Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development)

Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development)
Collection
Supreme Court Judgments
Date
1995-12-14
Report
[1995] 4 SCR 344
Case number
23516
Judges
La Forest, Gérard V.; L'Heureux-Dubé, Claire; Sopinka, John; Gonthier, Charles Doherty; Cory, Peter deCarteret; McLachlin, Beverley; Major, John C.
On appeal from
Federal Court of Appeal
Subjects
Aboriginal law
Action
Notes
SCC Case Information: 23516
Decision Content
Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development), [1995] 4 S.C.R. 344
Joseph Apsassin, Chief of the
Blueberry River Indian Band,
and Jerry Attachie, Chief of the Doig
River Indian Band, on behalf of themselves
and all other members of the Doig
River Indian Band, the Blueberry River
Indian Band and all present descendants
of the Beaver Band of Indians Appellants
v.
Her Majesty The Queen in right of Canada
as represented by the Department of Indian
Affairs and Northern Development and
the Director of the Veterans' Land Act Respondent
and
The Musqueam Nation and Ermineskin
Tribal Council, Chief Abel Bosum et al.,
Chief Terry Buffalo et al. and the Samson
Indian Band and Nation, and the Assembly
of First Nations Interveners
Indexed as: Blueberry River Indian Band v. Canada (Department of Indian Affairs and Northern Development)
File No.: 23516.
1995: June 13, 14; 1995: December 14.
Present: La Forest, L'Heureux‑Dubé, Sopinka, Gonthier, Cory, McLachlin and Major JJ.
on appeal from the federal court of appeal
Indians -- Surrender -- Reserve -- Nature of duty owed by Crown prior to surrender -- Whether Crown under a fiduciary duty -- Indian Act , R.S.C. 1927, c. 98 .
Indians ‑‑ Surrender ‑‑ Validity ‑‑ Indian chiefs not personally certifying surrender on oath ‑‑ Whether surrender invalid for failure to comply with s. 51 of Indian Act ‑‑ Whether s. 51 mandatory or directory ‑‑ Indian Act , R.S.C. 1927, c. 98, s. 51 .
Indians -- Surrender -- Reserve -- Indian band surrendering reserve to Crown "to sell or lease" -- Indian band claiming that Crown breached its fiduciary duty -- Whether Crown should have leased land of former reserve rather than sell it -- Whether Crown sold land under value -- Whether Crown should have restored reserve to Band after surrender in view of Band's impoverished situation.
Indians ‑‑ Surrenders ‑‑ Mineral rights ‑‑ Reserve ‑‑ Indian band surrendering mineral rights on reserve to Crown in 1940 and surrendering reserve in 1945 ‑‑ Whether mineral rights included in 1945 surrender ‑‑ Indian Act , R.S.C. 1927, c. 98, ss. 2 (e), (j), 51 .
Indians ‑‑ Crown ‑‑ Fiduciary duty ‑‑ Mineral rights ‑‑ Indian band surrendering mineral rights on reserve to Crown "to lease" in 1940 and surrendering reserve "to sell or lease" in 1945 ‑‑ Department of Indian Affairs transferring land of former reserve to Department of Veteran Affairs in 1948 ‑‑ Department of Indian Affairs aware in 1949 that mineral rights had been erroneously transferred to Department of Veteran Affairs and of potential value of these rights ‑‑ Whether Crown breached its fiduciary duty by transferring mineral rights in 1948 ‑‑ Whether Crown breached its fiduciary duty by failing to correct its error in 1949 when it learned of erroneous transfer ‑‑ Indian Act , R.S.C. 1927, c. 98, s. 64 .
Limitation of actions ‑‑ Breach of fiduciary duty ‑‑ Running of time postponed ‑‑ Indian band surrendering mineral rights on reserve to Crown in 1940 and surrendering reserve in 1945 ‑‑ Department of Indian Affairs transferring land of former reserve to Department of Veteran Affairs in 1948 ‑‑ Mineral rights inadvertently acquired by Department of Veteran Affairs in transfer ‑‑ Land and mineral rights subsequently sold to veterans between 1948 and 1956 ‑‑ Band learning of mineral rights' transfer in 1977 and commencing action in 1978 claiming that Crown breached its fiduciary duty ‑‑ Whether action barred by limitation periods ‑‑ Limitation Act, R.S.B.C. 1979, c. 236, ss. 3(4), 6(3), 8.
