an action requiring a solicitor to make compensation to his client for a breach of his duty arising out of a fiduciary relationship was not an action to recov er trust property. Such a claim is very similar to the alternative claim in this case. I share the view of McTague J. and, accordingly, have concluded that the appellants' alternative claim for compen sation cannot be characterized as an action for "the recovery of trust property". For all of the above reasons, it is my view that the 1936 B.C. Statute of Limitations, as qualified by the 1936 Trustee Act, did not entitle the appellants to com mence their action in 1979.
However, even if I am in error in the conclusion reached supra that the provisions of section 83 of the 1936 Trustee Act of British Columbia do not operate so as to prevent the commencement of any limitation period, I think that, having regard to the transitional provisions of the Limitation Act of British Columbia of 1975 5 which was in force in 1979 when the action was commenced, the appel lants' claim is statute barred, in any event. That statute came into force on July 1, 1975. Subsection 14(3) thereof provides:
14....
(3) If, with respect to a cause of action that arose before this Act comes into force, the limitation period provided by this Act is shorter than that which formerly governed the cause of action, and will expire on or before July 1, 1977, the limitation period governing that cause of action shall be the shorter of
' [1937] 3 D.L.R. 659 (Ont. S.C.), at p. 671, per McTague J. 5 Limitation Act, R.S.B.C. 1979, c. 236.
(a) 2 years from July 1, 1975; or
(b) the limitation period that formerly governed the cause of action.
Assuming the applicability of the 1936 Trustee Act and assuming that there was no limitation period thereunder applicable to this claim, it would appear, applying subsection 14(3) of the 1975 Act, that the shorter period mentioned in paragraph (a) thereof would apply in this case. Thus, if subsec tion 14(3) of the 1975 Act applies, the limitation period would have expired on July 1, 1977, almost two years prior to this claim being filed.
If, on the other hand, the transitional provisions of the 1975 Limitation Act do not apply, then it is likely that the provisions of sections 8 and 9 of that Act would operate so as to bar the within action. Subsection 8(1) is referred to as an "ultimate limitation" section and provides that:
8. (1) Subject to section 3(3), but notwithstanding ... a postponement or suspension of the running of time under section 6 ... no action to which this Act applies shall be brought after the expiration of 30 years from the date on which the right to do so arose ...
(Section 6 of the said 1975 Limitation Act is similar to section 83 of the 1936 Trustee Act.) Since I do not think the exceptions mentioned in subsection 3(3) apply here (given the validity of the expropriations, this is not a case of trespass), and as at least thirty-three years have passed between the time the cause of action arose and the statement of claim was filed, I accordingly con clude that, pursuant to subsection 8(1) of the governing Limitation Act at the time the action was commenced, the within cause of action is statute barred. Additionally, subsection 9(1) of the 1975 Act provides that on the expiration of the limitation period fixed by the Act, the cause of action is extinguished.
For all the above reasons, it is my reluctant opinion that the appellants' causes of action herein are statute barred. Because of this conclusion, it is unnecessary to consider the defence of laches raised by the respondent.
On this basis, it necessarily follows, in my view, that the appeal should be dismissed with costs.
* * *
The following are the reasons for jugdment rendered in English by
ÃœRIE J.
EDITOR'S NOTE
This is an appeal from the judgment of Mahoney J. dismissing an action arising out of the taking, on two occasions, of lands from an Indian reserve. It was alleged that the defendant had failed to exercise that degree of care, steward ship and prudent management required of a trus tee. The plaintiffs sought a declaration to that effect together with damages.
Parcel A was required by the Department of Transport for an airport as it was in a valley which was one of the few places Trans-Canada Air Lines aircraft could safely land in bad weather in the mountain area. The Indians had earlier agreed to lease 72.56 acres for a municipal airport at a rent of $6.50 per acre per annum plus other consideration. The Department needed 153.8 acres. The Indian Agent, who conducted negotia tions on behalf of the Indians, reported to his superior that they were not in favour of leasing the increased acreage. The Agent, however, got them to agree to lease the land required for 10 years at $10 an acre. The Indians wanted the higher rental since the increased area took in their hay and meadow lands. The Department decided to expropriate Parcel A and offered $100 per acre as compensation. P.C. 659, approved January 29, 1941, fixed the compensation at $115 per acre and a recital in the Order stated that the Indians were content. The compensation was, in fact, accepted by the Indians.
Parcel 8, a further 120 acres, was needed by the Department of National Defence for Air to serve as an emergency landing field of the West Coast defence system. Work on Parcel 8 com menced in September 1942, prior to the land
being expropriated or otherwise acquired. The Indians objected to the taking of possession before payment. Negotiations took place. Expro priation was completed in February 1944. In May, the Indians rejected an offer of an interim pay ment on account of compensation. On January 9, 1946, the Indian Agent reported that they would accept $15,000 if paid immediately and to avoid litigation. On January 14 the Deputy Minister of Transport advised Indian Affairs that the settle ment offer was accepted. But on February 1 the Indian Agent, acting on instructions from his supe riors, convened a meeting to obtain Band consent to the surrender of Parcel B. 28 out of 46 eligible voters had been in attendance and the vote was 18 for surrender with 9 opposed and 1 abstention. The Agent reported that the surrender proposal would have been defeated had all Band members been present. The Agent further reported that the Indians could not understand why they were being requested to surrender land which had been taken from them 3 years previously. He added that it had been embarrassing for him to have to ask them to agree to allow the Depart ment to sell land which had supposedly been expropriated. The surrender was accepted by the Crown and compensation paid. Apparently the reason that the Agent had been told to obtain a surrender was that the Department of Justice had given an opinion that Indian lands could not be expropriated.
The Indians argue that execution of the surren der did not constitute consent to the Crown's breach of fiduciary duty in view of their lack of knowledge as to the legality of the expropriation. A fully-informed consent could not be given to a breach not fully reported by a defaulting fiduciary. It was pointed out that a surrender in respect only of Parcel B was given. The Indians submit that by resorting to expropriation, the Department of Transport prevented Indian Affairs from using the strongest weapon in its arsenal: the right to refuse to sell or lease the land except upon appropriate terms. It was argued that the Crown's fiduciary
duty to the Indians had accordingly been breached.
II
THE ISSUES
The appellants' memorandum of fact and law defines the issues as follows:
1. Does s. 48 of the Indian Act, R.S.C. 1927, Chapter 98, provide a right to the Respondent (hereinafter called the "Crown") to expropriate lands from an Indian reserve? It is submitted it does not.
