Province of Ontario v. Dominion of Canada

Province of Ontario v. Dominion of Canada
Collection
Supreme Court Judgments
Date
1909-02-12
Report
(1909) 42 SCR 1
Judges
Girouard, Désiré; Davies, Louis Henry; Idington, John; Maclennan, James; Duff, Lyman Poore
On appeal from
Canada
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
Province of Ontario v. Dominion of Canada, (1909) 42 S.C.R. 1
Date: 1909-02-12
The Province of Ontario (Respondent) Appellant:
and
The Dominion of Canada (Claimant) Respondent.
1908: December 1-3; 1909: February 12.
Present: Girouard, Davies, Idington, Maclennan and Duff JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA.
Constitutional law—Indian lands—Extinguishment of Indian title—Payment by Dominion—Liability of Province—Exchequer Court Act, 5. 32—Dispute between Dominion and Province.
Where a dispute between the Dominion and a Province of Canada, or between two Provinces comes before the Exchequer Court as provided by sec. 32 of R.S.C. [1906] ch. 140, it should be decided on a rule or principle of law and not merely on what the judge of the court considers fair and just between the parties.
In 1873 a treaty was entered into between the Government of Canada and the Salteaux tribe of Ojibeway Indians inhabiting land acquired by the former from the Hudson Bay Co. By said treaty the Salteaux agreed to surrender to the government all their right, title and interest in and to said lands and the government agreed to provide reserves, maintain schools and prohibit the sale of liquor therein and allow the Indians to hunt and fish, to make a present of $12 for each man, woman and child in the bands and pay each Indian $5 per year and salaries and clothing to each chief and sub-chief; also to furnish farming implements and stock to those cultivating land. At the time the treaty was made the boundary between Ontario and Manitoba had not been defined. When it was finally determined, in 1884, it was found that 30,500 square miles of the territory affected by it was in Ontario and in 1903 the Dominion Government brought before the Exchequer Court a claim to be reimbursed for a proportionate part of the outlay incurred in extinguishing the Indian title. The Province disputed liability and, by counterclaim, asked for an account of the revenues received by the Dominion while administering the lands in the Province under a provisional agreement pending the adjustment of the boundary.
Held, reversing the judgment of the Exchequer Court (10 Ex. C.R. 445) Girouard and Davies JJ. dissenting, that the Province was not liable; that the treaty was not made for the benefit of Ontario, but in pursuance of the general policy of the Dominion in dealing with Indians and with a view to the maintenance of peace, order and good government in the territory affected; and that no rule or principle of law made the Province responsible for expenses incurred in carrying out an agreement with the Indians to which it was not a party and for which it gave no mandate.
APPEAL and CROSS-APPEAL from the judgment of the Exchequer Court of Canada[1] condemning the Province of Ontario to pay a portion of the amount claimed by the Dominion as having been expended for the benefit of the province.
In 1873 the Dominion Government made a treaty with the Salteaux tribe of' Ojibeway Indians by which the latter surrendered all their rights and privileges in land covering the area from the watershed of Lake Superior to the North-West Angle of the Lake of the Woods and from the American border to the height of land from which the streams flow towards Hudson Bay, containing about 55,000 square miles. The payments to be made for such surrender and the obligations to be performed by the Dominion are stated in the above head-note.
At the time this treaty was made the boundary between the Provinces of Ontario and Manitoba had not been defined and the lands were administered by the Dominion and Ontario jointly pending such definition.
In 1878 the position of the boundary was referred to arbitration and finally determined in 1884, when it was found that some 30,000 square miles of the territory surrendered by said treaty was in Ontario. The Dominion eventually took proceedings in the Exchequer Court to recover from the province its proportionate share of the sums expended in carrying out the treaty.
The judgment of the Exchequer Court as published in the report[2], holds the province liable to re-pay the Dominion the amounts necessarily expended in extinguishing the Indian title to the lands in question and the question as to which of the sums claimed were so expended was reserved for further hearing. On Dec. 4th, 1907, judgment on the further hearing was given and formally entered as follows:
"Wednesday the 4th day of December, 1907.
"The further consideration of the questions involved in this action reserved by the judgment of this court of the 18th day of March, 1907, having come on for hearing at Ottawa on the 3rd and 4th days of December in the year of our Lord, 1907, before this court, in the presence of counsel for the respondent as well as the claimant, upon hearing the evidence and what was. alleged by counsel aforesaid. "1. This court doth order and adjudge that the Dominion do recover from Ontario three hundred and five, four hundred and ninety-thirds (305-493) of all the following expenditures made by the Dominion to or on behalf of the Indians:—
"(a) All expenditures made by the Dominion to the Indians in payment of annuities under the treaty in the pleadings mentioned at the rate of five dollars per annum for each Indian person from the date of the treaty to the date hereof.
"(b) All expenditures made by the Dominion for ammunition and twine for nets for the use of the Indians as provided by the said treaty, not however exceeding in the whole one thousand five hundred dollars per annum.
"(c) All expenses reasonably incurred by the Dominion for provisions and presents supplied to the Indians at the treaty negotiations, but not to exceed in the whole the sum of twenty-one thousand two hundred and ninety-six dollars and ninety-six cents, claimed in Schedule "B" of the statement of claim of the Dominion herein.
"(d) In respect of the payments made by the Dominion for or on account of the present of twelve dollars per head stipulated by the treaty to be paid to each man, woman and child of the bands of Indians represented at the treaty and claimed under the first item of Schedule "A" in the said statement of claim, the sum of five dollars per head.
"2. This court doth further order and adjudge that the action of the Dominion with respect to all classes of claims in the schedules of the said statement of claim, other than those in respect of which the Dominion has hereinbefore been adjudged to be entitled to recover, be dismissed, without prejudice, however, to the right of the Dominion to claim against Ontario by way of set-off to the counterclaim of Ontario the expenditures made for the surveys of reserves for farming lands and the other reserves for the Indians agreed for under the treaty, as part of the expense properly incurred by the Dominion in the administration of the disputed territory pursuant to the conventional boundary agreement between the Dominion and Ontario, of the 26th day of June, 1874.
"3. This court doth further order and adjudge that it be referred to the registrar of this court to inquire into and take an account of all sums expended by the Dominion in respect of the several classes of expenditure as to which the Dominion has hereinbefore been adjudged to be entitled to recover and report thereon to this court.
"4. This court doth further order and adjudge that it be referred to the registrar of this court to inquire into and take an account of all revenues collected by the Dominion under the said conventional boundary agreement, and also of all disbursements and expenditures duly made in the administration by the Dominion of the territory falling to be administered by the Dominion under the said agreement, and report thereon to this court.
"5. And this court doth reserve further directions until after the said registrar shall have made his report.
"6. This court doth make no order with respect to the question of costs in this action.
"(Sgd.) L. A. Audette, Registrar."
The province appealed to the Supreme Court of Canada from both judgments and the Dominion cross-appealed for the amounts disallowed. Sir AEmilius Irving K.C., G. F. Shepley K.C., C. H. Ritchie K.C. and H. S. White, appeared for the appellant, the Province of Ontario.
