Date: 20050127
Docket: T-2022-89
Citation: 2005 FC 136
Ottawa, Ontario, this 27th day of January, 2005
PRESENT: THE HONOURABLE MR. JUSTICE MAX M. TEITELBAUM
BETWEEN:
CHIEF VICTOR BUFFALO acting on his own behalf
and on behalf of the other members of the Samson Indian Nation and Band
and THE SAMSON INDIAN BAND AND NATION
Plaintiffs
- and -
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
THE MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT,
and THE MINISTER OF FINANCE
Defendants
- and -
CHIEF JEROME MORIN acting on his own behalf
as well as on behalf of all the MEMBERS OF
ENOCH'S BAND OF INDIANS AND THE RESIDENTS THEREOF ON
AND OF STONY PLAIN RESERVE NO. 135
Intervenors
- and -
EMILY STOYKA and SARA SCHUG
Intervenors
REASONS FOR ORDER AND ORDER
TEITELBAUM J.
[1] The trial of this action has been lengthy and complex. Part of the relief sought by the plaintiffs Samson Cree Nation includes the following, contained in their Amended Statement of Claim No. 4:
2. A declaration that Defendant Her Majesty is in a conflict of interest, has unlawfully profited from moneys entrusted to Her and is subject to immediate removal as trustee of Plaintiffs' moneys.
6. A declaration that the trust moneys entrusted to Defendants for Plaintiff Band must be transferred forthwith to the ownership, management and control of Plaintiff Band.
7. An injunction requiring Defendant Ministers to pay and transfer immediately to the Plaintiff Band the amount of the said trust moneys in an amount of approximately $400 million.
8. In the alternative, the appointment of Peace Hills Trust Company as the trustee of the moneys of Plaintiffs presently entrusted to Her Majesty.
[2] Samson contends that they have the right to control their capital monies, which are presently held by the Crown, based on both their inherent right to self-determination and their rights pursuant to Treaty No. 6. Samson alleges, among other things, that the Crown has unlawfully loaned itself the trust money at a profit to itself, and has failed to obtain a rate of return consistent with prudent investment practices. Samson claims that the Crown has performed abysmally as trustee and has failed in its duties to properly administer the trust funds in the best interest of Samson Cree Nation members, present and future; consequently, Samson wishes to have the Crown relieved of its duties as trustee.
[3] The Crown has, throughout the course of this litigation and indeed before it began, consistently denied Samson's allegations of breach of treaty, trust and fiduciary duties. The Crown contends that the law requires it to hold these monies in the Consolidated Revenue Fund, that a reasonable rate of return was paid, and that the Crown did not profit in relation to these monies.
[4] Over the years there have been various discussions and attempts to effect a transfer of part or all of these monies. However, as is made plain by the fact of this aspect of the litigation, such initiatives have been unsuccessful. I need not, at this time, embark upon a detailed review of this history. Suffice it to say, however, that during closing submissions, Samson agreed that it would abide by any conditions the Court thinks fit to make in order to secure the transfer it desires. The Crown, for its part, indicated a willingness to transfer control, subject to the Court laying out certain conditions and declaring the Minister of Indian Affairs and Northern Development has the legal authority to make such a transfer.
[5] The amount of money at issue here is large: approximately $360 million. An outright transfer of control would be inappropriate at this time and in these circumstances, if no conditions were attached. Accordingly, and after hearing from counsel for the parties on this point, several conditions must be fulfilled by Samson before the transfer will occur.
[6] Samson must prepare and execute a trust agreement with provisions satisfactory to the Court. The agreement will name an external trustee or board of trustees, independent of Samson, which will hold the money. It will contain provisions dealing with a detailed financial plan which, in turn, will set out the fund's investment and spending policies. The trust agreement will establish the conditions necessary for the payout of income and encroachments upon capital. The agreement will contain provisions concerning the selection and dismissal of investment managers and trustees. It will establish processes for monitoring and reviewing the performance of the funds and the investment policy, as well as reporting to Samson Cree Nation members. Future capital monies paid to the Crown for the benefit of Samson shall be transferred to the trust in accordance with arrangements between Samson and the Crown to be agreed upon and, failing such agreement, to be determined by the Court.
