T-617-85
Montana Band, Chief Leo Cattleman, Marvin
Buffalo, Rema Rabbit, Carl Rabbit and Darell
Strongman, suing on their own behalf and on
behalf of all other members of the Montana Indian
Band, all of whom reside on the Montana Reserve
No. 139, in the Province of Alberta (Plaintiffs)
v.
Her Majesty the Queen (Defendant)
INDEXED AS: MONTANA BAND V. CANADA (T.D.)
Trial Division, Strayer J.—Ottawa, January 9 and
February 1, 1991.
Practice — Parties — Third party proceedings — Motion to
strike third party notice against Chief and Councillors of
Samson and Ermineskin Bands — Montana Band claiming
breach of fiduciary duty by Crown regarding reserve land for
which Crown taking surrender from remnants of Bobtail Band
— Profound issues of continuity of liability of Indian bands
and exigibility of present Band assets in lieu of previous assets
not to be decided on interlocutory motion — Defence in main
action need not be same as statement of claim in third party
proceedings — Pleading including third party notice —
Nature of third party notice and right of parties to resort
thereto — Facts on which plaintiff relies against defendant
should issue out of relations between defendant and third
party.
Practice — Parties — Joinder — Motion to add Chief and
Councillors of Samson and Ermineskin Bands as defendants to
action, by another Band, against Crown for breach of fiduciary
duty, equitable fraud and fraudulent breach of trust — Plain
tiff claiming .interest in reserve for which Crown obtaining
surrender in 1909 from remnants of Bobtail Band (whose
members now belong to Samson and Ermineskin Bands) —
Addition not "necessary to ensure that all matters in dispute in
the action be effectually and completely determined and
adjudicated upon": R. 1716(2)(b) — Doubtful Court having
jurisdiction between subjects or statement of claim asserting
claim to which Bands relevant parties.
Federal Court jurisdiction — Trial Division — Motion to
strike third party notice — Crown claiming relief over against
Samson and Ermineskin Bands if found Bobtail Band, whose
members now belonging to those Bands, had no rights in
reserve surrendered to Crown in 1909 — Court having juris
diction — Application of test in ITO—International Terminal
Operators Ltd. v. Miida Electronics Inc. et al. — Statutory
grant of jurisdiction by federal Parliament under Federal
Court Act, s. 17(4),(5)(a) — S. 17(4) applicable to conflicting
claims by independent parties as well as to conflicting claims
by one party — Crown contending no obligation to two parties
and such obligations mutually exclusive — Existing federal
common law relating to aboriginal title and statutory law
(Indian Act in force in 1909) essential to disposition of Crown's
claims.
Native peoples — Lands — Montana Band suing Crown for
breach of trust in (1) taking by surrender of reserve lands from
remnants of Bobtail Band and (2) subsequent disposition of
lands — Montana Band claiming it had interest in lands prior
to 1909 surrender — Bobtail Band remnants having joined
Samson and Ermineskin Bands — Crown seeking relief over
against Samson, Ermineskin Bands — Unnecessary latter
Bands be joined as defendants for adjudication of matters
litigated — Third party proceedings appropriate and Court
having jurisdiction as both federal statute and common law
essential to disposition of claims — Questions whether can be
succession by present Band members to liability of deceased
members and whether current Band assets exigible in lieu of
previous assets not to be decided upon interlocutory motion as
issues profound and no relevant authority cited — Nature of
aboriginal rights — Different from common law succession
principles.
The Crown sought directions as to the trial of matters
referred to in the third party notice or an order joining the
Chief and Councillors of the Samson and Ermineskin Indian
Bands on their own behalf and on behalf of the respective band
members as party defendants, and those Bands sought to strike
the third party notices against them. The plaintiff Montana
Band claims that prior to 1909 it had acquired an interest in
Reserve No. 139 by virtue of which the Crown owed it a
fiduciary duty in respect of the reserve. In 1909, the Crown
obtained a surrender of the reserve from "remnants" of the
Bobtail Band, who had become members of the Samson and
Ermineskin Bands. The Montana Band argued that this surren
der was void ab initio and the surrender and subsequent
disposition of the land and its proceeds was a breach of a
fiduciary obligation and breach of trust by the Crown which
amounted to equitable fraud, fraudulent breach of trust, and
interference with statutory rights. The third party notice
claimed that the Crown was entitled to contribution or indem
nity from, or relief over against the Samson and Ermineskin
Bands, if the plaintiff established that at the time of surrender
the Bobtail Band had no rights in the reserve. Rule 1716(2)(b)
permits the Court to add as a party any person whose presence
before the Court is "necessary to ensure that all matters in
dispute may be ... completely determined". The third parties
challenged the Court's jurisdiction ratione materiae. They fur
ther contended that the third party notices disclosed no reason
able cause of action because only two of the present members
of the Ermineskin Band were alive in 1909 and there could be
no succession by present Band members to the liability of
deceased Band members. Furthermore, none of the funds aris
ing from disposition of the Reserve were still in the hands of the
Band or the Crown and current Band assets could not be
exigible in lieu of previous Band assets that might have been
subject to some charge. The plaintiff also argued that the third
party notice was inconsistent with the defence. It was argued
that the basis of the Crown's claims against the third parties (if
it had owed a duty to the plaintiff which it had breached, it had
claims against the third parties for misrepresentation) was
different from the basis of its defence against the plaintiff's
claim (the plaintiffs had no rights in the reserve). Finally, the
plaintiff argued that the claims in the third party notice could
not arise out of the defendant being found liable to the plaintiff.
