Horseman v. Canada

Horseman v. Canada
Court (s) Database
Federal Court Decisions
Date
2015-10-15
Neutral citation
2015 FC 1149
File numbers
T-1784-12
Decision Content
Date: 20151015
Docket: T-1784-12
Citation: 2015 FC 1149
Ottawa, Ontario, October 15, 2015
PRESENT: The Honourable Mr. Justice Zinn
PROPOSED CLASS PROCEEDING
BETWEEN:
CHIEF EUGENE HORSEMAN
AND THE HORSE LAKE FIRST NATION
Plaintiffs
and
HER MAJESTY THE QUEEN
Defendant
AMENDED ORDER AND REASONS
[1] The plaintiffs seek to certify this action as a class proceeding pursuant to Part 5.1 of the Federal Courts Rules, SOR/98-106. Rule 334.16 sets out several factors that must be met if an action is to be certified.
[2] For the reasons that follow, the plaintiffs have not satisfied the Court that they meet all of these mandatory factors, and accordingly, this action cannot be certified as a class action.
Background [3] Between 1871 and 1921, Canada negotiated 11 separate treaties [the Numbered Treaties] with various First Nations. These treaties encompass all of Alberta, Saskatchewan and Manitoba, portions of British Columbia, Yukon, Northwest Territories, and Ontario. The treaties provided Canada with large tracts of land in exchange for promises Canada made to the First Nations. After the Numbered Treaties were entered into, other Bands adhered to them. The most recent adhesion was made by the McLeod Lake First Nation which adhered to Treaty 8 in 2000. Henceforth, I will refer to all of the First Nations signatories to the Numbered Treaties as the “Treaty Bands.”
[4] In each of the Numbered Treaties, Canada agreed to pay an annual annuity to each member of the Treaty Band, and in many cases an additional or greater annuity to the Chiefs and Headsmen [the Annuity Payments]. Attached as Appendix A are the relevant provisions of the Numbered Treaties regarding these Annuity Payments.
[5] The amount of the Annuity Payments in Treaties 1 and 2 was increased in 1875 from $3 per person to $5, and an additional allowance was to be paid to the Chiefs and Headsmen. Other than these adjustments, the plaintiffs allege that Canada has never adjusted the amount of the Annuity Payments in any of the Numbered Treaties and, as a consequence, they say that “the Annuity Payments have been reduced in value to the point that they no longer contribute to the welfare of the individual recipients.”
[6] The plaintiffs claim that the provisions in the Numbered Treaties that provide for the Annuity Payments entitle the recipient to an amount that is to be annually adjusted to reflect inflation and changes in purchasing power, in order to maintain a value equivalent to its buying power at the time the treaty was made. They claim that Canada is in breach of its obligations under the Numbered Treaties and its fiduciary duties and seek damages and “equitable compensation” for all members of the class “in an amount equal to the present value of losses sustained by the individual beneficiaries” as a result of Canada’s failure to adjust the Annuity Payments over time.
[7] Although the claim made for each individual member of the proposed class may be a small amount, Canada filed an expert’s report that estimates that, if the plaintiffs succeed in this class action, Canada’s liability with respect to past Annuity Payments would be between one and two billion dollars. As was observed at the hearing, the amount of potential liability has no relevance to whether this action may be certified.
[8] The proposed representative plaintiffs are Chief Eugene Horseman [the Chief] and the Horse Lake First Nation [the HLFN]. The Chief is a member of the HLFN which is the successor of the Beaver Indians of Dunvegan, one of the signatories to Treaty 8. The Chief is entitled to receive an Annuity Payment under the terms of that treaty.
[9] The plaintiffs are proposing that the class be defined as: “All persons entitled to receive Annuity Payments under the terms of each of the Numbered Treaties.”