2. If s. 48 of the Indian Act permits the Crown to expropriate reserve lands, was such jurisdiction properly exercised in the case at bar? The Appellants again submit that this question should be answered in the negative. A threshold question which arose in the reasons of the learned trial Judge, however, is whether or not the Court can enquire into the propriety of the exercise of the jurisdiction. The Appellants submit that it can.
3. Given the finding by the learned trial Judge that the Crown stood as a fiduciary vis-à-vis the Appellants (from which find ing no appeal has been taken by either of the parties), has there been a breach of that fiduciary duty by the Crown, notwith standing whatever powers of expropriation it might have prima fade? The Appellants submit that there has been such a breach, even if this Honourable Court finds that there was a jurisdiction to expropriate the land involved and that the exer cise of that jurisdiction satisfied the relevant statutory require ments. The appellants take this position because the lands at issue are not only subject to the general law regarding Indian reserve lands, but are also subject to the specialized rules regarding trust property in British Columbia. The Crown is, therefore, subject to the rules prohibiting a fiduciary from acquiring trust property for himself or allowing himself to be in a position whereby his personal interests may conflict with his duties as a fiduciary.
4. If there has been a breach of fiduciary duty by the Crown, have the Appellants consented to it so as to absolve the Crown from liability for same? It is submitted that no such consent has been given.
III
THE ARGUMENT
1. Section 48 of the Indian Act
Since the submissions of appellants' counsel as to the scope and applicability of section 48 of the Indian Act, R.S.C. 1927, c. 98 are intertwined, to some extent, with a consideration of section 50 of that Act, it would be convenient to set out both sections hereunder.
48. No portion of any reserve shall be taken for the purpose of any railway, road, public work, or work designed for any public utility without the consent of the Governor in Council,
but any company or municipal or local authority having statu tory power, either Dominion or provincial, for taking or using lands or any interest in lands without the consent of the owner may, with the consent of the Governor in Council as aforesaid, and subject to the terms and conditions imposed by such consent, exercise such statutory power with respect to any reserve or portion of a reserve.
2. In any such case compensation shall be made therefor to the Indians of the band, and the exercise of such power, and the taking of the lands or interest therein and the determination and payment of the compensation shall, unless otherwise pro vided by the order in council evidencing the consent of the Governor in Council, be governed by the requirements appli cable to the like proceedings by such company, municipal or local authority in ordinary cases.
3. The Superintendent General shall, in any case in which an arbitration is had, name the arbitrator on behalf of the Indians, and shall act for them in any matter relating to the settlement of such compensation.
4. The amount awarded in any case shall be paid to the Minister of Finance for the use of the band of Indians for whose benefit the reserve is held, and for the benefit of any Indian who has improvements taken or injured. R.S., c. 81, s. 46; 1911,c. 14, s. 1.
50. Except as in this Part otherwise provided, no reserve or portion of a reserve shall be sold, alienated or leased until it has been released or surrendered to the Crown for the purposes of this Part; but the Superintendent General may lease, for the benefit of any Indian, upon his application for that purpose, the land to which he is entitled without such land being released or surrendered, and may, without surrender, dispose to the best advantage, in the interests of the Indians, of wild grass and dead or fallen timber.
2. The Governor in Council may make regulations enabling the Superintendent General without surrender to issue leases for surface rights on Indian reserve, upon such terms and conditions as may be considered proper in the interest of the Indians covering such area only as may be necessary for the mining of the precious metals by any one otherwise authorized to mine such metals, said terms to include provision of compen sating any occupant of land for any damage that may be caused thereon as determined by the Superintendent General.
Counsel for the appellants argued forcefully that the Indian Act, 1927 confers no jurisdiction on the Crown to expropriate Indian reserve lands. He said that section 48 precludes any compulsory taking, for the purpose of a "public work", without the prior consent of the Governor in Council. As he interpreted the section, it provides that, on the obtaining of such consent, "any company or municipal or local authority having statutory power, either Dominion or provincial" to expropri-
ate lands may expropriate reserve lands, subject to any restrictions imposed by the consent. Nowhere did counsel find in the section an express or implied provision conferring on the Crown, as distinct from companies or authorities having a statutory power to take, the jurisdiction to take reserve lands.
Moreover, he contended, even if the Crown, on consent, is entitled to expropriate it can only do so pursuant to the Expropriation Act, R.S.C. 1927, c. 64, in respect of a "public work" as that term is defined in paragraph 2(g) of that Act, which does not include airports. That definition reads as follows:
2. In this Act, unless the context otherwise requires,
(g) "public work" or "public works" means and includes the dams, hydraulic works, hydraulic privileges, harbours, wharfs, piers, docks and works for improving the naviga tion of any water, the lighthouses and beacons, the slides, dams, piers, booms and other works for facilitat ing the transmission of timber, the roads and bridges, the public buildings, the telegraph lines. Government railways, canals, locks, dry-docks, fortifications and other works of defence, and all other property, which now belong to Canada, and also the works and proper ties acquired, constructed, extended, enlarged, repaired or improved at the expense of Canada, or for the acquisition, construction, repairing, extending, enlarging or improving of which any public moneys are voted and appropriated by Parliament, and every work required for any such purpose, but not any work for which the money is appropriated as a subsidy only;
As to the latter argument, the learned Trial Judge, after quoting paragraph 2(g) in full and emphasizing the portion underlined above, dealt with it as follows [at page 515]:
The portion of the definition which I have emphasized is clearly severable from the particular works enumerated before it and is not intended to be limited to works similar to those enumer ated. Recitals in the pertinent Orders in Council, exs. P-44 as to Parcel "A" and P-46 as to Parcel "B", make clear that public moneys had been voted and appropriated for their acquisition. The Aeronautics Act, R.S.C. 1927, c. 3 [now R.S.C. 1970, c. A-3], provided:
3. It shall be the duty of the Minister
(c) to construct and maintain all Government aerodromes and air stations, including all plant, machinery and buildings necessary for their efficient equipment and upkeep;
Airports were, at the relevant time, public works within the contemplation of the Expropriation Act. Furthermore, subse quent decisions make clear that once land was taken, as were both Parcels "A" and "B", by the procedure of recording the appropriate documents in the Land Titles Office under s. 9 of the Expropriation Act, it was not open to question that it had been taken for a "public work" ....
I agree with this reasoning and conclusion so that it is unnecessary for me to elaborate upon it.
