2005 FCA 220
A-243-04
Canadian Forest Products Ltd., Slocan Forest Products Ltd. and Evans Forest Products Limited (Appellants) (Third Parties)
v.
Attorney General of Canada (Respondent) (Defendant)
A-244-04
Norman Baptiste and others (Appellants/Third Parties)
v.
Former Chief Harvey Baptiste and others (Respondents/Plaintiffs)
and
Her Majesty the Queen in Right of Canada as represented by the Minister of Indian and Northern Affairs and the Minister of the Environment (Respondent/Defendant)
and
Leslie E. Bannert and others (Respondents/Third Parties)
A-248-04
Tolko Industries Ltd. (Appellant/Third Party)
v.
Attorney General of Canada (Respondent/Defendant)
A-250-04
International Forest Products Limited (Appellant/ Third Party)
v.
Chief Harvey Baptiste and others (Respondents/ Plaintiffs)
and
Her Majesty the Queen in Right of Canada as represented by the Minister of Indian and Northern Affairs and the Minister of the Environment (Respondent/Defendant)
and
Leslie Bannert and others (Respondents/Third Parties)
A-251-04
Downie Street Sawmills Ltd. and Gorman Bros. Lumber Ltd. (Appellants/Third Parties)
v.
Attorney General of Canada (Respondent/Defendant)
A-253-04
Pope & Talbot Ltd. (Appellant/Third Party)
v.
Chief Harvey Baptiste and others (Respondents/ Plaintiffs)
and
Her Majesty the Queen in Right of Canada as represented by the Minister of Indian and Northern Affairs and the Minister of the Environment (Respondent/Defendant)
and
Leslie Bannert and others (Respondents/Third Parties)
A-256-04
Emporium Investments Ltd. (Appellant/Third Party)
v.
Former Chief Harvey Baptiste and others (Respondents/Plaintiffs)
and
Her Majesty the Queen in Right of Canada including the Minister of Indian and Northern Development and others (Respondent/Defendant)
and
Leslie Bannert and others (Respondents/Third Parties)
A-265-04
Westwood Fibre Ltd. (Appellant/Third Party)
v.
The Attorney General of Canada (Respondent/ Defendant)
Indexed as: Stoney Band v. Canada (Minister of Indian Affairs and Northern Development) (F.C.A.)
Federal Court of Appeal, Richard C.J., Noël and Nadon JJ.A.--Vancouver, May 9; Ottawa, June 29, 2005.
Federal Court Jurisdiction -- Appeal from decision Federal Court having jurisdiction over third party proceedings brought by Canada in action by Stoney Band alleging breaches of various fiduciary duties re: harvesting of timber on reserve -- Prothonotary rejecting motion to stay action because of intention to issue third party notices against persons over whom F.C. not having jurisdiction, holding F.C. having jurisdiction -- Canada issuing third party notices, third parties challenging F.C.'s jurisdiction -- Motions Judge dismissing challenge as matter res judicata in light of Prothonotary's decision -- Matter not res judicata as third parties not having notice of proceedings -- Parties requesting Court determine issue of jurisdiction -- ITO--International Terminal Operators Ltd. v. Miida Electronics three-part test re: F.C. jurisdiction applied -- First branch met: statutory grant of jurisdiction found in Federal Courts Act, s. 17(5)(a) -- Second, third branches not met (Nadon J.A. dissenting) -- Indian Act, Indian Timber Regulations not forming general body of federal law providing source of rights, obligations of parties -- Detailed statutory framework of federal law under which third party claims arising not demonstrated -- Third party claims in fact based on provincial common law -- As provisions of Act, Regulations relied upon not providing for direct obligation, liability, Canada required to invoke provincial law, common law to assert claim -- Third party claims thus not sufficiently supported by federal law -- Because main action, third party action separate proceedings, fact main action within F.C. jurisdiction irrelevant -- Appeal allowed.
Practice -- Res Judicata -- Prothonotary dismissing motion to stay action, holding Federal Court had jurisdiction over proposed third party proceedings -- Motions Judge dismissing third parties' challenge to F.C. jurisdiction on basis matter already determined by Prothonotary -- Third party appellants not parties before Prothonotary, not receiving notice of those proceedings -- Motions Judge thus making reviewable error, matter not res judicata.
Practice -- Pleadings -- Motion to Strike -- Third party appellants seeking to strike third party claims for indemnification, contribution brought against them by Canada in action for breach of Crown's fiduciary duty relating to harvesting of timber on reserve on basis Federal Court not having jurisdiction over claims -- Third party claims based on provincial common law -- F.C. not having jurisdiction over claims (Nadon J.A. dissenting) -- Third party notice struck.
Aboriginal Peoples -- Lands -- Plaintiffs (Stoney Band) commencing action against Canada alleging breach of fiduciary duties re: timber harvesting on reserve -- Canada bringing third party claims against several parties -- These parties successfully challenging F.C.'s jurisdiction to hear claims -- Indian Act, Indian Timber Regulations incidental to third party claims -- Per Nadon J.A. (dissenting): Third party claims relying substantially on federal legislation, common law -- Indian Act provisions important components of overall scheme from which rights, obligations arising in connection with timber on reserve land -- Indian Timber Regulations constituting comprehensive set of obligations imposed on Band members, non-members -- Federal common law of Aboriginal title relevant as Canada's claims engaging questions of burden on Crown's title, role in management of reserve resources.
This was an appeal from a decision of the Federal Court holding that it had jurisdiction over third party proceedings brought by Canada against several parties. In the main action the plaintiffs (the Stoney Band) alleged breaches of various fiduciary duties owed by Canada to the Stoney Band concerning the harvesting of timber on their reserve. Canada brought a motion before the Federal Court seeking a stay of the action on the grounds that it intended to issue third party notices against persons over whom the Federal Court had no jurisdiction. The Prothonotary found that the Federal Court had jurisdiction over the proposed third party proceedings and Canada did not appeal. Canada sought indemnification, contribution damages and costs from the third parties. The parties against whom Canada asserted third party claims (the third party appellants or third parties) challenged the jurisdiction of the Federal Court. The motions Judge dismissed that challenge on the ground that the Prothonotary's decision was a bar to the relief sought on the principle of res judicata. It is that decision which was under appeal.
Held (Nadon J.A. dissenting), the appeal should be allowed.
Per Richard C.J. (Noël J.A. concurring): The third party appellants were not parties to the motion before the Prothonotary and did not have notice of the proceedings before him. The motions Judge therefore erred in dismissing the third parties' motion on the ground of res judicata. For this reason alone, the appeal could be allowed. However, at the parties' unanimous request, the Court proceeded to deal with the issue of jurisdiction and make the decision on that issue that should have been made.