[10] The plaintiffs propose the following as the common issues if this action is certified as a class proceeding:
a. Does each of the Annuity Provisions under the Numbered Treaties, properly construed, provide for the right to receive an Annuity Payment that is adjusted annually to account for inflation and changes in purchasing power, in order to maintain a value equivalent to its buying power at the time each of the Numbered Treaties was made?
b. Does Her Majesty the Queen in Right of Canada, by her agent the Minister of Aboriginal Affairs and Northern Development, owe a fiduciary duty to the Class in the administration of Annuity Payments under the Numbered Treaties to adjust the amount of Annuity Payments to account for changes in inflation and to preserve purchasing power, in order to maintain a value equivalent to the Annuity Payments’ buying power at the time the Treaty was made?
c. Is the Crown in an ongoing breach of its treaty obligations by providing Annuity Payments that are not adjusted for inflation and for changes in purchasing power?
d. Should the Class be awarded damages and equitable compensation as a result of the Defendant’s failure to adjust the Annuity Payments to account for changes in inflation and purchasing power and, if so, what is the methodology to be used to determine the amount?
[11] Prior to launching this action, the HLFN filed a claim with the Specific Claims Branch of the Department of Indian and Northern Affairs, asserting that the Annuity Payments owing pursuant to Treaty 8 had to be adjusted to reflect changes in purchasing power – the very claim advanced in this action. The Specific Claims Branch responded on December 7, 2011, saying that the claim could not be processed because it alleged a loss to individual members of the HLFN and not a loss to the HLFN itself:
After careful review, it has been determined that the claim submission will not be further assessed under the Specific Claims Policy (the Policy), as set out in The Specific Claims Policy and Process Guide. Allegations pertaining to the failure of the Crown to provide treaty annuities to individuals, if proven, would give rise to a personal loss to those individuals. In order to be assessed under the Policy, a claim must be submitted by a First Nation suffering a loss from the alleged grievance. Consequently, your claim submission has not been filed with the Minister and will not proceed in the specific claims process…
[12] Subsequent to hearing the submissions of the parties on this motion for certification, the parties advised the Court of a recent decision of the Specific Claims Tribunal in Beardy’s & Okemasis Band #96 and 97 v Her Majesty the Queen in Right of Canada, 2015 SCTC 3 [Beardy’s]. The decision involved a claim arising out of Canada’s non-payment of Treaty 6 annuity payments between 1885 and 1888, in the wake of the North-West Rebellion. Canada submitted that the tribunal had no jurisdiction over the claim because the annuity claims were individual in nature and not a right of the collective.
[13] The tribunal held at paras 314-317 that it did have jurisdiction because the failure to pay the annuity was a loss to the collective:
Treaty 6 provides for annual payments to all future generations of members of the collective. This could not be a promise to the unborn. They do not exist, at least in the corporeal sense. It is a promise to the collective comprised of the members, collectively, as it is constituted at every moment in time
The entitlement to the payment ceases when a member of the collective is removed from the band list. While an individual who is no longer on the band list may remain a de facto member of the community, he or she would no longer be recognized by the government as a member of the band constituted under the Indian Act, 1880. Under the system of administration and governance imposed on indigenous peoples by the Indian Act, 1880, the entitlement of the individual to the annual payment is lost, as it is not owed to the individual but to the collective as then constituted.
The annual payment sustains the collective by providing cash, meagre as it is, to each member. This is the intent of the provision for the annual payment required by Treaty 6 as partial consideration for the cession of a collective interest in the land. The failure to pay the required money to an entitled individual is a loss to the collective.
The Claimant, a band under the Indian Act, 1880, and a First Nation within the definition of the term in the SCTA, is the present incarnation of the collective that suffered the loss between 1885 and 1889. The loss between 1885 and 1889 is “its” loss within the meaning of the SCTA, section 14(1).
[14] The parties provided written submissions on the impact, if any, of Beardy’s on this motion. They addressed whether, in light of Beardy’s, the specific claims process would be a preferable procedure for adjudicating the claims herein advanced and also whether Beardy’s provides guidance on the issue of standing.
[15] Beardy’s is not binding on this Court and it is noted that even the tribunal saw the Annuity Payments issue to have both an individual and a collective aspect. For these reasons, I find that Beardy’s is unhelpful when considering the issue of standing. It may, however, be relevant to the question of the preferred procedure for advancing this claim.