The plaintiff's claims were based on the existence of fraud or
intentional wrongdoing by the defendant, whereas the third
party notice claimed that the defendant was the innocent victim
of misrepresentations or fraud practised by third parties. There
fore, if the plaintiff did not establish intentional wrongdoing,
the defendant would not be liable for sums in respect of which
it has claimed relief over.
Held, the motions to strike the third party notice and to add
the bands as defendants should be dismissed. The motion for
directions should be adjourned sine die.
It did not appear that the addition of the Ermineskin and
Samson Bands as defendants was, in the words of Rule
1716(2)(b), necessary to ensure that all matters in dispute
could be adjudicated upon. Further, it was clear neither that
the Court had, under the Federal Court Act, jurisdiction
between subjects in a case such as this, nor that such a claim
would be based on any "law of Canada". The statement of
claim did not directly assert any claim to which the Samson
and Ermineskin Bands would be relevant parties.
Applying the test set out in ITO—International Terminal
Operators Ltd. v. Miida Electronics Inc. et al., the Court had
jurisdiction to entertain the claims in the third party notices.
There was a statutory grant of jurisdiction by the federal
Parliament under Federal Court Act, paragraph 17(5)(a)
which gives the Trial Division concurrent original jurisdiction
in civil proceedings in which the Crown claims relief. That
describes the whole of the proceedings contemplated by the
third party notice. Some of those proceedings would also fall
within subsection 17(4), which gives the Trial Division exclu
sive original jurisdiction over proceedings where the Crown is
under an obligation in respect of which there may be conflicting
claims. Subsection 17(4) is not limited to situations where two
or more parties have independently initiated conflicting claims,
but covers as well situations where the Crown denies obliga
tions to both parties where such obligations are mutually
exclusive.
There was existing federal statute and common law which
was essential to the disposition of the Crown's claims against
the Samson and Ermineskin Bands. There is a federal common
law relating to aboriginal title which underlies the fiduciary
nature of the Crown's obligations to Indian bands. The Crown's
recourse against a band which has mistakenly claimed to be the
beneficiary of a fiduciary relationship, or has wrongly received
benefits thereunder must also develop as part of the federal
common law in respect of aboriginal title. The Indian Act in
force in 1909 would be a major factor in determining whether
the Crown and third parties had acted lawfully in respect of the
surrender of the reserve. Even if the Crown's claim against the
third parties was a matter of property and civil rights, it is
sufficient for Federal Court jurisdiction if the essential relation
ships out of which the claim arises are created by federal law.
The inadmissibility of the Crown's claim was not "plain and
obvious". The continuity of the liability of Indian bands and the
exigibility of present Band assets in lieu of previous Band assets
are profound issues which should not be disposed of on an
interlocutory motion to strike.
A third party notice is a pleading within Rule 2, as it defines
a claim. Rule 419 permits the Court to strike anything in a
pleading which is a departure from a previous pleading. This
does not, however, mean that there must be perfect symmetry
between the defence in the main action and the statement of
claim in the third party proceeding. What is central to resorting
to third party proceedings is that the facts upon which the
plaintiff relies against the defendant should issue out of the
relations between the defendant and the third party. Here the
plaintiff must demonstrate that the Crown in accepting the
surrender was dealing with the wrong parties. Therefore the
facts upon which the plaintiff relies issue in part out of the
relations between the defendant and the third party.
The third party notice should not be struck on an interlocuto
ry motion in light of the complexity of the claims and interrela
tionships. The statement of claim did not exclusively allege
intentional misconduct. The plaintiff could succeed on some of
its claims simply by proving negligence or even innocent pater
nalism. The Crown could then be found liable in respect of
facts out of which some legitimate claims, as described in the
third party notice, might arise against the third parties who
allegedly misrepresented their interest in the reserve.