[7] Samson must also release the Crown from any future liability for the capital monies (existing or future) or for their safe custody, management, preservation of capital and rate of return, once the funds are transferred to the trust, such release being applicable and remaining valid regardless of whether any sections of the Indian Act are subsequently declared unconstitutional.
[8] Samson must also hold a referendum seeking band members' approval for this transfer and future transfers, utilizing procedures satisfactory to the Court. Information by way of open band meetings and written material explaining the basic elements of the trust, the financial and investment plans and the release contemplated herein, must be provided so as to allow potential voters to become informed. The referendum will be open to all members eligible to vote in band elections; a regular majority of 50% plus one of those voting will constitute a binding result.
[9] Samson must then submit a Band Council Resolution ("BCR") to the Minister requesting the transfer, except for the sum of $3 million which will be held back to resolve any outstanding issues. The trust agreement, liability release, and referendum results will be attached to the BCR. In view of my conclusion that the transfer and future transfers is for the benefit of the Samson Cree Nation, the Minister may then authorize the transfer of Samson's existing and future capital monies to the agreed upon trust pursuant to paragraph 64(1)(k) of the Indian Act. Crown counsel advised the Court that they have received confirmation and instructions that the Minister will in fact authorize the transfer of the existing capital monies upon compliance with the conditions established herein.
[10] I note that by setting out these conditions for the transfer, the Court is not, in any way, pronouncing upon Samson's constitutional challenges and arguments concerning the Indian Act, their inherent rights, or their treaty rights. These will be addressed in the Court's final judgment on the first and second phases of this trial.
ORDER
[11] THIS COURT ORDERS that:
1. Samson Cree Nation execute a trust agreement with provisions satisfactory to the
Court in accordance with the reasons accompanying this Order.
2. Samson Cree Nation release the Crown from any future liability for the capital monies (existing or future) or for their safe custody, management, preservation of capital and rate of return, once the funds are transferred to the agreed upon trust, such release being applicable and remaining valid regardless of whether any sections of the Indian Act are subsequently declared unconstitutional.
3. Samson Cree Nation hold a referendum amongst eligible band members on the transfer and release of liability, using procedures satisfactory to the Court and in accordance with the conditions set out in the reasons accompanying this Order, with a regular majority of 50% plus one of those voting constituting a binding result.
4. Samson Cree Nation Chief and Council submit a Band Council Resolution containing all of the above to the Minister of Indian Affairs and Northern Development requesting the transfer of the capital monies, except for the sum of $3 million which shall be held back to resolve any outstanding issues.
5. Upon the Minister's receipt of this Band Council Resolution, and in view of the advice that the Minister has confirmed through counsel to the Court and Samson that he will authorize the transfer of the existing capital monies upon the basis of this Order, this Court declares that the transfer, and transfers of future capital monies, are for the benefit of the Samson Cree Nation, and that the Minister of Indian Affairs and Northern Development has the authority to authorize such transfers pursuant to paragraph 64(1)(k) of the Indian Act. The Court also declares that in any event it is proper and expedient for the Minister to effect this transfer, and future transfers of new capital monies received, even if that paragraph or any other provisions of the Indian Act are subsequently declared unconstitutional.
6. Future capital monies paid to the Crown for the benefit of Samson shall be transferred to the trust in accordance with arrangements between Samson and the Crown to be agreed upon and, failing such agreement, to be determined by the Court.
"Max M. Teitelbaum"
J.F.C.
Ottawa, Ontario
January 27, 2005
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-2022-89
STYLE OF CAUSE: CHIEF VICTOR BUFFALO ET AL v. HER MAJESTY THE QUEEN ET AL
PLACE OF HEARING: OTTAWA, ONTARIO
DATE OF HEARING: JANUARY 21, 2005
REASONS FOR ORDER AND ORDER OF: TEITELBAUM, J.
DATED: JANUARY 27, 2005
APPEARANCES:
JAMES O'REILLY
ED MOLSTAD, Q.C., FOR PLAINTIFF
CLARKE HUNTER
MARY COMEAU FOR DEFENDANT
SOLICITORS OF RECORD:
O'REILLY & ASSOCIÉS
MONTREAL QUEBEC
PARLEE MCLAWS LLP
EDMONTON ALBERTA FOR PLAINTIFF
MACLEOD DIXON LLP
CALGARY ALBERTA FOR DEFENDANT