[16] The five requirements for certification of an action as a class proceeding are set out in Rule 334.16, reproduced in Appendix B. Those requirements are as follow:
1. The pleading must disclose a reasonable cause of action;
2. There must be an identifiable class of two or more persons;
3. The claims of the class must raise common questions of law or fact;
4. A class proceeding must be the preferable procedure for the just and efficient resolution of the common questions of law or fact; and
5. There must be a representative plaintiff who
i. would fairly and adequately represent the interests of the class;
ii. has prepared a plan for the proceeding that sets out a workable method of advancing the action and notifying the members of its progress;
iii. does not have an interest in conflict with the other class members regarding the common questions of law and fact; and
iv. has provided a summary of the agreement with legal counsel respecting fees and disbursements.
[17] Canada submits that the motion for certification fails to meet all of these requirements except the second: Canada agrees that there is an identifiable class.
Analysis A. Do the pleadings disclose a reasonable cause of action? [18] The plaintiffs plead two causes of action: Canada’s alleged breach of treaty obligations and its alleged breach of fiduciary duty.
[19] Canada submits that there are three reasons why the pleading does not disclose a reasonable cause of action.
[20] First, Canada submits that the claims advanced by the plaintiffs are based on collective and not individual rights. It says that a representative action is used where there are common or collective rights at issue; whereas a class proceeding is used where there are individual rights at issue. There being no individual rights at issue, it says that the claim cannot succeed as drafted. Canada argued this as a preliminary issue of standing; however, for the reasons that follow, this submission is more appropriately considered when examining whether the claim advances a reasonable cause of action.
[21] Second, Canada submits that the plaintiffs’ claims are bound to fail “because there is no air of reality to the causes of action alleged.”
[22] Third, Canada submits that “the Statement of Claim does not disclose a cause of action for breach of fiduciary duty or a sustainable claim for ongoing breach of treaty obligations.”
[23] The plaintiffs note that there is a very low threshold they must meet to satisfy the Court that their pleading discloses a reasonable cause of action. In Le Corre v Canada (Attorney General), 2004 FC 155 paras 21-23, aff’d 2005 FCA 127, this Court held that the test to be met is the same as that applied to striking a pleading: Is it plain and obvious that the plaintiff cannot succeed and that the action is doomed to failure? The jurisprudence tells us that the plaintiffs need not pass a preliminary merits test requiring an examination of the evidence. However, the Supreme Court in Pro-Sys Consultants Ltd v Microsoft Corp, [2013] 3 SCR 477 at para 63, said that the test will not be met if, “assuming all the facts pleaded to be true, it is plain and obvious that the plaintiff’s claim cannot succeed.” Therefore, while the Court can examine the facts as pled, it cannot go outside the four corners of the Statement of Claim in determining if the test has been satisfied.
(1) Can this action be brought as a class proceeding? [24] Class proceedings provisions provide a procedural mechanism for the consolidation of similar claims. It follows that the viability of a class action is contingent on the viability of the individual claims that comprise it. If the individual members of a class do not have standing to make the claims that are asserted, then the class action will necessarily fail.
[25] This point was recognized by the Manitoba Court of Appeal in Soldier v Canada (Attorney General), 2009 MBCA 12 at para 30 [Soldier CA], where the Court of Appeal held that “[t]he plaintiffs who bring the certification action must have standing to sue as if it were an individual action.” Similarly, in Bisaillon v Concordia University, 2006 SCC 19 at para 17, the majority of the Supreme Court of Canada held that “[t]he class action is…a procedural vehicle whose use neither modifies nor creates substantive rights…It cannot serve as a basis for legal proceedings if the various claims it covers, taken individually, would not do so.” Class action legislation does not create any new cause of action; rather, it is procedural.
[26] Because a class action cannot succeed unless the individual class members have standing, the issue of standing should be considered as part of the analysis of whether the pleadings disclose a reasonable cause of action under Rule 334.16(a). This was the approach taken by the Manitoba Court of Queen’s Bench in Soldier v Canada (Attorney General), 2006 MBQB 50 [Soldier QB], at para 26:
I am persuaded that the issue of standing is a matter to be considered at this stage, in determining whether there is a cause of action and whether s. 4(a) of the Act is met. There can be no cause of action if there is no standing.