In 1916 the Beaver Band of Indians entered into a treaty with the Crown. In exchange for surrendering aboriginal title, the Band was given a parcel of land in British Columbia. The Band was nomadic, subsisting through trapping and hunting. The reserve was used as the site of its summer campground; in the winter, the Band trapped further north. In 1940, the Band surrendered the mineral rights on its reserve to the Crown, in trust "to lease" for its benefit. At the end of World War II, the federal government instituted a program under which agricultural land was made available to veterans for settlement. The Band was not using the reserve land for farming and, after considerable discussion, agreed in 1945 to surrender the reserve to the Crown "to sell or lease". The Department of Indian Affairs ("DIA") then transferred the reserve land to the Director of The Veterans' Land Act ("DVLA ") for $70,000 in March 1948. Part of that sum was later used by the DIA to purchase other lands for the Band closer to its trap lines. The DVLA also obtained the mineral rights "by inadvertence" because they had not been reserved from the 1948 transfer. In the same year gas was discovered near the former reserve and, in 1949, oil companies expressed interest in exploring the land for oil and gas. Between 1948 and 1956, the land of the former reserve was sold to veterans. In 1976, oil and gas were discovered and the revenue from this discovery went to the veterans or their assigns. In 1977, the Beaver Band was divided into the Blueberry River and the Doig River Indian Bands. That same year, a DIA officer found out how the Beaver Band had lost the mineral rights and informed the appellant Bands. The appellants commenced their action on September 18, 1978, claiming damages against the Crown for allowing it to make an improvident surrender of the reserve, and once surrendered, for disposing of it under value. They also claimed damages for permitting the transfer of the mineral rights to the DVLA and thence to the veterans. In the Federal Court, Trial Division, the trial judge dismissed the claims except for the sale of the surface rights to the DVLA , which he found to be under value. He held, however, that the appellants' action was barred by the 30-year limitation period under the British Columbia Limitation Act. The majority of the Federal Court of Appeal dismissed the appellants' appeal and the Crown's cross‑appeal on the issue of sale under value. The appellants appeal to this Court, and the Crown cross‑appeals.
Held: The appeal and cross‑appeal should be allowed.
The appellants have not established that the Crown wrongly failed to prevent the surrender of the reserve in 1945. The measure of control which the 1927 Indian Act permitted a band to exercise over the surrender of its reserve negates a contention that, absent exploitation, the Act imposed a fiduciary obligation on the Crown with respect to the surrender of a reserve. Under the Act, a band had the right to decide whether or not to surrender its reserve, and its decision was to be respected. The Crown's obligation was limited to preventing exploitative bargains. The Crown could thus refuse its consent if the band's decision was foolish or improvident. Here, subject to the matter of mineral rights, the Beaver Band's surrender of its reserve did not amount to exploitation. Further, the circumstances of this case did not give rise to a fiduciary duty on the Crown with respect to the 1945 surrender. While the Band trusted the Crown to provide it with information as to its options and their foreseeable consequences in relation to the surrender of the reserve and the acquisition of new reserve lands, the Band did not abnegate or entrust its power of decision over the surrender of the reserve to the Crown. Finally, the failure to comply with s. 51(3) of the 1927 Indian Act does not invalidate the 1945 surrender. The word "shall" in s. 51(3) should not be considered mandatory. The true object of ss. 51(3) and 51(4) was to ensure that the surrender was validly assented to by the Band and the evidence amply established valid assent. The non‑compliance with s. 51 was technical.
The 1945 surrender imposed a fiduciary duty on the Crown with respect to the subsequent sale or lease of the land, and the Crown did not breach that duty when it sold the land to the DVLA in 1948. First, the sale of the land was made in the best interests of the Beaver Band. Different options, including leasing, were considered. While in retrospect, with the decline of trapping and the discovery of oil and gas, the decision to sell, rather than to lease, may be argued to have been unfortunate, at the time it was defensible as a reasonable decision since that choice had the advantage of meeting the Band's need and wish to purchase lands closer to its trap lines. Second, the Crown did not breach its fiduciary duty by selling the land for $70,000. The DIA received a higher appraisal but there were also appraisals giving lower value to the land. Since the Crown adduced evidence showing that the sale price lay within a range established by the appraisals, this raised a prima facie case that the sale price was reasonable. The onus then shifted to the appellants, who failed to demonstrate that the sale price was unreasonable. Third, the Crown did not breach its fiduciary duty after the surrender of the reserve by failing to restore the land to the Band. Although the Band lived in apparent poverty between 1945 and 1961, one cannot infer that the solution was to cancel the 1945 surrender or refuse to sell the reserve land. The Band's condition appears to have been unrelated to possession of the reserve.