The three-part test to be applied regarding the jurisdiction of the Federal Court was articulated by the Supreme Court of Canada in ITO--International Terminal Operators Ltd. v. Miida Electronics et al. The first branch of the test (that there be a statutory grant of jurisdiction by the federal Parliament) was not at issue. The statutory grant was found in paragraph 17(5)(a) of the Federal Courts Act, which provides that the Federal Court has concurrent original jurisdiction "in proceedings of a civil nature in which the Crown or the Attorney General of Canada claims relief." However, the second (that there be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction) and third (that the law on which the case is based be a "law of Canada") branches of the test were not met.
Canada submitted that a general body of federal law exists in the combination of the Indian Act and the Indian Timber Regulations, and that this legislation provides the source of the rights and obligations of the parties. It relied on Rhine v. The Queen; Prytula v. The Queen (S.C.C.) and Oag v. Canada (F.C.A.). These cases, in which federal law infused every aspect of the relationship between the parties, were distinguishable from the present proceedings, in which the federal law component was incidental to Canada's claims against the third parties.
Canada did not demonstrate the existence of "a detailed statutory framework" of federal law under which its claims against the third parties arose. It based its claims on various provisions of the Indian Act and Indian Timber Regulations, which do not contemplate civil recourse. It also relied on the principle that when a case is in pith and substance within the court's statutory jurisdiction, the Federal Court may apply provincial law incidentally necessary to resolve the issues. Canada's third party claims were in fact based on provincial common law (trespass, conversion, conspiracy, negligence). To succeed in its claims, Canada thus had to prove the elements of the above-mentioned common-law torts. Because the provisions relied upon by Canada do not provide for any direct obligation or direct liability, Canada had to go beyond the Indian Act and Indian Timber Regulations and invoke the provisions of provincial law and provincial common law to assert its claim of damages against the third parties.
For these reasons, Canada's claims against the third parties were not sufficiently supported by federal law as this Court required such claims to be supported in Stephens v. R. And although the action between the Stoney Band and Canada was rightly before the Federal Court, there was no relationship between the third party proceedings and any applicable federal law that would be sufficient to give the Federal Court jurisdiction. The S.C.C. held in R. v. Thomas Fuller Construction Co. (1958) Ltd. et al. that an action and a third party action are separate proceedings. An analysis of the claims of the plaintiff against the defendant in the main action will not be determinative of the nature of the claim against the third parties. Although the dissent in Fuller was compelling (i.e. the interrelationship between the main action and third party proceedings should not be ignored), based on the current state of the law, Canada's third party claims were to be considered independently of the main action, and when so considered, were clearly based almost entirely on provincial law.
The federal statutory framework created by the interaction of the Indian Act and the Indian Timber Regulations was therefore insufficiently broad to encompass Canada's claims in this case. The Federal Court did not have jurisdiction over those claims.
Per Nadon J.A. (dissenting): There exists a detailed federal statutory framework, by reason of the Indian Act and Indian Timber Regulations, which provides the source of the rights and obligations of the parties. This detailed statutory framework, on which Canada's third party claims were founded, combined with the federal common law of Aboriginal title, satisfied the second and third branches of the ITO test.
The third party claims relied substantially on federal legislation and common law. The claims were founded on the detailed statutory scheme which arises from both the Indian Act and the Indian Timber Regulations, which govern the cutting and removal of timber from Indian reserves. While the Indian Act provisions do not create a statutory cause of action, they nonetheless constitute important components of the overall scheme from which rights and obligations arise in connection with timber situated on reserve lands. And the Indian Timber Regulations constitute a comprehensive set of obligations imposed on Band members and members of the public.
The federal common law of Aboriginal title is also relevant to the analysis under the second and third branches of the ITO test. Canada's claims against the third parties would engage questions of the burden on the Crown's title and its role in management of reserve resources. The fact that a claim is framed as a tort or contract claim does not by necessity oust the jurisdiction of the Federal Court. As in Oag, the claims in the present instance depended for their existence on federal law. That they were expressed in terms of trespass, conversion etc. did not obviate that fact.
Finally, the S.C.C.'s comments in McNamara Construction (Western) Ltd. et al. v. The Queen seemed to indicate that the Federal Court had jurisdiction over the third party claims directed at Band members who were plaintiffs in the main action, as the federal law supporting the main action embraced the issues in the third party claims.
statutes and regulations judicially
considered
British North America Act, 1867 (The), 30 & 31 Vict., c. 3 (U.K.) [R.S.C., 1985, Appendix II, No. 5], s. 101.
| Canada Student Loans Act, R.S.C. 1970, c. S-17. |
| Contributory Negligence Act, R.S.A. 2000, c. C-27. |
| Federal Court Act, R.S.C., 1985, c. F-7, s. 50.1 (as enacted by S.C. 1990, c. 8, s. 16). |
| Federal Courts Act, R.S.C., 1985, c. F-7, ss. 1 (as am. by S.C. 2002, c. 8, s. 14), 17(1) (as am. idem, s. 25), (5) (as am. idem). |
| Indian Act, R.S.C., 1985, c. I-5, ss. 18, 28, 30, 31(as am. by S.C. 2002, c. 8, s. 182), 32, 93. |
| Indian Timber Regulations, C.R.C., c. 961, ss. 1 (as am. by SOR/94-690, s. 3(F)), 3.1 (as enacted by SOR/95-531, Sch. I, s. 2), 5 (as am. by SOR/93-244, Sch. I, ss. 4, 14; 94-690, ss. 1, 3(F); 95-531, Sch. I, s. 6(F)), 9 (as am. by SOR/93-244, Sch. I, s. 5; 95-531, Sch. I, s. 5(F)). |
| Parole Act, R.S.C. 1970, c. P-2. |
| Penitentiary Act, R.S.C. 1970, c. P-6. |
| Prairie Grain Advance Payments Act, R.S.C. 1970, c. P-18. |
| Tort-feasors Act, R.S.A. 2000, c. T-5. |
cases judicially considered
applied:
ITO--International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752; (1986), 28 D.L.R. (4th) 641; 34 B.L.R. 251; 68 N.R. 241; Stephens v. R. (1982), 26 C.P.C. 1; [1982] CTC 138; 82 DTC 6132; 40 N.R. 620 (F.C.A.); R. v. Thomas Fuller Construction Co. (1958) Ltd. et al., [1980] 1 S.C.R. 695; (1979), 106 D.L.R. (3d) 193; 12 C.P.C. 248; 30 N.R. 249.
