Supreme Court of Canada decides Metis land case

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SCC expands claims based on honour of the Crown, and sheds light on the application of limitation periods and laches to Aboriginal law cases

The Supreme Court of Canada released its decision in Manitoba Métis Federation Inc. v. Canada (Attorney General), 2013 SCC 14 on March 8 (« MMF« ).

This most recent decision of the Supreme Court of Canada is a significant development in the law governing breaches of Crown obligations.

In MMF, the Supreme Court clarified the legal doctrine of the honour of the Crown and outlined a new cause of action of diligent fulfilment of treaties that flows from the honour of the Crown. This duty appears to arise in situations  where an obligation is owed but for some reason the full fiduciary duty does not apply. The court also shed new light on the application of limitations periods and the defence of laches (delay) to claims involving Aboriginal law.

The plaintiffs had sought a declaration that Canada breached its fiduciary duty to the Métis in Manitoba as a result of Canada’s errors and delays in implementing ss. 31 and 32 of the Manitoba Act, 1870, which promised to provide 1.4 million acres of land to Métis children and recognize existing Métis ownership of lands.

The court upheld the rulings below that there was not a sufficient basis to conclude a fiduciary duty was owed to the Métis in the circumstances. The court analyzed two branches of argument about the existence of a fiduciary duty: one about a fiduciary duty being created by the Crown having assumed discretionary control over specific Aboriginal interests, and an independent argument that a fiduciary duty was created by a specific Crown undertaking.

In order for a fiduciary duty to apply in the case of Aboriginal peoples, the specific interest over which the Crown takes discretionary control must be uniquely Aboriginal. The Crown purported to extinguish “Indian title” through the Manitoba Act. However, the court held regardless of this, because the Métis held land individually, not collectively, the Métis could not have proven Aboriginal title to lands. Therefore, the Métis  could not show a specific interest that was uniquely Aboriginal in nature to ground a fiduciary duty (i.e. the Métis interest in land pre-1870 was similar that of the settlers).

On the second branch of argument regarding a duty created by a clear undertaking, the court found the Manitoba Act did not show a clear undertaking on the part of the Crown to act in the best interests of the Métis (in priority to other legitimate interests) in implementing the land grant provisions, it simply showed an intent to distribute the land.

Honour of the Crown

While not finding a basis for a breach of fiduciary duty, the Supreme Court did find that Canada’s pattern of inattention and lack of diligence in fulfilling the promise of land grants under s. 31 of the Manitoba Act was a breach of the honour of the Crown, and ordered a declaration to that effect in favour of the Métis.

The honour of the Crown is a constitutional obligation that arises from the Crown’s assertion of sovereignty of lands owned and occupied by Aboriginal peoples, and the purpose of the duty is reconciliation of these two facts.

MMF indicates that the behaviour that constitutes honourable conduct will vary with the circumstances. The honour of the Crown will be engaged:

• in situations involving the reconciliation of Aboriginal rights and Crown sovereignty (e.g. the interpretation of treaties or statutory provisions that may affect those rights);
• by s. 35 of the Constitution Act;
• when there is a specific, “solemn” obligation or promise that is intended to create obligations is made by the Crown to an Aboriginal group, such as a treaty or other commitment.

The court, citing R. v. Badger, [1996] 1 S.C.R. 771, held that the honour of the Crown is always at stake in the Crown’s dealings with Aboriginal peoples where the issue at hand is specific to Aboriginal peoples. The duty will not be engaged whenever an Aboriginal person accesses a benefit that is also being provided to non-Aboriginals.

The court went on to explain that the honour of the Crown is not totally distinct from a breach of fiduciary duty. The honour of the Crown is the broad obligation that in some factual circumstances will lead to a fiduciary duty being imposed, and in other cases will lead to other obligations.

The duties imposed by the honour of the Crown is a “heavy obligation”, and while it will vary, the honour of the Crown has been applied in four situation so far:

• when the Crown assumes discretionary control over a specific Aboriginal interest, a fiduciary duty will arise from the honour of the Crown;
• the purposive interpretation of s. 35, and therefore gives rise to a duty to consult and accommodate where the Crown contemplates action that may affect claimed but unproven rights;
• in treaty-making and implementation there will be a duty to engage in honourable negotiation and to avoid the appearance of sharp-dealing;
• when the Crown makes a treaty or statutory grant, the Crown is required to act in a way that accomplishes the intended benefit to be conferred on the Aboriginal group.