Third party proceedings were appropriate because the facts
pertinent to claims in both the statement of claim and the third
party notice were identical or closely related and should be
tried together. The third parties should be bound by the
findings of the Court in the plaintiffs' action and there should
not be a multiplicity of proceedings.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as
am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule
to the Constitution Act, 1982, Item 1) [R.S.C., 1985,
Appendix II, No. 5], s. 101.
Federal Court Act, R.S.C., 1985, c. F-7, s. 17(4),(5)(a).
Federal Court Rules, C.R.C., c. 663, RR. 2(1),
419(1)(e), 1716(2)(b), 1726 (as am. by SOR/79-57, s.
26), 1729.
Indian Act, R.S.C. 1906, c. 81, ss. 17, 18, 48, 49.
CASES JUDICIALLY CONSIDERED
APPLIED:
ITO—International Terminal Operators Ltd. v. Miida
Electronics Inc. et al., [1986] I S.C.R. 752; (1986), 28
D.L.R. (4th) 641; 34 B.L.R. 251; 68 N.R. 241; Roberts v.
Canada, [1989] 1 S.C.R. 322; [1989] 3 W.W.R. 117;
(1989), 35 B.C.L.R. (2d) 1; 25 F.T.R. 161; 92 N.R. 241;
Rhine v. The Queen; Prytula v. The Queen, [1980] 2
S.C.R. 442; (1980), 116 D.L.R. (3d) 385; 34 N.R. 290;
Allan v. Bushnell T.V. Co. Ltd.; Broadcast News Ltd.,
Third Party, [1968] 1 O.R. 720; (1968), 67 D.L.R. (2d)
499 (C.A.).
CONSIDERED:
Guerin v. R., [1982] 2 F.C. 385; [1982] 2 C.N.L.R. 83;
(1981), 10 E.T.R. 61 (T.D.); Guerin et al. v. The Queen
et al., [1984] 2 S.C.R. 335; (1984), 13 D.L.R. (4th) 321;
[1984] 6 W.W.R. 481; 59 B.C.L.R. 301; [1985] 1
C.N.L.R. 120; 20 E.T.R. 6; 55 N.R. 161; 36 R.P.R. 1.
REFERRED TO:
Oag v. Canada, [1987] 2 F.C. 511; (1987), 33 C.C.C.
(3d) 430; 73 N.R. 149 (C.A.); Kigowa v. Canada, [1990]
1 F.C. 804; (1990), 67 D.L.R. (4th) 305; 10 Imm. L.R.
(2d) 161; 105 N.R. 278 (C.A.); The Queen v. F.E.
Cummings Construction Co. Ltd., [1974] 2 F.C. 9
(T.D.); Davie Shipbuilding Limited v. The Queen, [ 1984]
1 F.C. 461; 4 D.L.R. (4th) 546; 53 N.R. 50 (C.A.).
COUNSEL:
Thomas R. Berger and Gary A. Nelson for
plaintiffs.
David Akman for defendant.
Lewis F. Harvey for third party, the Ermines-
kin Band.
Edward A. Molstad, Q.C. for third party, the
Samson Band.
SOLICITORS:
Thomas R. Berger, Vancouver, for plaintiffs.
Deputy Attorney General of Canada for
defendant.
Davis & Company, Vancouver, for third
party, the Ermineskin Band.
Molstad Gilbert, Edmonton, for third party,
the Samson Band.
The following are the reasons for order ren
dered in English by
STRAYER J.:
Relief Requested
Four motions were heard together on January 9,
1991, as follows:
(1) a motion by Her Majesty under Rule 1729
[Federal Court Rules, C.R.C., c. 663] seeking
directions as to the trial of matters referred to in
the third party notice it had served on the Chief
and Councillors of the Samson and Ermineskin
Indian Bands of intention to sue them on their
own behalf and on behalf of the members of
their respective bands;
(2) a motion by Her Majesty (in effect in the
alternative) for an order under Rule 1716(2)(b)
joining the Chief and Councillors of those
bands, sued on their own behalf and on behalf of
the members of their respective bands, as party
defendants in the within action;
(3) a motion on behalf of the Ermineskin Band
seeking leave to file a conditional appearance
and an order striking out the third party notice
against it referred to above; and
(4) a motion by the Samson Band for an order
striking out the third party notice against it as
referred to above.
The Crown's motion for directions as to the trial of
matters referred to in the third party notice was
not argued, counsel for the plaintiffs and the
defendant both having indicated that this matter
should be dealt with later.