E. L. Newcombe K.C., Deputy Minister of Justice, and W. D. Hogg K.C., appeared for the Dominion of Canada, respondent.
Ritchie K.C. opens for the appellant and deals first with the history of the proceedings in the Exchequer Court and with the general features of the Indian treaty. He then proceeds to argue that there was no liability on the part of the province to indemnify the Dominion Government for the financial burdens imposed by carrying out the treaty and goes on: The paramount object of the Dominion Government in entering into that treaty was not to extinguish the Indian title in favour of Ontario, but to enable the Dominion Government to carry out certain obligations into which it had theretofore entered. Under the "British North America Act" to the Dominion was assigned the obligation to maintain peace, order and good government throughout Canada. In addition to that, the care of the Indians and all responsibility in connection with the Indians was assigned to them; so that there were two obligations thrust upon them, the principal one being the maintenance of peace, order and good government throughout Canada. In 1870 the rebellion occurred and it was necessary to construct a route over which the troops might pass and they were most anxious to complete what was then known and is now known as the "Dawson Route." The rebellion cost Canada a very large amount of money to quell, and in 1872 and 1873, spreading over these years from the time of the Riel Rebellion, there was a sense of uneasiness among all the Indians; they were disaffected more or less and there was also present to the Dominion Government the fear of another uprising among the Indians and they were, therefore, most anxious to do everything possible in order to effectually extinguish any ill-feeling that might exist on the part of these Indians.
Idington J.—Is there anywhere in the legislation affecting that point or anything in the practice that has prevailed upon it, to shew that the Dominion would have a claim over against any particular province that derived some direct benefit from its steps, whatever they were?
Mr. Ritchie: Nothing whatever, my lord. The liability was cast upon the Dominion and it is a national question. It was cast upon the Dominion, as the Dominion, representing all the provinces. It was something that the Dominion and the Dominion alone was liable for. If they had not made this treaty and another rebellion had occurred, an uprising of these same Indians, it would have cost, no doubt, ten times the amount of money that they are paying under this treaty to have quelled that rebellion and restored peace and order and that obligation rested on the Dominion under the express provisions of the "British North America Act." So that it was not Ontario they were looking after; it was not the extinguishment of the Indian title so that Ontario might get a benefit; but they had the particular paramount object to which I have referred, as also other objects of a Dominion character, a national character, which they were obliged to carry out and in order to carry these out it was necessary for them to secure a passage through the territory occupied by these Indians, and to see that people passing over this line were not molested; it was also necessary for them to endeavour, as far as possible to obtain the good will of the chiefs of these tribes so as to get them to undertake thab they would do all in their power to preserve peace and good will and to prevent subjects of Her Majesty crossing this territory, from being molested. That is shewn by the treaty itself. When you look at the last clause of the treaty, see what it is that they get from the Indians. The undertaking they get from the Indians is an undertaking that enures to the benefit of the Dominion and the Dominion alone. All the obligations undertaken by these Indians were obligations which it was necessary that the Dominion, in the national interests, should secure. After pointing out the presents they were giving, what they were to do in the way of maintenance of schools and so on, they take from the Indians the covenants which are the consideration for what they are giving. "And the undersigned chiefs on their own behalf and on behalf of all other Indians inhabiting the tracts within ceded, do hereby solemnly promise and engage to strictly observe this treaty, and also to conduct and behave themselves as good and loyal subjects of Her Majesty the Queen. They promise and engage that they will in all respects obey and abide by the law; that they will maintain peace and good order between each other and also between themselves and other tribes of Indians, and between themselves and others of Her Majesty's subjects, whether Indians or whites, now inhabiting or hereafter to inhabit any part of the said ceded tract, and that they will not molest the person or property of any inhabitant of such ceded tract, or the property of Her Majesty the Queen, or interfere with or trouble any person passing or travel ling through the said tract or any part thereof, and that they will aid and assist the officers of Her Majesty in bringing to justice and punishment, any Indians offending against the stipulations of this treaty, or infringing the laws in force in the country so ceded." These are the covenants and promises of the Indians.
Davies J.—Are these considerations any different from the considerations which enter into the negotiation of all Indian treaties?
Mr. Ritchie: I am not able to say how that is. Probably similar stipulations have been put in other treaties. All I am emphasizing is that these are stipulations which enure to the benefit of the Dominion, to whom was assigned the obligation of maintaining peace, order and good government. Then, as I pointed out to your lordships, if a rebellion had broken out the cost of quelling that would rest upon the Dominion and be paid out of the Dominion Exchequer and no portion could be charged up against any of the provinces.
Then, after referring to the conventional boundary agreement and the surrender by the Hudson Bay Co. of their interest in these lands counsel proceeds as follows on the question of the obligation of the Dominion to build the Canadian Pacific Railway.
There is an Imperial order in council of 16th May, 1871, that after the 20th of July, 1871, British Columbia shall become part of the Dominion.
Clause 11 of that Imperial order in council is that the government of the Dominion undertake to secure the commencement simultaneously within two years of the date of the Union, the construction of a railway from the Pacific to the Rocky Mountains and from the east to the Rocky Mountains, and to complete that within ten years. The documents put in here shew that that is one of the objects they had in view. The documents shew, by the reports of those who were through there that the whole of this territory was not as valuable as 100 acres on the Red River.
Then there is a report of those who were negotiating, and at that time your lordships will bear in mind that they were negotiating for a right of way simply, and the report is that they can acquire the whole title of the Indians, giving them reserves anywhere, the whole title just as easily as they can get the right of way. In other words, they could get the whole title just as easily as they could get the easement. Now, there is a letter from the Lieutenant-Governor to the Dominion of the 7th April, 1871. He says, "practically you may count on having to deal with 1,000 savages in any treaty you make for a right of passage. Mr. Pither seems to think they would give up their rights to the whole country for much the same price they would ask for the right of way. If so, it would be useless to confine the purchase to a mere easement, though, after all, with the exception of the strip on Rainy River, they have no land worth owning." Up to that time they were negotiating for the passage of a right of way for an easement and they were negotiating for that easement in fulfilment of the obligations they had incurred in connection with this surrender and in connection with their obligations with British Columbia. Now then, what I say is that these are the reasons which operated upon the mind of the Dominion in endeavouring to negotiate the treaty at that time. Ontario, who owned the land, was not anxious to negotiate at that time. They had no idea of extinguishing the Indian title. They might not have done it for many years afterwards. They might have effected the surrender or extinguishment of that title on very much more advantageous terms than those obtained by the Dominion, and what right, I ask, has the Dominion to come in and simply say because for objects of their own in order to enable them to fulfil obligations they have entered into apart altogether from Ontario: We will negotiate this treaty on our own terms; true, we know you have claimed the land, but we will ignore that fact and we will go on and acquire that title, and if we find afterwards we get nothing by it we will turn around and ask you to bear the burden simply because you get the benefit of the extinguishment of the title?
Duff J.—Would Ontario have had power without the concurrence of the Dominion to make any arrangement to extinguish the title?
Mr. Ritchie: Perhaps not unless they could get it under the Proclamation of 1763, which did allow them to make arrangements with any one representing the government. Of course Ontario would represent one branch of the government and under that proclamation probably any arrangement entered into between Ontario and the Indians would be valid and binding as an extinguishment of the Indian title, unless it was contended that inasmuch as the "British North America Act" assigned to the Dominion the exclusive right to deal with Indian affairs, that that to some extent overrode the terms of the proclamation and would require Ontario to obtain the assent of the Dominion to any agreement that might be entered into. However that may be, I suppose there is no doubt that we could not go in there and deal with the Indians apart from getting an extinguishment of their title in any shape or form. In connection with that, as to settlement and opening up of the land, it was just as much in the interest of the Dominion, I submit, to have that opened up as Ontario. At all events to a very great extent, because when opened up for settlement, settlers were coming in from time to time and the revenues of the Dominion would be increased; the customs and excise duties would be increased. There was an interest that the Dominion might very reasonably be supposed to have in view, because the greater the settlement the greater the amount of revenue they are likely to obtain.