Per La Forest, L'Heureux‑Dubé, Sopinka and Gonthier JJ.: Under the 1945 surrender, both the surface and mineral rights in the reserve were surrendered to the Crown in trust "to sell or lease". This conclusion rests on reasoning unrelated to the scope of the 1927 Indian Act surrender regime and, in particular, to the issue of whether or not the 1940 surrender of mineral rights was actually governed by the 1927 Act, and therefore holds even if the mineral rights had attained the status of "Indian lands" through the 1940 dealings. The ultimate issue to be determined in this case is the impact of the 1945 surrender of the reserve on the 1940 surrender of the mineral rights in that reserve. The 1927 Act is entirely silent on the subjects of surrender variation, surrender revocation, and resurrender, yet no one would seriously suggest that this silence renders all surrenders, including the 1940 surrender, permanent and irrevocable.
The legal character of the 1945 surrender, and its impact on the 1940 surrender, should be determined by reference to the Band's intention. The principles of common law property are not helpful in the context of this case. When determining the legal effect of dealings between aboriginal peoples and the Crown relating to reserve lands, the sui generis nature of aboriginal title requires courts to go beyond the usual restrictions imposed by the common law, in order to give effect to the true purpose of the dealings. Accordingly, unless some statutory bar exists (which is not the case here), the Band members' intention should be given legal effect. Here, the trial judge's findings indicate that the Band members neither expected nor intended to hold rights over the reserve once the 1945 surrender was completed. They understood that by agreeing to the 1945 surrender they would be transferring all their rights in the reserve to the Crown in trust, and that the Crown would either sell or lease those rights for the benefit of the Band. The Band's intention is also evidenced by the terms of the 1945 surrender. It is reasonable to conclude that the term "Reserve", as used in that surrender, was intended to have the same meaning as the term "reserve" in the 1927 Indian Act , which is defined in s. 2 (j) as an unsurrendered tract of land including the "minerals . . . thereon or therein". The true nature of the 1945 surrender can best be characterized as a variation of a trust in Indian land. The 1945 surrender subsumed the 1940 surrender, and expanded upon it. Although a trust in Indian land cannot be equated with a common law trust, "trust‑like" obligations and principles are relevant to the analysis of a surrender of Indian lands. Both surrenders in this case were framed as trusts, and the parties therefore intended to create a trust‑like relationship. In light of the guiding principle that the decisions of aboriginal peoples should be honoured and respected, this surrender variation should be given effect since the Band's understanding of its terms was adequate, and since the Crown's conduct did not taint the dealings in a manner which made it unsafe to rely on the Band's understanding and intention. There was also substantial compliance with the technical surrender requirements embodied in s. 51 of the 1927 Indian Act .
By taking on the obligations of a trustee in relation to the reserve, the DIA was under a fiduciary duty to deal with the land in the best interests of the Band members. This duty extended to both the surface rights and the mineral rights. Although the 1945 surrender was "to sell or lease", there was no clear authorization from the Band which justified the DIA in departing from its long‑standing policy of reserving mineral rights for the benefit of the aboriginal peoples when surface rights were sold. Given these circumstances, the DIA was under a fiduciary duty to continue the leasing arrangement which had been established in the 1940 surrender. It was a violation of this fiduciary duty to sell the mineral rights to the DVLA in 1948.
The evidence showed that by August 9, 1949, the DIA was aware that the mineral rights in the reserve were potentially of considerable value, and that these rights had been sold to the DVLA in 1948. The DIA breached its fiduciary duty to deal with the reserve in the best interests of the Band because, as of August 9, 1949, a reasonable person in the position of the DIA would have realized that a mistake had occurred, and would have exercised its power under s. 64 of the 1927 Indian Act to reacquire the mineral rights for the purpose of effecting a leasing arrangement for the benefit of the Band. Therefore, for the reasons given by McLachlin J., the appellants may recover any losses stemming from transfers by the DVLA after August 9, 1949 as such losses fall within the 30-year limitation period imposed by the British Columbia Limitation Act, and are not barred by any other provision of that Act.