The Chief and Councillors of each band, suing
or sued on their own behalf and on behalf of the
members of that band, will be referred to compen-
diously hereinafter as the Montana Band (or "the
plaintiff"), the Ermineskin Band and the Samson
Band (or "the third parties") respectively.
Facts
Briefly stated, the essential facts as alleged to
date in the pleadings are as follows. The plaintiff
Montana Band claims that it had acquired an
interest before 1909 in Reserve No. 139 near
Hobbema, Alberta, a reserve which it says was
previously known as the Bobtail Reserve of which
the Bobtail Band was the beneficial owner. The
plaintiff alleges that the Bobtail Band had aban
doned this reserve before 1909. It states that by
1909 the defendant Crown owed the Montana
Band a fiduciary duty in respect of Reserve No.
139, then occupied by the Montana Band, of the
same nature as the Crown owes to other bands in
respect of their recognized reserves. The plaintiff
Band complains that in 1909 the defendant Crown
purported to obtain a surrender of Reserve No.
139 from "remnants" of the Bobtail Band who had
by that time become members of the Samson and
Ermineskin Bands located on adjacent reserves. It
says that this surrender was void ab initio and the
taking thereof amounted to the breach of a fiduci
ary obligation and a breach of trust by the Crown,
as did the subsequent sale or other disposition of
the land and its proceeds. The plaintiff alleges
against the Crown a breach of fiduciary obligation
amounting to equitable fraud, fraudulent breach of
trust, and interference with statutory rights of the
plaintiff. It seeks declarations which will be dis
cussed later, an order for an accounting of the
proceeds of the sale of the lands, damages and
compensation.
The defendant Crown filed a third party notice
directed to the Samson Band and the Ermineskin
Band under Rule 1726 [as am. by SOR/79-57, s.
26], claiming to be entitled to contribution or
indemnity from, or to relief over against, those
bands. The Crown states in this notice that if the
plaintiff is able to establish certain allegations in
the statement of claim to the effect that at the
time of the surrender the Bobtail Band had no
rights in Reserve No. 139, then the defendant
Crown would be entitled to contribution, indemni
ty, or relief over, such relief including: a declara
tion that the Crown holds any proceeds from the
disposition of the lands for the benefit of the
plaintiff and not for the benefit of the Samson and
Ermineskin Bands to whom proceeds were to be
paid under the terms of surrender; a declaration
that it holds a portion of the Samson Reserve
which had been transferred from Reserve No. 139,
in trust for the Montana Band and not for the
Samson Band; an accounting by the Samson and
Ermineskin Bands for proceeds paid to them from
disposition of the land in question; declarations
that those two bands hold such proceeds in trust
for the defendant Crown; and an order that those
bands indemnify the defendant Crown for all dam
ages and compensation for which the Crown may
be adjudged liable to the plaintiff. The defendant
filed, at the same time as the third party notice, a
defence which was subsequently served in respect
of the principal action. Suffice it to say that in that
defence the Crown essentially denies that the
plaintiff has any right to the reserve in question.
Conclusions
(1) Directions on Third Party Notice.
As noted, counsel for the plaintiff and the
defendant both suggested that this matter be dealt
with later, counsel for the defendant suggesting
that directions might be settled by agreement.
Counsel for the third parties took no position on
this matter. For reasons which will become appar
ent, I am adjourning this motion sine die in the
hope that agreement can be reached on a set of
directions having regard to my reasons herein.
(2) Addition of Samson and Ermineskin
Bands as Defendants.
I am dismissing this motion. I am not satisfied
that the addition of the Ermineskin and Samson
Bands as defendants is, in the words of Rule
1716(2)(b), "necessary to ensure that all matters
in dispute in the action may be effectually and
completely determined and adjudicated upon .... "
Further, it is not apparent to me that any section
of the Federal Court Act [R.S.C., 1985, c. F-7]
purports to give this Court jurisdiction between
subjects in a case such as this, quite apart from
whether such a claim would be based on any "law
of Canada". Further, it is not clear to me that the
statement of claim, as presently framed, directly
asserts any claim to which the Samson and
Ermineskin Bands would be relevant parties.
(3) and (4) Motions to Strike Third
Party Notice.
Both of the third parties challenge the jurisdic
tion of this Court to entertain the claims described
against them in the third party notice. Although
the Ermineskin Band asked for leave to file a
conditional appearance to challenge the jurisdic
tion of the Court, this was not pursued and I did
not consider it necessary. I understand this to be a
challenge to the jurisdiction of the Court ratione
materiae. Such a challenge may be raised at any
time and, indeed, the Court may raise such matter
itself. Further, Rule 1729(2) expressly refers to
the power of the Court to strike out a third party
notice when an application is made for directions
as to trial of the matters referred to therein, and it
appears to me that it is open to a third party to
raise the question of jurisdiction among other
objections to the third party notice at that time.