Now let us consider the question on the admitted facts that the Dominion knew of the claim of Ontario to these lands; then without asking the assent of Ontario, having no mandate from Ontario and knowing, as I say, that Ontario was claiming the land as its own, the Dominion goes on and makes a treaty with the Indians, it being clear that there were many natives that would induce them to make this treaty, peculiar to the Dominion itself, and it turns out afterwards that the title they sought to acquire and which they thought might be a valid title, availed them nothing; can they turn around as a matter of law or equity and say to Ontario—who claimed these lands, who did not authorize the Dominion in any way to negotiate in respect of this territory—and say, because you have received some benefit you must assume the whole burden?
In other words, simply because two people are claiming to own a particular piece of property, why should one arrogate to himself the right to say, I know you are claiming, but I don't think your claim is good, I will ignore you and I will make a bargain off my own bat, so to speak, I will make my own bargain, I won't consult you, I will pay whatever I please and if it turns out that I get nothing by that bargain then I saddle you with the burden I have created. I submit that to permit any doctrine of that kind to get abroad would be subversive of all the interests in connection with property. If a bargain is made under these circumstances, surely the man makes the bargain at his own peril; knowing that another person is claiming to own this particular property, he enters into some contract and under that he benefits this particular individual who owns the property; I submit there is no principal of law or equity upon which he is entitled to recover. On that point take the case, for instance, of co-tenants, tenants in common of property, where one co-tenant goes on and makes improvements on the property owned by both, which necessarily benefits the other. It has been held by the Court of Appeal in England, that if he does that without the assent of the other he cannot claim any contribution, although the other undoubtedly receiver a benefit. That I submit is a stronger case than the present one.
The most recent case I have been able to find is directly in point and I will just read the head note. The principle is laid down in this way: "There is no principle of law which requires a person to contribute to an outlay merely because he has derived a material benefit from it." That is a decision of the House of Lords; I shall not take up your lordships' time in reading the case, but the cases are all collected there. That is Ruabon Steamship Co. v. London Assurance Co.[3]. That is the statement of law laid down by the Lord Chancellor. That was a case where, during a voyage covered by a policy of marine insurance, the vessel was injured and put in dry dock; the loss had to fall upon the underwriters alone and could not be apportioned between them and the owners.
The learned counsel then analyzes at some length the judgment of the Exchequer Court, which is the subject of the appeal.
Shepley K.C. follows for the appellant; My lords, there are two or three observations which have fallen from the Bench during the argument of my learned friend as to which before dealing at all with the principal questions involved in the appeal, I desire to say a word or two. Perhaps the most important subject is that suggested by his lordship, Mr. Justice Duff, which, if I appreciate the point, was this: Assuming that the Indian right in these lands was a burden on the interests of the province within the meaning of the "British North America Act," and assuming further, that there was residing in some sovereign power, say the Imperial or Dominion, the right to deal with that interest, is there not implied a corresponding obligation on the part of Ontario to indemnify that sovereign power in whatever shape that Indian interest may be transmitted? Have I appreciated what your lordship said?
Duff J.—May I carry it a little further, to indicate the idea in my mind at the time? Whether Ontario came under the implied obligation to assume the burden of extinguishing the title, whenever the Dominion in the exercise of its powers should think it desirable to extinguish it.
Mr. Shepley: That is putting the question in another form.
Idington J.—The way it struck my mind at the time was the possibly analogous case of a person who, having a trust to discharge and incurring some expense incidentally to the discharge of that trust, has to be indemnified.
Mr. Shepley: Out of the trust estate.
Idington J.—That is the point. Where is the trust estate here?
Mr. Shepley: That is one of the answers I was going to attempt to make. But it seems to me there are two or three considerations that ought to be dwelt on briefly in this aspect of the case. In the first place the Crown—whether the Crown represented by the sovereign at home or the Crown represented by the Dominion—the Crown by the very terms of the "British North America Act," vested all the rights that the Crown had in these lands in Ontario. And as a Crown claim no such claim as this can possibly be maintained. It must be maintained, if at all, because the interest of the Indians, subject to which Ontario took the lands, has been transmuted in the claim to the Dominion and is recognizable as the interest of Ontario because it represents some form of the Indian interest. The first answer to that seems to me that by the decision of the Privy Council in the St. Catharines Milling Case[4] there never was any transmutation or transfer of that interest to the Crown or anybody else. There was the bare extinguishment of it and nothing more. Perhaps your lordships will let me dwell a little upon a passage in the judgment in the Privy Council at the top of page 60. Lord Watson said: "By the treaty of 1873 the Indian inhabitants ceded and released the territory in dispute, in order that it might be opened up for settlement, immigration and such other purpose as to Her Majesty might seem fit, to the Government of the Dominion of Canada,' for the Queen and her successors for ever. 'It was argued that a cession in these terms was in effect a conveyance to the Dominion Government of the whole rights of the Indians, with consent of the Crown." What is that but a statement that the argument was that the Indian right had been transmuted into something else in the hands of the Crown? "That is not the natural import of the language of the treaty, which purports to be from beginning to end a transaction between the Indians and the Crown; and the surrender is in substance made to the Crown. Even if its language had been more favourable to the argument of the Dominion upon this point, it is abundantly clear that the Commissioners who represented Her Majesty, whilst they had full authority to accept a surrender to the Crown, had neither authority nor power to take away from Ontario the interest which had been assigned to that province by the Imperial statute of 1867." It occurred to us that that afforded a complete answer to your lordship's question; that it was not possible in the negotiation of this treaty for the Crown to set up anything arising out of these negotiations, or out of this treaty, by way of claim against the Province of Ontario. Then there is another consideration which I think your lordships have not clearly appreciated. It seems to us that the Dominion had put it out of its power to raise any such question as this by an issue which has been made and which is upon this record. In presenting the documents, my learned friend Mr. Hogg put in an agreement between the two Governments made on the 16th of April, 1894. It recites the treaty and it recites that by the treaty certain reserves were to be selected and laid aside for the benefit of the Indians; the Indians were, amongst other things, to have the right to pursue their avocations of hunting and fishing throughout the tract surrendered, subject to such regulation as might be made by the Government and saving such tracts as might be taken up for settlement and so on. Then it recites that the two boundaries of Ontario have since been ascertained and declared to include part of the territory surrendered by the treaty and other territory north of the height of land with respect to which the Indians are understood to make a claim as being occupants thereof according to their mode of occupying and as not having yet surrendered their claim thereto or their interest therein. "And whereas before the true boundaries had been declared as aforesaid, the Government of Canada had selected and set aside certain reserves for the Indians in intended pursuance of the said treaty and the said Government of Ontario was no party to the selection and has not yet concurred therein." Then it is stated that it is deemed desirable for the two Governments to come to a friendly understanding and it is therefore agreed between the two Governments as follows, "with respect to the tracts to be from time to time taken up for settlement, mining, lumbering or other purposes, and to the regulations required in that behalf, as in the said treaty mentioned, it is hereby conceded and declared that, as the Crown lands in the surrendered tract have been decided to belong to the Province of Ontario or to Her Majesty in right of the said province, the rights of hunting and fishing by the Indians
throughout the tract surrendered, not including the reserves to be made thereunder, do not continue with reference to any tracts which have been made, or from time to time may be required or taken up for settlement, mining, lumbering or other purposes by the Government of Ontario or persons duly authorized by the said Government of Ontario; and that the concurrence of the Province of Ontario is required in the selection of the said reserves." There is a declaration that in order to effectively deal with the question of reserves and therefore to effectively deal with any interest Ontario has in these lands or had in these lands, the consent of Ontario was necessary. That brings me to the second answer to your lordship's question, and that is, it is perhaps for this purpose necessary to admit—perhaps not at all undesirable to admit—that the Dominion had the sole treaty making power, that that power did not reside with Ontario; but inasmuch as the making of such a treaty involved the dealing with the property of Ontario, the consent and concurrence of Ontario would be necessary in the making of any such treaty.