distinguished:
Rhine v. The Queen; Prytula v. The Queen, [1980] 2 S.C.R. 442; (1980), 116 D.L.R. (3d) 385; 34 N.R. 290; Oag v. Canada, [1987] 2 F.C. 511; (1987), 33 C.C.C. (3d) 430; 73 N.R. 149 (C.A.); revg [1986] 1 F.C. 472; (1985), 23 C.C.C. (3d) 20; 22 C.R.R. 171 (T.D.).
considered:
Stoney Band v. Canada (Minister of Indian Affairs and Northern Development) (1997), 131 F.T.R. 58 (F.C.T.D.); Roberts v. Canada, [1989] 1 S.C.R. 322; (1989), 57 D.L.R. (4th) 197; [1989] 3 W.W.R. 117; 35 B.C.L.R. (2d) 1; [1989] 2 C.N.L.R. 146; 25 F.T.R. 161; 92 N.R. 241; 3 R.P.R. (2d) 1; Oag v. Canada, [1987] 2 F.C. 511; (1987), 33 C.C.C. (3d) 430; 73 N.R. 149 (C.A.); revg [1986] 1 F.C. 472; (1985), 23 C.C.C. (3d) 20; 22 C.R.R. 171 (T.D.); McNamara Construction (Western) Ltd. et al. v. The Queen, [1977] 2 S.C.R. 654; (1977), 75 D.L.R. (3d) 273; 13 N.R. 181; Quebec North Shore Paper Co. et al. v. Canadian Pacific Ltd. et al., [1977] 2 S.C.R. 1054; (1976), 9 N.R. 471; Montana Band v. Canada, [1991] 2 F.C. 273; [1993] 2 C.N.L.R. 123; (1991), 44 F.T.R. 183 (T.D.); affd [1993] 2 C.N.L.R. 134 (F.C.A.); Karl Mueller Construction Ltd. v. Canada (1993), 59 F.T.R. 161 (F.C.T.D.).
APPEAL from a decision of the motions Judge ((2004), 252 F.T.R. 58; 2004 FC 653), dismissing the third parties' challenge to the Federal Court's jurisdiction over third party claims brought against them by Canada in the context of an action commenced against the latter by the plaintiffs (Stoney Band). Appeal allowed, Nadon J.A. dissenting.
appearances:
S. Bradley Armstrong, Q.C. and D. Michael Bain for appellants (third parties) in A-243-04 Canadian Forest Products Ltd., Slocan Forest Products Ltd. and Evans Forest Products Ltd.
Olivier Fuldauer for appellants (third parties) in A-244-04 Norman Baptiste and others.
G. Ross Switzer for appellant (third party) in A-250-04 International Forest Products Limited.
Todd R. Davies for appellants (third parties) in A-251-04 Downie Street Sawmills Ltd. and Gorman Bros. Lumber Ltd.
Charles F. Willms and Andrew I. Nathanson for appellant (third party) in A-253-04 Pope & Talbot Ltd.
No one appearing for appelant (third party) in A-248-04 Tolko Industries Ltd.
No one appearing for appellant (third party) in A-256-04 Emporium Investments Ltd.
No one appearing for appelant (third party) in A-265-04 Westwood Fibre Ltd.
No one appearing for respondents (third parties) in A-244-04, A-250-04, A-253-04, A-256-04 Leslie E. Bannert and others..
James A. O'Reilly, Nathan Richards and Stuart C. B. Gilby for respondents (plaintiffs) in A-244-04, A-250-04, A-253-04, A-256-04 former Chief Harvey Baptiste and others.
Constance E. O'Laughlin and David E. R. Venour for respondent (defendant) Attorney General of Canada.
solicitors of record:
Lawson Lundell LLP, Vancouver, for appellants (third parties) in A-243-04 Canadian Forest Products Ltd., Slocan Forest Products Ltd. and Evans Forest Products Ltd.
Chamberlain Hutchison, Edmonton, for appellants (third parties) in A-244-04 Norman Baptiste and others.
Borden Ladner Gervais LLP, Vancouver, for appellant (third party) in A-250-04 International Forest Products Limited.
Alexander Holburn Beaudin & Lang LLP, Vancouver, for appellants (third parties) in A-251-04 Downie Street Sawmills Ltd. and Gorman Bros. Lumber Ltd.
Fasken Martineau DuMoulin LLP, Vancouver, for appellant (third party) in A-253-04 Pope & Talbot Ltd.
O'Reilly & Associés, Montréal, for respondents (plaintiffs) in A-244-04, A-250-04, A-253-04, A-256-04 former Chief Harvey Baptiste and others.
Deputy Attorney General of Canada for respondent (defendant) Attorney General of Canada.
The following are the reasons for judgment rendered in English by
[1]Richard C.J.: This appeal concerns the subject-matter jurisdiction of the Federal Court with respect to third party proceedings.
[2]To understand our disposition of this appeal, a brief background of the events is necessary.
[3]On February 7, 1996, the plaintiffs (the Stoney Band) commenced an action against the defendant (Canada).
[4]The statement of claim alleged, inter alia, breaches of various fiduciary duties owed by Canada to the Stoney Band concerning the harvesting of timber on the Stoney Band reserve in Alberta in 1994 and 1995.
[5]There is no dispute that this action comes within the jurisdiction of the Federal Court pursuant to subsection 17(1) [as am. by S.C. 2002, c. 8, s. 25] of the Federal Courts Act, R.S.C., 1985, c.F-7 [s. 1 (as am. by S.C. 2002, c. 8, s. 14)], which provides that the Federal Court has concurrent original jurisdiction with superior courts "in all cases in which relief is claimed against the Crown."
[6]On January 22, 1997, Canada brought a motion before the Federal Court seeking a stay of the action pursuant to section 50.1 [as enacted by S.C. 1990, c. 8, s. 16] of the Federal Court Act on the grounds that it intended to issue third party notices against persons over whom the Federal Court had no jurisdiction.
[7]Canada filed several third party notices on April 4, 1997, prior to the hearing of its motion by Prothonotary Hargrave on April 23, 1997. The third parties did not receive notice of Canada's motion or participate in the hearing before the Prothonotary.
[8]By order issued on May 16, 1997 [Stoney Band v. Canada (Minister of Indian Affairs and Northern Development) (1997), 131 F.T.R. 58 (F.C.T.D.)], the Prothonotary found that the Federal Court had jurisdiction over the proposed third party proceedings. Canada did not appeal the Prothonotary's decision.
[9]An amended statement of claim, an amended statement of defence, and amended third party notices were served and filed in the period October 2002 to March 2003.
[10]The third party claims were for the most part identical, differing only in minor aspects depending on the identity of the third party. In every case, however, the relief sought by Canada was identical.
