Toronto, Ontario, May 23, 2006
PRESENT: The Honourable Mr. Justice Hughes
BETWEEN:
WILFRED N. KING, as representative of the band council Kiashke Zaaging
Anishinaabnek, a.k.a. Gull Bay First Nations, and KIASHKE ZAAGING
ANISHINAABNEK, a.k.a. GULL BAY FIRST NATIONS
and
SHUNIAH FINANCIAL SERVICES LIMITED and
HER MAJESTY THE QUEEN IN RIGHTS OF CANADAas represented by THE ATTORNEY GENERAL OF CANADA, and THE MINISTRY OF INDIAN &
NORTHERN AFFAIRS CANADA
REASONS FOR JUDGMENT AND JUDGMENT
[1] This is an application for declarations as to entitlement of a First Nations group to certain records made and kept by a Third Party Manager which administers funds on behalf of the Crown, which funds would otherwise be payable directly to that First Nations group.
[2] The Applicants are Wilfred N. King, Chief of the Gull Bay First Nations and the Gull Bay First Nation. For as long as can be remembered that Gull Bay has had to rely upon funding from the Federal Crown, as represented by the Minister of Indian & Northern Affairs Canada (INAC) (hereafter referred to as the Crown or Minister) in order to pay for essential public services for its members. The basis of the obligation of the Crown to make those funds available is not in evidence in these proceedings however it was acknowledged that Gull Bay is a signatory to the Robinson Treaty and there is reference, in the Third Party Management Agreement, to Comprehensive Funding Arrangements.
[3] Until the Gull Bay 1995-1996 financial year, the Crown paid funds to provide for essential services directly to the Gull Bay. Problems were perceived at that time whereupon a co-management arrangement was structured so that the funds would be administered jointly by Gull Bay and a co-manager. This proved ineffective. Starting in 1997 a Third Party Manager was appointed by the Crown whose job it was to receive and disburse the funds otherwise payable to Gull Bay so as to provide for essential services. Over the ensuing years a number of different Third Party Managers came and went. It is one of those Third Party Management situations that is at issue here, the Respondent Shuniah being the Third Party Manager at the time.
[4] The Applicants have recognized that the appointment of the Third Party Managers were for Gull Bay's own protection, however no progress was made in reducing a crushing debt load that continued to be borne by Gull Bay. It appears that such debt load was increasing. Shortly after Shuniah assumed the position of Third Party Manager, Gull Bay became uncomfortable with what it perceived as a number of mismanagement issues. Gull Bay and its lawyers made a number of requests of Shuniah and the Minister for the provision of information and documents respecting the administration of these funds. At the time that these proceedings were instituted, very little information or documents had been provided. By the time of the hearing much of the information and documents, but not all, had been disclosed. Also, by the time of the hearing Shuniah's contract for Third Party Management had lapsed and a different Manager was in place.
Issue
[5] What is truly at issue here is whether Gull Bay has the right to compel a Third Party Manager such as Shuniah, directly, or through the Minister, to disclose information and documents relating to its management of funds otherwise payable to Gull Bay and, if so, under what circumstances?
The Third Party Management Agreement
[6] As of April 1, 2004 the Queen (Minister) and Shuniah entered into a Third Party Management Agreement. Gull Bay (the Council) is not a party to that Agreement.
[7] The basis for the Agreement is set out in the "Whereas" clauses:
A. The Gull Bay First Nation (the "Council") and the Minister have entered into previous Comprehensive Funding Arrangements to transfer funds from the Minister to the Council for the provision of programs and services to the Council's members and the Council has chosen not to execute a Comprehensive Funding Arrangement for fiscal year 2004/2005 with the Minister;
B. The Minister notified the Council that pursuant to the default and remedial management provisions contained in the Comprehensive Funding Arrangement, (CFA) the Minister is appointing the Manager;
C. The Minister has appointed the Manager to administer, in whole or in part, funding otherwise payable to the Council and to fulfill the Council's obligations under the Comprehensive Funding Arrangement (CFA); and
D. The Manager has agreed to provide sound financial management and effective and efficient delivery of programs and services under this Agreement.