Per Cory, McLachlin and Major JJ.: The 1945 surrender of the reserve did not include the mineral rights. When the Band surrendered the reserve, it could transfer only those rights in the reserve which it still possessed. Since the Band had already surrendered the mineral rights to the Crown in 1940, the 1945 surrender involved only the surface rights of the reserve. This result is dictated not only by the most basic principles of property transfer, but by the 1927 Indian Act itself. The 1940 surrender was a valid surrender of a portion of the reserve which converted that portion into "Indian lands". As "Indian lands" held by the Crown in trust, they could not be surrendered again in 1945. By the definition in s. 2(j) of the Act, a reserve cannot include what has already been surrendered. The Crown therefore continued to hold the mineral rights in trust "to lease" for the welfare of the Band. The suggestion that mineral rights cannot be conveyed except in conjunction with surface rights is inconsistent with the general policy of the law permitting severance of the various property interests in a given parcel of land, the wording of the 1927 Indian Act and the regulations governing oil and gas enacted under it.
The general language of the 1945 surrender did not constitute a revocation of the 1940 surrender and a resurrender of the mineral rights. The mineral rights were not discussed in the negotiations leading to the 1945 surrender, nor referred to in the 1945 document of surrender. As well, the appropriate administrative formalities for a resurrender of the mineral rights complying with the provisions of the 1927 Indian Act were not followed. An intention by the Band to transfer the mineral rights in 1945 cannot sweep aside the provisions of the Act or of the 1940 surrender and, even if it could, such an intention has not been established in this case. In the absence of evidence of intention, the 1940 surrender should not be overturned and the Band should be entitled to the protection of the 1927 Indian Act and the common law which prevent the Crown from unilaterally changing the terms under which it held the property as fiduciary without obtaining the informed consent of the Band.
While there was no breach of the Crown's fiduciary duty with respect to the sale of the surface rights of the reserve, the 1940 surrender also imposed a fiduciary duty on the Crown with respect to the mineral rights, and the DIA breached this duty and the terms of the 1940 surrender by conveying these rights to the DVLA in 1948. The 1940 surrender restricted the DIA to leasing the mineral rights for the benefit of the Band. In any event, even if one were to assume that the 1945 surrender revoked the previous surrender of mineral rights, the 1945 surrender still imposed an obligation on the Crown to lease or sell in the best interests of the Band. A reasonable person does not inadvertently give away a potentially valuable asset which has already demonstrated earning potential. Nor does a reasonable person give away for no consideration what it will cost him nothing to keep and which may one day possess value, however remote the possibility. The Crown managing its own affairs reserved out its minerals. It should have done the same for the Band. The duty on the Crown as fiduciary was that of a man of ordinary prudence in managing his own affairs.
The transfer of the mineral rights to the DVLA was made in March 1948 and the appellants' action filed in September 1978 is thus outside the 30‑year limitation period in s. 8 of the Limitation Act of British Columbia. However, while the fiduciary duty associated with the administration of the reserve as Indian lands may have terminated with the sale of the lands in 1948, an ongoing fiduciary duty to act to correct error in the best interests of the Indians may be inferred from the exceptional nature of s. 64 of the 1927 Indian Act . Under that section, the DIA had the power to revoke the erroneous transfer of the mineral rights to the DVLA up to the time they were sold by the DVLA . The Crown committed a second breach of fiduciary duty by failing to correct its error on August 9, 1949 when it learned of the erroneous transfer and of the potential value of the mineral rights. Since the present action was filed in September 1978, any losses stemming from sales after August 9, 1949 are still permissible under the 30‑year general limitation period. Claims for breach of fiduciary duty regarding mineral rights which survive the 30‑year limitation period are not barred by the 6‑year limitation period provided by s. 3(4) of the Limitation Act. Although the action falls well beyond 6 years from the agreements for sale with the veterans, which took place between 1948 and 1956, by virtue of s. 6(3) of the Limitation Act the running of time was postponed until 1977 since it is only in that year that the appellants became aware of the true facts, placing their writ well within the applicable limitation period. The appellants are therefore entitled to damages against the Crown for breach of fiduciary duty with respect to such mineral rights as were conveyed by agreement for sale after August 9, 1949.
Cases Cited
By Gonthier J.
Referred to: Guerin v. The Queen, [1984] 2 S.C.R. 335.
By McLachlin J.
