Beattie v. Canada

Beattie v. Canada
Court (s) Database
Federal Court Decisions
Date
2005-05-18
Neutral citation
2005 FC 715
File numbers
T-2134-00, T-2203-00, T-2204-00
Decision Content
Date: 20050518
Docket: T-2134-00
T-2203-00
T-2204-00
Citation: 2005 FC 715
BETWEEN:
BRUCE ALLAN BEATTIE
Plaintiff (Appellant)
- and -
HER MAJESTY THE QUEEN
Defendant (Respondent)
REASONS FOR ORDER
LEMIEUX J.
INTRODUCTION
[1] These appeals by Bruce Allan Beattie are from three judgments dated May 6, 2004, by Prothonotary Lafrenière dismissing three actions falling within his jurisdiction under Rule 50(2) of the Federal Courts Rules, 1998 (the "Rules") since the amount claimed in each of them did not exceed $50,000 exclusive of interest and costs in which Mr. Beattie was the plaintiff. These appeals raise identical issues, were heard together and are dealt with in a single set of reasons.
[2] Mr. Beattie sues Her Majesty the Queen in right of Canada ("HMQ" or the "federal Crown") as the assignee of persons claiming to be natural descendants of Indians who adhered to Treaty No. 6 between HMQ and the Plains and Wood Cree Indians and other tribes in 1876.
[3] Mr. Beattie also sues HMQ as assignee of persons claiming to be heads of families and natural descendants of Indians who adhered to Treaty No. 11 between HMQ and aboriginal adherents at Fort Good Hope, N.W.T., on July 21, 1921.
[4] Each assignor assigned to Mr. Beattie "absolutely, all unpaid arrears of per head yearly (annuity) payments, plus interest thereon, which are lawfully due and payable to me pursuant to the terms of the said Treaty [No. 6 or No. 11] up to the date of this assignment, and all causes of action related to such debt."
[5] Typical in each claim in the three actions is an allegation that each assignor from a certain date [such as 1987 being the date of registration pursuant to the Indian Act] has received treaty annuity payments since that date but never received such annuities prior to that date of registration.
[6] In its statement of defence, the federal Crown denied the assignors were entitled to treaty annuities for the periods claimed or, in the alternative, were entitled to interest on the arrears. The federal Crown also challenged the validity of the assignments pursuant to the provisions of the Financial Administration Act ("FAA").
[7] Pursuant to an order made under Rule 107, Prothonotary Lafrenière had to determine two issues separately from other issues raised by the pleadings. Those two issues were:
(a) the effect, if any, of the FAA on the validity of the assignments to Mr. Beattie;
(b) whether interest is owing on any annuity arrears that may be found owing and, if so, what is the rate of interest, whether it is simple or compound interest and how it is to be calculated.
[8] Prothonotary Lafrenière held the assignments were void under the FAA and no interest was payable on any arrears that might be owing to the assignors.
FACTS
[9] It is common ground that Mr. Beattie is not a registered Indian but has family ties to Registered Indians.
[10] Treaty No. 6 provides in part:
And further, that Her Majesty's Commissioners shall, as soon as possible after the execution of this treaty, cause to be taken an accurate census of all the Indians inhabiting the tract above described, distributing them in families, and shall, in every year ensuing the date hereof, at some period in each year, to be duly notified to the Indians, and at a place or places to be appointed for that purpose within the territory ceded, pay to each Indian person the sum of $5 per head yearly. [emphasis mine]
Treaty No. 11 contains similar wording, as follows:
AND in order to show the satisfaction of His Majesty with the behaviour and good conduct of His Indian subjects, and in extinguishment of all their past claims hereinabove mentioned, He hereby, through his Commissioner, agrees to give to each Chief a present of thirty-two dollars in cash, to each Headman, twenty-two dollars, and to every other Indian of whatever age of the families represented, at the time and place of payment, twelve dollars.
HIS MAJESTYalso agrees that during the coming year, and annually thereafter, He will cause to be paid to the said Indians in cash, at suitable places and dates, of which the said Indians shall be duly notified, to each Chief twenty-five dollars, to each Headman fifteen dollars, and to every other Indian of whatever age, five dollars, to be paid only to heads of families for the members thereof, it being provided for the purposes of this Treaty that each band having at least thirty members may have a Chief, and that, in addition to a Chief, each band may have councillors or headmen in the proportion of two to each two hundred members of the band. [emphasis mine]
[11] The hearing of the bifurcated issues proceeded on the basis of an agreed statement of facts specific to each action, the affidavit evidence of Nicholas Mitchell and Michael McGinty, the documentary evidence contained in a Joint Book of Documents (the "Joint Book"), and the evidence from examinations for discovery of the plaintiff and the assignors. No witnesses were called at trial.