I turn now to the more difficult aspect of the argument based on subsection 48(1) of the Indian Act which I suspect did not receive the attention of counsel before the Trial Judge that it did in this Court. On an initial reading, counsel's argument, supra, has considerable force particularly when read with subsection (2). It will be noted that that subsection commences with the words "In any such case" which obviously refer to a case envisaged by the wording of subsection (1). At first blush a case of that kind would mean where "any company or municipal or local authority having statutory power ... for taking or using lands ... with the consent of the Governor in Council as aforesaid" (emphasis added) exercised such statutory power with respect to the taking of any reserve or portion of a reserve. The words "as aforesaid" must relate to the first words in the subsection, namely "No portion of any reserve shall be taken for the purpose of any ... public work ... without the consent of the Governor in Council". The only limiting factor relating to the "taking" body in those words, so far as this case is concerned, is that the taking must be for the purpose of a "public work". It is not until after the word "but" that there is reference made to specific bodies having "statutory power ... for taking".
If the meaning to be ascribed to the subsection is that for which the appellants contend, why did the draftsman deem it necessary by the balance of the subsection to limit the generality of the first three lines in it by specifying bodies other than the Crown who had the power of compulsory taking?
Surely it was to distinguish the position of such corporations or authorities from that of the Crown by enabling the imposition of "terms and condi tions" in the consent. Read that way, the interpre tation of the subsection given by the Trial Judge in the following passage [at page 516] appears to be supported and correct:
The fundamental provision of s-s. 48(1) is that no compulsory taking may be effected without the required consent; the balance of the subsection amplifies, rather than limits, that requirement, making clear that the consent may be given to any private or public authority and that conditions may be imposed. It would be an odd result indeed, if, under s-s. 48(1), the Governor in Council, without the concurrence of a band in surrendering reserve lands, could consent to another expropriat ing authority taking those lands but could not so consent when the expropriating authority was the Crown in right of Canada itself.
Provisions in a statute should, of course, be construed in the context in which they appear. That being so, subsection (2) of section 48 cannot be ignored. Not only does the subsection com mence with the words "In any such case", which can only be referable to subsection (1), but the last three lines thereof refer to the determination of the compensation payable on a taking of lands which shall "be governed by the requirements applicable to the like proceedings by such company, munic ipal or local authority in ordinary cases" (empha- sis added). Those are the bodies referred to in the latter part of subsection (1) as having the statutory power to take lands. How then is the construction of subsection (1) given by the Trial Judge affected by the limited scope of the directions as to the determination of compensation given by subsection ( 2 )?
To assist in answering that question it is neces sary, in my view, to examine the legislative history of section 48. The first appearance of its predeces sor was in The Railway Act, 1868 [31 Vict., c. 68], as section 37. The wording was considerably different from the section here under review. It continued in virtually the same language in The Consolidated Railway Act, 1879, 42 Vict., c. 9, s. 37.
In The Indian Act, 1880, 43 Vict., c. 28, there appeared section 31 which differed from section 37
of the 1879 Railway Act, as shown in the under lined portions of the section set out hereunder:
31. If any railway, road or public work passes through or causes injury to any reserve belonging to or in possession of any band of Indians, or if any act occasioning damage to any reserve be done under the authority of any Act of Parliament, or of the Legislature of any Province, compensation shall be made to them therefor in the same manner as is provided with respect to the lands or rights of other persons; the Superinten- dent-General shall, in any case in which an arbitration may be had, name the arbitrator on behalf of the Indians, and shall act for them on any matter relating to the settlement of such compensation; and the amount awarded in any case shall be paid to the Receiver-General for the use of the band of Indians for whose benefit the reserve is held, and for the benefit of any Indian having improvements thereon.
For the first time the Indians became entitled to compensation not only when railways passed through their reserve but when any "road or public work" did so. As will be noted, provision was made for the appointment of an arbitrator and for the disposition of an award of compensation. Sections 36 and 37, it should be pointed out, provided for the cases in which a release or surrender of Indian lands was required before they could be sold, alienated or leased. They were predecessor sections to section 50 of the Indian Act, 1927, supra.
In the Revised Statutes of Canada, 1886 [c. 43], section 31 became section 35 [of The Indian Act] (virtually unchanged from the 1880 Act) and sec tions 36 and 37 became sections 38 and 39. By an amendment in 1886, the underlined words were added to section 35 which became section 46 of the Revised Statutes of Canada, 1906 [c. 81].
46. No portion of any reserve shall be taken for the purposes of any railway, road or public work without the consent of the Governor in Council, and, if any railway, road, or public work passes through or causes injury to any reserve, or, if any act occasioning damage to any reserve is done under the authority of an Act of Parliament or of the legislature of any province, compensation shall be made therefor to the Indians of the band in the same manner as is provided with respect to the lands or rights of other persons.
2. The Superintendent General shall, in any case in which an arbitration is had, name the arbitrator on behalf of the Indians, and shall act for them in any matter relating to the settlement of such compensation.
3. The amount awarded in any case shall be paid to the Minister of Finance for the use of the band of Indians for
whose benefit the reserve is held, and for the benefit of any Indian who has improvements taken or injured.
Two things should be noted. First, the under lined words are identical to those appearing in all subsequent versions of the Act and in particular, in the first three lines of section 48 of the Indian Act, 1927, although the balance of the section is sub stantially different in that section. Second, subsec tions (2) and (3) are identical with subsections (3) and (4) of the 1927 Act.
Section 46 was repealed in 1911 and was replaced by the following as it appeared in 1-2 Geo. V, c. 14, s. 1:
46. No portion of any reserve shall be taken for the purpose of any railway, road, public work, or work designed for any public utility without the consent of the Governor in Council, but any company or municipal or local authority having statu tory power, either Dominion or provincial, for taking or using lands or any interest in lands without the consent of the owner may, with the consent of the Governor in Council as aforesaid, and subject to the terms and conditions imposed by such consent, exercise such statutory power with respect to any reserve or portion of a reserve; and in any such case compensa tion shall be made therefor to the Indians of the band, and the exercise of such power, and the taking of the lands or interest therein and the determination and payment of the compensa tion shall, unless otherwise provided by the order in council evidencing the consent of the Governor in Council, be governed by the requirements applicable to the like proceedings by such company, municipal or local authority in ordinary cases.
There were several noteworthy changes:
(1) the words commencing with "but" in line 4 which are all new;
(2) the use of the word "but" rather than the conjunction "and";
(3) the inclusion of the additional words, following a semi-colon, "and in any such case compensation shall be made therefor to the Indians of the band" to the end of the section.