Applied: Guerin v. The Queen, [1984] 2 S.C.R. 335; referred to: St. Ann's Island Shooting and Fishing Club Ltd. v. The King, [1950] S.C.R. 211; Frame v. Smith, [1987] 2 S.C.R. 99; Norberg v. Wynrib, [1992] 2 S.C.R. 226; Hodgkinson v. Simms, [1994] 3 S.C.R. 377; Montreal Street Railway Co. v. Normandin, [1917] A.C. 170; British Columbia (Attorney General) v. Canada (Attorney General), [1994] 2 S.C.R. 41; Berkheiser v. Berkheiser, [1957] S.C.R. 387; Attorney‑General of British Columbia v. Attorney‑General of Canada (1889), 14 A.C. 295; Fales v. Canada Permanent Trust Co., [1977] 2 S.C.R. 302; M. (K). v. M. (H), [1992] 3 S.C.R. 6.
Statutes and Regulations Cited
Act to amend the Indian Act, S.C. 1938, c. 31, s. 1.
Dominion Lands Act, R.S.C. 1927, c. 113.
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 38(1).
Federal Court Act, R.S.C., 1985, c. F‑7, s. 39(1) .
Indian Act , R.S.C. 1927, c. 98, ss. 2 (e), (j), 50 , 51 , 53 , 54 , 64 , 93(3) .
Land Act, R.S.B.C. 1924, c. 131, ss. 119, 120.
Limitation Act, R.S.B.C. 1979, c. 236, ss. 3(2), (4), 6(3), 8.
Order in Council P.C. 8939, November 19, 1941.
Regulations for the Disposal of Petroleum and Gas on the Indian Reserves in the Provinces of Alberta and Saskatchewan and the Northwest Territories, May 17, 1910, Order in Council P.C. 987.
Regulations for the Disposal of Petroleum and Natural Gas Rights on Indian Reserves, (1938) 72 Can. Gaz. 725, s. 1(a).
Soldier Settlement Act, 1919, S.C. 1919, c. 71.
Veterans' Land Act, 1942, S.C. 1942, c. 33, s. 5(2).
Authors Cited
A. H. Oosterhoff: Text, Commentary and Cases on Trusts, 4th ed. By A. H. Oosterhoff and E. E. Gillese. Toronto: Carswell, 1992.
Chambers English Dictionary, 7th ed. Cambridge: Cambridge University Press, 1988.
Concise Oxford Dictionary, 8th ed. Oxford: Clarendon Press, 1990.
Shepherd, J. C. The Law of Fiduciaries, Toronto: Carswell, 1981.
APPEAL and CROSS‑APPEAL from a judgment of the Federal Court of Appeal, [1993] 3 F.C. 28, 100 D.L.R. (4th) 504, 151 N.R. 241, [1993] 2 C.N.L.R. 20, dismissing an appeal and a cross‑appeal from a judgment of the Trial Division, [1988] 3 F.C. 20 (abridged version), 14 F.T.R. 161, [1988] 1 C.N.L.R. 73. Appeal and cross‑appeal allowed.
Thomas R. Berger, Q.C., Leslie J. Pinder, Arthur Pape and Gary A. Nelson, for the appellants.
I. G. Whitehall, Q.C., John R. Haig, Q.C., and Mitchell R. Taylor, for the respondent.
Marvin R. V. Storrow, Q.C., and Maria Morellato, for the interveners the Musqueam Nation and Ermineskin Tribal Council.
James O'Reilly, Edward H. Molstad, Q.C., and Chantal Chatelain, for the interveners Chief Abel Bosum et al.
James O'Reilly, Edward H. Molstad, Q.C., and L. Douglas Rae, for the interveners Chief Terry Buffalo et al.
Peter K. Doody and John E. S. Briggs, for the intervener the Assembly of First Nations.
The judgment of La Forest, L'Heureux-Dubé, Sopinka and Gonthier JJ. was delivered by
Gonthier J. --
I. Introduction
1 I have had the benefit of reading the reasons of my colleague, McLachlin J. While I agree with her analyses of the surrender of the surface rights in Indian Reserve 172 ("I.R. 172"), and the application of the British Columbia Limitation Act, R.S.B.C. 1979, c. 236, and with her ultimate disposition of the case, I find that I cannot agree with her conclusion that the 1945 surrender of I.R. 172 to the Crown did not include the mineral rights in the reserve. In my view, the 1945 agreement constituted a complete surrender to the Crown of the surface and mineral rights in the St. John Indian Reserve, in trust, "to sell or lease". The Beaver Band's intention at the time of the 1945 surrender, and the terms of the surrender instrument, bear this out. Moreover, while I agree with my colleague that in dealing with the mineral rights subsequent to the 1945 surrender, the Department of Indian Affairs ("DIA") committed a breach of fiduciary duty, my reasons are somewhat different. I set them out below.