MMF adds to the existing list of obligations flowing from the honour of the Crown, the duty to diligently fulfill a treaty or obligation. The key question with respect to the implementation of obligations, as occurred in this case, is: did the Crown act with diligence to pursue the fulfillment of the purposes of the obligation?

The honour of the Crown does not require Crown officials to be perfect or even to completely avoid individuals acts of negligence in implementation. However, a persistent pattern of inattention that may frustrate the purpose of the obligation will bring dishonour to the Crown.

Given that the purpose of the land grants was to give the Métis a “leg-up” in the settlement land-race, the 10-year delay in the full completion of s. 31, while not the result of bad faith, were nonetheless a breach of the honour of the Crown.

It would appear the duty of diligent fulfillment is intended to apply as an alternative to a fiduciary duty in situations in which there is a Crown undertaking, but where because of other reasons the full fiduciary obligation is not triggered.

Limitations and Laches

The court held that limitations periods cannot operate to bar the court from issuing declarations on the constitutionality of legislation, or by extension, on the constitutionality of the Crown’s conduct.

The court held that while the limitations legislation in Manitoba applied to the claims for breaches of fiduciary duty, the limitations period did not apply to the declaration sought by the Métis in relation to the vindication of a constitutional principle. In addition, in Aboriginal cases, the principle of reconciliation must sometimes trump other considerations in the assessment of the application of limitations periods.

The court noted in obiter (i.e. in passing and not technically part of the decision) that if the Métis had sought “personal remedies” in this case then the limitations period would have applied.

Laches is a defence that essentially says that if you know about a claim you have, if you don’t do anything to advance a claim, and if you take an action that makes the other party think you agree to give up those rights, then you lose those rights.

The Court gave a number of reasons why the declaration the Métis sought should not be barred by the doctrine of laches: 1) mere delay is not enough to create a laches bar – one needs acquiescence (i.e. taking an action that waives your rights) 2) an imbalance in power means acquiescence cannot be inferred from delay 3) it is unrealistic to expect a group to take legal action before Courts were willing to recognize the right in question 4) Canada made no change in position premised on the non-action of the Métis; and 5)  it would be inappropriate to use an equitable doctrine to bar a claim that a constitutional duty has not been fulfilled.

The court also looked to the behaviour of the Crown, and found that while there was no clear evidence the Crown acted in bad faith, the failure of the Crown to act with diligence in fulfilling its promise and therefore its breach of the honour of the Crown, must weigh in the consideration of whether to exercise the court’s discretion to apply the defence of laches.

Dissent

Justice Rothstein (along with Moldaver J.) dissented. Justice Rothstein strongly objected to the majority’s decision on the honour of the Crown on the basis that the majority was creating a new cause of action that was not fully raised or canvassed by the parties, and that the legal test was vaguely defined, and the majority was expanding Crown liability in unpredictable ways.

Justice Rothstein would have applied both limitations periods and laches to dismiss the claims in any event. The view of the dissent was that it was up to the legislature to determine if there should be exceptions to limitations periods, otherwise limitations periods should apply to all claims, even constitutional ones, if the claims are based on factual events (as opposed to division of powers cases).

Comment

The decision in MMF will open some doors, but may begin to close others.

The decision clearly creates a new cause of action (the duty of diligent fulfilment) based on the honour of the Crown, which appears to be broader and perhaps shallower than a fiduciary obligation.

The extent of the impact of the decision on limitations periods remains to be seen. While the court appears to have reduced the strength of a laches defence in constitutional cases, it is possible that claims for individual remedies for breaches of fiduciary duty or the honour of the Crown may become more challenging because of the application of limitations periods (depending on the specific provincial legislation). However, the court’s analysis of the limitations period issue with respect to personal remedies was brief and in obiter, so the ultimate impact of the decision remains to be seen.

By Matt McPherson