The significance of these changes are, as I see it, the following:
(1) the use of the word "but" by the draftsman was to distinguish the requirements for expropria tion by a body, other than the Crown, having the statutory power of compulsory taking, by import-
ing the procedures for expropriation applicable to them by their constituent statutes, into the Indian Act and, as well, by enabling terms and conditions to be imposed by the Governor in Council in giving his authority to such a body to expropriate reserve lands. No such power of limitation was imposed in the earlier words in the section. Since the only body having the power of compulsory taking other than a company, municipal or local authority having such power to expropriate conferred on it by either the Dominion or provincial Crown, was the Crown in the right of Canada, the first three lines of the subsection must relate to it;
(2) the latter part of the subsection dealing with compensation, opening with the words "and in any such case", obviously refer to the authorities having the statutory power "for taking or using lands ... without the consent of the owner".
In my view, this analysis of section, 46 assists greatly in construing section 48 of the 1927 Act. My observations respecting section 46 continue to apply to the interpretation of section 48 because the wording is, with the exception to which I will hereunder refer, identical. Moreover, the relevance of subsection (2) of section 48, supra, in that interpretation is clarified. That subsection is in precisely the same language as section 46 after the words "and in any such case" with the deletion of the conjunction "and". What happened was that section 46 was simply divided into two subsections. Since, as I see it, the words following "and in any such case" in section 46 clearly applied only to bodies having the statutory power to expropriate, the same must be true after the section was renumbered if a coherent construction of the sub section is to be found.
My view that this is the correct interpretation to be given subsection (1) of section 48 is reinforced by noting that subsections (3) and (4) of that section appeared in identical terms as subsections (2) and (3) in the 1906 version of the Indian Act and appear to have continued in such terms as subsections (2) and (3) of section 46 of the 1911
amending Act because only subsection (1) was repealed and substituted for in that Act. Since those subsections apply "in any case in which an arbitration is had", they would appear to apply to those companies and authorities which have a statutory power to expropriate and whose constitu ent statutes provide for arbitration. I have not found, nor were we referred to any section in the 1927 Indian Act, providing for arbitration. That being so, it seems that two separate expropriating procedures were contemplated by subsection (1) of section 48, i.e., one where the federal Crown was expropriating and the second where other statutory powers were being exercised.
I am further of the view that, contrary to what was submitted by counsel for the appellants, sec tion 50, supra, does not require in all cases in which the Crown is to be the transferee of Indian reserve lands that a release or surrender to the Crown be obtained from the Indians. Section 50 clearly applies to cases where reserve lands are to be "sold, alienated or leased". As I see it, a release or surrender by the Indians to the Crown must be obtained if it is proposed to sell or lease such lands to a third party. This enables the Crown to ensure that its obligations to the Indians are protected. That may be so, counsel agreed, but the use of the word "alienated" would encompass an expropria tion of reserve lands by the Crown.
I do not agree. In its context, the word "alienat- ed" is neither used in its technical sense nor does it apply on the facts of this case. In that sense Armour C.J. in Meek v. Parsons et al. (1900), 31 O.R. 529 (Div. Ct.) quoting from Masters v. Madison County Mutual Ins. Co. (1852), 11 Barb. 624 (N.Y. App. Div.), said [at page 533]:
The word, "alienate," has a technical legal meaning, and any transfer of real estate, short of a conveyance of the title, is not an alienation of the estate. No matter in what form the sale may be made, unless the title is conveyed to the purchaser, the "estate" is not alienated.
That being so, while it might have been argued otherwise had the facts been different, in the cir cumstances of this case, because of the opening words of section 50, viz., "Except as in this Part
otherwise provided" an alienation (if an expropria tion does create an alienation in the technical sense) resulting from an expropriation pursuant to section 48 (which is included "in this Part") was excluded from the requirements of release or sur render which might otherwise have prevailed. In my opinion, therefore, compliance with section 50 is not required where reserve lands are expropriat ed pursuant to section 48 of the Indian Act.
Counsel for the appellants found support for his submissions in Point v. Dibblee Construction Co. Ltd., et al., [1934] O.R. 142 (H.C.), at pages 151 and 152. The passage upon which he relied reads as follows:
The legal title to the land set apart by treaty or otherwise for the use or benefit of a particular band of Indians is in the Crown. The tenure of the Indians is a personal and usufructu- ary right, dependent upon the good will of the Sovereign. They have no equitable estate in the lands: Attorney-General for Quebec v. Attorney-General for Canada, [1921] 1 A.C. 401; Reg. v. St. Catharines Milling and Lumber Co. (1885), 10 O.R. 196, affirmed (1886), 13 A.R. 148, (1887), 13 S.C.R. 577, (1889), 14 App. Cas. 46. For the history of the public lands of Ontario and the Canadian policy upon Indian ques tions, see the classic judgment of Boyd, C., in 10 OR., at p. 203, and the Report on the Affairs of the Indians in Canada (1842) Appendix E.E.E. of the Journals of the Legislative Assembly of the Province of Canada, vol. 4. The land compris ing Cornwall Island is the property of His Majesty the King in the right of the Dominion of Canada (The British North America Act, 1867, 30 Vic., ch. 3 (Imp.), sec. 91(24); The King v. Easterbrook, [1929] Ex. C.R. 28, affirmed [1931] S.C.R. 210). And that is the reason why no release or surrender by the Indians of any reserve or portion of a reserve to any person other than His Majesty is valid (secs. 50 to 54). This being so, how can the prerogative right of the Crown to deal with its own property be fettered? No provision or enactment in any Act shall affect, in any manner whatsoever, the rights of His Majesty, his heirs or successors, unless it is expressly stated therein that His Majesty shall be bound thereby (The Interpre tation Act, R.S.C. 1927, ch. 1, sec. 16).
There is, in my reading of The Indian Act, R.S.C. 1927, ch. 98, no limitation upon this prerogative right. The provisions of sec. 48, whereby no portion of any reserve shall be taken for the purpose of any railway, road, public work, or work designed for any public utility without the consent of the Governor in Council, and the compulsory taking by any company or munic ipal or local authority having the statutory power is regulated, refer, obviously, to the case where land is taken away or withdrawn from the reserve and the title to the land so taken passes from the Crown to the company, municipal or local authority concerned. [Emphasis added.]
Far from supporting the appellants' interpreta tion of subsection 48(1) as I read the excerpt, it appears to support that of the Trial Judge, which as I have said earlier herein, is consonant with my construction of the subsection.
For all of the foregoing reasons, I am of the opinion that the appellants fail on the first ground of their appeal.