[27] This approach was upheld in Soldier CA, where the Court of Appeal at para 37 wrote that “the certification judge did not err in principle or commit palpable and overriding error when she considered standing as part of the question as to whether the plaintiffs had a cause of action.”
[28] To say that the issue of standing is, as a matter of logic, part of the certification analysis is not to say that, as a matter of procedure, they must always be addressed at the same time. As the Court of Appeal emphasized in Soldier CA at para 34, “the question of when to consider the issue of standing is discretionary and may vary depending on the facts of each case and the nature of the evidence presented.” It observed that, depending on the material that is before the Court, it may be appropriate to consider the issue of standing earlier, as part of a precertification motion to strike or for summary judgment, or later, as was done in this case, as part of the certification hearing.
[29] In this case, Canada submits that the individual members of the plaintiff class lack standing to enforce the right to annuities under the Numbered Treaties. Canada claims that the right to annuities under a treaty is a collective right held by the Treaty Bands. It can therefore only be enforced on behalf of the Bands as a whole, by way of a representative action.
[30] In order to understand why Canada says that representative actions are uniquely well suited to the enforcement of collective rights, it is useful to understand the history of that form of action and, in particular, its history in the federal courts. The development of multiparty actions is described in some detail by the Supreme Court of Canada in Western Canadian Shopping Centres Inc v Dutton, 2001 SCC 46 at paras 19 - 29. Unlike the law courts which judged individual questions between the plaintiff and the defendant, courts of equity developed a rule of compulsory joinder that required that all those interested in the subject matter of the litigation be made and named as parties. The advantage of this development was that it “allowed the Court to examine every facet of the dispute and thereby ensure that no one was adversely affected by its decision without first having had an opportunity to be heard” and it “possessed the additional advantage of preventing a multiplicity of duplicative proceedings.”
[31] The compulsory joinder rule became inadequate when the interested parties to the conflict became too numerous to be joined. The court of equity relaxed the rule and created the representative action. In Chance v May (1722), Prec Ch 592, 24 ER 265, members of a partnership were allowed to sue on their own behalf and on behalf of some 800 other partners for the misapplication and embezzlement of funds by the partnership’s former treasurer and manager. As the Supreme Court indicates: “The court allowed the action because ‘it was in behalf of themselves, and all others the proprietors of the same undertaking, except the defendants, and so all of the rest were in effect parties,’ and because ‘it would be impracticable to make them all parties by name, and there would be continual abatements by death and otherwise, and no coming at justice, if all were to be made parties’.” The representative action thus became available where there were numerous parties who had the same interest in an action – one or more persons could represent all interested persons and the decision was binding on all of them.
[32] Prior to 2002, the requirement that the persons have the same interest was reflected in Rule 114(1) of the Federal Courts Rules which provided: “Where two or more persons have the same interest in a proceeding, the proceeding may be brought by or against any one or more of them as representing some or all of them.”
[33] Rule 114 was repealed in 2002 when the class action regime was brought into effect. However, The Hon. Allan Lutfy and Emily McCarthy in Rule-Making in a Mixed Jurisdiction: The Federal Court (Canada) (2010), 49 SCLR (2d) 313 indicate that Rule 114 was reinstated in an amended format in 2007, at the request of the Aboriginal litigation bar. They observe at page 324 that a subcommittee of the Rules Committee found that treaty rights are generally not individual rights and that the availability of opt out in class aboriginal proceedings is problematic:
A review of the nature of Aboriginal and treaty rights in Canada demonstrates that they are, for the most part, sui generis rights that are held communally and that arise, at times, from an agreement that was entered into by a band or a nation with the Crown in right of Canada. These rights are transmitted to individuals because of their membership in a particular band or nation, but are not held by these individuals in an individual capacity. Thus membership in the group is the sine qua non of exercising or enforcing the right.
Governance of a band or a nation is regulated by either customary law or the Indian Act. Thus members of First Nations communities belong to a (generally) identifiable group, they are seeking to enforce a communal right, and the capacity to opt out from the litigation – due to the nature of the right at issue – is problematic at best.