The learned counsel then deals with the questions of the conventional boundary, the surrender of Rupert's Land by the Hudson Bay Co. and the acquirement of the whole territory instead of enough only for the right of way of the Canadian Pacific Railway because the land was of so little value. He then criticizes the judgment of the Exchequer Court reading from pages 482-5 of the report in 10 Ex. C.R. and proceeds. Here your lordships are called upon to administer the lex loci, because it is a contract with regard to lands in the Province of Ontario, and it is a law of Ontario that the Court of Exchequer and your lordships must administer in disposing of these questions. Then after referring to the statutes which the Dominion and the Province of Ontario passed and which enabled this controversy to be brought into the Court of Exchequer, his lordship says: "I agree with Mr. Shepley that the mere fact that there is a controversy does not give the court authority to decide against the province simply because it should think that as a matter of good conscience and honourable dealing the province, having derived the benefit from the treaty, should relieve the Dominion from a proportionate part of the burden arising therefrom; that it is not simply a question of what the court might think to be fair in the premises without regard to the principles of law applicable to the case."
So his lordship disclaimed any intention or right to adjudicate upon the grounds of conscience merely.
"At the same time," he said, "as Mr. Newcombe pointed out the question arises between governments, each of which within its own sphere exercises the authority of one and the same Crown. For that reason one cannot expect the analogies of the law as applied between subject and subject to be perfect or in every way adequate to the just determination of the case." I do not know just what his lordship means by that, but I think it answers itself in the subsequent part of the case because he comes to the conclusion that for the purposes of this controversy the Dominion and the province are upon the same footing as two subjects. Then after that he deals with the question of what was the result of the treaty. At pages 489-90 he says: "There is no question as to its validity. In the St. Catharines Milling and Lumber Company v. The Queen[5], Lord Watson stated that they had full authority to accept a surrender to the Crown; but that they had no authority or power to take away from Ontario the interest which had been assigned to that province by the Imperial Statute of 1867. There can, I think, be no doubt of that authority to bind the Crown to make the payments stipulated for in the treaty. The case cited shews that the lands thereby surrendered were, or might fall, within the true construction of the words of section 91 (24) of the Act of 1867, 'lands reserved for the Indians,' p. 59." With that I venture respectfully to find fault. I think the whole course of that decision is absolutely contrary to any such idea as that. With the exception of the strong dissenting judgment of Mr. Justice Strong, in this court, I think every court that pronounced upon it declared that these lands were not, in any sense, lands reserved for Indians, in any sense in which those words were used in the statute. And I think the Privy Council agreed with that.
"The difficulty is that in one aspect of the matter they were, although it was not known at the time, dealing with the public lands belonging to the Province of Ontario, and removing a burden therefrom. It is argued for the Dominion that Ontario must be taken to have acquiesced in what the Dominion authorities did in negotiating this treaty, and that the province is bound by such acquiescence. I am not able to accede to that contention or to rest my judgment on that ground." So that that is excluded. He says: "The most that can be said on that branch of the case is, it seems to me, that while on the one hand the Government of Canada holding, in good faith, but erroneously as it turned out, the view that all the lands to be surrendered belonged to the Dominion, did not consult the Government of Ontario in respect of the negotiations with the Indians for the surrender of their title in such lands; on the other hand the Government of the province did not raise any objection to the matter so proceeding and did not prefer any request to be represented in the negotiation of the treaty."
I do not think it was shewn—I speak subject to correction, because there is a great deal of correspondence here—but I do not think it can be suggested on this correspondence that Ontario was made aware that negotiations were going on. I daresay individuals, perhaps those concerned in advising the Lieutenant-Governor, read in the press from time to time things that were going on, but that there was any official communication of any kind between the two Governments does not, I venture to think, appear anywhere.
Then comes the question which really lies at the root of this controversy. "Now, with regard to the contention that inasmuch as a part of the benefit arising from the surrender of the lands mentioned in the treaty accrues to Ontario that province should relieve the Dominion from a proportionate part of the obligations thereby created, it appears to me that that consideration is not, of itself, sufficient to make the province liable." He accedes to the argument of Ontario on that point, that you cannot create a liability merely because a burden has been removed or a benefit conferred. He says: "If the province had had any option in the matter, if it had been open to it to accept or decline such benefit, and it had accepted it, then the province would have been liable for its bare proportion. But that is not the case. The burden of the Indian title was removed from these lands before it was determined whether any part of them was within the province or not. When it was decided that a large proportion of such lands was within the Province of Ontario, there was nothing the province could do but accept the lands and administer them free from such burden."
Then he refers to the Ruabon Case[6] and he says the principle which that case lays down, "is, I think, as clearly applicable to the transaction of the Dominion and Provincial Governments as it is to those which occur between individuals."
So far your lordships will see that everything he has said is in favour of the contentions which we are making. Then he says: "If the Parliament of Canada should appropriate and the Government of Canada should extend public moneys of the Dominion for Dominion purposes, with the result that a province was benefited, and there was no agreement with the province or request from it, then it would be clear that the province was under no obligation to contribute to such expenditure or to indemnify the Dominion against any part thereof." That is at page 491. That is as strong a statement as anything that can possibly fall from us in the course of this argument. "Equally it seems clear that if the Parliament of Canada should appropriate and the Government of Canada should expend the public moneys of the Dominion for a provincial purpose for the benefit of a province, there being no agreement with the province or request from it, no obligation would arise on the part of the province to contribute towards such expenditure or to reimburse the Dominion for any part thereof."
He carries it a step farther. He is assuming here that the Dominion had, with the intention of benefiting the province and, therefore, of carrying out some provincial purpose or some provincial object, expended moneys, there would be no right to contribution or indemnity against the province without the previous acquiescence of the province. "The principle would apply as well to expenditures made by a province, with the result that the Dominion as a whole was benefited. In all such cases the appropriation and expenditure would be voluntary and no obligation to contribute would arise."
Then comes the principle upon which he has decided this case and that I venture to criticize, respectfully but strongly. He says: "The present case appears to me to differ from those stated in some material respects. At the time when the treaty was negotiated the boundaries of the province were unsettled and uncertain." That is common ground, of course. "The lands described in the treaty formed part of the territory that the Hudson's Bay Company had claimed and had surrendered to the Crown. The surrender embraced all lands belonging to the company or claimed by it. That, of course, did not affect Ontario's title to such part of the lands claimed by the company as were actually within the province. But on the admission of Rupert's Land and the North-Western Territory into the Union, the Government of Canada acquired the right to administer all. the lands that the company had the right to administer. And with respect to that portion of the territory which the company had claimed, but which was in fact within the Province of Ontario, the Dominion Government occupied a position analogous to that of a bonà fide possessor or purchaser of lands of which the actual title was in another person."