[12] In his reasons, the Prothonotary reproduced the Agreed Statement of Facts in Court No. T-2203-00, said to be representative of the statements agreed to in the two other proceedings. That statement of facts reads:
AGREED STATEMENT OF FACTS
1. The assignors, Philip George Harris, Mary Martha Harris, Margaret Mary Napora, Kevin Kimberley Napora, and Shannon Trevor Napora, (the "Assignors") are children or grandchildren of original Treaty 11 adherents and are all currently registered as Indians pursuant to the Indian Act, R.S.C. 1985, c. I-5.
2. The signing of Treaty 11 pre-dates the births of all the Assignors.
3. The Plaintiff, Bruce Beattie, is not a Treaty 11 Indian, nor is he registered as an Indian under the Indian Act, but he is a family member to each of the Assignors through marriage.
4. The Department of Indian Affairs and Northern Development ("DIAND") has recognized each of the Assignors as being entitled to receive annuities pursuant to Treaty No. 11 ("Annuities") since the dates of their respective applications for registration as status Indians under the Indian Act, but not prior to those dates.
5. Treaty paylist records indicate when payment to any individual Indian entitled to receive treaty annuity was not made.
6. The Plaintiff sent the Receiver General a Notice of Assignment of Crown Debt in respect to the assignment of the Assignor, Charles Edward Harris, in related Action No. T-2134-00. However, the assignment was not approved by the Receiver General.
7. As a result of the Receiver General's response to the Notice of Assignment of Crown Debt of Charles Edward Harris, the Plaintiff has not sent the Receiver General any further Notices of Assignment of Crown Debt in respect to the assignments of the other Assignors.
8. Treaty 11 does not contain express terms with respect to payment of interest on annuity arrears.
9. The historical documents listed by the parties to the actions before the Court disclose no reference to discussions of interest on annuity arrears during negotiations leading to the signing of Treaty 11.
10. Any cause of action herein in respect of any debts arising from breach of treaty obligations by the Crown to pay annuity arrears, and to pay interest thereon, arose in more than one province or outside a province. [emphasis mine]
[13] The Prothonotary made no factual distinction between any of the individual assignors or between the two treaties. The parties on this appeal were content with that finding.
[14] He drew from Mr. Mitchell's affidavit to describe the procedure for the payment of annuities under both treaties. The Prothonotary wrote the following at paragraph 16 of his reasons:
¶ 16 Second, both Treaty No. 6 and Treaty No. 11 promise annual payments by the Crown of $5.00 to each of the original adherents of the respective treaties and their natural descendants. In his affidavit, Mr. Mitchell sets out the procedure for payment of annuities:
1. Treaty annuity payments were provided by the Department of Indian Affairs on an annual basis, using funds voted by Parliament each year. The funds used to pay annuities were voted on the basis of Departmental Estimates.
2. Annuities were paid to Treaty Indians at pre-determined times and places, and these payments were recorded in Treaty paylists for each Band.
3. When the payment process had been completed each year, unused treaty annuity moneys were returned to the Receiver General. No annuity payments were retained for use in subsequent years.
4. The same procedure was repeated every fiscal year.
5. The annual Estimates prepared by the Department of Indian Affairs each year included moneys to pay arrears of annuities to Treaty Indians who had missed previous payments.
6. Arrears were paid from the annuity moneys for the same fiscal year in which the request for arrears was made.
7. No interest was paid on arrears of Treaty annuities. [emphasis mine]
THE PROTHONOTARY'S DECISION - [2004 FC 674]
(a) The Validity of the Assignments
[15] HMQ submitted to the Prothonotary three reasons why the assignments which Mr. Beattie took were invalid:
(a) Section 67 of the FAA bars the assignment of Crown debts except in the situations described in section 68 of that Act. None of those exceptions, it is said by the federal Crown, apply to the assignment of arrears of treaty annuities due and owing. In particular, treaties are not contracts for the purposes of subsection 68(1) of the FAA.