It is common ground that the established test for
jurisdiction of this Court was set out by McIntyre
J. in ITO—International Terminal Operators Ltd.
v. Miida Electronics Inc. et al.' as follows:
' [1986] 1 S.C.R. 752, at p. 766.
1. There must be a statutory grant of jurisdiction by the federal
Parliament.
2. There must be an existing body of federal law which is
essential to the disposition of the case and which nourishes the
statutory grant of jurisdiction.
3. The law on which the case is based must be "a law of
Canada" as the phrase is used in s. 101 of the Constitution Act,
1867.
With respect to the first test I am satisfied that
this Court has jurisdiction under paragraph
17(5)(a) of the Federal Court Act e which provides
as follows:
17.
(5) The Trial Division has concurrent original jurisdiction
(a) in proceedings of a civil nature in which the Crown or the
Attorney General of Canada claims relief ....
That literally describes the whole of the proceed
ings contemplated by the third party notice. I
believe that at least some of those proceedings
would also fall within subsection 17(4) which
provides:
17....
(4) The Trial Division has exclusive original jurisdiction to
hear and determine proceedings to determine disputes where
the Crown is or may be under an obligation, in respect of which
there are or may be conflicting claims.
Among other claims made by the plaintiff, a decla
ration is sought that certain unalienated mineral
rights in the reserve in question "are held in trust
for the plaintiffs". It appears to me that this is a
claim "conflicting" with possible claims of the
Ermineskin and Samson Bands, since, according to
the surrender document of June 12, 1909 (referred
to by the plaintiff in its statement of claim) the
balance of monies received from the sale of
Reserve No. 139 (minus certain per capita distri
butions to members of various bands) was to be
placed to the credit of the Samson and Ermineskin
Bands. There is also a claim for a declaration that
the Crown "held the subject lands under a fiduci
ary relationship" for the benefit of the plaintiff
Band. This surely is inconsistent with the position
of the defendant in paragraph 9(b) of the state
ment of defence that the "Indians of the Hobbema
area" including several bands named therein "have
been and continue to be the sole beneficiaries of
the said surrender of 1909 and of the disposition
2 R.S.C., 1985, c. F-7.
and sale of the reserve"—a position which recog
nizes a claim by the third parties to the same
proceeds of surrender. Further, the plaintiff wants
a declaration that the taking of the surrender, the
sale and disposition of Reserve No. 139 "was a
breach of fiduciary obligation" owed to them
selves. This is clearly inconsistent with the surren
der document which operates in favour of, inter
alia, the Samson and Ermineskin Bands and the
general responsibility which the Crown asserts it
owed to the "Indians of the Hobbema area". An
assertion that the Crown owed a fiduciary obliga
tion to the plaintiff Band in respect of Reserve No.
139 or its proceeds of sale is in effect an assertion
that the Crown owed no fiduciary duty to the
Samson and Ermineskin Bands in respect thereof.
This surely gives rise to a "conflicting claim" to
being the beneficiary of a fiduciary obligation. I do
not understand subsection 17(4) to be limited to
situations where two or more parties have
independently initiated conflicting claims; it must
also cover situations where the Crown contends
that it does not owe, or has not owed, obligations
to both parties where such obligations are mutual
ly exclusive.
The more difficult question arises as to whether
requirements 2 and 3 as set out in the ITO case are
met: that is, is there an existing body of federal
law essential to the disposition of the case "nour-
ishing" the statutory grant of jurisdiction, which
federal law is a "law of Canada" within the mean
ing of section 101 of the Constitution Act, 1867
[30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act
1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1) [R.S.C., 1985, Appendix
II, No. 5]]? As recognized by Wilson J. in Roberts
v. Canada' these two elements overlap and can be
dealt with together. It appears to me that there is
both federal statute law and federal common law
which is essential to the disposition of the claims
by the Crown against the Samson and Ermineskin
Bands as contemplated by the third party notice.
As recognized by the Supreme Court in the Rob
' [ 1989] 1 S.C.R. 322, at pp. 330-331.
erts case there is a federal common law relating to
aboriginal title which underlies the fiduciary
nature of the Crown's obligations to Indian
bands." Just as decided cases have elaborated the
nature of the fiduciary obligation in respect of the
duty owed by the Crown to an Indian band 5 so, I
assume, the recourse which the Crown might have
against a band which has falsely or mistakenly
claimed to be the beneficiary of that relationship,
or has wrongly received benefits thereunder when
those benefits were owing to someone else, must
also develop as part of the federal common law in
respect of aboriginal title. With respect to federal
statutory law governing the situation, the Indian
Act in force in 1909 6 would be a major factor in
determining whether the Crown and the third
parties had acted lawfully in respect of the surren
der of Reserve No. 139. For example sections 17
and 18 of that Act governed membership in bands,
transfers of membership from one band to another,
and entitlement to share in the assets of a band.