I have always been unable to understand why the Hudson's Bay surrender was adopted as the basis of this judgment. Every word that is said with regard to the Hudson Bay surrender is equally applicable to the Indian surrender. The Dominion did not acquire any title by either, but by either or both it thought that it got some title. I do not know why the Hudson's Bay Company surrender was the one picked out rather than the Indian surrender. Either would have answered the purpose which the Hudson's Bay Company surrender is made to do in this judgment. What he says is, it is true the Hudson's Bay could not give you any title, it is true you did not get any title but you got into the position of a bonà fide possessor or purchaser of Ontario lands. By virtue of what? The transfer or the surrender of those lands by the Hudson's Bay Company to you. Then what follows? "The question of the extinguishment of the Indian title in these lands could not, with prudence, be deferred until such boundaries were determined." It could not, of course, having regard to the national objects to be served by the treaty. It could with reference to the provincial objects. As Mr. Justice Burbidge himself has said, the lands were not then wanted for settlement or any other purpose and the surrender was not obtained because of that; the surrender was obtained because it served the national purposes to which reference has been made.” It was necessary to the peace, order and good government of the country that the question should be settled at the earliest possible time. The Dominion authorities held the view that the lands belonged to the Dominion, and that they had a right to administer the same. In this they were in a large measure mistaken, but no doubt the view was held in good faith. They proceeded with the negotiations for the treaty without consulting the province. The latter, although it claimed the lands to be surrendered, or the greater part thereof, raised no objection, and did not ask to be represented in such negotiations. The case bears some analogy to one in which a person, in consequence of unskilful survey, or in the belief that the land is his own, makes improvements on lands that are not his own. In such a case the statutes of the old Province of Canada made, and those of the Province of Ontario make, provision to protect him from loss in respect of such improvements or to give him a lien therefor."
Idington J.—If it existed in law already, why was there a necessity for this statute?
Mr. Shepley: That seems to me an entirely pertinent question. If there ever could have been a right at law, if there ever was, why were these statutes passed? The creation of any lien or right of that kind required a statute, but you cannot find in our law, in the law of Ontario or the law of England any such right apart from the statute.
Then, my lords, how does Mr. Justice Burbidge conclude? At page 495 after referring to what is laid down in Beaty v. Shaw[7], he says: "It appears, therefore, that if the question in issue were to be determined by analogy to the law of Ontario applicable to individuals, the province could not maintain its counterclaim for the moneys which the Dominion collected as revenue from the disputed territory, without submitting to the enforcement of the equity existing in favour of the Dominion in respect of the charges incurred in extinguishing the burden of the Indian title; but that it is, to say the least, extremely doubtful if this equity could be enforced in an action by the Dominion against the province."
Let me pause there for a moment. My learned friend has already pointed out to your lordships how utterly foreign to this controversy is the question arising on the counterclaim. By the conventional boundary agreement the Dominion and the province mutually undertook with each other in the event of the boundary award determining or the boundary dispute resulting in shewing that the territory which had been administered did not belong to the person administering, to account for all the revenues they had derived from the territory during the course of that administration. It was just as simple as that, and our counterclaim says to the Dominion, in the course of our administration under the conventional boundary agreement, of the territory which that agreement assigned to your administration and management, you derived certain revenue and you undertook under that agreement to account, that is, if we turned out to be the owners of the land and entitled to those revenues, to account to us accordingly. That is our counterclaim. What has that to do with the Indian title or any question resting upon contract? If we brought an action against the Dominion upon a promissory note, could the Dominion say, your coming into court against us on that promissory note gives us an opportunity of setting up every equitable claim and having you refused relief unless you agree to it? Now that is what this case has been decided upon. That is the point which has been taken by Mr. Justice Burbidge and upon which the case has been decided.
Then, my lords, he goes on to deal with what is no doubt at the bottom of all this litigation. In the course of the delivering of the judgment in the St. Catharines Milling Case[8], Lord Watson used this language, and I will read the whole of two sentences here rather than confine myself to the one which is the foundation of this claim. "Seeing that the benefit of the surrender accrues to her, Ontario must, of course, relieve the Crown, and the Dominion, of all obligations involving the payment of money which were undertaken by Her Majesty, and which are said to have been in part fulfilled by the Dominion. There may be other questions behind, with respect to the right to determine to what extent, and at what periods, the disputed territory, over which the Indians still exercised their avocations of hunting and fishing, is to be taken up for settlement or other purposes, but none of these questions are raised for decision in the present suit."
Idington J.—Is there any track of that having been argued?
Mr. Shepley: I will tell your lordships how that is. I was reading from page 60 of the report. In order to determine the weight to be given to that, let us see what the St. Catharines litigation was about, what the issues in it were, and what place in the adjudication of those issues this obligation had. As I told your lordships, the Dominion, notwithstanding the adverse result of the boundary dispute, claiming to have acquired the paramount title to that of Ontario by virtue of the alleged transfer of the Indian title under this treaty, issued a license to cut timber to the St. Catharines Milling Company in territory which was within that in question. The Attorney-General of Ontario brought an action in the courts of Ontario against the licensee, alleging that the licensee was trespassing upon Crown lands belonging to Ontario and obtained an injunction restraining that trespass. The Dominion was no party to that at all and the sole question for adjudication there was whether or not the St. Catharines Milling Company, the licensees, setting up as it did the license of the Dominion, justified the acts of trespass. That is, in other words, whether the licensee had acquired a right to cut that timber as against the rights that Ontario had by virtue of the license issued by the Dominion. That was the sole question. I will give your lordships a reference to the case in its various stages. Your lordships will find it first in 10 Ontario, at page 196. That is the decision of the Chancellor, a very lengthy decision and your lordships are very familiar with it no doubt. I only refer to it because I want to shew just what the Chancellor had in his mind with regard to the very question which Lord Watson afterwards expressed himself upon. At page 235 of the report he says: "In the present case, my judgment is, that the extinction of title procured by and for the Dominion enures to the benefit of the province as constitutional proprietor by title paramount, and that it is not possible to preserve that title or transfer it in such wise as to oust the vested right of the province to this as part of the public domain of Ontario. "Whatever equities—I use this word for want of a more suitable one—may exist between the two governments in regard to the consideration given and to be given to the tribes, that is a matter not agitated on this record."
That case went to the Court of Appeal and came to this court and then to the Privy Council and up to that time the Dominion had not been a party to the controversy at all. Of course it goes without saying that none of the evidence which is on the present record before your lordships was before either the Chancellor or either of the appellate courts. There was not a word of the evidence which Mr. Justice Burbidge heard or which is before your lordships to-day with regard to the circumstances under which the treaty was negotiated. The whole question was: Did the treaty confer upon the Dominion such a title as was paramount to that of Ontario, and by reason of that paramount title was the license of the alleged trespasser a license which authorized him to do what he did and which effectively answered the claim of the Province of Ontario for an injunction?
Then what happened in the Privy Council is this and it is stated in the judgment. I will take the statement from the judgment. At pages 52 and 53 Lord Watson says: "Although the present case relates exclusively to the right of the Government of Canada to dispose of the timber in question to the appellant company, yet its decision necessarily involves the determination of the larger question between that government and the Province of Ontario with respect to the legal consequences of the treaty of 1873. In these circumstances, Her Majesty, by the same order which gave the appellants leave to bring the judgment of the court below under the review of this Board, was pleased to direct that the Government of the Dominion of Canada should be at liberty to intervene in this appeal, or to argue the same upon, a special case, raising the legal question in dispute. The Dominion Government elected to take the first of these courses and their lordships have had the advantage of hearing from their counsel an able and exhaustive argument in support of their claim to that part of the ceded territory which lies within the provincial boundaries of Ontario." They appeared upon that intervention; they intervened in the St. Catharines Milling Company Case[9] on that appeal and they argued that the St. Catharines Milling Company ought to succeed in that appeal; that is, that the St. Catharines Milling Company's license gave a valid right to cut the timber as against any right on the part of Ontario. The whole question was argued there and that is the whole question raised upon that record, and in the result the order that was made simply dismissed the licensees' appeal and no more. It made no declaration between the Dominion and the province. Your lordships have upon this record the formal judgment before you. All that the formal order of the Privy Council did was to dismiss the licenseholder's appeal. The whole thing done was to dismiss the appeal.