(b) treaty annuities cannot be assigned even if they fall within the exception set out in subsection 68(1) of the FAA since treaty rights are non-transferable due to their special status. This argument is linked to subsection 68(4) of the FAA which provides that an assignment is subject to "all conditions and restrictions in respect of the right of transfer that relate to the original Crown debt or that attach to or are contained in the original contract" which led the Prothonotary to consider the provisions of section 90 of the Indian Act;
(c) the notice of assignment which Mr. Beattie provided did not comply with the Assignment of Crown Debt Regulations. The Prothonotary did not accept this argument and it is not an issue before me according to the federal Crown.
[16] For ease of reference, I set out the definition of "public money" in section 2, sections 66, 67 and 68 of the FAA, as well as sections 87, 89 and 90 of the Indian Act:
Financial Administration Act
2. In this Act,
« fonds publics »
"public money" means all money belonging to Canada received or collected by the Receiver General or any other public officer in his official capacity or any person authorized to receive or collect such money, and includes
(a) duties and revenues of Canada,
(b) money borrowed by Canada or received through the issue or sale of securities,
(c) money received or collected for or on behalf of Canada, and
(d) all money that is paid to or received or collected by a public officer under or pursuant to any Act, trust, treaty, undertaking or contract, and is to be disbursed for a purpose specified in or pursuant to that Act, trust, treaty, undertaking or contract;
66. In this Part,
"appropriate paying officer" « agent payeur compétent »
"appropriate paying officer", in relation to a Crown debt, means the paying officer who makes the payments in respect of that debt;
"contract" « marché »
"contract" means a contract involving the payment of money by the Crown;
"Crown" « Sa Majesté »
"Crown" means Her Majesty in right of Canada;
"Crown debt" « créance sur Sa Majesté »
"Crown debt" means any existing or future debt due or becoming due by the Crown, and any other chose in action in respect of which there is a right of recovery enforceable by action against the Crown;
"paying officer" « agent payeur »
"paying officer" means any person designated as such by regulation;
"prescribed" Version anglaise seulement
"prescribed" means prescribed by regulation.R.S., 1985, c. F-11, s. 66; 1999, c. 31, s. 113(F).
General prohibition
67. Except as provided in this Act or any other Act of Parliament,
(a) a Crown debt is not assignable; and
(b) no transaction purporting to be an assignment of a Crown debt is effective so as to confer on any person any rights or remedies in respect of that debt.
R.S., c. F-10, s. 80.
Assignments of specified Crown debts
68. (1) Subject to this section, an assignment may be made of
(a) a Crown debt that is an amount due or becoming due under a contract; and
(b) any other Crown debt of a prescribed class.
Conditions for validity
(2) The assignment referred to in subsection (1) is valid only if
(a) it is absolute, in writing and made under the hand of the assignor;
(b) it does not purport to be by way of charge only; and
(c) notice of the assignment has been given to the Crown as provided in section 69.
Effect of assignment
(3) The assignment referred to in subsections (1) and (2) is effectual in law, subject to all equities that would have been entitled to priority over the right of the assignee if this section had not been enacted, to pass and transfer, from the date service on the Crown of notice of the assignment is effected,
(a) the legal right to the Crown debt;
(b) all legal and other remedies for the Crown debt; and
(c) the power to give a good discharge for the Crown debt without the concurrence of the assignor.
Original conditions and restrictions
(4) An assignment made in accordance with this Part is subject to all conditions and restrictions in respect of the right of transfer that relate to the original Crown debt or that attach to or are contained in the original contract.
Salary, wages, pay and allowances not assignable
(5) Notwithstanding subsection (1), any amount due or becoming due by the Crown as or on account of salary, wages, pay or pay and allowances is not assignable and no transaction purporting to be an assignment of any such amount is effective to confer on any person any rights or remedies in respect of that amount.
R.S., 1985, c. F-11, s. 68; 1991, c. 24, s. 49(E).
Indian Act
87. (1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation, namely,
(a) the interest of an Indian or a band in reserve lands or surrendered lands; and
(b) the personal property of an Indian or a band situated on a reserve.
Idem
(2) No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any property mentioned in paragraph (1)(a) or (b) or is otherwise subject to taxation in respect of any such property.
Idem
(3) No succession duty, inheritance tax or estate duty is payable on the death of any Indian in respect of any property mentioned in paragraphs (1)(a) or (b) or the succession thereto if the property passes to an Indian, nor shall any such property be taken into account in determining the duty payable under the Dominion Succession Duty Act, chapter 89 of the Revised Statutes of Canada, 1952, or the tax payable under the Estate Tax Act, chapter E-9 of the Revised Statutes of Canada, 1970, on or in respect of other property passing to an Indian.