[11]The parties against whom Canada asserted these third party claims fall into three categories: certain members of the Stoney Band in their capacity as individuals, loggers, and sawmill operators.
[12]Canada framed the relief it sought from the third parties as follows:
(a) Indemnity or contribution in respect of any judgment which may be obtained by the plaintiffs against the defendant, including any judgment for costs;
(b) Indemnity or contribution in respect of the costs and expenses incurred by the defendant in defending the action brought by the plaintiffs;
(c) Aggravated, punitive and exemplary damages;
(d) Costs and expenses of the third party proceedings.
[13]Canada also pleaded the provisions of the Contributory Negligence Act, R.S.A. 2000, c.C-27, the Tort-feasors Act, R.S.A. 2000, c. T-5, the Indian Act, R.S.C., 1985, c. I-5, and the Indian Timber Regulations, C.R.C., c. 961, s. 1 (as am. by SOR/94-690, s. 3(F)).
[14]The third party appellants challenged the jurisdiction of the Federal Court on April 30, 2003 and these motions were heard together by a judge of the Federal Court on October 21, 2003.
[15]The motion before the Federal Court Judge was not supported by any affidavit material and proceeded on the basis of the pleadings and the third party notices as framed by Canada.
[16]Canada did not oppose the third parties' motion but took the position that, having elected not to appeal, it was bound by the Prothonotary's decision.
[17]On May 3, 2004, the motions Judge dismissed the jurisdictional challenge of the third parties on the ground that the Prothonotary's decision was a bar to the relief sought on the principle of res judicata [Stoney Band v. Canada (Minister of Indian Affairs and Northern Developemnt) (2004), 252 F.T.R. 58 (F.C.)].
[18]The appeals before us were consolidated and heard together. None of the parties supported the motions Judge's finding that the matter was res judicata. It is clear to us that the motions Judge erred in law by applying the principle of res judicata in these circumstances. The third parties were not parties to the motion before the Prothonotary and did not have notice of the proceedings before the Prothonotary in April 1997.
[19]We are all of the view that the motions Judge erred in dismissing the motion made by the third parties on the ground of res judicata and for this reason alone, the appeal could be allowed.
[20]However, the parties were unanimous in requesting that this Court make the decision on the issue of jurisdiction that should have been made by the motions Judge and accordingly, I will proceed to deal with the issue of jurisdiction raised by the parties.
[21]The sole issue in this appeal is the jurisdiction of the Federal Court to hear and determine the third party claims as framed by Canada. This is a question of law. Although the Prothonotary was very articulate in his reasons in support of his finding that the Federal Court did have subject-matter jurisdiction, we are not bound by that decision or those reasons.
[22]The classic three-part test regarding the jurisdiction of the Federal Court was articulated by Justice McIntyre of the Supreme Court of Canada in ITO--International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752, at page 766:
1. There must be a statutory grant of jurisdiction by the federal Parliament;
2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction;
3. The law on which the case is based must be a "law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867.
[23]The first branch of the ITO test is not at issue in the present case. All parties to the present proceedings agree that the Federal Court's statutory grant of jurisdiction over these proceedings is found in paragraph 17(5)(a) of the Federal Courts Act [as am. by S.C. 2002, c. 8, s. 25], which provides that the Federal Court has concurrent original jurisdiction "in proceedings of a civil nature in which the Crown or the Attorney General of Canada claims relief."
[24]In Roberts v. Canada, [1989] 1 S.C.R. 322 [at pages 330-331], the Supreme Court of Canada recognized that there is an overlap between the second and third elements of the ITO test, and in particular:
. . . the second element . . . requires a general body of federal law covering the area of the dispute . . . and the third element requires that the specific law which will be resolutive of the dispute be a "law of Canada" within the meaning of s. 101 of the Constitution Act, 1867.
[25]Before this Court, Canada submitted that a general body of federal law exists in the combination of the Indian Act and the Indian Timber Regulations and that this legislation provides the source of the rights and obligations of the parties and is resolutive of the dispute. As a result, the Federal Court may assume jurisdiction.
[26]Canada bases its claims against the third parties on subsection 18(1) and on sections 28, 30, 32 and 93 of the Indian Act as well as on sections 3.1 [as enacted by SOR/95-531, Sch. I, s. 2], 5 [as am. by SOR/93-244, Sch. I, ss. 4, 14; 94-690, ss. 1, 3(F); 95-531, Sch. I, s. 6(F)] and 9 [as am. by SOR/93-224, Sch. I, s. 5; 95-531, Sch. I, s. 5(F)] of the Indian Timber Regulations. The most pertinent of these provisions are discussed below.
[27]Subsection 18(1) of the Indian Act creates a burden on Crown title as well as the fiduciary duty between the Crown and the Aboriginal people regarding reserve land.
18. (1) Subject to this Act, reserves are held by Her Majesty for the use and benefit of the respective bands for which they were set apart, and subject to this Act and to the terms of any treaty or surrender, the Governor in Council may determine whether any purpose for which lands in a reserve are used or are to be used is for the use and benefit of the band.
[28]Sections 30 and 31 [as am. by S.C. 2002, c. 8, s. 182] of the Indian Act make it an offence to trespass on a reserve and allow the Attorney General of Canada to proceed in the Federal Court:
30. A person who trespasses on a reserve is guilty of an offence and liable on summary conviction to a fine not exceeding fifty dollars or to imprisonment for a term not exceeding one month or to both.
31. (1) Without prejudice to section 30, where an Indian or a band alleges that persons other than Indians are or have been
(a) unlawfully in occupation or possession of,
(b) claiming adversely the right to occupation or possession of, or
(c) trespassing on
a reserve or part of a reserve, the Attorney General of Canada may exhibit an information in the Federal Court claiming, on behalf of the Indian or band, the relief or remedy sought.
(2) An information exhibited under subsection (1) shall, for all purposes of the Federal Courts Act, be deemed to be a proceeding by the Crown within the meaning of that Act.
[29]Canada also based its claims on the Indian Timber Regulations which govern timber harvesting on a reserve by establishing a permit and licensing system.
[30]Canada relied on the cases of Rhine v. The Queen; Prytula v. The Queen, [1980] 2 S.C.R. 442; and Oag v. Canada, [1987] 2 F.C. 511 (C.A.). These cases, in which federal law infused every aspect of the relationship between the parties, are distinguishable from the present proceedings, in which the federal law component is incidental to Canada's claims against the third parties.