Duff J.-—Is there anything to shew, Mr. Shepley, that this statement of Lord Watson's was the result of any concession or confession made on behalf of the province?
Mr. Shepley: We thought we had here a copy of the shorthand notes of the argument; unfortunately we have not, but it can be found and given to your lordships, or a reference to the sessional papers in which it will be found. I can tell your lordships from recollection—because of course we studied that matter very carefully—from time to time spasmodic attempts during the argument were made to introduce that discussion and, in the St. Catharines Milling Co. Case[10], invariably the court said, "We have nothing to do with that, that does not arise in this appeal; it has not to do with any question as to whether or not Ontario ought to bear any portion of the burden." That was during the argument. Then to say, my lords, in these circumstances, that the Privy Council has gone out of its way, without any evidence before it whatever and in a case where the question was not raised, to determine our rights, rights between the Dominion and the province, was going much farther than it was possible to go. No doubt that dictum is the foundation of this litigation and your lordships will find, I think, that the right of the Dominion in this statement of claim is in the words of the dictum. We say it cannot be binding between the parties in this controversy; that was not a controversy between the Dominion and the province and there was no estoppel.
Davies J.—What was the controversy? There must have been some or they would not have been allowed to intervene.
Mr. Shepley: Whether or not the right of Ontario against the licenseholder should be sustained. There was nothing before the Privy Council to indicate the circumstances under which the Dominion Government had extinguished the title, whether it had done that for the benefit of Ontario or for reasons such as are shewn to your lordships to-day. They could not have known whether Ontario acquiesced or was consulted or not.
My learned friends have found a good deal of comfort in the civil law, the law of negotiorum gestor, but that is not our law. Apart from that, there was no mandate, no commission from Ontario to the Dominion to go and extinguish this title on behalf of Ontario and no ratification.
Duff J.—Except such mandate as the "British North America Act" would give the Dominion. Though that is going back to the same thing. Mr. Shepley: Yes, my lord, perhaps that is coming back to the same point again. I have tried to shew how any mandate from the "British North America Act" can only be construed as a mandate to deal with the lands of Ontario with the concurrence of Ontario. You cannot go adversely to Ontario and deal with Ontario's rights. What Mr. Justice Burbidge says with regard to that statement, at page 496, is—and I find it very difficult to understand exactly what he means by it—"So far as the questions in this case relate to the extent to which the province is liable to contribute to the expenses incurred by the Crown in fulfilment of the obligations created by the treaty this case, no doubt, differs materially from the St. Catharines Milling and Lumber Company's Case"[11]. That is what we say. We say the two cases raise entirely different issues. Then he goes on to say:-"But with respect to the principal question at issue, namely, whether the province is liable to contribute anything, this case presents, I think, no new fact or aspect," I confess I am utterly unable to understand that. First he says that to the extent to which the province is liable to contribute there is a new case, but with respect to the question of whether it is liable to contribute anything there is no new factor. I should have thought that neither of these issues was before the Privy Council. Then he says: "The province's main defence here is that it was not a party to the treaty." That is not our main defence. Your lordships have heard elaborated, at perhaps too great length, what we think our defences are, but your lordships have not, I am sure, got the idea that our main defence is that we were not a party to the treaty. That is one of our comments upon the situation, of course.
Then he says: "By the order which gave the appellants leave to bring the judgment of that court under review, Her Majesty was pleased to direct that the Government of the Dominion should be at liberty to intervene in the appeal or to argue the same upon a special case, raising the legal question in dispute. The Dominion Government elected to take the first of these courses, with the result that between the Dominion and the province there was no formal judgment on the questions at issue between them." Well, the question at issue between them was the question at issue between the province and the license-holder. There was no other question. You could not extend the record by mere intervention on the license-holder's appeal. The record could not be expanded by the intervention of the Dominion. Then he says further: "In the St. Catharines Milling and Lumber Company's Case[12] the Province of Ontario stood in the position of a plaintiff; and as between the province and the Dominion the views of their lordships as to the province's liability to indemnify the Dominion may, I think, with fairness, be taken as a part or condition of the judgment of the province, although such views found no place in the formal judgment pronounced." That again I am unable to understand. The judgment was a judgment dismissing the license-holder's appeal. I do not know whether Mr. Justice Burbidge means that they would have allowed the appeal if they had not imposed this condition upon Ontario. There is no indication of any such view in anything that I have been able to find in the record.
One other question I propose to trouble your lordships with and that is the question which has already been quite fully covered, perhaps, by my learned friend Mr. Ritchie, namely, whether or not upon the hypothesis of this judgment it was essential that the relative part played by the various considerations moving the Dominion to this treaty should have been played. In other words, in 1873, that all the elements entering into the negotiation of the treaty, which Mr. Justice Burbidge speaks of, the obligation imposed by the "British North America Act," the obligation imposed by the Hudson Bay Company's surrender, the obligation imposed by the terms made with British Columbia when British Columbia came into the Union and the surrender of the title to this barren piece of territory as it was supposed to be., that these considerations upon the theory of this judgment entered into the treaty. Then why is the Dominion to recover against Ontario any more than a measured proportion having regard to the respective values of these different considerations? Mr. Justice Burbidge acceded to that in the principal judgment; he said it was difficult of ascertainment, but further evidence might be given. Further evidence was given, but not upon that point. The thing is incapable of measurement, that is why. The Dominion made no attempt to produce any evidence upon that subject. We venture to think that it is inherently incapable of measurement; that you cannot say at this time—that indeed at any time you could not have said—this great project the trans-continental road, the Canadian Pacific Railway Company, this great territory, Rupert's Land, that we want to open up and want a road to, the pacification of the Indians, the acquisition of the title to the few barren rocks that they have got here, you cannot put those together, you never could have put them together and said, so much for this and so much for that and so much for the other. The thing is unthinkable, that you can sit down and make a sum in arithmetic of propositions such as these. If that is so, how can the Dominion hope to recover anything here?
Davies J.—Does the extinguishment of the Indian title depend at all upon the value of the land? I suppose there would be some evidence of general dealing.
Mr. Shepley: That is a point that I had almost overlooked. It is said by Mr. Justice Burbidge that we know pretty generally what other treaties have cost; but we do not know what was the value of the lands those treaties covered, nor do we know the value of the lands covered by this treaty. You cannot compare the price paid for a farm in a county away north with the value of a farm situated along the River St. Lawr ence. You must have some evidence. Supposing the fact to be—I do not say it is at all, but it is fair to test the question that way—that the whole of the 30,000 square miles of land which Ontario got the Indian title extinguished in, supposing the whole value of that was nothing whatever, that it was all rocks like the north shore of Lake Superior without of any valuable mineral, this judgment must have proceeded upon precisely the same principle and Ontario would have had to pay for land which she never would have opened up for settlement; she would have had to pay because the Dominion extinguished this title not for the purpose of getting the land at all, but for the purpose of the construction of these great national works.
Newcombe K.C. opens for the respondent. After referring to the material parts of the treaty and to the conventional boundary agreement the learned counsel combats the argument that the land surrendered was of no value, contending that the grounds on which it was based were not sufficient and then proceeds as follows.