R.S., c. I-6, s. 87; 1980-81-82-83, c. 47, s. 25.
89. (1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band.
Exception
(1.1) Notwithstanding subsection (1), a leasehold interest in designated lands is subject to charge, pledge, mortgage, attachment, levy, seizure, distress and execution.
Conditional sales
(2) A person who sells to a band or a member of a band a chattel under an agreement whereby the right of property or right of possession thereto remains wholly or in part in the seller may exercise his rights under the agreement notwithstanding that the chattel is situated on a reserve.
R.S., 1985, c. I-5, s. 89; R.S., 1985, c. 17 (4th Supp.), s. 12.
Property deemed situated on reserve
90. (1) For the purposes of sections 87 and 89, personal property that was
(a) purchased by Her Majesty with Indian moneys or moneys appropriated by Parliament for the use and benefit of Indians or bands, or
(b) given to Indians or to a band under a treaty or agreement between a band and Her Majesty,
shall be deemed always to be situated on a reserve.
Restriction on transfer
(2) Every transaction purporting to pass title to any property that is by this section deemed to be situated on a reserve, or any interest in such property, is void unless the transaction is entered into with the consent of the Minister or is entered into between members of a band or between the band and a member thereof.
Destruction of property
(3) Every person who enters into any transaction that is void by virtue of subsection (2) is guilty of an offence, and every person who, without the written consent of the Minister, destroys personal property that is by this section deemed to be situated on a reserve is guilty of an offence.
R.S., c. I-6, s. 90.
Loi sur la Gestion des finances publiques
2. Les définitions qui suivent s'appliquent à la présente loi.
"public money"
« fonds publics » Fonds appartenant au Canada, perçus ou reçus par le receveur général ou un autre fonctionnaire public agissant en sa qualité officielle ou toute autre personne autorisée à en percevoir ou recevoir. La présente définition vise notamment :
a) les recettes de l'État;
b) les emprunts effectués par le Canada ou les produits de l'émission ou de la vente de titres;
c) les fonds perçus ou reçus pour le compte du Canada ou en son nom;
d) les fonds perçus ou reçus par un fonctionnaire public sous le régime d'un traité, d'une loi, d'une fiducie, d'un contrat ou d'un engagement et affectés à une fin particulière précisée dans l'acte en question ou conformément à celui-ci.
66. Les définitions qui suivent s'appliquent à la présente partie.
« agent payeur » "paying officer"
« agent payeur » Personne désignée à ce titre par règlement.
« agent payeur compétent » "appropriate paying officer"
« agent payeur compétent » L'agent payeur qui règle une créance sur Sa Majesté.
« créance sur Sa Majesté » "Crown debt"
« créance sur Sa Majesté » Dette existante ou future, échue ou à échoir, de Sa Majesté, ainsi que tout autre droit incorporel dont le recouvrement peut être poursuivi en justice contre Sa Majesté.
« marché » "contract"
« marché » Contrat prévoyant un versement de fonds par Sa Majesté.
« Sa Majesté » "Crown"
« Sa Majesté » Sa Majesté du chef du Canada.
L.R. (1985), ch. F-11, art. 66; 1999, ch. 31, art. 113(F).
Interdiction générale
67. Sous réserve des autres dispositions de la présente loi ou de toute autre loi fédérale :
a) les créances sur Sa Majesté sont incessibles;
b) aucune opération censée constituer une cession de créances sur Sa Majesté n'a pour effet de conférer à quiconque un droit ou un recours à leur égard.
S.R., ch. F-10, art. 80.
Cas particuliers
68. (1) Sous réserve des autres dispositions du présent article, les créances suivantes sont cessibles :
a) celles qui correspondent à un montant échu ou à échoir aux termes d'un marché;
b) celles qui appartiennent à une catégorie déterminée par règlement.
Conditions de validité
(2) La cession n'est valide que si les conditions suivantes sont remplies :
a) elle est absolue, établie par écrit et signée par le cédant;
b) elle n'est pas censée faite à titre de sûreté seulement;
c) il en a été donné avis conformément à l'article 69.
Conséquences
(3) Sous réserve des droits qui, en l'absence du présent article, auraient pris rang avant celui du cessionnaire, la cession a pour effet de transférer, à compter de la date de la signification de l'avis :
a) le droit à la créance sur Sa Majesté;
b) les recours juridiques et autres concernant la créance;
c) le pouvoir de donner quittance à cet égard sans l'assentiment du cédant.