[8] Shuniah (the Manager) agreed to provide services on behalf of Gull Bay (the Council):
2.0 PROGRAMS AND SERVICES
2.1 The Manager agrees to:
a) delver, on behalf of the Council, the programs and services provided for in PART D - Program Budgets, Authorities and Monthly Expenditure Plan of the Comprehensive Funding Arrangement, in accordance with the terms and conditions of the Comprehensive Funding Arrangement, including, without limitation, the program delivery and reporting requirements provided for in PART E - Program Delivery and Reporting Requirements and meet the due dates for reporting set out in PART C - Schedule of Reporting Requirement Due Dates, and all of the terms of this agreement;
b) competently administer and manage, to the standard of a prudent professional manager, all funding advanced by the Minister pursuant to this Agreement, including implementing procedures to facilitate program management, and to support financial control, and account to the Minister for the use of the funding advanced and the results achieved in terms of programs and services delivered to the Council's members.
[9] The Minister agreed to pay the funds otherwise payable to Gull Bay to be held "in trust":
4.0 FUNDING
4.1 Cash Payments
4.1.1 The Minister shall make payments to the Manager, in accordance with the Federal Cash Management Policy, based on the amounts identified in PART D - Program Budgets, Authorities and Monthly Expenditure Plan of the Comprehensive Funding Arrangement.
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5.0 MINISTER'S OBLIGATIONS
5.1 The Minister shall:
(a) transfer the funding required to administer the programs and services referred to in this Agreement to the Manager to be held by the Manager in trust for the purposes provided for in this Agreement, and subject to applicable terms and conditions contained herein;
(b) at the Manager's request, provide any publicly available fiscal management policies, information or guidelines produced by the Minister which are relevant to the funding provided for in this Agreement.
[10] As far as disclosure to Gull Bay (the Council) the Agreement provides:
6.4 Financial and Non-Financial Reporting
6.4.1 The Manager shall also use its best efforts to provide the Minister the Council's consolidated financial statements required under the Comprehensive Funding Arrangement by the dates and in accordance with the requirements of the Comprehensive Funding Arrangement. These consolidated financial statements shall include accounting for the funds transferred to the Manager under this Agreement. If the Council has appointed its own auditor for these purposes, then the Manager shall provide to Council's auditor full access to the Manager's financial records prepared under this Agreement in order to assist that auditor in preparation of the Council's consolidated financial statements. The Manager shall, in any event, provide to Council and to Council's auditor, copies of the Manager's audited financial statements provided to the Minister pursuant to subsection 6.4.2 on or before the date the Manager's audited financial statements are provided to the Minister.
6.4.2. The Manager shall maintain financial records, in accordance with generally accepted accounting principals and the requirements of this Agreement, and shall provide to the Minister audited financial statements in respect of the funding provided under this Agreement in accordance with the requirement set out in SCHEDULE B and which shall be provided to the Minister within one hundred and twenty (120) days of March 31st, which obligation shall survive the early termination, or expiry of this Agreement. If the Manager fails to provide these financial statements by the date they are due, or if the Minister is for any reason and in his absolute discretion not satisfied with the financial statements provided by the Manager, the Minister may appoint an independent auditor to review all of the Manager's records related to the funding provided hereunder all at the Manager's expense and the Manager shall provide to such auditor full and free access to those records.
6.4.3. The Manager shall provide the Minister and the Council, quarterly (or more often as the Minister may require) unaudited statements of revenue and expenditure for each program and service funded under this Agreement, within twenty-one (21) days of the months following quarter end and monthly variance reports that establish comparisons between budgets and actual expenditures.
6.4.4. The Manager shall provide the Minister and the Council, quarterly (or more often as the Minster may require) written progress reports on all maters pertaining to this Agreement, which may include meeting with the Minister of his representative from time to time.