2. Review of Expropriation
This issue, as defined by appellants' counsel is, if section 48 of the Indian Act permitted the Crown to expropriate reserve lands, was such jurisdiction properly exercised in the case at bar? The thrust of this argument is that the Court is entitled to examine not only the expressed purpose for the expropriation but the actual reason therefor. In counsel's submission the dominant purpose for the expropriations was not that expressed in either Order in Council P.C. 3801 (to construct public work, namely, an airport at Penticton) nor in P.C. 9696 (to further develop the Penticton airport as a public work), but rather for the beneficiaries of a fiduciary relationship (the Penticton Indian Band) to deliver up Parcels A and B at prices which suited the fiduciary notwithstanding that they were not satisfactory to the beneficiaries. Counsel argued in his memorandum that "had it been necessary to expropriate land for the establishment of an airport, the Crown could have exercised its powers against non-Indian land on the river bank opposite the relevant Indian lands. The price which would have had to be paid for such alternate land, however, would have been higher than that at which the Crown hoped to obtain the reserve lands." Such motivation, he said, fails to satisfy the "dominant purpose" test thus entitling this Court to review the exercise of the Crown's juris diction, if any, to expropriate reserve lands. The test upon which he relied he found in the decision of the Nova Scotia Supreme Court Trial Division in Warne v. The Province of Nova Scotia, Aker- ley, Jamerson, Henry and Kinsman (1970), 1 N.S.R. (2d) 150, at pages 152-153.
Before reviewing that authority, it should be said that there is neither any direct nor indirect evidence which I have found disclosed in the record which might attribute to the Crown the motive for the expropriation suggested by the appellants. At its very highest the record is replete with evidence that when the Department of Trans port concluded that it could no longer hope to negotiate with the Indian Affairs Branch valua tions for Parcels A and B which it could justify and, given the urgency, in the case of Parcel B, for enlarging the runways at the airport for defence purposes, it decided the only course open to it was to expropriate the lands. It is a very long step, indeed, to proceed from that factual situation to one which ascribes to the respondent the motive that the Departmental officials deliberately acquired the Indian lands in preference to those of non-Indians because they could be acquired at lower prices. As I have said I could find no evi dence to support such a contention. In fact, there is substantial evidence that the lands were desired because they were the most suitable for the pur poses for which they were required.
I turn now to the Warne case. The key passage in that decision, as I appreciate it, is the passage which appears at page 152 of the report where Cowan C.J.T.D., after reviewing cases examining the power of a court to inquire into the exercise by a Minister of his statutory power to expropriate, said:
In my opinion, however, the exercise of the discretion referred to in the foregoing cases was one which was for a purpose contemplated by the statute under consideration. If the predominant purpose of the expropriation is in furtherance of a tortious conspiracy to injure the owner of the land taken, the action of the Minister is, in my opinion, subject to review by the Court.
Here I have been unable to find the slightest evidence that the "predominant purpose" of the expropriation was in furtherance of a "tortious conspiracy to injure the owner of the land". Undoubtedly the Department of Transport, having been unable to negotiate what they deemed to be suitable prices for the lands, obtained authoriza tion to expropriate. That had the effect of limiting the options available to the Indians in that they were unable then to elect not to sell or lease their lands. All they could do was negotiate the compen-
sation. However, that is a far cry from attributing to the Department the predominant purpose attributed to it by the appellants.
Since that was the only test of the five pro pounded in the Warne case which was relied upon by the appellants, it is unnecessary to further examine the applicability of that case. The second ground of appeal in my view, therefore fails.
3. Breach of Fiduciary Duty
The appellants' attack on the basis that the respondent was in breach of Her fiduciary duty to the Penticton Band, was three-pronged:
(a) Although the relationship between the Band and the respondent was that of a fiduciary requir ing Her to deal with lands occupied by Indians for their benefit rather than that of a trustee and cestui que trust, the rules applicable to conflicts of interest of trustees are, it was said, equally appli cable to fiduciaries. Therefore, since a trustee is liable for breach of trust if he deals with property for his own interest in preference to that of his cestui que trust, so will a fiduciary be liable to those for whom he is responsible in the fiduciary relationship, in this case the Indians of the Pentic- ton Band;
(b) The respondent failed to exercise the degree of care expected of a fiduciary when Her officials failed to consider the peculiar value and impor tance of Parcels A and B to the Band and its locatees in determining the compensation payable to them;
(c) The Crown in failing to ensure that the Indians of the Penticton Band were fully informed of the opinion acquired by the Crown relating to the inability of the Crown to expropriate reserve lands and that they may be acquired only after a surren der by the Indians, was in breach of its fiduciary duty of full disclosure.
Before dealing with these attacks it should be pointed out that the Trial Division decision, which was delivered on July 9, 1981, was rendered before
the judgment of the Supreme Court of Canada in Guerin et al. v. The Queen et al. (judgment ren dered November 1, 1984, [1984] 2 S.C.R. 335). That judgment will be referred to hereinafter as the Guerin case. To appreciate its significance in the context of the three attacks above referred to, the decision should be reviewed in some depth.
The headnote sufficiently sets forth the facts as follows [at page 335]:
An Indian Band surrendered valuable surplus reserve lands to the Crown for lease to a golf club. The terms obtained by the Crown, however, were much less favourable than those approved by the Band at the surrender meeting. The surrender document did not refer to the lease or disclose the terms approved by the Band. The Indian Affairs Branch officials did not return to the Band for its approval of the revised terms. Indeed, they withheld pertinent information from both the Band and an appraiser assessing the adequacy of the proposed rent. The trial judge found the Crown in breach of trust in entering the lease and awarded damages as of the date of the trial on the basis of the loss of income which might reasonably have been anticipated from other possible uses of the land. The Federal Court of Appeal set aside that judgment and dismissed a cross-appeal seeking more damages.
At pages 375-376 of the reasons of Dickson J. (as he then was), speaking for himself and Beetz, Chouinard and Lamer JJ. (all other members of the Court concurred in the result) had this to say of the Crown's obligations to the Indians:
... it is my view that the Crown's obligations vis-à-vis the Indians cannot be defined as a trust. That does not, however, mean that the Crown owes no enforceable duty to the Indians in the way in which it deals with Indian land.
In my view, the nature of Indian title and the framework of the statutory scheme established for disposing of Indian land places upon the Crown an equitable obligation, enforceable by the courts, to deal with the land for the benefit of the Indians. This obligation does not amount to a trust in the private law sense. It is rather a fiduciary duty. If, however, the Crown breaches this fiduciary duty it will be liable to the Indians in the same way and to the same extent as if such a trust were in effect.