Conditions
(4) Une cession faite en conformité avec la présente partie est assujettie à toutes les conditions et restrictions, relatives au droit de transfert, qui se rattachent à la créance originale ou qui découlent du marché original.
Incessibilité des salaires, allocations, etc.
(5) Par dérogation au paragraphe (1), les créances sur Sa Majesté échues ou à échoir à titre de traitements, salaires ou allocations sont incessibles; aucune opération censée constituer une cession de ces créances n'a pour effet de conférer à quiconque un droit ou un recours à leur égard.
L.R. (1985), ch. F-11, art. 68; 1991, ch. 24, art. 49(A).
Loi sur les Indiens
87. (1) Nonobstant toute autre loi fédérale ou provinciale, mais sous réserve de l'article 83, les biens suivants sont exemptés de taxation :
a) le droit d'un Indien ou d'une bande sur une réserve ou des terres cédées;
b) les biens meubles d'un Indien ou d'une bande situés sur une réserve.
Idem
(2) Nul Indien ou bande n'est assujetti à une taxation concernant la propriété, l'occupation, la possession ou l'usage d'un bien mentionné aux alinéas (1)a) ou b) ni autrement soumis à une taxation quant à l'un de ces biens.
Idem
(3) Aucun impôt sur les successions, taxe d'héritage ou droit de succession n'est exigible à la mort d'un Indien en ce qui concerne un bien de cette nature ou la succession visant un tel bien, si ce dernier est transmis à un Indien, et il ne sera tenu compte d'aucun bien de cette nature en déterminant le droit payable, en vertu de la Loi fédérale sur les droits successoraux, chapitre 89 des Statuts révisés du Canada de 1952, ou l'impôt payable, en vertu de la Loi de l'impôt sur les biens transmis par décès, chapitre E-9 des Statuts révisés du Canada de 1970, sur d'autres biens transmis à un Indien ou à l'égard de ces autres biens.
S.R., ch. I-6, art. 87; 1980-81-82-83, ch. 47, art. 25.
89. (1) Sous réserve des autres dispositions de la présente loi, les biens d'un Indien ou d'une bande situés sur une réserve ne peuvent pas faire l'objet d'un privilège, d'un nantissement, d'une hypothèque, d'une opposition, d'une réquisition, d'une saisie ou d'une exécution en faveur ou à la demande d'une personne autre qu'un Indien ou une bande.
Dérogation
(1.1) Par dérogation au paragraphe (1), les droits découlant d'un bail sur une terre désignée peuvent faire l'objet d'un privilège, d'un nantissement, d'une hypothèque, d'une opposition, d'une réquisition, d'une saisie ou d'une exécution.
Ventes conditionnelles
(2) Une personne, qui vend à une bande ou à un membre d'une bande un bien meuble en vertu d'une entente selon laquelle le droit de propriété ou le droit de possession demeure acquis en tout ou en partie au vendeur, peut exercer ses droits aux termes de l'entente, même si le bien meuble est situé sur une réserve.
L.R. (1985), ch. I-5, art. 89; L.R. (1985), ch. 17 (4e suppl.), art. 12.
Biens considérés comme situés sur une réserve
90. (1) Pour l'application des articles 87 et 89, les biens meubles qui ont été :
a) soit achetés par Sa Majesté avec l'argent des Indiens ou des fonds votés par le Parlement à l'usage et au profit d'Indiens ou de bandes;
b) soit donnés aux Indiens ou à une bande en vertu d'un traité ou accord entre une bande et Sa Majesté,
sont toujours réputés situés sur une réserve.
Restriction sur le transfert
(2) Toute opération visant à transférer la propriété d'un bien réputé, en vertu du présent article, situé sur une réserve, ou un droit sur un tel bien, est nulle à moins qu'elle n'ait lieu avec le consentement du ministre ou ne soit conclue entre des membres d'une bande ou entre une bande et l'un de ses membres.
Destruction de biens
(3) Quiconque conclut une opération déclarée nulle par le paragraphe (2) commet une infraction; commet aussi une infraction quiconque détruit, sans le consentement écrit du ministre, un bien meuble réputé, en vertu du présent article, situé sur une réserve.
S.R., ch. I-6, art. 90.
(1) The first ground of invalidity
[17] The first ground of invalidity is the Prothonotary's finding that any Crown debt owing under a treaty does not fall within the exception under subsection 68(1) for the reason that a treaty is not a "contract" within the meaning of that subsection.