[34] As a result, Rule 114 was reinstated. A representative action may be brought by a person acting as a representative of one or more other persons on condition that “the issues asserted by … the representative and the represented persons (i) are common issues of law and fact and there are no issues affecting only some of those persons, or (ii) relate to a collective interest shared by those persons.”
[35] The plaintiffs acknowledged that treaty rights are generally collective in nature, “belonging” to the signatory First Nations. However, they submit that, in appropriate circumstances, treaty rights claims can be pursued on an individual basis. In Soldier CA, the Court of Appeal concluded that it was not plain and obvious that individual members of the plaintiff First Nations lacked standing to seek adjusted annuity payments by way of class action. The plaintiffs also refer to Behn v Moulton Contracting Ltd., 2013 SCC 20 [Behn] where the Supreme Court of Canada confirmed that treaty rights are collective, but went on to note at para 33 that this does not completely preclude individual members from asserting treaty rights because there may be individual aspects to those rights:
The Crown argues that claims in relation to treaty rights must be brought by, or on behalf of, the Aboriginal community. This general proposition is too narrow. It is true that Aboriginal and treaty rights are collective in nature. However, certain rights, despite being held by the Aboriginal community, are nonetheless exercised by individual members or assigned to them. These rights may therefore have both collective and individual aspects. Individual members of a community may have a vested interest in the protection of these rights. It may well be that, in appropriate circumstances, individual members can assert certain Aboriginal or treaty rights, as some of the interveners have proposed. [authorities omitted]
In Behn the Supreme Court of Canada chose not to determine whether there were some treaty rights that could be enforced by individuals by way of a class proceeding as it was unnecessary “at this stage of the development of the law” and in light of the basis on which the decision was made.
[36] In support of its position that the Annuity Payments are individual rights, the plaintiffs point to the 2011 letter from the Specific Claims Branch which sets out its view that the right to collect an annuity payment is an individual right. Canada submits that this evidence is not persuasive.
[37] The plaintiffs also note that Canada distributes the Annuity Payments directly to individual band members, and therefore they say that it is properly construed as an individual right. Aboriginal Affairs and Northern Development Canada’s [AANDC] Manual for the Administration of Payments Pursuant to Treaty [the AANDC Manual] states that treaty annuities are “payable to an individual” and that the individual must acknowledge receipt by signing the treaty pay list, which “acts as evidence of the Crown’s fulfillment of its treaty obligation to pay annuity to an individual.” Further, the administrative processes in place at AANDC recognizes that the entitlement of certain individuals survives even where their First Nation no longer exists or is no longer recognized as a First Nation by the Crown.
[38] Canada may ultimately succeed in establishing that the right to receive an Annuity Payment is collective in nature because the Numbered Treaties address the cessation of collectively-held land and were entered into by Treaty Bands and First Nations. Canada’s position that it is an individual’s connection with a Treaty Band or First Nation that creates his or her entitlement to receive an annuity payment and the fact that this right may be exercised or asserted individually does not change the nature of the underlying right. However, the question the Court must address at this stage is whether it is plain and obvious that the plaintiffs’ claim cannot succeed.
[39] The present action is quite similar to that in Soldier QB. That claim related to the Annuity Payments under Treaty 1 and Treaty 2. The certification judge described the claim to be essentially “that the Crown was under a continuing obligation to pay to each Indian cash in an amount sufficient to purchase the basket of goods [being as many blankets, clothing, prints, twine or traps, that $15.00 would have purchased at the 1871 cost price in Montreal] at the current cost price.” The judge rejected the certification motion, holding at para 43 that “the right to the annuity itself and any interpretation of the treaty right necessary to determine that right are collective.” Although the Court of Appeal dismissed the appeal, it found that the certification judge erred in holding that the plaintiffs had no standing because the Annuity Payments were a collective and not an individual right. The Court of Appeal states, at para 59:
…the answer to whether this is a matter of collective rights to be litigated by way of a representative action or a matter of common rights to be litigated by way of class proceedings is not so clear a matter of law that it can be said that it is plain and obvious that the plaintiffs have no standing and therefore no cause of action.