6.4.5. The Manager shall provide the Minister reports as prescribed in the First Nations National Reporting Guide, and other reports as may be required by written notification, and meet the due dates identified for the reporting requirements set out in the Comprehensive Funding Arrangement.
6.5 Accountability
6.5.1. The Manager shall maintain, with respect to the programs and services provided by the Manager pursuant to this Agreement, a system of accountability to the Council's community members that meets or exceeds the requirements set out in PART C - Accountability Framework of the Comprehensive Funding Arrangement.
6.5.2 The Manager shall, use its reasonable efforts to keep the Council and the community members informed in respect of progress under this Agreement, and shall, during the term of this Agreement initiate, at a minimum, quarterly meetings with the Council and its community members to provide updates on any decisions and actions taken under this Agreement.
[11] Thus, the Agreement provides that funds otherwise payable directly to Gull Bay are to be paid to the Manager "in trust" to be disbursed "on behalf of the Council" with an obligation on the Manager to provide to the Minister and, in some circumstances, to the Council, information as to the administration of those funds.
[12] Very early on in the term of Shuniah's administration, Gull Bay became uncomfortable with what it perceived as mismanagement. Their lawyer wrote a letter to Shuniah dated December 13, 2004 stating, inter alia:
We are counsel on behalf of the Council of the Gull BayFirst Nation ('the Council'). We are writing to you in connection with the above noted agreement dated April 1, 2005 ("the Third Party Agreement"), and in particular clause 6.4.1. thereof. This provision allows our client to appoint its own auditor to prepare its own audited financial statements, which statements will include a statement of the uses of all funds transferred by the Department to your firm under the terms of the Third Party Agreement. This letter is written notice of our client's appointment of Buset Sarvis LLP, Chartered Accountants for that purpose. Our client's auditor may be reached c/o Tom Sarvis, Buset Sarvis LLP, 131 N. Archibald Street, Thunder Bay, ON P7C 3X7.
[13] Gull Bay received a very limited amount of information in response to this request. Matters escalated, the Minister became involved, further and more expansive requests for information were made. The Minister and Shuniah took the position that Gull Bay was entitled to information only for the purposes as set out in section 6.4.1 of the Agreement "to assist (Gull Bay's) auditor in preparation of the Council's consolidated financial statements". Further, they took the position that any further disclosure would have to await the production of Shuniah's audited annual report. That report, as it turns out, was several month's late and only produced during late in the course of these proceedings. The Minister and Shuniah have offered to produce other documents but only if Gull Bay made certain concessions as to costs in these proceedings.
[14] Gull Bay takes the position that it is entitled not only to production of documents and information in a reasonable and timely manner as set out in the Agreement, but also because it is the beneficiary of that Agreement, and, just as the beneficiary of a trust in ordinary common law circumstances, it is entitled to reasonable disclosure from the trustee, in this case the Third Party Manager, of all information and documents relevant to the administration of the funds, upon reasonable request. Gull Bay takes this position for two reasons:
1. Under the expanded doctrine of privity in contract law it can enforce the Agreement as if it were a party; and
2. The Minister is in a fiduciary relationship with Gull Bay such that Gull Bay, has rights just as a beneficiary of a trust in ordinary common law circumstances.
[15] These two issues will be considered.
1) Privity of Contract
[16] The Supreme Court of Canada has, in two recent cases, London Drugs and Fraser River, stated that the strict doctrine of privity of contract does not apply in all cases and that, in instances where a third party was clearly intended to be the beneficiary of the agreement, that third party may be entitled to enforcement of these terms which are for its benefit.