Sections 48 and 49 governed the procedure for
surrender of reserves. While it was argued by the
third parties that any claim which the Crown may
assert against the third parties is essentially a
matter of property and civil rights involving ques
tions of equity or tort, I do not believe this is
determinative. As was said by Laskin C.J. in
Rhine v. The Queen; Prytula v. The Queen: 7
It should hardly be necessary to add that "contract" or other
legal institutions, such as "tort" cannot be invariably attributed
to sole provincial legislative regulation or be deemed to be, as
common law, solely matters of provincial law.
The same can equally be said of claims in equity.
According to the jurisprudence, it is sufficient for
Federal Court jurisdiction if the essential relation
ships are created by federal law, relationships out
° Ibid, at p. 337.
5 See e.g. Guerin et al. v. The Queen et al., [1984] 2 S.C.R.
335.
6 R.S.C. 1906, c. 81.
[ 1980] 2 S.C.R. 442, at p. 447.
of which the claim submitted to that Court arises. 8
I therefore conclude that this Court has jurisdic
tion to entertain the claims contemplated in the
third party notices.
The third parties contend that the third party
notice discloses no reasonable cause of action. In
part this seemed to be an argument that the
defendants now to be sued, namely the Band
Council members of each band who are sued on
behalf of all members of the Band, are not the
same people who could have incurred liability in
1909 through deceit or misrepresentation. Counsel
for the Crown was prepared to admit, for the
purposes of this motion, what counsel for the
Ermineskin Band stated in this respect, namely
that only two of the present members of the
Ermineskin Band were alive in 1909, being aged
one year and eighteen months respectively at that
time. Counsel for the Band also asserted, and
wanted the opportunity to submit affidavit evi
dence on the point if necessary, that none of the
funds arising from the disposition of Reserve No.
139 were still in the hands of the Band or the
Crown. It was argued that if the funds could no
longer be traced by the Crown to the Ermineskin
or Samson Bands, then no decision could be ren
dered imposing on present Band members any
obligation in respect of such proceeds. In short,
counsel argued that there could be no succession
by present Band members to the liability of
deceased Band members, and that current Band
assets cannot be exigible in lieu of previous Band
assets that might have been subject to some
charge. I believe this is the kind of question which
should not be disposed of on an interlocutory
motion to strike. Profound issues are raised here
on which counsel were unable to cite any directly
pertinent authority. Given that Indian bands are
not corporate bodies with a perpetual legal person
ality there may well be doubts as to the continuity
of their liability. On the other hand, the whole
concept of aboriginal rights represents a substan
tial departure from common law principles of
succession. Aboriginal rights arise out of the use of
land "since time immemorial". As claims to such
rights arise from long use, it is axiomatic that
8 Rhine v. The Queen; Prytula v. The Queen, ibid; Oag v.
Canada, [1987] 2 F.C. 511 (C.A.); Kigowa v. Canada, [1990]
1 F.C. 804 (C.A.).
current claimants base their claims on the entitle
ment through use of their ancestors—ancestors
who have not conveyed to them any interests by
any ordinary legal instrument. Similarly band
members claim under treaties signed many genera
tions ago, without any title to succession which
would be recognized in other fields of law. It
would not be surprising if there were some con
tinuing obligations, as well as continuing rights,
flowing from the acts of their forebears. If the
band was unjustly enriched several generations
ago, it is arguable that present band assets might
somehow be exigible. These are profound issues
which I do not think appropriate to address here:
suffice it to say that the inadmissibility of the
Crown's claim against the third parties is far from
being "plain and obvious", the usual test for strik
ing out claims. While I have particular doubts
about the viability of the claims in tort—if such
are contemplated in the third party notice—
against present members of the Band arising out of
activities of their ancestors, I believe all these
matters should be left to the Trial Judge to dispose
of after hearing evidence and full argument.
A further complaint made against the third
party notice is that it is inconsistent with the
defence which the defendant Crown filed at the
same time. The Rule invoked here is paragraph
419(1)(e) which allows the Court to strike out
anything in a "pleading" if
Rule 419.(1)....
(e) it constitutes a departure from a previous pleading ....
Assuming for the moment that a document appar
ently filed on the same day as the statement of
defence can be regarded as a "previous" pleading,
I am prepared to treat the third party notice as a
"pleading". Rule 2 defines "pleading" as meaning
Rule 2. (1)
"pleading" ... any document whereby an action in the Trial
Division was initiated or a claim in such an action was
defined ....