[40] My view of the jurisprudence, given the facts as pled, parallels that of the Court of Appeal. It is not plain and obvious that the plaintiffs have no standing such that this claim cannot succeed as a class action.
(2) Breach of Treaty Obligations [41] Canada submits that the plaintiffs’ claim that it breached its treaty obligations and fiduciary duty is “entirely based on an unfounded assertion that the parties to each of the Numbered Treaties intended and understood at the time each Numbered Treaty was signed that the amount of the annuities would increase annually to account for the effects of inflation.” Canada points out that at para 43 of their memorandum the plaintiffs admit that “the assembly and review of historical evidence … did not uncover any evidence that the parties negotiating the Numbered Treaties considered the potential for inflation.” Accordingly, Canada submits that there is no air of reality to the plaintiffs’ claims and the plaintiffs cannot show that the pleading discloses a reasonable cause of action.
[42] The plaintiffs plead that it was the “common intention and understanding of the parties at the time each of the Numbered Treaties was signed was that the Annuity Payments would continue to provide a significant contribution to the welfare of the individual beneficiaries.” The plaintiffs indicate that they will rely, in part, on evidence that at the time the first treaties were negotiated in 1871, a skilled farm labourer and a female domestic earned only $156 and $60 annually. Treaty 1 provided an aboriginal family of 5 an annual sum of $25 which was described in the Commissioner’s report at the time as being “usually sufficient to procure many comforts for the family.”
[43] The plaintiffs argue that neither party contemplated that the purchasing power of the annuity would be dissipated over time. Rather, they say that the mutual assumption was that the annuity would provide the Indians with a level of “comfort” based on the purchasing power of the amount agreed upon at the time. The plaintiffs will be asking the Court to imply a contractual term on the basis of that understanding in order to assure and provide efficacy to their mutual agreement – namely, to imply a term that the annuity is to be adjusted to maintain its purchasing power. This submission is based on the approach the Supreme Court of Canada expressed at para 43 of R v Marshall, [1999] 3 SCR 456:
The law has long recognized that parties make assumptions when they enter into agreements about certain things that give their arrangements efficacy. Courts will imply a contractual term on the basis of presumed intentions of the parties where it is necessary to assure the efficacy of the contract, e.g., where it meets the "officious bystander test": M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619, at para. 30. (See also: The "Moorcock" (1889), 14 P.D. 64; Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711; and see generally: Waddams, supra, at para. 490; Treitel, supra, at pp. 190-94.) Here, if the ubiquitous officious bystander had said, "This talk about truckhouses is all very well, but if the Mi'kmaq are to make these promises, will they have the right to hunt and fish to catch something to trade at the truckhouses?", the answer would have to be, having regard to the honour of the Crown, "of course". If the law is prepared to supply the deficiencies of written contracts prepared by sophisticated parties and their legal advisors in order to produce a sensible result that accords with the intent of both parties, though unexpressed, the law cannot ask less of the honour and dignity of the Crown in its dealings with First Nations. The honour of the Crown was, in fact, specifically invoked by courts in the early 17th century to ensure that a Crown grant was effective to accomplish its intended purpose: The Case of The Churchwardens of St. Saviour in Southwark (1613), 10 Co. Rep. 66b, 77 E.R. 1025, at p. 67b and p. 1026, and Roger Earl of Rutland's Case (1608), 8 Co. Rep. 55a, 77 E.R. 555, at p. 56b and pp. 557-58.
[emphasis added]
[44] In my view, it cannot be said that it is plain and obvious that the pleading as framed does not disclose a reasonable cause of action for breach of treaty if, as is pled, it was the intention and understanding of the parties at the time the treaty was signed that the annuity would provide a certain level of comfort to the Indians. No adjustment clause was negotiated because, as the plaintiffs submit and Canada appears to agree, neither party considered then that the purchasing power of the annuity might be substantially eroded. Those alleged facts, together with the application of the “officious bystander test,” provide a reasonable cause of action for breach of treaty.