[31]In the case of Rhine, the Crown sought to recover $417, allegedly an advance payment made to Rhine under the Prairie Grain Advance Payments Act [R.S.C. 1970, c. P-18], which he had failed to repay. In the Prytula case, the Crown sought to recover $540 and interest, allegedly owed because of a loan made to Prytula pursuant to the Canada Student Loans Act [R.S.C. 1970, c. S-17], guaranteed by the Minister of Finance and repaid by the Crown on her failure to repay. The Crown claimed the amount by subrogation. Each of the statutes in question provided for the advancing of federal funds or federally guaranteed funds to eligible individuals, for repayment, and for the means of enforcing repayment. In each case, a statutory framework established the relationship between the Crown and the defendants and defined their mutual obligations, as well as the remedies. These cases involved transactions between the Crown and the defendants which were governed by federal laws.
[32]In the Rhine case, the Supreme Court of Canada, after looking at the statutory framework of the Prairie Grain Advance Payments Act stated [at page 447] that:
At every turn, the Act has its impact on the undertaking so as to make it proper to say that there is here existing and valid federal law to govern the transaction which became the subject of litigation in the Federal Court. It should hardly be necessary to add that "contract" or other legal institutions, such as "tort" cannot be invariably attributed to sole provincial legislative regulation or be deemed to be, as common law, solely matters of provincial law.
[33]In the Prytula case, the Court found [at page 449] that the Canada Student Loans Act and regulations:
. . . govern every aspect of the relationship between the borrowing student, the lending bank and the guaranteeing government. Resort must necessarily be had to the statute and regulations to support any legal claims, whether by the bank or by the government, or to determine the liability of the borrowing student. Moreover, subrogation of the Crown to the claim of the bank is expressly dealt with. The prescribed form of agreement between the student and the bank emphasizes this by the student's signed assertion that "I understand my obligations under this Act and the Regulations and . . . I shall repay my total indebtedness as required by the Act and Regulations". Once it is accepted, as it is here, that the Act and regulations are valid, I do not see how it can be doubted that there is here existing and applicable federal law to underpin the jurisdiction of the federal court.
[34]The case of Oag is also distinguishable from the present proceedings and Canada's claims against the third parties. In Oag, the plaintiff made a claim against members of the National Parole Board for false arrest and imprisonment, arising out of his release on mandatory supervision and the subsequent suspension of the mandatory supervision on two occasions.
[35]After reviewing the statutory framework, the Court found [at pages 520-521]:
There thus appears, to use the phrase of Laskin, C.J.C. in the Rhine and Prytula case, "a detailed statutory framework" of federal law under which the appellant not only acquired the right to be free but also the right to remain so. It must be emphasized that, as he remained under sentence, the quality of freedom he enjoyed was not the same as that possessed by a person not under sentence. Its limits were demarcated by federal statutes. If the torts of false arrest and imprisonment were committed as alleged, they were committed because his right to remain free thus delineated was interfered with. I do not think that law need expressly provide a remedy for such interference for the claims to be governed by it. These torts, in my view, depend for their existence upon federal law; any provable damages resulting from their commission are recoverable in the Trial Division. I have concluded that the claims are provided for in the "laws of Canada" or "federal law".
[36]Canada has not demonstrated the existence of "a detailed statutory framework" of federal law under which its claims against the third parties arise. Subsection 18(1) of the Indian Act serves only to establish the status of Canada to bring the claims against the third parties.
[37]Unlike the federal statutory scheme on which the cause of action was based in the case of Rhine and Prytula, the applicable provisions of the federal statute and regulations in the present case do not contemplate civil recourse. For example, section 30 of the Indian Act makes it a summary offence to trespass on Indian land, while section 93 of the Indian Act makes it a summary offence to remove or to permit anyone to remove, inter alia, trees or timber from a reserve. Neither of these sections creates a statutory cause of action for damages. It is well established that a provision which creates an offence does not create a right of action. Furthermore, there is no tort recognized in Canadian law arising from a statutory breach in and of itself.
[38]Regarding the remaining statutory and regulatory provisions relied on by Canada, for reasons to which we are not privy, Canada decided not to invoke the enforcement mechanisms provided in this legislation against the third parties.
[39]Canada has not demonstrated that the combination of the Indian Act and the Indian Timber Regulations creates a federal statutory framework sufficient to nourish the jurisdiction of the Federal Court. Without the type of broad, all-encompassing federal regime called for in Rhine; Prytula and in Oag, the second and third branches of the ITO test cannot be met.
[40]Canada also relied on the principle established by Justice McIntyre in ITO [at page 781] that when "a case is in `pith and substance' within the court's statutory jurisdiction, the Federal Court may apply provincial law incidentally necessary to resolve the issues presented by the parties."
[41]In the present proceedings and in the claims as framed by Canada, the provincial common laws of conversion, conspiracy and negligence cannot be characterized as "incidentally necessary to resolve the issues presented by the parties". They are, in fact, the very laws under which Canada asserts its entitlement to indemnity, contribution, or damages. Canada's claims are in "pith and substance" based on provincial common law. If anything, it is the federal law component that is incidental to Canada's claims against the third parties.
[42]The law upon which Canada relies in bringing the claims against the third parties is the common law of trespass, conversion, conspiracy and negligence.
[43]This is clear from an analysis of the third party claims where Canada alleges:
1. trespass to timber and land;
2. conspiracy to engage in activities contrary to federal legislation;
3. conversion of Crown timber;
4. contributory negligence; and
5. negligent interference with the Crown's fiduciary duty to the Stoney Band.
[44]Aboriginal and treaty rights are not in issue between Canada and the third parties in these proceedings.
[45]For Canada to succeed in its third party claims, it must prove the elements of the common-law torts. It is the proof of the elements of these common-law torts that will be resolutive of Canada's claims.
[46]Since there is no statutory provision which provides for any direct obligation or direct liability, to assert its claim of damages against the third parties, Canada must necessarily go beyond the Indian Act and the Indian Timber Regulations and invoke the provisions of provincial law and provincial common law.
[47]In Stephens v. R. (1982), 26 C.P.C. 1 (F.C.A.), at pages 7-8, Le Dain J. stated that:
The issue of jurisdiction is whether the claims against the defendants other than the Crown are sufficiently supported by federal law to satisfy the requirement of Federal Court jurisdiction laid down and applied by the Supreme Court of Canada. . . .
[48]He continued:
The issue is the relationship that must exist between the cause of action and the existing and applicable federal law to give the Court jurisdiction.
[49]In the present proceedings, the claims of Canada against the third parties are not sufficiently supported by federal law. To the contrary, the claims are firmly rooted in provincial common law.