[17] In London Drugs Limited v. Kuehne & Nagel International, [1992]3 S.C.R. 299, Justice Iacobucci for the Court made a thorough review of the doctrine of privity in Canadian law. At pages 416-417 he said:
The decisions most often cited in Canadian courts in support of the doctrine of privity are: Tweddle v. Atkinson (1861), 1 B. & S. 393, 121 E.R. 762; Dunlop Pneumatic Tyre Co. v. Selfridge & Co., [1915] A.C. 847 (H.L.); Scruttons Ltd. v. Midland Silicones Ltd., supra; Canadian General Electric, supra; and Greenwood Shopping Plaza, supra. As confirmed by these and other decisions, privity of contract is an established principle of contract law. It is not, however, an ancient principle. As noted by this Court in Greenwood ShoppingPlaza, at p. 237, the doctrine "has not always been applied with the rigor which has developed during modern times". Indeed, many have noted earlier decisions in the English common [page417] law which have allowed third party beneficiaries to enforce contracts made for their benefit: see, for example, the review of the history by Windeyer J. in Coulls v. Bagot's Executor and Trustee Co., [1967] Aust. Argus L.R. 385 (H.C.), at pp. 407-9; R. Flannigan, "Privity -- The End of an Era (Error)" (1987), 103 L.Q. Rev. 564, at pp. 565-68; and Carver's Carriage by Sea (13th ed. 1982), at pp. 241-47. It is generally recognized that the law in this respect was not "settled" until the mid-nineteenth century. It is also accepted that there are certain exceptions to the doctrine of privity such as trust and agency: see Greenwood ShoppingPlaza, supra, at pp. 238-41 and ITO-International Terminal Operators, supra, at pp. 784-94.
And at pages 438 -439 he said:
As we have seen earlier, the doctrine of privity has come under serious attack for its refusal to recognize the right of a third party beneficiary to enforce contractual provisions made for his or her benefit. Law reformers, commentators and judges have pointed out the gaps that sometimes exist between contract theory on the one hand, and commercial reality and justice on the other. We have also seen that many jurisdictions around the world, including Quebec and the United States, have chosen from an early point (as early as the doctrine became "settled" in the English common law) to recognize third party beneficiary rights in certain circumstances. As noted by the appellant, the common [page439] law recognizes certain exceptions to the doctrine, such as agency and trust, which enable courts, in appropriate circumstances, to arrive at results which conform with the true intentions of the contracting parties and commercial reality. However, as many have observed, the availability of these exceptions does not always correspond with their need. Accordingly, this Court should not be precluded from developing the common law so as to recognize a further exception to privity of contract merely on the ground that some exceptions already exist.
[18] This doctrine was further considered, again by Justice Iacobucci for the Court, in Fraser River Pile & Dredge Ltd. V. Can-Dive Services Ltd., [1999] 3 S.C.R. 108. At paragraphs 28, 31 and 32 he explained that what was said in London Drugs was not to be limited to employer-employee situations. The exception is to be intended to be dependent on the intention of the parties. He said:
In order to distinguish mere strangers to a contract from those in the position of third-party beneficiaries, the Court first established a threshold requirement whereby the parties to the contract must have intended the relevant provision to confer a benefit on the third party. In other words, an employer and its customer may agree to extend, either expressly or by implication, the benefit of any limitation of liability clause to the employees. In the circumstances of LondonDrugs, the customer had full knowledge that the storage services contemplated by the contract would be provided [page125] not only by the employer, but by the employees as well. In the absence of any clear indication to the contrary, the Court held that the necessary intention to include coverage for the employees was implied in the terms of the agreement. The employees, therefore, as third-party beneficiaries, could seek to rely on the limitation clause to avoid liability for the loss to the customer's property.
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As a preliminary matter, I note that it was not our intention in LondonDrugs, supra, to limit application of the principled approach to situations involving only an employer-employee relationship. That the discussion focussed on the nature of this relationship simply reflects the prudent jurisprudential principle that a case should not be decided beyond the scope of its immediate facts.