II. The Effect of the 1945 Surrender of I.R. 172 on the 1940 Surrender of
the Mineral Rights in I.R. 172
2 McLachlin J.'s position, in brief, is that since there had already been a surrender of the mineral rights in I.R. 172 for "lease" in 1940, these mineral rights could not have been included in the 1945 surrender. The basis of her position lies in the Indian Act , R.S.C. 1927, c. 98 , scheme governing the transfer of reserve lands to the Crown. Once such lands are surrendered, they become "Indian lands" under the Act. Section 2(e) of the Act defines "Indian lands" as follows:
"Indian lands" means any reserve or portion of a reserve which has been surrendered to the Crown;
It is therefore clear that "Indian lands" must constitute a "reserve or portion of a reserve". "Reserve" is defined in s. 2(j) of the Act:
"reserve" means any tract or tracts of land set apart by treaty or otherwise for the use or benefit of or granted to a particular band of Indians, of which the legal title is in the Crown, and which remains so set apart and has not been surrendered to the Crown, and includes all the trees, wood, timber, soil, stone, minerals, metals and other valuables thereon or therein;
McLachlin J. argues that when the Band surrendered the mineral rights in I.R. 172 to the Crown in 1940, this severed the mineral rights from the "reserve". The mineral rights thus constituted "Indian lands" under s. 2(e) of the Act, because they were a "portion of a reserve" which had been "surrendered". Therefore, the 1945 agreement could not have included the Band's rights over the minerals, since the surrendered "reserve", as defined in s. 2(j) of the Act, was composed of only those portions of I.R. 172 which had not yet been surrendered. Furthermore, because the parties did not comply with certain administrative procedures associated with the resurrender of reserve lands (i.e., the execution of a formal revocation document prior to resurrender), McLachlin J. rejects the notion that the 1945 agreement constituted a revocation of the 1940 surrender of mineral rights for "lease", and a resurrender of those same rights "to sell or lease". She concludes that the 1940 surrender was unaffected by the 1945 agreement, and that s. 54 of the Act prevented the DIA from selling the mineral rights since it was required to continue to lease the mineral rights according to the 1940 terms.
3 The issue of whether the 1940 surrender of mineral rights was governed by the 1927 Indian Act surrender regime has been a source of considerable controversy. In the courts below, both Addy J. and Stone J.A. were of the view that the surrender by a band of the right to exploit indeterminate mineral deposits within reserve lands was outside the scope of the 1927 Act. This conclusion was based on their view that the statutory regime only applied to the surrender of surface rights and mineral rights together, and that mineral rights themselves could not be a "reserve" with the status of "Indian lands". Isaac C.J., and my colleague McLachlin J., have both reached the opposite conclusion, finding that the 1927 Act applied also to a surrender of mineral rights only, since such rights constituted a "portion of a reserve", and therefore, would have the status of "Indian lands" following surrender.
4 In my view, the debate as to the juridical nature of the 1940 surrender is academic in the circumstances of this case, and the matter need not be determined here. Whether or not the 1940 surrender was actually governed by the 1927 Act, there has been no challenge to its legitimacy in this appeal. Nor should there be, since the Band gave its full and informed consent, the Crown fulfilled its fiduciary duty in relation to the surrender, and the parties complied with the statutory surrender procedures. My conclusion that the mineral rights in I.R. 172 were surrendered as part of the 1945 agreement rests on reasoning unrelated to the scope of the statutory surrender regime, and therefore holds even if the mineral rights had attained the status of "Indian lands" through the 1940 dealings. This is because the ultimate issue to be determined in this case is the impact of the 1945 surrender of I.R. 172 on the earlier 1940 surrender of the mineral rights in I.R. 172, regardless of the latter's effectiveness. The 1927 Act is entirely silent on the subjects of surrender variation, surrender revocation, and resurrender, yet no one would seriously suggest that this silence renders all surrenders, including the 1940 agreement, permanent and irrevocable. In fact, the DIA developed its own administrative procedures for the revocation of a surrender, in order to facilitate resurrender and fill the void left by the statute. It is this statutory void which must be addressed here, and I do not think that the analysis is advanced by a finding one way or the other as to whether "Indian lands" are in dispute.