[50]Even though the action between the Stoney Band and Canada is rightly before the Federal Court, there is no relationship between the cause of action in the third party proceedings and any applicable federal law that would be sufficient to give the Federal Court jurisdiction.
[51]The Supreme Court of Canada held in R. v. Thomas Fuller Construction Co. (1958) Ltd. et al., [1980] 1 S.C.R. 695 that an action and a third party action are separate proceedings. Thus, an analysis of the claims of the plaintiff against the defendant in the main action will not be determinative of the nature of the claim against the third parties.
[52]Therefore, the fact that the Federal Court has jurisdiction over the main action between the Stoney Band and Canada cannot be considered when determining the Court's jurisdiction over the third party claims. I reach this conclusion based on the present state of the jurisprudence on this matter.
[53]I do, however, find the reasons of Justice Martland in Fuller to be compelling. In his dissent, he accepted that third party proceedings are separate proceedings. However, he did not share the view of the majority that the "interrelationship of those proceedings in considering the jurisdiction of the Federal Court under s. 101 can be ignored" [at page 705].
[54]In his opinion, the existence of a judgment given by the Federal Court against the Crown in the principal action was a sufficient basis on which to found a jurisdiction in the Federal Court to deal with a third party claim because such a judgment was the very foundation of the Crown's third party claim. That judgment would also be a pronouncement of "federal law."
[55]A related concern which was not as pressing when the Fuller decision was handed down 25 years ago is judicial economy. Where a plaintiff invokes the Federal Court's original jurisdiction in an action against the Crown, judicial economy would seem to require that third party claims brought by the defendant Crown be dealt with as an incident to the main action.
[56]Nevertheless, based on the current state of the law, in the present case, even though the Federal Court has jurisdiction over the principal action, Canada's third party claims are to be considered independently of the main action, and, when so considered, are clearly based almost entirely in provincial law.
[57]In conclusion, I find that the federal statutory framework created by the interaction of the Indian Act and the Indian Timber Regulations is insufficiently broad to encompass Canada's third party claims in this case. The Act and the Regulations relied on by Canada are not the source or the foundation of its claim against the third parties. The claims against the third parties are in "pith and substance" based on provincial common law. I must conclude that the Federal Court does not have jurisdiction over Canada's claims against the third parties in these circumstances.
[58]The appeal will be allowed, the third party notice will be struck out and each party will bear its own costs.
Noël J.A.: I agree.
* * *
The following are the reasons for judgment rendered in English by
[59]Nadon J.A. (dissenting): I have read, in draft, the reasons which lead the Chief Justice to conclude that the Federal Court is without jurisdiction to hear and determine the respondent's [Canada] third party claims. For the reasons that follow, I cannot agree with his proposed disposition of the appeal.
[60]In my view, the requirements to support jurisdiction in the Federal Court, enunciated by the Supreme Court of Canada in ITO--International Terminal Operators Ltd. v. Miida Electronics Inc. et al., [1986] 1 S.C.R. 752, are met and thus, the third party claims fall within the Federal Court's jurisdiction.
[61]The plaintiffs' action against the respondent is one for, inter alia, alleged breaches of the Crown's treaty, trust, and fiduciary obligations, including mismanagement of forested areas and misuse of funds belonging to the Stoney Band, the Bearspaw Band, the Chiniki Band and the Wesley Band (collectively, the Stoney Band), pertaining to the harvesting of timber which took place in 1993 and 1994 on the Stoney Band reserve in Alberta.
[62]As a result of this action, the respondent commenced third party claims against a number of parties, including log brokers, sawmill operators and individual members of the Stoney Band. I should point out that since the main action is pursued on behalf of all members of the Stoney Band, the Stoney Band third party defendants are also plaintiffs in the main action.
[63]As the Chief Justice indicates in his reasons, the respondent, prior to commencing its third party claims, brought a motion before the Federal Court for an order staying the plaintiffs' action on the grounds that the respondent intended to commence third party claims against persons over whom the Federal Court was without jurisdiction.
[64]On May 16, 1997, in Stoney Band v. Canada (Minister of Indian Affairs and N orthern Development) (1997), 131 F.T.R. 58 (F.C.T.D.), Prothonotary John Hargrave refused the stay, concluding that the defendant third party claims fell within the Federal Court's jurisdiction. At paragraph 15 of his reasons, the Prothonotary summarizes the third party claims in the following terms:
In her material the defendant provided copies of three generic third party notices similar to those filed. While they are addressed to three different types of third parties, Stoney Band members, log brokers and sawmill operators, the notices are all parallel and contain essentially the same provisions, which may be summarized as follows:
| 1. Wrongful cutting, harvesting, selling and removal of timber from the Stoney Reserve, without a ministerial permit, contrary to section 93(a)(ii) of the Indian Act and sections 5 and 30 of the Indian Timber Regulations and engaging in these activities without the permission of the Minister as required by section 93 of the Indian Act and, one would expect, sections 5 and 9 of the Indian Timber Regulations; |
| 2. Trespass to timber and to the Stoney Reserve pursuant to sections 20, 30 and 93 of the Indian Act and by so doing interfering with the Crown's obligations to the Stoney Band and to the Crown's title in the timber; |
| 3. An inability of Band members to transfer title and of log brokers and sawmills to acquire title to the timber pursuant to sections 28(1) and 32 of the Indian Act; |
| 4. Environmental damage caused by reason of breaches of the Indian Act, that is by cutting and removing timber; |
| 5. Conversion of timber from the Stoney Reserve, to which the Crown has legal title; |
| 6. Conspiracy to engage in the foregoing activities without a permit from the Minister, thereby injuring the Crown; |
| 7. Cutting, harvesting, selling and removal of timber without a permit and thereby breaching a duty of care owed to the Crown; |
| 8. Negligent interference with the Crown's obligation to hold timber for the use and benefit of the Stoney Band; and |
| 9. Contributory negligence involving provincial legislation, the Indian Act and regulations thereunder. |
[65]As the Chief Justice makes clear in his reasons, there is no dispute between the parties with respect to the Federal Court's jurisdiction over the action commenced by the plaintiffs. However, in his opinion, the respondent's third party claims do not meet the second and third requirements of the test set out in ITO. After reviewing the provisions of the Indian Act (the Act) and of the Indian Timber Regulations (the Regulations), and the cases relied on by the respondent, namely Rhine v. The Queen; Prytula v. The Queen, [1980] 2 S.C.R. 442; and Oag v. Canada, [1987] 2 F.C. 511 (C.A.), he concludes that the respondent has failed to show the existence of a detailed statutory framework of federal law pursuant to which the third party claims arise.