In terms of extending the principled approach to establishing a new exception to the doctrine of privity of contract relevant to the circumstances of the appeal, regard must be had to the emphasis in London Drugs that a new exception first and foremost must be dependent upon the intention of the contracting parties. Accordingly, extrapolating from the specific requirements as set out in London Drugs, the determination in general terms is made on the basis of two critical and cumulative factors: (a) Did the parties to the contract intend to extend the benefit in question to the third party seeking to rely on the contractual provision? and (b) Are the activities performed by the third party seeking to rely on the contractual provision the very activities contemplated as coming within the scope of the contract in general, or the provision in particular, again as determined by reference to the intentions of the parties?
[19] In this circumstance there exists a Third Party Management Agreement. The Third Party was inserted between the Minister and Gull Bay for more efficient management of funds that would otherwise have gone directly to Gull Bay for the provision of essential services. It is clear that Gull Bay was intended by the Minister and the Manager to be the beneficiary of the Agreement. Certain clauses in the Agreement clearly provide for provision of information to Gull Bay for certain purposes and on certain occasions. The evidence shows that, to a large extent each of the Minister and the Manager recognized that Gull Bay could require, just as if it were a party to the Agreement, that the Manager provide information to Gull Bay in accordance with its terms.
[20] I find that Gull Bay is entitled to enforcement of those terms of the Agreement that are for its benefit and that the so called strict doctrine of privity does not preclude such enforcement.
2) Fiduciary Duty
[21] The duty of the Crown toward first nations such as Gull Bay has been recently examined by the Supreme Court of Canada in recent cases including Guerin, Sparrow, Wewaykum, Gladstone and Haida Nation. The current status of "fiduciary relationship" considerations can be said to be still in development. In some circumstances the Crown owes a fiduciary duty to a first nation person or group however, simply because the Crown has some form of relationship with a first nations person or group does not in itself give rise to a fiduciary duty.
[22] Starting with Guerin v. The Queen, [1984] 2 S.C.R. 335, Justice Dickson said at pages 383-384:
Parliament has conferred upon the Crown a discretion to decide for itself where the Indians' best interests really lie. This is the effect of s. 18(1) of the Act.
This discretion on the part of the Crown, far from ousting, as the Crown contends, the jurisdiction of the courts to regulate the relationship between the Crown and the Indians, has the effect of transforming the Crown's obligation into a fiduciary one. Professor Ernest Weinrib maintains in his article The Fiduciary Obligation (1975), 25 U.T.L.J. 1, at p. 7, that "the hallmark of a fiduciary relation is that the relative legal positions are such that one party is at the mercy of the other's discretion." Earlier, at p. 4, he puts the point in the following way:
Where there is a fiduciary obligation] there is a relation in which the principal's interests can be affected by, and are therefore dependent on, the manner in which the fiduciary uses the discretion which has been delegated to him. The fiduciary obligation is the law's blunt tool for the control of this discretion.
I make no comment upon whether this description is broad enough to embrace all fiduciary obligations. I do agree, however, that where by statute, agreement, or perhaps by unilateral undertaking, one party has an obligation to act for the benefit of another, and that obligation carries with it a discretionary power, the party thus empowered becomes a fiduciary. Equity will then supervise the relationship by holding him to the fiduciary's strict standard of conduct.
It is sometimes said that the nature of fiduciary relationships is both established and exhausted by the standard categories of agent, trustee, partner, director, and the like. I do not agree. It is the nature of the relationship, not the specific category of actor involved that gives rise to the fiduciary duty. The categories of fiduciary, like those of negligence, should not be considered closed.
[23] In commenting upon Guerin the Chief Justice (Dickson) for the Court in R. v. Sparrow, [1990] 1 S.C.R. 1075 at page 1108 said:
In Guerin, supra, the Musqueam Band surrendered reserve lands to the Crown for lease to a golf club. The terms obtained by the Crown were much less favourable than those approved by the Band at the surrender meeting. This Court found that the Crown owed a fiduciary obligation to the Indians with respect to the lands. The sui generis nature of Indian title, and the historic powers and responsibility assumed by the Crown constituted the source of such a fiduciary obligation. In our [page1109] opinion, Guerin, together with R. v. Taylor and Williams (1981), 34 O.R. (2d) 360, ground a general guiding principle for s. 35(1). That is, the Government has the responsibility to act in a fiduciary capacity with respect to aboriginal peoples. The relationship between the Government and aboriginals is trust-like, rather than adversarial, and contemporary recognition and affirmation of aboriginal rights must be defined in light of this historic relationship.