The fiduciary relationship between the Crown and the Indi- ans has its roots in the concept of aboriginal, native or Indian title. The fact that Indian bands have a certain interest in lands does not, however, in itself give rise to a fiduciary relationship between the Indians and the Crown. The conclusion that the Crown is a fiduciary depends upon the further proposition that the Indian interest in the land is inalienable except upon surrender to the Crown.
An Indian Band is prohibited from directly transferring its interest to a third party. Any sale or lease of land can only be carried out after a surrender has taken place, with the Crown then acting on the Band's behalf. The Crown first took this responsibility upon itself in the Royal Proclamation of 1763. It is still recognized in the surrender provisions of the Indian Act. The surrender requirement, and the responsibility it entails, are the source of a distinct fiduciary obligation owed by the Crown to the Indians. [Emphasis added.]
Mr. Justice Dickson then discussed the nature of Indian title to reserve lands and concluded that either characterizing it as a beneficial interest of some sort or a personal, usufructary right was not quite accurate. Rather he said at page 382:
Indians have a legal right to occupy and possess certain lands, the ultimate title to which is in the Crown. While their interest does not, strictly speaking, amount to beneficial owner ship, neither is its nature completely exhausted by the concept of a personal right. It is true that the sui generis interest which the Indians have in the land is personal in the sense that it cannot be transferred to a grantee, but it is also true, as will presently appear, that the interest gives rise upon surrender to a distinctive fiduciary obligation on the part of the Crown to deal with the land for the benefit of the surrendering Indians. These two aspects of Indian title go together, since the Crown's original purpose in declaring the Indians' interest to be inalien able otherwise than to the Crown was to facilitate the Crown's ability to represent the Indians in dealings with third parties. The nature of the Indians' interest is therefore best character ized by its general inalienability, coupled with the fact that the Crown is under an obligation to deal with the land on the Indians' behalf when the interest is surrendered. Any descrip tion of Indian title which goes beyond these two features is both unnecessary and potentially misleading. [Emphasis added.]
It should be noted that in the above passages from his judgment, Dickson J. says that "The surrender requirement ... [is] the source of a distinct fiduciary obligation", that the interest of the Indians "gives rise upon surrender to a distinc tive fiduciary obligation" and that "the Crown is under an obligation to deal with the land on the Indians' behalf when the interest is surrendered" (emphasis added). At page 383 he stated "In the present appeal its [the fiduciary obligation] rele vance is based on the requirement of a "surrender" before Indian land can be alienated" (emphasis added). Lastly, at page 385, Mr. Justice Dickson said, "When, as here, an Indian Band surrenders its interest to the Crown, a fiduciary obligation takes hold to regulate the manner in which the
Crown exercises its discretion in dealing with the land on the Indians' behalf" (emphasis added).
From the foregoing, it is clear that what was said by Dickson J., in the Guerin case was related to a fiduciary relationship in the context of that case, i.e., where there was a surrender of Indian lands to the Crown on certain terms, which terms were changed by the Crown without consultation with or approval by the Indians. That is not the factual situation in the case at bar. Nevertheless, for the purposes of this appeal I am prepared to accept that the principle propounded by Dickson J., applies. When the Crown expropriated reserve lands, being Parcels A and B, there would appear to have been created the same kind of fiduciary obligation, vis-à-vis the Indians, as would have been created if their lands had been surrendered. The precise obligation in this case was to ensure that the Indians were properly compensated for the loss of their lands as part of the obligation to deal with the land for the benefit of the Indians, just as in the Guerin case, the obligation was to ensure that the terms of the lease were those agreed to by the Indians as part of the general obligation to them to ensure that the surrendered lands be dealt with for their use and benefit. How they ensured that lies within the Crown's discre tion as a fiduciary and so long as the discretion is exercised honestly, prudently and for the benefit of the Indians there can be no breach of duty.
Before dealing with the attacks based on the alleged breach of fiduciary duty, it should be observed that there was virtually no viva voce evidence adduced to support the allegations of breach of duty. Of two witnesses called by the appellants at trial for the purpose of proving the allegations, only one, Louise Gabriel, was old enough to have participated in any of the Band meetings concerning the taking of the airport lands. While she was old enough to have par ticipated, she, as a woman, was not entitled to attend Band meetings nor to vote on questions there raised. That situation did not change until the late 1940's after the relevant events in this case had occurred. Neither was she a locatee on either
Parcel A or B, although her husband had an interest in an estate, part of the property of which was in Parcel A. She could only testify that the expropriation disrupted Band life in many ways.
The second witness in respect of this issue, Morris Kruger, is one of the appellants herein and is the present Chief of the Band, was born in the early 1940's and, thus, has no memory of any of the events surrounding the expropriation.
None of the locatees alive at the time of trial, if any, were called as witnesses. The Indian Agent, Mr. Barber was then dead so that the allegations must be established through the documentary evidence.
I turn now to the attacks based on the alleged breach of fiduciary duty.
(a) Assuming, without deciding, that the rules applying to conflicts of interest between trustees and their cestuis que trust apply to fiduciaries, what was found by the learned Trial Judge is most pertinent. At page 519 of his reasons:
The plaintiffs, at trial, expressly abandoned reliance on all pleadings alleging fraudulent conduct.
Among the terms of the trust is s-s. 48(1) of the Indian Act. Parliament cannot have intended that the Governor in Council consider only the best interests of the band concerned in deciding whether or not to consent to an expropriation of reserve lands. It is rarely in the best interests of an occupant to be dispossessed or of an owner to be deprived of his property against his will. Certainly, here, it was not in the best interests of the Band.
The defendant's duty to the Band, as trustee, was by no means the only duty to be taken into account. The evidence is clear that those officials responsible for the administration of the Indian Act urged a lease while those responsible for the airport ultimately urged expropriation. The Governor in Coun cil was entitled to decide on the latter. There was no breach of trust in doing so.
The defendant, as trustee, had also the obligation to obtain proper compensation for the Band. Since the time has long since passed that the compensation paid and accepted could be reviewed in Court, there is little to be said on the subject.