5 To explain the impact of the 1945 surrender of I.R. 172 "to sell or lease" on the 1940 surrender of the mineral rights in I.R. 172 for "lease", both the appellants and the Crown have advanced different common law property concepts in support of their competing positions. The Crown's position, which is essentially that of the trial judge, Addy J., is that the mineral rights were transferred in the 1945 surrender through the operation of the legal presumption that a general conveyance of land passes all interests except those specifically reserved in the deed of transfer. The appellants, whose position is adopted by my colleague McLachlin J., prefer the common law principle nemo dat quod non habet __ a person cannot give what she does not possess. According to the reasons of McLachlin J., the Band could not surrender the mineral rights in I.R. 172 in 1945, since these rights had already been surrendered in 1940.
6 In my view, principles of common law property are not helpful in the context of this case. Since Indian title in reserves is sui generis, it would be most unfortunate if the technical land transfer requirements embodied in the common law were to frustrate the intention of the parties, and in particular the Band, in relation to their dealings with I.R. 172. For this reason, the legal character of the 1945 surrender, and its impact on the 1940 surrender, should be determined by reference to the intention of the Band. Unless some statutory bar exists (which, as noted above, is not the case here), then the Band members' intention should be given legal effect.
7 An intention-based approach offers a significant advantage, in my view. As McLachlin J. observes, the law treats aboriginal peoples as autonomous actors with respect to the acquisition and surrender of their lands, and for this reason, their decisions must be respected and honoured. It is therefore preferable to rely on the understanding and intention of the Band members in 1945, as opposed to concluding that regardless of their intention, good fortune in the guise of technical land transfer rules and procedures rendered the 1945 surrender of mineral rights null and void. In a case such as this one, a more technical approach operates to the benefit of the aboriginal peoples. However, one can well imagine situations where that same approach would be detrimental, frustrating the well-considered plans of the aboriginals. In my view, when determining the legal effect of dealings between aboriginal peoples and the Crown relating to reserve lands, the sui generis nature of aboriginal title requires courts to go beyond the usual restrictions imposed by the common law, in order to give effect to the true purpose of the dealings.
8 While McLachlin J. dedicates a considerable portion of her reasons to an analysis of the Band's intention, the fact remains that under her approach, the Band's intention in 1945 is irrelevant. Even if McLachlin J. were to agree with my conclusion that the Band intended to surrender the mineral rights as part of the 1945 agreement, she would be forced to the conclusion that the mineral rights were not part of the 1945 surrender because of her findings in relation to the 1927 Act, the operation of nemo dat quod non habet, and the administrative procedures adopted by the DIA for surrender revocation. Although McLachlin J. and I might disagree on the Band's intention in this case, since I prefer to rely on the factual findings of the trial judge, I think that in principle an intention-based approach is preferable to my colleague's more technical reasoning.
9 In applying this approach in the circumstances of this case, one must have regard to the factual findings of the trial judge, Addy J. Three are particularly relevant in determining the Band members' intention when they agreed to the surrender of I.R. 172 in 1945:
1. That the plaintiffs had known for some considerable time that an absolute surrender of I.R. 172 was being contemplated;
. . .
6. That Mr. Grew [the local Indian agent] fully explained to the Indians the consequences of a surrender;
7. That, although they would not have understood and probably would have been incapable of understanding the precise nature of the legal interest they were surrendering, they did in fact understand that by the surrender they were giving up forever all rights to I.R. 172, in return for the money which would be deposited to their credit once the reserve was sold and with their being furnished with alternate sites near their trapping lines to be purchased from the proceeds; [Emphasis added.]
([1988] 3 F.C. 20, at pp. 66-67.)
The Band understood that by agreeing to the 1945 surrender, they would be transferring all their rights in I.R. 172 to the Crown in trust, and that the Crown would either sell or lease those rights for the benefit of the Band. The sale or lease of I.R. 172 by the Crown would provide the funds necessary for the Band to purchase alternate reserve sites better suited to their traditional hunting and gathering activities. The Band neither expected nor intended to hold rights over I.R. 172 once the 1945 surrender was completed. This was entirely appropriate, as my colleague McLachlin J. points out, because I.R. 172 was virtually useless to the Band at the time.
10 The Band's intention is evidenced by the terms of the 1945 surrender instrument, signed by Chief Succona, Joseph Apsassin and two councillors on behalf of the Band. This instrument states that the Band did "release, remise, surrender, quit claim and yield up unto our Sovereign Lord the King, his Heirs and Successors forever, ALL AND SINGULAR, that certain parcel or tract of land and premises . . . composed of St. John Indian Reserve No. 172". Since this instrument effected the surrender of certain land forming a "reserve", it is reasonable to conclude that the term "Reserve", as used in the surrender instrument, was intended to have the same meaning as the term "reserve" in the Indian Act . As I noted above, s. 2(j) of the Act defines "reserve" as an unsurrendered tract of land including the "minerals . . . thereon or therein". Therefore, the 1945 surrender included the tract of land forming I.R. 172, the minerals in that tract of land, and the right to exploit those minerals. On this basis, I must respectfully disagree with McLachlin J.'s assertion that the surrender document was silent concerning the mineral rights.