[18] I reproduce, omitting the citations, the relevant paragraphs of his decision on this point:
¶ 32 The modern principle of statutory interpretation requires the words of an Act to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament...
¶ 33 In keeping with the modern principle, when the legislature makes a general rule and lists certain exceptions, the latter must be strictly construed. An exception should not be construed in such a manner that the broad purpose of the legislation is undermined....
¶ 34 Section 68 of the FAA exempts a "Crown debt due or becoming due under a contract" from the general prohibition against the assignability of Crown debts contained at s. 67. Since it is an exception to the general rule, it must be strictly construed, particularly given that the underlying purpose of this part of the FAA is to restrict the assignability of Crown debts.
¶ 35 Indian treaties have often been equated to contracts. However, the jurisprudence and authorities cited by the Plaintiff do not deal treaties within the context of the FAA. They are therefore of little assistance.
¶ 36 In fact, the Supreme Court of Canada has held that a treaty is not a commercial contract, and that contract principles do not apply to treaties....
[19] He then indicated that "Parliament appears to have intended to differentiate between treaties and contracts in the FAA" and referred to the definition of "public moneys" in section 2 of that Act where the words "treaty" and "contract" are used separately when, by contrast, section 68 of the FAA only includes the term "contract" and does not refer to "treaty".
[20] He rejected the plaintiff's argument that "treaty" in subsection 2 should be restricted to treaties in the international sense, writing the following at paragraph 39:
¶ 39 Although the Plaintiff maintains that the word "treaty", as used in s. 2 of the FAA, should be restricted to treaties in the international sense, no authorities are cited in support of such a proposition. To the contrary, the use of the indefinite pronoun "any" to modify the terms "Act, trust, treaty, undertaking or contract", suggests that "treaty" should be given a broader, rather than limited, interpretation.
[21] He then referred to the French version of section 68(1), which he said "also supports an interpretation which excludes treaties from the meaning of "contract"."
[22] He focussed on the word "marché" in the French text, examined its ordinary dictionary meaning and concluded the following:
¶ 45 The term "marché" is therefore restricted to commercial transactions. This more restricted meaning is the meaning which is common to both the English term "contract" and the French term "marché". Since a treaty is far broader than a mere commercial transaction, Parliament evidently did not intend to include treaties in s. 68 of the FAA.
(2) The second ground of invalidity
[23] As to the second ground of invalidity, the Prothonotary's analysis centered on section 90 of the Indian Act. The reasoning to his conclusion on invalidity is as follows:
[49] In Her Majesty the Queen v. Kakfwi, [1999] 99 DTC 5639, the Federal Court of Appeal held that the term "personal property" in s. 90 of the Indian Act includes money and debts: see also Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85 at paras. 95 and 96 Per La Forest J. and at para. 41 per Dickson C.J. On the plain reading of section 90, therefore, treaty annuities, and any claims to such annuities, are deemed to be situated on a reserve, and their assignment is prohibited without the consent of the Minister of Indian Affairs.
[50] The Plaintiff submits that enforcement of a core treaty right, and any lawful action reasonably necessary to that end, including the assignment of a Crown debt, are activities which are reasonably incidental to a core treaty right, and are therefore protected from infringement to the same extent as the core treaty right. He claims that the assignments at issue show that assignment to the Plaintiff was the preferred means by each of the Indian assignors of exercising their incidental right to enforce payment of Crown debts of treaty annuity arrears. According to the Plaintiff, to the extent that provisions of the FAA infringe that incidental right, those provisions must be justified by the Defendant in accordance with s.35(1) of the Constitution Act, 1982.
[51] I am not prepared to entertain a constitutional challenge in the absence of any proper or sufficient notice. In any event, I fail to see how the assignors' rights, which could be enforced individually, can be said to have been infringed by any provisions of the FAA.
[52] On the evidence before me, it appears that, as a matter of general policy, the Crown does not consent to the assignment of annuities to third parties. Although there is evidence that payments were occasionally made to a person other than to the treaty Indian on the pay list, such arrangements were made solely with close relatives of the Indian person, a Chief, or an Indian agent in order to facilitate payment.