(3) Breach of Fiduciary Duty [45] Canada submits that the plaintiffs have failed to plead the material facts necessary to meet either of the two tests for establishing a fiduciary duty. Relying on Manitoba Métis Federation Inc v Canada (Attorney General), 2013 SCC 14, it submits that the first situation where a fiduciary duty may arise is “where there is a specific or cognizable communal Aboriginal interest and a Crown undertaking of discretionary control over the specific Aboriginal interest in a way that invokes responsibility in the nature of a private law duty.” The second situation is where “there is an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries, a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries), and a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control.”
[46] With respect to the first situation, the plaintiffs submit that the Annuity Provisions are a specific and cognizable Aboriginal interest. They further submit that Canada assumed control over that interest. I accept that the Annuity Provisions are arguably a specific Aboriginal interest. It is pled that “the Minister is responsible for setting the amount of the Annual Payments and for distributing Annuity Payments” and that in doing so he is “under an obligation to adjust the amount of the Annuity Payments to account for changes in inflation and to preserve purchasing power.” In my view, this is a sufficient basis to find that there is a reasonable cause of action pled that Canada breached its fiduciary duty to the beneficiaries of the treaty Annuity Payments.
[47] On this basis, it cannot be said that it is plain and obvious that the facts as pled fail to disclose a reasonable cause of action of breach of fiduciary duty.
[48] The plaintiffs have met the first part of the test for certification.
B. Identifiable Class of Two or More Persons [49] As noted above, Canada accepts that this requirement has been met if the class is defined as “all persons entitled to receive Annuity Payments under the terms of the Numbered Treaties in accordance with chapter 4 of the March 2002 AANDC Manual for the Administration of Payments Pursuant to Treaty.”
C. Common Questions of Law or Fact [50] The law on what constitutes common questions of law or fact for certification purposes is well settled.
[51] The claims of the proposed class must raise questions of law or fact that are common to all class members, regardless of whether or not those common questions predominate over questions only affecting individual class members: Rule 334.16(1)(c).
[52] In order to assess whether there are such common questions, the Court undertakes a purposive inquiry – the question to be addressed is whether allowing the claim to proceed will “avoid duplication of fact-finding or legal analysis:” Western Canada Shopping Centres Inc v Dutton, 2001 SCC 46 at para 39, [2001] 2 SCR 534 [Dutton], Rumley v British Columbia, 2001 SCC 69 at para 29, [2001] 3 SCR 184 [Rumley], Vivendi Canada Inc. v Dell'Aniello, 2014 SCC 1 at para 44, [2014] 1 SCR 3 [Vivendi]. The answer to a common question can be nuanced to reflect individual claims: Rumley at para 32.
[53] It is not essential that all class members be identically situated vis-à-vis the opposing party and even a significant level of difference among the class members does not preclude a finding of commonality: Dutton at para 39, Pro-Sys at paras 108 and 112. To establish commonality, evidence that the acts alleged actually occurred is not required; rather, the evidence must demonstrate that the questions are common to all class members: Pro-Sys at para 110.
[54] In Dutton and Pro-Sys the Supreme Court held that an issue will only be “common” when its resolution is necessary for each member’s claim to be resolved. Dutton held that success for one member must mean success for all. However, the Supreme Court in Vivendi at paras 45 - 46 relaxed that strict requirement somewhat such that the question now is, “does success for one member result in failure for another?”:
Having regard to the clarifications provided in Rumley, it should be noted that the common success requirement identified in Dutton must not be applied inflexibly. A common question can exist even if the answer given to the question might vary from one member of the class to another. Thus, for a question to be common, success for one member of the class does not necessarily have to lead to success for all the members. However, success for one member must not result in failure for another.
Dutton and Rumley therefore establish the principle that a question will be considered common if it can serve to advance the resolution of every class member's claim. As a result, the common question may require nuanced and varied answers based on the situations of individual members. The commonality requirement does not mean that an identical answer is necessary for all the members of the class, or even that the answer must benefit each of them to the same extent. It is enough that the answer to the question does not give rise to conflicting interests among the members.
[emphasis added.]