I agree with these findings. There was no breach of the fiduciary obligation of the Crown based on the alleged conflict existing between two of its Departments—Mines and Resources, Indian Affairs Branch, and Transport. In fact, the record contains many letters involving particularly the Indian Agent and his superior, the Indian Com missioner for British Columbia, which revealed that they were articulate, forceful and passionate spokesmen for the Penticton Indians. Their supe rior in Ottawa, the Secretary of the Indian Affairs Branch, also was a strong advocate in advancing the views of the Indians as to the proper compen sation payable as a matter of rent, as a purchase price for the property or for the expropriation thereof. Their views did, in fact, influence those of the senior officials in the Department of Transport with whom they dealt since their original offers of compensation for the expropriation were increased because of the representations. In fact, the sum of $15,000 was substantially closer to the independ ent evaluation obtained by the appellants than to those obtained by the respondent. Moreover, as the Trial Judge pointed out, the Transport officials, too, owed a duty in the performance of their functions, not a direct duty to the Indians but a duty owed to the people of Canada as a whole, including the Indians, not to improvidently expend their moneys. Ultimately a decision had to be taken which, unfortunately, may not have been wholly in accord with the view of the Indians as to the worth of their lands to them although, as earlier pointed out, the settlement figure was one which was originally suggested by them. (See letter from Barber dated January 9, 1946.) That fact does not mean that there was a breach of fiduciary duty nor that there was a conflict of interest which had to be resolved in their favour, disregarding the obligations of the Department of Transport officials. To summarize, I do not under stand how it could be said that there was a conflict of duty precluding the Indian Affairs Branch from settling the compensation at a figure which was not wholly satisfactory to the Indian Band when all of the circumstances relating to the transac tions were taken into account.
(b) With respect to the second attack, supra, there is no doubt in my mind that the Indian Affairs officials were fully cognizant of the "peculiar value and importance" of Parcels A and B to the Indians.
His Lordship made reference to certain corre spondence which demonstrated that the Indian Affairs officials were aware of the importance of Parcels A and B to the Band and that this had been communicated in a forceful manner to the Deputy Minister of Transport.
In summary, then, without reviewing all of the evidence in detail, a fair reading of the record indicates that officials at all levels were well aware of their respective obligations and discharged them to the best of their abilities. Valid criticism might be directed to the inordinate length of time required to make payment of the compensation but I do not conceive that to be a breach of duty sufficient to invalidate the expropriation.
(c) With respect to the alleged failure of the Indian Affairs officials to disclose to the Band the opinion of the Deputy Minister of Justice that Parcel B could not be expropriated, the Trial Judge found as follows [at pages 519-520]:
I accept that the present plaintiffs were not aware of that opinion until the research leading to the bringing of this action disclosed it but the evidence does not satisfy me that those at the meeting were not informed. In reporting on the meeting, the Indian agent, Alfred H. Barber, who died in 1960, wrote, ex. P-49, as follows:
I would advise that this meeting was a very difficult one and I have not the least doubt but that, if all members of the Band had been present, or should the surrender be resubmit ted to the Band, it will be defeated.
The Indians do not understand just why they are required to surrender these parcels of land when the land has been taken from them for the past three years and they have been repeatedly told that the land had been expropriated by the Government. Also they point out very forcibly that there was no surrender submitted to them for the land taken previously. It will be realized that I was in an unfortunate position in having to ask them to agree to allow the Department to sell this land when I have for the past three years been telling them that the land was expropriated, and that there was no possibility of the land being returned to them.
That is open to a number of interpretations but, on all the evidence, Barber's consistent sympathy for the position of the Band and his outspoken advocacy of its interests is so apparent that I cannot conceive that he withheld any information from
the meeting, provided he had that information himself. It is not clear that he knew of the opinion but, on the evidence, I must hold that the onus of proving the information was withheld has not been discharged.
I can only say that, in my opinion, the finding was a reasonable inference to be drawn from the known facts. Unfortunately, it was simply not possible for viva voce evidence to be adduced by Mr. Barber, who is now deceased, or from any of the Indians who were actually present at the "sur- render" meeting. The best evidence is from the Barber report referred to in the above excerpt in the reasons of the Trial Judge, written shortly after the meeting (the report was dated February 4, 1946). Having read and re-read Mr. Barber's many reports and his quite apparent understanding of and sympathy for the Indians, I can only conclude that he would have disclosed everything of which he was aware in respect of the requirement of a surrender. The letter from the Director of Indian Affairs, dated January 18, 1946 instructing Mr. Barber to call a meeting of the Band for the purpose of considering a surrender refers to a telegram which is not part of the record. I can only assume that in order for him intelligent ly to discuss the necessity for the surrender, he would have been advised of the basis for the requirement. And, of course, as pointed out by the learned Trial Judge, the onus for proving the alleged lack of communication of the existence of the opinion, where, on a fair appraisal of the evidence, a prima facie case had been made out, that it had been, must lie with those who allege it. They have failed to discharge that onus.
Even if this were not so, since the property had already been expropriated on February 17, 1944, and since, as I have found, the expropriation of reserve lands was a valid one pursuant to section 48 of the Indian Act, 1927, the surrender was both superfluous and a nullity. I agree with the Trial Judge in so concluding.
Therefore, in my view, the appellants have failed in all three of their attacks alleging a breach of fiduciary duty.
Before leaving this branch of the appeal I should return to the appellants' basic criticism of the conduct of the Crown in its dealings with the reserve lands to which I adverted at the beginning of this opinion, i.e., that by resorting to expropria tion, the Indians were effectively deprived of their options to refuse to sell, or to negotiate suitable lease terms or sale prices. The options remaining open to them were, it was said, to settle the compensation at a figure which might not be in accord with the value of the lands to them or to resort to resolution of the question of compensa tion in the Exchequer Court. It is clear from the record that the Indians understood, both from the Indian Agent and their independent legal advisors, that court action could not only be costly but also could result in further delay in receipt of the compensation. There is no question that from the expropriations those consequences did flow.
However, from the perspective of the Crown in its Department of Transport incarnation, there were competing considerations. First: initially the requirement for an enlarged aerodrome as an emergency landing site for commercial aircraft, in a mountainous region where such sites were scarce, was important. Second: later on the more urgent requirement for an even larger aerodrome for western defence purposes in wartime was of at least equal importance.
From these considerations and facts, the ques tion which must be posed is, did the fact that the competing considerations were resolved in respect of both Parcels A and B, with the concurrence of the Indians, on terms which clearly were compro mises, not entirely satisfactory to either of the branches of the Crown involved, result in a breach of the Crown's fiduciary duty to the Indians enti tling them to the remedies sought in this action? I think not for the reasons which I have already given and for those which follow.