[24] The Supreme Court in Wewaykum Indian Band v. Canada, [2002] 4 S.C.R. 245 cautioned that there were limits to a fiduciary duty in many circumstances. At paragraphs 81 to 83, Justice Binnie for the Court said:
But there are limits. The appellants seemed at times to invoke the "fiduciary duty" as a source of plenary Crown liability covering all aspects of the Crown-Indian band relationship. This overshoots the mark. The fiduciary duty imposed on the Crown does not exist at large but in relation to specific Indian interests. In this case we are dealing with land, which has generally played a central role in aboriginal economies and cultures. Land was also the subject matter of Ross River("the lands occupied by the Band"), BlueberryRiverand Guerin (disposition of existing reserves). Fiduciary protection accorded to Crown dealings with aboriginal interests in land (including reserve creation) has not to date been recognized by this Court in relation to Indian interests other than land outside the framework of s. 35(1) of the Constitution Act, 1982.
Since Guerin, Canadian courts have experienced a flood of "fiduciary duty" claims by Indian bands across a whole spectrum of possible complaints, for example:
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I offer no comment about the correctness of the disposition of these particular cases on the facts, none of which are before us for decision, but I think it desirable for the Court to affirm the principle, already mentioned, that not all obligations existing between the parties to a fiduciary relationship are themselves fiduciary in nature (Lac Minerals, supra, at p. 597), and that this principle applies to the relationship between the Crown and aboriginal peoples. It is necessary, then, to focus on the particular obligation or interest that is the subject matter of the particular dispute and whether or not the Crown had assumed discretionary control in relation thereto sufficient to ground a fiduciary obligation.
[25] In Haida Nation v. British Columbia, [2004] 3 S.C.R. 511 the Chief Justice (McLachlin) provided a summary of the findings expressed in Wewaykum, at paragraph 18:
The honour of the Crown gives rise to different duties in different circumstances. Where the Crown has assumed discretionary control over specific Aboriginal interests, the honour of the Crown gives rise to a fiduciary duty: Wewaykum Indian Band v. Canada, [2002] 4 S.C.R. 245, 2002 SCC 79, at para. 79. The content of the fiduciary duty may vary to take into account the Crown's other, broader obligations. However, the duty's fulfilment requires that the Crown act with reference to the Aboriginal group's best interest in exercising discretionary control over the specific Aboriginal interest at stake. As explained in Wewaykum, at para. 81, the term "fiduciary duty" does not connote a universal trust relationship encompassing all aspects of the relationship between the Crown and Aboriginal peoples:
... "fiduciary duty" as a source of plenary Crown liability covering all aspects of the Crown-Indian band relationship ... overshoots the mark. The fiduciary duty imposed on the Crown does not exist at large but in relation to specific Indian interests.
Here, Aboriginal rights and title have been asserted but have not been defined or proven. The Aboriginal interest in question is insufficiently specific for the honour of the Crown to mandate that the Crown act in the Aboriginal group's best interest, as a fiduciary, in exercising discretionary control over the subject of the right or title.
[26] Fiduciary duty was spoken of briefly by Justice Major for the Court in Gladstone v. Canada, [2005] 1 S.C.R. 325 at paragraph 23:
A further submission was that the Crown owed the respondents a fiduciary duty. This argument cannot succeed. First, it should be noted that in the issue as framed by the parties, the aboriginal status of the respondents was not raised. Second, even if it were raised, it would not affect the outcome of this appeal. Although the Crown in many instances does owe a fiduciary duty to aboriginal people, it is the nature of the relationship, not the specific category of actor involved, that gives rise to a fiduciary duty. Not every situation involving aboriginal people and the Crown gives rise to a fiduciary relationship. See Haida Nation v. British Columbia(Minister of Forests), [2004] 3 S.C.R. 511, 2004 SCC 73, at para. 18, per McLachlin C.J. The provisions of the Fisheries Act dealing with the return of things seized are of general application. I agree with the trial judge and the Court of Appeal that the respondents' aboriginal ancestry alone is insufficient to create the duty in these circumstances.