Before going further with the question in difference here, let us consider what was the state of the title at Confederation and what sort of an asset did the Indians have in this territory. That has been pretty clearly defined by the numerous cases which have been before the courts and before the Judicial Committee, I think. The judgment of Chief Justice Strong in the St. Catharines Milling Co. Case[13], which was a dissenting judgment, is nevertheless a very instructive judgment with regard to the nature of the Indian title and it is the judgment, of all the judgments which were pronounced in the St. Catharines Milling Co. Case which came nearest to accord with that of the Judicial Committee. I mean to say, he took the view that the title was in the Dominion but, so far as considerations of Indian title, the quality of the Indian title, the nature of the Indian reserves and considerations of that sort are concerned, which are more or less material here, the view of the learned Chief Justice coincided entirely with that later expressed by Lord Watson in appeal.
Now it seems to have been supposed in the Ontario courts that the Indian title was nothing except such as might be recognized as a matter of grace; that they had no legal right; that they might be recognized or not, as the authorities determined. But that is not the case, as shewn by Chief Justice Strong. His judgment is a long one and I do not propose to refer to it at length.
Now, in the judgment in the St. Catharines Milling Co. Case[14], at pages 58 to 60, it is said: "The Crown has all along had a present proprietary estate in the land, upon which the Indian title was a mere burden. The ceded territory was at the time of the Union land vested in the Crown, subject to an interest other than that of the province in the same within the meaning of section 109, and must now belong to Ontario in terms of that clause unless its rights have been taken away by some provision of the Act of 1867 other than those already noticed." That is to say at Confederation this territory, in so far as it ultimately turned out to be within the boundaries of Ontario, was by force of the "Confederation Act" vested in Ontario subject to an interest other than that of Ontario therein. That is the Indian interest. Now that is further explained in Attorney-General of Canada v. Attorney-General of Ontario[15], known as the Robinson Treaties Case, and there Lord Watson said, at pages 210 to 211, that the expression in section 109, "an interest other than that of the province in the same appeared to their lordships to denote some kind of right or interest in a third party independent of and capable of being vindicated in competition with the beneficial interest of the province." Therefore, previous to this surrender, from the time of Confederation down to the time of the surrender the Indians had an interest in the land other than that of the province and an interest capable of being vindicated in competition with the beneficial interest of the province. So that, my lords, they had a title, as I submit, of occupation and possession; a title which made it legally impossible for the province to administer the lands, to make grants and administer the lands in the way in which they have administered them since the surrender was made.
Your lordships will see, too, by the proclamation of 1763, which is the evidence of the Indian title here, that the Government was prohibited from dealing with these lands, from making grants, or doing anything with them pending the cession of the Indian title. The proclamation declares that "no governor or commander-in-chief of any of the new colonies of Quebec, East Florida or West Florida do presume on any pretence to grant warrants of survey or pass any patents for lands beyond the boundaries of their respective governments, or until our further pleasure is known, upon lands which, not having been ceded or purchased as aforesaid are reserved to the Indians or any of them. It is further declared to be our royal will to reserve under our sovereignty and protection all the lands not included within the limits of our said three governments or within the limits of the lands granted to the Hudson Bay Company." Therefore I submit that the Indians had title inconsistent with the right of Ontario to do any of the things with this land which she immediately proceeded to do after this treaty was made.
Counsel then quotes at length from the speech of the Lieutenant-Governor on opening the legislature of Ontario, in January, 1874, in which he speaks of the boundary question and refers to these lands as "the important territory in dispute," and to a report from Mr. Laird to the governor in council dated June 2nd, 1874, quoting from it as follows:
"That as the Indian title of a considerable part of the territory in dispute had not then been extinguished, it was thought desirable to postpone the negotiations for a conventional arrangement, under which the territory might be opened for sale or settlement, until a treaty was concluded with the Indians."
That is very strong evidence, my lords, as to what was taking place. The project was the settlement and administration of this territory. There was the mineral wealth, the timber and the settlers going in and contention and strife to be avoided, and there was the question of the boundary to be settled. Negotiations had been begun and then, according to this report, by mutual consent between Ontario and the Dominion it had been conceded as expedient that those negotiations should be postponed pending the surrender of the Indian title, which, of course, the Dominion undertook to bring about as speedily as possible.
Then he says: "That barrier being now removed, the undersigned has the honour to recommend that as some considerable time must yet elapse before the boundaries of Ontario can be finally adjusted, it is desirable in the meantime to agree upon conventional boundaries, otherwise the development of that import- ant portion of Canada lying between Lake Superior and Lake of the Woods will be seriously retarded, as applications to take up lands in that section are being constantly made, and the inability to obtain recognition of claims from either the Government at Ottawa or Toronto is impeding the settlement of the country." Then there is a recommendation of the appointment of Commissioners and this report is communicated to Ontario under order in council printed on the following page and then there is a memorandum of supplementary agreement, the conventional agree- ment, where it is mentioned that Ontario acted on the suggestion of the Privy Council by appointing a Commissioner. They acted on the suggestion set out in this report of Mr. Laird. There is no question by Ontario that that does not represent the state of the facts as they existed.
There can be no doubt, it seems to me, that this project was mainly in aid of the settlement of the country. What sort of a position would it have been in? My learned friend says: "Oh, they wanted to build a railway through there; they wanted to build a railway and they might just as well take a release of the whole thing." Suppose they had stipulated with the Indians, as they might have stipulated with them, to get the surrender of the right of way of the Canadian Pacific Railway and gone through there with that and left the whole thing. How much less, I would like to know, would Ontario have had to pay if she waited and got a surrender from the Indians afterwards, after the settlers began to come in and the railway to go through there?
Then, after referring to a letter from the Under Secretary of State to the Lieutenant-Governor of Ontario, dated July 15th, 1874, respecting the selection of Indian reserves under the treaty and asking for a schedule or plan of the mineral lands in the territory surrendered and the reply thereto on July 31st enclosing such plan he proceeds:
Now we pass from that to the statutory agreement, to the Dominion statute of which the agreement is a schedule. The statute I do not think is set out in the case, but the agreement is. The Dominion statute simply contained one section, that it shall be lawful for the Governor in Council, if he shall see fit, to enter into an agreement with the Government of Ontario, according to the schedule to this Act, and such agreement when entered into and every matter and thing therein shall be as binding on the Dominion of Canada as if set forth by statute. The Ontario Act I have not got, but presumably it is to the same affect.