I believe that a third party notice defines a claim
even though it is not a statement of claim. 9
It is necessary to consider more fully the nature
of a third party notice and the right of parties to
resort to this procedure. Filing a third party notice,
unlike adding co-defendants, is not a step for
which a defendant requires the leave of the Court.
By Rule 1726(1) a defendant is entitled to file a
third party notice where he
Rule 1726. (1) ... claims to be entitled to contribution or
indemnity from, or to relief over against, any person not a
party to the action (hereinafter called the "third party") ....
The only challenge that can be made to the exer
cise of this choice by the defendant is on the basis
that what he claims is not a "contribution or
indemnity from, or . .. relief over against ..." the
third party. Counsel for the third parties and for
the plaintiff argued to varying degrees that the
third party notice was improper because the basis
of the claims which the Crown asserts against the
third parties is different from the basis of its
defence against the plaintiff's claim. That is, it was
argued that in the Crown's defence to the plain
tiff's action the main contention is that the plain
tiff is without any rights in the reserve in question.
However, in the claims signalled by its third party
notice, the Crown is contending that if it is found
to have owed a duty to the plaintiff, a duty which
it has breached, then it will have various claims
against the third parties for having misled the
Crown and wrongly taken benefits under a surren
der of lands to which the third parties were never
entitled.
I do not believe there has to be perfect symme
try between the defence in the main action and the
statement of claim in the third party proceeding. I
respectfully accept the rationale for third party
proceedings stated by Laskin J.A. [as he then was]
9 Per The Queen v. F. E. Cummings Construction Co. Ltd.,
[ 1974] 2 F.C. 9 (T.D.), at p. 15.
in Allan v. Bushnell T.V. Co. Ltd.; Broadcast
News Ltd., Third Party 10 which was cited with
approval by the Federal Court of Appeal in Davie
Shipbuilding Limited v. The Queen" where he
said:
What, in my view, is central to resort to third party proceed
ings is that the facts upon which the plaintiff relies against the
defendant should issue out of the relations between the defend
ant and the third party. [Emphasis deleted.]
In the present case the statement of claim is
replete with allegations to the effect that neither
the Samson and Ermineskin Bands nor certain
members of those Bands had any interest in
Reserve No. 139 in 1909, the purported surrender
by them thus being invalid. The invalidity of that
surrender is fundamental to the plaintiffs case.
For the plaintiff to refute the allegations in the
Crown's statement of defence that the plaintiff
had no right to that reserve, the plaintiff will, inter
alia, have to establish that the Bobtail Band had
abandoned its rights to the reserve. If it succeeds
in establishing that fact then the defendant Crown
will prima facie be able to make out a case that it
gave the proceeds to the wrong party. In other
words the plaintiff must, inter alia, demonstrate
that the defendant Crown in accepting the surren
der from members of the Samson and Ermineskin
Bands was dealing with the wrong parties. There
fore the facts upon which the plaintiff relies issue,
in part, "out of the relations between the defend
ant and the third party" as described by Laskin
J.A.
It was argued by counsel for the plaintiff that
the claims described in the third party notice could
not arise out of the defendant Crown being found
liable to the plaintiff in respect of its claims.
Counsel contended that the plaintiff is basing its
claim on the existence of fraud or intentional
wrongdoing on behalf of the defendant whereas, it
is said, the rationale of the claims described in the
third party notice is that the defendant was the
innocent victim of misrepresentations or fraud
practised by the third parties. Counsel for the
plaintiff contended that if the plaintiff fails to
make out intentional wrongdoing by those acting
for the defendant then the plaintiff's claims will
fail and the defendant will not be liable for sums in
respect of which it might have a claim over against
"' [1968] I O.R. 720 (C.A.).
[ 1984] 1 F.C. 461 (C.A.), at p. 466.