[27] Applying these principles to the circumstances here, consideration must be given to the decision of the Federal Court of Appeal in Choken v. Lake St. Martin Indian Band, 2004 FCA 248. In that case the Court had to deal with a Third Party Management situation similar to the one here, but in respect to the question as to whether funds paid by the Crown to the Manager for purposes of administering Band programs could be garnished by a third party. It was held by the Court, per Justice Décary at paragraphs 27 to 29:
The word "trust" in paragraph 5.1(a) and subsection 6.2.1 of the TPMA should not be read in isolation. It is a "trust account" the TPMA is referring to, i.e. an account established by a first person (the manager) to hold funds in the hands of that person but which are intended for a second person (the Band). The trust account is used to prevent the intermingling of the personal funds of the manager with the funds paid by the Minister (see paragraph 6.1.1(e) of the TPMA). The use of a trust fund is not determinative of the relationship between the first and the second person (see Air Canada v. M & L Travel Ltd., [1993] 3 S.C.R. 787), but it is an indication that the person in whose name the account stands claims no personal interest in the funds. That fact is consistent with the funds retaining their character as public funds at least until such time as they are used by the manager for the purposes expressly provided in the TPMA (see paragraph 6.1.1(a)).
In these circumstances, the moneys advanced by the Minister to the manager and held by the latter in his account have retained their status of public funds. As such, they cannot be garnished.
Whether the Band has a legal right to unconditional payment
Even if the moneys were found no longer to be public funds, it could not be said that they are debts owing to the Band within the meaning of rule 449. The documents make it clear that the Band has no unconditional right to be paid the funds. The Band has no contract with the manager and so the Band has no contractual right to call upon him to pay them the funds. The Band's contract is with the Minister. The fact that the funds are intended to be spent on members of the Band does not make them a debt.
[28] The issue here is different, it is not a question of entitlement to funds at a certain point, but entitlement to disclosure of the management of these funds. Management has been removed from Gull Bay and put in the hands of a Third Party by the Crown. In that regard Indian and Northern Affairs Canada, in its own website has expressed its obligation very well:
Compelling authority for concluding that such an obligation exists is provided by the Guerin decision. In that case, the Supreme Court of Canadaheld that the Crown was legally liable for damages to an Indian band for mismanaging the leasing of certain band lands to a golf club. The court found that the nature of Aboriginal title in land and the fact that it can be surrendered only to the Crown, coupled with the surrender provisions of the Indian Act, created a unique fiduciary relationship between the Crown and Indian peoples concerning surrendered Indian lands. That fiduciary relationship imposes trust-like responsibilities on the Crown, requiring it to act with the utmost good faith and care in the interests of the Indian people affected by its actions.
While the principle determined in the Guerin case was stated to apply to surrendered Indian lands, it seems to have broader application. Some of the conduct of which the Crown was held liable in that case occurred before the land in question was surrendered by the band. In any event, the Supreme Court of Canada subsequently stated the principle in much broader terms in Sparrow, a decision that dealt with legislative restrictions on the Aboriginal right to fish:
In our opinion, Guerin, together with R. v. Taylor and Williams (1981), 62 C.C.C. 92d) 227, 34 O.R. (2d) (C.A.), ground a general guiding principle for section 35(1). That is, the government has the responsibility to act in a fiduciary capacity in respect to Aboriginal peoples. The relationship is trust-like, rather than adversarial, and contemporary recognition and affirmation of Aboriginal rights must be defined in light of this historic relationship.