11 Given the Band's intention vis-à-vis the 1945 surrender, and the terms of that surrender, Stone J.A., in the court below, concluded:
It would seem to me that the overall effect of the 1945 transaction was essentially the same as might have been achieved by first cancelling the 1940 surrender with consent of the Indians followed by the acceptance of that cancellation by the Governor in Council. According to the Trial Judge's finding the Indians agreed to the release of their rights in I.R. 172; their consent was reflected in the language of the formal surrender instrument and the surrender was afterwards accepted by the Governor in Council.
([1993] 3 F.C. 28, at pp. 122-23.)
He therefore construed the 1945 surrender as a revocation of the 1940 agreement, and a transfer of I.R. 172, including the mineral rights, to the Crown "to sell or lease".
12 Although the "revocation-resurrender" description offered by Stone J.A. is one plausible construction of the 1945 agreement, I think that the true nature of the 1945 dealings can best be characterized as a variation of a trust in Indian land. In 1940, the Band transferred the mineral rights in I.R. 172 to the Crown in trust, requiring the Crown to lease those rights for the benefit of the Band. The 1945 agreement was also framed as a trust, in which the Band surrendered all of its rights over I.R. 172 to the Crown "to sell or lease". The 1945 agreement subsumed the 1940 agreement, and expanded upon it in two ways: first, while the 1940 surrender concerned mineral rights only, the 1945 surrender covered all rights in I.R. 172, including both mineral rights and surface rights; and second, while the 1940 surrender constituted a trust for "lease", the 1945 surrender gave the Crown, as trustee, the discretion "to sell or lease". This two-pronged variation of the 1940 trust agreement afforded the Crown considerably greater power to act as a fiduciary on behalf of the Band. Of course, under the terms of the trust, and because of the Crown's fiduciary role in the dealings, the DIA was required to exercise its enlarged powers in the best interests of the Band.
13 I should add that my reasons should not be interpreted to equate a trust in Indian land with a common law trust. I am well aware that this issue was not resolved in Guerin v. The Queen, [1984] 2 S.C.R. 335, and I do not wish to pronounce upon it in this case. However, this Court did recognize in Guerin that "trust-like" obligations and principles would be relevant to the analysis of a surrender of Indian lands. In this case, both the 1940 and 1945 surrenders were framed as trusts, and the parties therefore intended to create a trust-like relationship. Thus, for lack of a better label, I think that it is appropriate to refer to these surrenders as trusts in Indian land.
14 I should also add that I would be reluctant to give effect to this surrender variation if I thought that the Band's understanding of its terms had been inadequate, or if the conduct of the Crown had somehow tainted the dealings in a manner which made it unsafe to rely on the Band's understanding and intention. However, neither of these situations arises here. As the trial judge found, the consequences of the 1945 surrender were fully explained to the Indians by the local agent of the DIA during the negotiations. There was also substantial compliance with the technical surrender requirements embodied in s. 51 of the 1927 Indian Act , and as McLachlin J. concludes, the evidence amply demonstrates the valid assent of the Band members to the 1945 agreement. Moreover, by the terms of the surrender instrument, the DIA was required to act in the best interests of the Band in dealing with the mineral rights. In fact, the DIA was under a fiduciary duty to put the Band's interests first. I therefore see nothing during the negotiations prior to the 1945 surrender, or in the terms of the surrender instrument, which would make it inappropriate to give effect to the Band's intention to surrender all their rights in I.R. 172 to the Crown in trust "to sell or lease". In fact, the guiding principle that the decisions of aboriginal peoples should be honoured and respected leads me to the opposite conclusion.
15 I therefore conclude that under the 1945 agreement, both the surface rights and the mineral rights in I.R. 172 were surrendered to the Crown in trust "to sell or lease".
III. Breach of Fiduciary Duty by the DIA Subsequent to the 1945 Surrender
16 The terms of the 1945 surrender transferred I.R. 172 to the Crown "in trust to sell or lease the same to such person or persons, and upon such terms as the Government of the Dominion of Canada may deem most conducive to our Welfare and that of our people". By taking on the