[55] As noted earlier, the plaintiffs submit that there are four common issues of law or fact requiring determination in this litigation: Interpretation of the Numbered Treaties, whether Canada owes the class members a fiduciary duty, whether there is an ongoing breach of Canada’s treaty obligations, and the method of calculating compensation for the lost annuity payments.
(1) Treaty Interpretation [56] The plaintiffs submit that the interpretation of the Annuity Provisions in the Numbered Treaties is a common issue because resolution of this issue would substantially advance the claims of all the proposed class members.
[57] They argue that the wording of the Annuity Provisions is substantially the same in each Numbered Treaty and that each subsequent treaty was built on those preceding it. The plaintiffs refer to the evidence of Ms. Holmes, a witness for Canada, who stated that the Numbered Treaties cannot be properly considered in isolation and that researching all of the Numbered Treaties individually would be “very inefficient” because of the “tremendous amount of overlap.” The plaintiffs submit that resolving this as a common issue would avoid considerable duplication of fact-finding and analysis.
[58] Moreover, they submit that if the evidence indicates that the Numbered Treaties must be interpreted differently, then all that is required is a nuanced answer to the common question, which approach does not mean the question is not common, as was endorsed in Vivendi.
[59] Canada correctly points out at paras 16-17 of its memorandum that the eleven treaties differ in wording and scope:
16. By express language in each treaty, not only does the amount of the annual treaty payment differ, but significantly, so does the mode or “currency” of payment. For example:
a) Treaties 1 and 2 provide for payment: “…to each Indian family of five persons the sum of fifteen dollars Canadian currency, or in like proportion for a larger or smaller family, such payment to be made in articles as the Indians shall require of blankets, clothing, prints (assorted colours), twine or traps, at the current cost price in Montreal, or otherwise, if her Majesty shall deem the same desireable in the interests of Her Indian people, in cash”.
b) On April 30, 1875, the Privy Council issued an Order in Council increasing the amount of “the annual payment to each Indian under Treaties Nos. 1 and 2, from $3 to $5 per annum …” on the condition that anyone receiving the increased payment would abandon their claim to the so-called “outside promises”, which refers to certain items orally promised by the Treaty Commissioners, which were not included in the text of the treaties.
c) Treaties 3 through 8, 10 and 11 provide for the annual treaty payment of $5 in cash to each Indian. Treaties 4, 7, 8, and 11 stipulate that the payment is to be “paid only to the heads of families”
d) Treaty 9 provides for the annual payment of $4 in cash for each Indian, to be “paid only to the heads of families”.
17. The Numbered Treaties, with the exception of Treaties 1, 2 and 9, also contain provisions for an annual treaty payment (sometimes referred to as a “salary”) for the chief and councillors. The amount of the payment and the number of councillors eligible to receive this payment varies from treaty to treaty, and in some cases, by Treaty Band:
a) Although Treaties 1 and 2 do not provide for any supplemental annual treaty payment for chiefs and councillors, the 1875 Order in Council approved the “payment over and above such sum of $5, of $20 each and every year to each chief”. Since 1875, Canada has also paid $15 per year to councillors of Treaties 1 and 2 Bands.
b) Treaties 3, 5, and 6 provide for an aggregate payment of $30 per chief and $20 per eligible councillor because in addition to the $5 annual treaty payment to each Indian person, “it is further agreed” that each chief is to be paid $25 per annum and each councillor is to be paid $15 per annum. The number of councillors who may receive the additional payment varies: not exceeding 3 (Treaties 3 and 5) or up to 4 councillors (Treaty 6).
c) Treaties 4, 7, 8, 10 and 11 provide for an annual treaty payment of $25 to each chief and $15 to each councillor. Unlike Treaties 1, 2, 3 5, and 6, Treaties 4, 7, 8, 10 and 11 do not provide that the annual treaty payment to the chief and councillors is in addition to the $5 annual treaty payment for each Indian person. The number of councillors who may receive payment varies by treaty: not to exceed 4 per Band (Treaty 4), unlimited (Treaty 10). Others vary based on the size of the Band: not to exceed 4 to a large Band and 2 to a small Band (Treaty 8), at least 30 members for the chief to receive payment, and 2 councillors for every 200 members will receive payment