Now this agreement is with respect to what we call the special reserves. Your lordships are aware that under the treaty by the first provision, the first covenant on behalf of the Crown, the Crown was to lay aside reserves for farming lands, due respect being had to lands at present cultivated by the Indians. "Also to lay aside and reserve for the benefit of the said Indians, to be administered and dealt with for them by Her Majesty's Government of the Dominion of Canada, in such a manner as shall seem best, other reserves of land in the said territory hereby ceded, which said reserves shall be selected and set aside where it shall be deemed most convenient and advantageous for each band of Indians." Then the Dominion proceeded to lay aside these reserves. You see the effect of the treaty or surrender as ultimately held by the Judicial Committee, was to vest the whole title in Ontario. The Indians did not reserve or except their special reserves; they surrendered their original Indian title, the title which existed under the proclamation; they surrendered the whole thing to the Crown and it enured to the benefit of Ontario. Therefore Ontario held the whole freed from their interests. The Indians reserved nothing, but they took a covenant from the Crown that the Dominion would give them special reserves. The Dominion did so without any special acquiescence by Ontario. I have shewn your lordships that there was some reference to the subject because they did not want to give them the mineral lands, but without Ontario becoming bound the Dominion laid aside these reserves, and then questions arose, Ontario claiming that we had set them aside out of their Crown lands in which the Indians had no interest, we had taken their Crown lands and made reserves of them. They said we had no right to do that. That was ultimately conceded, but the Indians had been put on these reserves and were occupying them in fact, and the situation had been dealt with and it was dealt with by this agreement. Now this agreement recites the treaty. "Whereas by articles of a treaty made on the 3rd of October, 1873, between Her Most Gracious Majesty the Queen, by Her Commissioners, the Honourable Alexander Morris, Lieutenant-Governor of Manitoba and the North-West Territories," and soon, "the Ojibeway Indians, inhabitants of the country within the limits thereinafter defined and described by their chiefs chosen and named as thereinafter mentioned, of the other part, which said treaty is usually known as the North-West Angle Treaty No. 3, the Salteaux tribe of the Ojibeway Indians and all other Indians inhabiting the country therein defined and described surrendered to Her Majesty all their rights, titles and privileges whatsoever to the lands therein defined and described on certain terms and considerations therein mentioned.'' Now that was the recital they made of it in 1894, and it is a correct recital. It states the effect of the treaty precisely, in a solemn agreement ratified by the statutes of both Governments; and it says what is apparent on the face of the instrument, that they did surrender these to Her Majesty on certain terms and considerations therein mentioned. That is, they gave up their title to the Crown and the Crown in consideration of that gave them certain covenants, and I am going to refer to that again. One of those covenants is as much a consideration for this transfer as another. There is no method of separating them. Then it goes on with further recitals and the last one is: "Whereas it is deemed desirable for the Dominion of Canada and the Province of Ontario to come to a friendly and just understanding in respect of the said matters, and the Governor-General of Canada in Council and the Lieutenant-Governor of Ontario in Council have given authority for the execution on their behalf respectively, pursuant to the said statutes of an agreement in terms of these presents." It is therefore agreed as follows: "With respect to the tracts to be from time to time taken up for settlement, mining, lumbering, or other purposes, and to the regulations required in that behalf, as in the said treaty mentioned, it is hereby conceded and declared that, as the Crown lands in the surrendered tract have been decided to belong to the Province of Ontario or to Her Majesty in right of the said province, the rights of hunting and fishing by the Indians throughout the tract surrendered, not including the reserves to be made thereunder do not continue with reference to any tracts which have been, or from time to time may be required or taken up for settlement, mining, lumbering or other purposes by the Government of Ontario or persons duly authorized by the said Government of Ontario; and that the concurrence of the Province of Ontario is required in the selection of the said reserves."
There Ontario is saying that inasmuch as this treaty has been made, these lands have become provincial Crown lands and the Indian rights have been extinguished.
Now, by lords, there is the other agreement made with regard to these reserves. That is the agreement between Mr. Blake and myself made in London. "Agreement between counsel on behalf of the Dominion and Ontario, intervening parties upon the appeal to the Judicial Committee of the Privy Council in Ontario Mining Co. v. Seybold et al.[16].
"As to all treaty Indian reserves in Ontario (including those in the territory covered by the North-West Angle Treaty) which are or shall be duly established pursuant to the statutory agreement of 1894, and which have been or shall be duly surrendered by the Indians, to sell or lease for their benefit, Ontario agrees to confirm the titles heretofore made by the Dominion and that the Dominion shall have full power and authority to sell or lease and convey title in fee simple or for any less estate.
"The Dominion agrees to hold the proceeds of such lands when or so far as they have been converted into money upon the extinction of the Indian interest therein subject to such rights of Ontario thereto as may exist by law.
"As to the reserves in the territory covered by the North-West Angle Treaty which may be duly established as aforesaid, Ontario agrees that the precious metals shall be considered to form part of the reserves, and may be disposed of by the Dominion for the benefit of the Indians to the same extent and subject to the same undertaking as to the proceeds as heretofore agreed with regard to the lands in such reserves.
"The question as to whether other reserves in Ontario include the precious metals to depend upon the instruments and circumstances and law affecting each case respectively.
"Nothing is hereby conceded by either party with regard to the constitutional or legal rights of the Dominion or Ontario, as to the sale or title to Indian reserves or precious metals, or as to any of the contentions submitted by the cases of either Government herein, but it is intended that as a matter of policy and convenience the reserves may be administered as hereinbefore agreed."
This agreement was made and acted upon and it settled the differences existing between Ontario and the Dominion in that case, so that while it was argued by the parties it was not argued by the Dominion.
Duff J.—I see that presents a point that did not occur to me before. You put it, but I did not appreciate it. The making of these reserves under the treaty involved giving the Indians an interest in the land which even after the St. Catharines Milling Co. Case[17] might have been contended at all events to be a greater interest than they had before the treaty, than the original interest.
Mr. Newcombe: Yes, my lord.
Duff J.—And that would necessarily involve Ontario?
Mr. Newcombe: Yes. I may be in conflict with some decisions, but not in conflict with any decision of the Judicial Committee—doubtless in conflict with the Chancellor of Ontario, at all events—but I submit that with regard to those special reserves which are set aside for the Indians uniformly upon the surrender of their original title in the large areas over which they claimed it, in those special reserves which are set aside, the Indians acquire a larger interest, a different interest from the interest which can be conveyed by surrender to the Crown for sale.
Duff J.—That is a disputed point.
Mr. Newcombe: I admit it is a disputed point, but the reasons in favour of that proposition appeal very clear to me. What happened in the Seybold Case was this: One of these special reserves, "38B" which had been laid off for the Indians by the Dominion without any reference to Ontario and out of the Ontario Crown lands, was found to contain mineral and it was deemed desirable that it should be sold and converted into money so that the Indians might have greater enjoyment of their property. It was surrendered under the terms of the "Indian Act" to the Dominion and sold to this mining company who thereupon took up the mining, and Ontario made a grant, I think, of the same property. The question arose as to whether the Ontario patent was to prevail or whether the Dominion patent was to prevail. It was held or assumed that this was a good reserve. It was assumed by the courts below, at all events by the Chancellor, and I think by this court too; it was not decided that it was a good reserve, but it was disposed of on the assumption that it was a good reserve. And it was said that when the Indians surrendered that to the Dominion for sale that a patent could only be made by Ontario and therefore the Dominion patent was no good, and the Ontario patent was good. Of course that was a serious question and upon that and upon the denial of Ontario that the Indians were to have the metal in these properties the Dominion intervened and proposed to argue that question in the Judicial Committee, but the settlement was made and the Committee decided what, of course, was the turning point of the case, that there was no reserve there, that Ontario had to acquiesce in the reserve, that the reserve never was laid off, and the point upon which the Chancellor had decided the case had never arisen.
Now, in dealing with this case and what I have to say in the following part of my argument, it must not be forgotten that it is not like an ordinary case between individuals. There is only one Crown and really only one party to the case; while we speak of Ontario and Quebec and the Dominion and so on, they are not separate and independent governments like the governments of the United States.
Each represents the same Crown in respect of separate departments of the same government. As illustrating that to some extent I want to refer to a case, Williams v. Howarth[18]. That was a case where the Government of New South Wales, I think it was, sent a force of soldiers to the war in South Africa, and they had contracted with these soldiers to pay them certain rates per day during the period of their enlistment. When these men reached South Africa they fell under Imperial command and Imperial regulations and they got certain allowances, certain pay from the Imperial Government for their services there. I do not remember what the amounts were, but we will suppose that the Government of New South Wa