[53] I conclude, therefore, that absent the Crown's consent, treaty annuities cannot be transferred. [emphasis mine]
(b) The Interest Issue
[24] For the purposes of these appeals, I need only summarize Prothonotary Lafrenière's reasoning on the issue of whether interest is payable on annuity arrears which is the only issue relating to interest argued before me. In his judgments, he had to deal with issues such as Crown immunity in respect of Crown liability to pay interest, the statutory provisions moving away from such immunity in the Supreme Court and Exchequer Court Acts, and then in section 36 of the Federal Courts Act and in the Crown Liability and Proceedings Act. He also dealt with, if interest was payable on arrears, whether that interest could be compounded.
[25] The Prothonotary began his analysis of whether interest is payable on arrears in the payment of treaty annuities by referring to the common law and to the treaties in question. He stated:
¶ 59 At common law, the general rule is that interest is not payable on a debt or loan in the absence of express agreement or some course of dealing or custom to that effect.
¶ 60 The parties agree that neither Treaty 6 nor Treaty 11 provides for the payment of interest. In addition, the parties have agreed that the payment of interest was not discussed when Treaty 6 and Treaty 11 were negotiated. Based on the historical documents on the record, it appears that after the signing of Treaty 6 and Treaty 11, the Crown did not pay interest on annuity arrears, except in circumstances where annuities were placed in individual savings accounts at the behest of the annuity recipients.
[26] He then considered Mr. Beattie's argument that interest was payable by virtue of subsection 61(2) of the Indian Act. Section 61 of the Indian Act reads:
61.(1) Indian moneys shall be expended only for the benefit of the Indians or bands for whose use and benefit in common the moneys are received or held, 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 Indian moneys are used or are to be used is for the use and benefit of the band.
(2) Interest on Indian moneys held in the Consolidated Revenue Fund shall be allowed at a rate to be fixed from time to time by the Governor in Council. [emphasis mine]
61.(1) L'argent des Indiens ne peut être dépensé qu'au bénéfice des Indiens ou des bandes à l'usage et au profit communs desquels il est reçu ou détenu, et, sous réserve des autres dispositions de la présente loi et des clauses de tout traité ou cession, le gouverneur en conseil peut décider si les fins auxquelles l'argent des Indiens est employé ou doit l'être, est à l'usage et au profit de la bande.
(2) Les intérêts sur l'argent des Indiens détenu au Trésor sont alloués au taux que fixe le gouverneur en conseil.
[27] The federal Crown countered by arguing that "annuity payments" are not "Indian moneys" as defined in section 2 of that Act since such moneys are not "collected, received or held by Her Majesty". According to the federal Crown, moneys used for the payment of treaty annuities come out of the Consolidated Revenue Fund ("CRF") and are payable pursuant to a separate and distinct provision of the Indian Act, namely section 72.
[28] For convenience, I reproduce here the definition of Indian moneys in section 2 and section 72 of the Indian Act:
2.(1) In this Act,
"Indian moneys" « argent des Indiens »
"Indian moneys" means all moneys collected, received or held by Her Majesty for the use and benefit of Indians or bands;
72.Moneys that are payable to Indians or to Indian bands under a treaty between Her Majesty and a band and for the payment of which the Government of Canada is responsible may be paid out of the Consolidated Revenue Fund. [emphasis mine]
2.(1) Les définitions qui suivent s'appliquent à la présente loi.
« argent des Indiens » "Indian moneys"
« argent des Indiens » Les sommes d'argent perçues, reçues ou détenues par Sa Majesté à l'usage et au profit des Indiens ou des bandes.
72.Les sommes payables à des Indiens ou à des bandes d'Indiens en vertu d'un traité entre Sa Majesté et la bande, et dont le paiement incombe au gouvernement du Canada, peuvent être prélevées sur le Trésor.
[29] The Prothonotary concluded that section 72 applied - treaty annuities are "moneys that are payable to Indians or Indian bands under a treaty" and not under section 61 which relates to "Indian moneys".
[30] He also referred to section 62 of the Indian Act as providing, regarding the meaning of the term "Indian moneys", and concluded at paragraph 67:
¶ 67 Treaty annuity moneys are clearly not moneys derived from the sale of surrendered lands. Section 62 provides that another type of Indian moneys are revenue moneys of a band. "Revenue moneys" is not defined in the Indian Act, but it is clear from the provisions in the Indian Act that these types of moneys are band moneys, and not moneys of individual Indians.