[66]The Chief Justice also rejects the proposition put forward by the respondent that as its case against the third parties is in "pith and substance" within the Federal Court's jurisdiction, it is open to the Federal Court to apply provincial law incidentally to the extent necessary to resolve the issues before the Court.
[67]Moreover, relying on the Supreme Court of Canada's decision in R. v. Thomas Fuller Construction Co. (1958) Ltd. et al., [1980] 1 S.C.R. 695, the Chief Justice makes the point that the main action and the third party claims are separate proceedings and, hence, that jurisdiction over the main action is not a relevant factor in determining the issue of jurisdiction in respect of the third party claims.
[68]Finally, the Chief Justice goes on to point out that, notwithstanding the fact that he finds compelling the dissenting opinion of Martland J. in Fuller, and that judicial economy should lead us to a different result, the current state of the law leaves no choice but to consider the third party claims independently of the main action. At paragraph 57, he concludes his reasons in the following terms:
In conclusion, I find that the federal statutory framework created by the interaction of the Indian Act and the Indian Timber Regulations is insufficiently broad to encompass Canada's third party claims in this case. The Act and the Regulations relied on by Canada are not the source or the foundation of its claim against the third parties. The claims against the third parties are in "pith and substance" based on provincial common law. I must conclude that the Federal Court does not have jurisdiction over Canada's claims against the third party in these circumstances.
[69]With the greatest of respect, I find Prothonotary Hargrave's treatment of the Federal Court's jurisdiction over the third party claims to be compelling. Like Prothonotary Hargrave, I am satisfied that there exists a detailed federal statutory framework, by reason of the Act and the Regulations, which provides the source of the rights and obligations of the parties and, therefore, supports the Federal Court's jurisdiction. This detailed statutory framework, combined with the federal common law of Aboriginal title, satisfies the second and third branches of the test set out in ITO for jurisdiction in the Federal Court.
[70]I largely adopt the Prothonotary's analysis of the question as my own. The Prothonotary's reasoning, in concluding as he did, is as follows. Having surveyed the background of the case, he begins his analysis with the Supreme Court's decision in McNamara Construction (Western) Ltd. et al. v. The Queen, [1977] 2 S.C.R. 654, in which Laskin C.J. reaffirmed the Court's decision in Quebec North Shore Paper Co. et al. v. Canadian Pacific Ltd. et al., [1977] 2 S.C.R. 1054, to the effect that, by reason of section 101 of The British North America Act, 1867 [30 & 31 Vict., c. 3 (U.K.) [R.S.C., 1985, Appendix II, No. 5]], the existence and applicability of federal law which can be invoked to support proceedings before the Federal Court is a prerequisite to the exercise of jurisdiction by that Court.
[71]The Prothonotary [at paragraph 8] then proceeded to discuss the refinement of the test for Federal Court jurisdiction, as elaborated by the Supreme Court in ITO, in which the Court sets out the essential requirements for Federal Court jurisdiction at page 766:
1. There must a statutory grant of jurisdiction by the federal Parliament;
2. There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction;
3. The law on which a case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867.
[72]The Prothonotary noted that the statutory grant of jurisdiction was met in the case before him by reason of paragraph 17(5)(a) of the Federal Courts Act, which reads:
17. . . .
(5) The Federal Court has concurrent original jurisdiction
(a) in proceedings of a civil nature in which the Crown or the Attorney General of Canada claims relief;
[73]The Prothonotary then found that the second and third branches of the ITO test, which could be analysed together, were met, relying on Roberts v. Canada, [1989] 1 S.C.R. 322 and Montana Band v. Canada, [1991] 2 F.C. 273 (T.D.), affd [1993] 2 C.N.L.R. 134 (F.C.A.). The Prothonotary then opined that claims before the Federal Court would be within its jurisdiction as long as they were, in pith and substance, validly founded on federal law, citing Karl Mueller Construction Ltd. v. Canada (1993), 59 F.T.R. 161 (F.C.T.D.), at page 165 and ITO, at page 781. At paragraph 13 of his reasons, the Prothonotary explained his point of view in the following terms:
The important thing to recognize about the Roberts and the Montana Band decisions is that both involved the use and occupation of a Reserve and alleged trespass by another Indian Band or Bands, which fell neatly to be decided by the application of the Indian Act and the law relating to Aboriginal title. However, as Mr. Justice Strayer pointed out in the Montana Band case, if issues of property and civil rights arose, it was sufficient that the Federal Court's jurisdiction arose essentially out of a claim created by federal law (page 284). In the present instance, there is more than just a trespass to a Reserve. The causes of action include conversion, conspiracy and negligence. While there is reliance upon the Indian Act and the Indian Timber Regulations, there is also reliance upon provincial legislation. That the third party claims rely in part on provincial law and provincial legislation, is not necessarily a bar to jurisdiction, but to be otherwise the claim must be in pith and substance within the Court's jurisdiction and validly founded on federal law: see for example Karl Mueller Construction Limited v. Canada (1993), 59 F.T.R. 161 at 165 and Miida Electronics (supra) at 781.
[74]Notwithstanding the fact that he had some concern regarding three aspects of the respondent's third party claims, namely conversion of the Crown's timber, breach of duty of care to the Minister and parallel interference with the Crown's obligation to hold timber for the use and benefit of the Band and reliance on provincial contributory negligence legislation, he went on to conclude, relying in part on this Court's decision in Oag, that since the third party claims relied substantially on federal legislation, statute and common law, the requirements of the ITO test were met. As a result, he concluded as follows [at paragraphs 23-24]:
The third party claims, brought pursuant to Rule 17(5)(a), are well-grounded in federal legislation, being in essence claims founded on the Indian Act and the Indian Timber Regulations. The claims rely substantially on Federal Aboriginal common law. As such, they satisfy the requirements set out in Miida Electronics, requirements that may blend in to one another, that there be an existing body of federal law essential to decide the case and that the law on which the case is based be a law of Canada.
That provincial law may be needed to assist in the determination of the fairly detailed statutory and legal framework, provided by the Indian Act, the Indian Timber Regulations and Federal Aboriginal common law is proper for there is, as I have indicated, a valid foundation in federal Canadian law for the claims which are in pith and substance within the Court's jurisdiction.
[75]The Prothonotary reached his conclusion in reasons which I can only describe as clear, cogent and most persuasive. As I do not believe that I can improve these reasons, I hereby adopt them as my own.
[76]I would, however, make a few additional remarks.
[77]Specifically, it is my view that sections 18, 28, 30, 31, 32 and 93 of the Act and sections 3.1, 5 and 9 of the Regulations constitute a detailed statutory framework for the administration of timber resources on reserves. These provisions read as follows:
THE ACT:
18. (1) Subject to this Act, reserves are held by Her Majesty for the use and benefit of the respective bands for which they were set apart, and subject to this Act and to the terms of any treaty or surrender, the Governor in Council may determine whether any purpose for which lands in a reserve are used or are to be used is for the use and benefit of the band.