[29] In these circumstances, I find that the Crown (Minister-INAC) owes a fiduciary duty to Gull Bay such that it is required to ensure that the Manager makes a full and adequate disclosure, exceeding that required by the terms of the Agreement, such that concerns as to management or inadequate disclosure are addressed promptly, openly and completely, without delay or complication.
Conclusion
[30] There has, by now, been disclosure as to much of what Gull Bay has sought, subject to withholding of some information and documents subject to issues that the Crown and Manager wanted to impose as to costs. There must be full and prompt disclosure of all that has been sought without stipulation as to costs.
[31] Further, Gull Bay is entitled to a declaration (1) that it is entitled to enforce disclosure in accordance with the terms of the Agreement as if it were a party, and (2) that it is entitled to such further disclosure as is reasonable and necessary as to address legitimate concerns as to management of funds by the Manager.
[32] Gull Bay is entitled to its costs from the Crown to be assessed at the middle of Column III. Shuniah was to a large extent caught in the middle of this matter however it treated requests for disclosure somewhat distainfully and with considerable delay. Shunian shall not have to pay any costs, nor shall it be awarded any costs.
[33] At the outset of the hearing the Crown made a motion for dismissal of the Application on the basis of mootness, arguing that the information requested had essentially been disclosed. As discussed in these Reasons, disclosure has not been complete, and, in any event, the Applicant is seeking a declaration applicable more broadly than a single instance. This motion is dismissed with costs to the Applicant, no costs are awarded for or against Shuniah.
JUDGMENT
UPON APPLICATION made to this Court on Wednesday, May 17, 2005 for a declaration as to disclosure of certain information by the Third Party Manager respecting administration of funds, and a declaration respecting the obligation of the Crown to request such disclosure, and the right of the Applicants to request same;
AND UPON reviewing the Records filed herein and hearing counsel for the parties;
AND UPON hearing the Crown's motion for dismissal by reason of mootness;
AND FOR the Reasons delivered herewith;
THIS COURT ADJUDGES that:
1. The Crown's motion for dismissal is dismissed with costs to the Applicants herein, to be assessed on a Column III basis, no costs to be assessed in favour or against Shuniah;
2. It is declared that the Applicant Gull Bay is entitled, as if it were a party to the Third Party Management Agreement, to enforce the terms of disclosure to it as set out in that Agreement as if it were a party thereto;
3. It is declared that the Minister of Indian and Northern Affairs Canada owes a fiduciary duty to Gull Bay to require that a Third Party Manager make sufficient and prompt disclosure to Gull Bay of information relating to its management of funds to it in accordance with the Agreement so as to satisfy the reasonable concerns of Gull Bay, even if such disclosure goes beyond the terms of the Third Party Management Agreement; and
4. Gull Bay is entitled to its costs from the Crown to be assessed on a Column III basis. No costs are awarded to or against Shuniah.
"Roger T. Hughes"
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-290-05
STYLE OF CAUSE: Wilfred N. King et al. v.
Shuniah Financial Services Limited et al.
PLACE OF HEARING: Ottawa, Ontario
AND JUDGMENT: Hughes J.
APPEARANCES:
| Mr. Etienne G.D. Esquega
|
|
| Mr. Michael Harris
|
FOR THE RESPONDENT (SHUNIAH FINANCIAL SERVICES LIMITED)
|
| Mr. Michael Roach |
FOR THE RESPONDENT (HER MAJESTY THE QUEEN IN RIGHT OF CANADA) |
SOLICITORS OF RECORD:
| Erickson & Partners Thunder Bay, Ontario
|
|
| Cheadles LLP Thunder Bay, Ontario
|
FOR THE RESPONDENT (SHUNIAH FINANCIAL SERVICES LIMITED) |
| John H. Sims, Q.C. FOR APPLICANT Deputy Attorney General |
FOR THE RESPONDENT (HER MAJESTY THE QUEEN IN RIGHT OF CANADA) |