[31] He referred to the Indian Bands Revenue Moneys Regulations and concluded at paragraph 69:
¶ 69 The Indian Bands Revenue Moneys Regulations, C.R.C. 1978, c. 953, as amended, address issues relating to the ability of certain bands to control, manage and expend their revenue moneys. It is clear from this context that treaty annuity moneys cannot be construed to be revenue moneys and, as a result, do not fall within the definition of "Indian moneys".
[32] He then stated that section 90 of the Indian Act, previously reproduced, distinguishes between revenue moneys and Indian moneys and concluded at paragraphs 71 and 72:
¶ 71 The separate references to "Indian moneys" and personal property "given to Indians ...under a treaty" in s. 90 of the Indian Act suggests that Parliament did not intend the term "Indian moneys" to refer to treaty moneys. If it had so intended, there would be no reason for Parliament to separately refer in s. 90 to property given under a treaty.
¶ 72 As a result, there is no support for the proposition that annuity payments constitute "Indian moneys" pursuant to the Indian Act.
[33] He dismissed an argument by Mr. Beattie that the federal Crown was obligated to pay interest as a fiduciary duty at paragraph 79 in the following terms:
¶ 79 In my view, even if the Assignors were entitled to receive annuities from their respective dates of birth, as the Plaintiff alleges, the Crown's failure to pay annuities because of the statutory definition of "Indian" does not amount to a breach of fiduciary duty. A determination by the Crown as to who is an "Indian" for treaty purposes is an administrative function which does not involve any exercise of discretion and, therefore, cannot give rise to fiduciary duties.
ISSUES
[34] Mr. Beattie put the following questions in issue:
(1) whether the Prothonotary erred in finding that, absent the Crown's consent, treaty annuity is not transferable by a treaty Indian and debts of annuity arrears are not assignable;
(2) whether the Prothonotary erred by disregarding entirely the fundamental legal principle that statutory limitations which restrict the rights of Indians under treaties must be narrowly construed, and a generous and liberal interpretation of Indian rights is to be preferred over a narrow and technical one;
(3) whether the Prothonotary erred in finding that treaty annuity arrears are not "Indian moneys" within the meaning of subsection 2(1) of the Indian Act; and
(4) whether the Prothonotary erred by disregarding entirely the Court's paramount obligation to recognize and affirm existing treaty rights in accordance with the principles of treaty interpretation established to give effect to section 35 of the Constitution Act, 1982.
[35] Mr. Beattie's position is that the Prothonotary erred in all respects. The federal Crown takes the opposite view and argues the Prothonotary made no errors at all.
[36] Issue No. 4 raises a constitutional issue which was not argued before me, objection having been made by the federal Crown as that issue had not been argued before Prothonotary Lafrenière. I will issue a separate ruling on this point based on supplementary memoranda filed by each party.
ANALYSIS
(a) Standard of Review
[37] In Grenier v. Canada (Attorney General), 2004 FC 1435, Justice Blanchard considered the standard of review on an appeal from a judgment of Prothonotary Morneau in a simplified action under the Rules.
[38] He was of the view the standard of review was not that set out in Canada v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425, but rather the standard established by the Supreme Court of Canada in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, because on an appeal from a judgment in an action within a prothonotary's jurisdiction under the Rules, the Court was not reviewing a discretionary decision but one deciding the substantive merits of an action. I agree with his views and his analysis of the Housen standard.
[39] Justice Blanchard expressed the Housen, supra, standard as follows:
¶ 15 The rule that emerges from Housen is that, on questions of law, appellate courts apply the standard of the correct decision. However, where questions of fact are concerned, a palpable and overriding error must be found in the trial judge's conclusions if an appellate court is to intervene. Finally, on mixed questions of fact and law, the rule for intervention must be adjusted to take all the facts of each case into account.
The standard of review on pure questions of law is one of correctness, and an appellate court is thus free to replace the opinion of the trial judge with its own ...
The standard of review for findings of fact is such that they cannot be reversed unless the trial judge has made a "palpable and overriding error". (at 237)
[40] His analysis concurs with Justice Blais' reasoning in Giroux v. Canada, 2001 FCT 531, sustained on appeal 2002 FCA 319.
(b) The historical evidence
[41] The historical evidence before Prothonotary Lafrenière was provided through the affidavit of Nicholas Mitchell, who holds a post-graduate degree in history and was a doctoral candidate in that field between 1994 and 2002. Since September 1999, he has been engaged with the Department of Indian Affairs as a researcher in order to assemble, analyse and report upon historical information relating to the numbered treaties of Canada and, in particular, in connection with the provisions and payments of treaty annuities and the practices and proced