the third parties. That is, if the defendant's agents
were innocent of any intentional wrongdoing, the
premise upon which the third party claims are
based, then it will suffer no liability to the plaintiff
in respect of which there would be any need for
indemnity, contribution, or claim over against the
third parties. But I am unable to characterize the
statement of claim as exclusively alleging inten
tional misconduct on the part of the agents of the
defendant. Without going through the statement
of claim in detail, there is reference, for example,
in paragraphs 15, 16, 18, 19, 21, 24, and 25 to the
alleged fiduciary obligation owed by the Crown to
the plaintiff and the breach thereof. In paragraph
25 it is said that this breach of fiduciary obligation
amounted to "equitable fraud". It appears to me
from the jurisprudence that allegations of breach
of fiduciary relationship of the Crown in respect of
Indian lands and allegations of equitable fraud
related thereto do not necessarily imply an allega
tion of intentional fraudulent misconduct. In the
Guerin case the Trial Judge specifically found
that:
There was not, as argued by the plaintiffs, fraud in the sense of
deceit, dishonesty, or moral turpitude on the part of Anfield,
Arneil and others. But the failure to return to the Band or
Council, after October 6, 1957, for authorization as to the
proposed terms of the lease, was, in view of all that had gone on
" ... an unconscionable thing for the one to do towards the
other". There was a concealment amounting to equitable
fraud. 12
This view was upheld in the Supreme Court of
Canada. Dickson C.J. writing on behalf of four
members of the Court agreed that there was
breach of the fiduciary relationship and equitable
fraud
[a]lthough the Branch officials did not act dishonestly or for
improper motives in concealing the terms of the lease from the
Band .... 13
12 Guerin v. R., [1982] 2 F.C. 385 (T.D.), at p. 425.
13 Supra, note 5 at p. 390; see also the views of Wilson J. to
similar effect, writing on behalf of three judges, at p. 356.
Further, in paragraph 26 the plaintiff alleges that
the servants or agents of the Crown
knew or ought to have known that the persons from whom the
surrender was taken had no legal interest in the subject lands
and that the Montana Indian Band had a legal interest therein,
[and thereby] acquired the surrender by deceit. [Emphasis
added.]
This is an allegation of deceit based in part on
negligence. Also in paragraph 28 it is alleged that
the Crown "interfered with the statutory rights of
the Montana Indian Band," this allegation appar
ently embracing intentional, negligent, or innocent
interference with the statutory rights of the
plaintiffs.
Allegations of this nature, it appears to me, are
not exclusively allegations of intentional miscon
duct for the reasons which I have stated. If the
plaintiff's contentions are sound in law and fact it
could succeed on some of its claims simply by
proving negligence on the part of agents of the
Crown, and on other claims simply by proving
innocent paternalism of the kind found to exist in
the Guerin case. The Crown might thereby be
found liable in respect of facts out of which some
legitimate claims, as described in the third party
notice, might arise against the third parties who
allegedly misrepresented their interest in Reserve
No. 139. It is conceivable, for example, that the
facts could demonstrate that agents of the Crown
were led to an erroneous belief in circumstances
where, perhaps, they should have verified more
carefully the identity of those entitled to Reserve
No. 139; but in such circumstances the Crown
might have a claim over against the third parties
in respect of misleading representations by those
responsible for the affairs of the Samson and
Ermineskin Bands at that time.
It appears to me that the pleadings of the
defendant Crown are consistent with this possibili
ty. In subparagraph 6(n)(i) of the statement of
defence the defendant alleges that:
6(n)(i) Upon realizing their mistake, [i.e. as to who were the
beneficial owners of Reserve No. 139] on June 12, 1909,
officials of DIA obtained a surrender of the entire reserve from
a group of Indians whom they believed to be and were reputed
to be Bobtail Indians. [Emphasis added.]
Consistently with this, in paragraph 8(a) of the
third party notice a claim is made against the
Samson and Ermineskin Bands on the basis that
they "unlawfully held out or represented or passed
off to the Crown" that certain members of those
bands were members of the Bobtail Band "when
you knew or ought to have known this to be false"
and caused or aided and abetted those members to
sign the surrender, thus causing the Crown to act
upon the surrender instruments and thereby
obtaining lands, monies and other rights and ben
efits for the third parties.
The complexity of these various claims and the
interrelationships among them demonstrate very
well why a judge should not, on an interlocutory
motion, strike out the third party notice. It is far
from being plain and obvious that the third party
notice contains no claim that would be sustainable
as a claim for a contribution, indemnity, or for
relief over against the third parties should the
plaintiff succeed in some or all of its claims.
Having regard to broader principles, it appears
to me that this is an appropriate case for third
party proceedings because the facts pertinent to
claims in both the statement of claim and the third
party notice are identical or closely related and
should, in my view, be tried together if possible.
Further, it is eminently desirable that the third
parties be bound by the findings of the Court in
the plaintiff's action and that there should not be a
multiplicity of proceedings all of which would
involve in one way or another the circumstances
and the validity of the surrender of June 12, 1909.
It was also contended by the Ermineskin Band
that the third party notice is scandalous, frivolous
or vexatious or otherwise an abuse of the process
of the Court. This point was not argued specifical
ly nor do I think it has any merit having regard to
what I have said above.
I am therefore dismissing the motions to strike
the third party notice.
Costs
Costs of these applications should be in the
cause.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.