In essence, however unhappy they were with the payments made, they accepted them. The pay ments were for sums which could be substantiated by the independent valuations received by both parties and which were determined after extensive
negotiations and foreceful representations on the Indians' behalf by the Indian Agent and other high officials of the Indian Affairs Branch. If the sub missions advanced by the appellants were to pre vail, the only way that the Crown could successful ly escape a charge of breach of fiduciary duty in such circumstances would have been, in each case, to have acceded in full to their demands or to withdraw from the transactions entirely. The com peting obligations on the Crown could not permit such a result. The Crown was in the position that it was obliged to ensure that the best interests of all for whom its officials had responsibility were protected. The Governor in Council became the final arbiter. In the final analysis, however, if the appellants were so dissatisfied with the expropria tions and the Crown's offers, they could have utilized the Exchequer Court to determine the issues. For whatever reasons, they elected not to make these choices. They accepted the Crown's offers and, at least in the case of Parcel B, the offer was at the figure which they had suggested. I fail to see, then, how they could now successfully attack, after so many years, the settlements to which they agreed.
IV
THE LIMITATION ACT AND LACHES
Since I have concluded that none of the attacks on the impugned judgment can succeed, it is, strictly speaking, unnecessary to deal with the Crown's contention that the Band's claim is barred by section 38 of the Federal Court Actio and the
6 38. (1) Except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions in force in any province between subject and subject apply to any proceedings in the Court in respect of any cause of action arising in such province, and a proceeding in the Court in respect of a cause of action arising otherwise than in a province shall be taken within and not after six years after the cause of action arose.
(2) Except as expressly provided by any other Act, the laws relating to prescription and the limitation of actions referred to in subsection (1) apply to any proceedings brought by or against the Crown.
Limitation Act, R.S.B.C. 1979, c. 236, subs. 3(4), 7 because more than six years had elapsed between the date upon which the cause of action arose and March 23, 1979, the date upon which the action was commenced. Nevertheless, I will deal briefly with the submissions which may become important should I be found to have been in error on any of the substantive issues.
The Crown conceded that no limitation provi sion will apply where there has been a fraudulent concealment of the existence of the cause of action until the expiry of the prescription period when, with reasonable diligence, the plaintiffs could have discovered it had there not been such a conceal ment. Here, however, on the hearing of the appeal, appellants' counsel advised the Court that, at trial, the plea of fraudulent concealment had been abandoned.
However, relying on the Guerin case as his authority, counsel for the appellants argued that the breach of duty arising from the failure to disclose the opinion of the Deputy Minister of Justice constituted an equitable fraud. It was, to employ the words quoted in Guerin by Dickson J., at page 390 of his reasons for judgment, from the Kitchen case [Kitchen v. Royal Air Force Asso ciation, [1958] 1 W.L.R. 563 (C.A.)], "conduct which, having regard to some special relationship between the two parties concerned, is an uncons cionable thing for the one to do towards the other".
I do not think that the conduct of the Crown in this case amounted to equitable fraud. As earlier held, I do not believe that the existence of the legal opinion was withheld from Mr. Barber, nor did he, in turn, withhold disclosure of its existence from the Band either inadvertently or deliberately.
It would have been conduct which was com pletely out of character both for Mr. Barber and
'3....
(4) Any other action not specifically provided for in this Act or any other Act shall not be brought after the expiration of 6 years after the date on which the right to do so arose.
for those to whom he reported, to do so. The record discloses many, many instances of the com plete candidness exhibited by these Indian Affairs officials with the Indians throughout the years so that it would be indeed a reversal of an established pattern of conduct for them to have withheld pertinent information at the time when the expro priation of Parcel B was so near completion. That being so I am quite unable to find any conduct by the Indian Affairs Branch officials which was so clearly unconscionable as to amount to equitable fraud.
In addition, it is important to note that there is considerable documentary evidence in the record which discloses that, well before the Crown's legal opinion became known, at least some of the Band, including probably all of the locatees, had obtained advice from independent legal counsel as to their rights. It is inconceivable to me that any such counsel would have failed to consider the legality of the expropriation of the reserve lands even had he been consulted initially only with respect to the quantum of compensation desired. If he did that then he would obviously have had to consider the possibility that only a properly- executed surrender would suffice. If such is the case the Indians were not taken by surprise by the disclosure in early 1946, that a surrender was required by the Crown to effectuate the transfer of the lands. If that is correct, the action in the Exchequer Court which was clearly within the contemplation of both the Indian locatees and the Indian Affairs Branch officials could have, and perhaps ought to have, been proceeded with. Instead, the Indians, however reluctantly, chose to settle. Then, some thirty-three years later, they sought to set aside the settlement alleging equita ble fraud as the basis for the inapplicability of the Limitation Act. As I have said, I do not believe there was either actual or equitable fraud in the circumstances of this case. Therefore, since the action was not brought within the time limited by the applicable statute, it could have been dismissed on that ground.
In the circumstances, the question of laches need not be dealt with.
V
DAMAGES
Counsel for the appellants advance, in his memorandum of fact and law, a number of argu-
ments based on the notion that the measure of damages to be applied in the assessment thereof in this case, would assist the Court in deciding the substantive issues. Since I do not agree with any of those submissions, and in view of the fact that the appeal is to be dismissed so that damages need not be assessed, it is unnecessary to discuss the argu ments under this head.
VI
CONCLUSION
The appellants having failed to satisfy me that the learned Trial Judge erred in any material way in the judgment appealed from, I would dismiss the appeal with costs.
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EDITOR'S NOTE
Stone J. concurred with the disposition and reasons of Urie J.
With respect to the compensation for Parcel B, the question was whether Indian Affairs had acted properly in making the $15,000 settlement rather than litigating.
The doctrine of fiduciary duty recently enunciat ed by the Supreme Court of Canada in the Guerin case will require elaboration and refinement on a case-by-case basis. That case was, however, applicable to the case at bar even though the circumstances were quite different. Nothing in the judgment of Dickson J. in Guerin prevented refer ence to the law of trustees for guidance in decid ing whether Indian Affairs had discharged its fiduciary duty in accepting the settlement. It had acted prudently in view of the following facts: (1) the valuations ranged from as low as $6,800 up to $16,958; (2) litigating involves legal costs; (3) litigating involves delays; (4) the outcome of litiga tion is uncertain.
As said by Wynn—Parry J. in Buttle v. Saunders, [1950] 2 All E.R. 193 (Ch. D.), at page 195, although trustees have a duty to obtain the best price they can for their beneficiaries, it does not follow that "the mere production of an increased
offer at any stage, however late in the negotia tions, should throw on the trustees a duty to accept the higher offer and resile from the exist ing offer". They could properly act upon the proverb "a bird in the hand is worth two in the bush". A net award exceeding the settlement figure was not even a probability let alone a certainty.
Stone J. preferred not to comment on the limi tation and laches issues as it was unnecessary to do so.
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