(2) The Minister may authorize the use of lands in a reserve for the purpose of Indian schools, the administration of Indian affairs, Indian burial grounds, Indian health projects or, with the consent of the council of the band, for any other purpose for the general welfare of the band, and may take any lands in a reserve required for those purposes, but where an individual Indian, immediately prior to the taking, was entitled to the possession of those lands, compensation for that use shall be paid to the Indian, in such amount as may be agreed between the Indian and the Minister, or, failing agreement, as may be determined in such manner as the Minister may direct.
. . .
28. (1) Subject to subsection (2), any deed, lease, contract, instrument, document or agreement of any kind, whether written or oral, by which a band or a member of a band purports to permit a person other than a member of that band to occupy or use a reserve or to reside or otherwise exercise any rights on a reserve is void.
(2) The Minister may by permit in writing authorize any person for a period not exceeding one year, or with the consent of the council of the band for any longer period, to occupy or use a reserve or to reside or otherwise exercise rights on a reserve.
. . .
30. A person who trespasses on a reserve is guilty of an offence and liable on summary conviction to a fine not exceeding fifty dollars or to imprisonment for a term not exceeding one month or to both.
31. (1) Without prejudice to section 30, where an Indian or a band alleges that persons other than Indians are or have been
(a) unlawfully in occupation or possession of,
(b) claiming adversely the right to occupation or possession of, or
(c) trespassing on
a reserve or part of a reserve, the Attorney General of Canada may exhibit an information in the Federal Court claiming, on behalf of the Indian or band, the relief or remedy sought.
(2) An information exhibited under subsection (1) shall, for all purposes of the Federal Courts Act, be deemed to be a proceeding by the Crown within the meaning of that Act.
(3) Nothing in this section shall be construed to impair, abridge or otherwise affect any right or remedy that, but for this section, would be available to Her Majesty or to an Indian or a band.
32. (1) A transaction of any kind whereby a band or a member thereof purports to sell, barter, exchange, give or otherwise dispose of cattle or other animals, grain or hay, whether wild or cultivated, or root crops or plants or their products from a reserve in Manitoba, Saskatchewan or Alberta, to a person other than a member of that band, is void unless the superintendent approves the transaction in writing.
(2) The Minister may at any time by order exempt a band and the members thereof or any member thereof from the operation of this section, and may revoke any such order.
. . .
93. A person who, without the written permission of the Minister or his duly authorized representative,
(a) removes or permits anyone to remove from a reserve
(i) minerals, stone, sand, gravel, clay or soil, or
(ii) trees, saplings, shrubs, underbrush, timber, cordwood or hay, or
(b) has in his possession anything removed from a reserve contrary to this section,
is guilty of an offence and liable on summary conviction to a fine not exceeding five hundred dollars or to imprisonment for a term not exceeding three months or to both.
THE REGULATIONS:
3.1 No person shall cut timber on surrendered lands or on reserve lands without a licence.
. . .
5. (1) With the consent of the council of a band, permits to cut timber for sale may be issued by the Minister to a band or to a member or group of members of a band.
(2) Dues shall be charged at prevailing rates for timber cut on band land, and for timber harvested from individual locations or holdings of Indians the rate of dues may be reduced to one-half of such prevailing rates, and the rate of the dues shall be stated in the permit.
. . .
9. Subject to section 10, the Minister may grant licences for the right to cut timber
(a) on surrendered lands; or
(b) with the consent of the council of a band, on reserve lands.
[78]In my view, the third party claims issued by the respondent are founded on the detailed statutory scheme which arises from both the Act and the Regulations. More particularly, they arise by reason of the Regulations which govern the cutting and removal of timber from Indian reserves.
[79]Subsection 18(1) of the Act creates a burden on Crown title as well as the fiduciary duty between the Crown and Aboriginal peoples regarding reserve lands.
[80]Section 28 of the Act provides that agreements allowing members of the public to occupy or use a reserve is void without a permit issued by the Minister. Consequently, any member of the public involved in the cutting of timber on a reserve without a permit would be doing so without legal justification.
[81]Section 30 of the Act provides that it is an offence to trespass on a reserve, while section 93 provides that it is an offence to remove or to permit anyone to remove trees or timber from a reserve. While it is true, as the Chief Justice points out at paragraph 37 of his reasons, that these sections do not create a statutory cause of action for damages, they nonetheless constitute important components of the overall federal statutory scheme from which rights and obligations arise in connection with timber situated on reserve lands.
[82]As to the Regulations, they govern timber harvesting on a reserve by establishing a permit and licensing system. Section 5 thereof, for example, requires the issuance of a permit before timber can be lawfully cut by Band members on a reserve. As for section 9, it requires the issuance of a licence before timber can be lawfully cut and removed by members of the public. Finally, section 3.1 provides that no person shall cut timber on surrendered lands or on reserve lands without a licence.
[83]The remainder of the Regulations deals with varied matters, such as licence fees, ground rent, security deposits, scaling requirements, record maintenance, conservation, fire protection, and the seizure of timber cut without a licence or permit.
[84]Hence, in my view, these Regulations constitute a comprehensive set of obligations imposed on Band members and members of the public. Failure to comply with the permit and licensing scheme will constitute wrongful conduct that interferes with the Crown's rights under section 18 of the Act.
[85]As established by Wilson J. in Roberts, the phrase "laws of Canada" with respect to the third branch of the ITO test includes federal common law and, more specifically, the federal common law of Aboriginal title. As the Crown's claims against the third parties in this case will engage questions of the burden on the Crown's title and its role in management of reserve resources, the federal common law of Aboriginal title is relevant to the analysis under the second and third branches of the test set out in ITO.
[86]My conclusion rests on the proposition that the Act, Regulations, and federal Aboriginal common law frame and source the rights and obligations at stake in the third party claims. That is, the claims flow from the particular relationship of the Crown to lands held in reserve for Aboriginal peoples.
[87]As noted by Strayer J. (as he then was) in Montana Band, the fact that a claim is framed as a tort or contract claim does not by necessity oust the jurisdiction of the Federal Court. At page 284, he noted:
While it was argued by the third parties that any claim which the Crown may assert against the third parties is essentially a matter of property and civil rights involving questions of equity or tort, I do not believe this is determinative. As was said by Laskin C.J. in Rhine v. The Queen; Prytula v. The Queen ([1980] 2 S.C.R. 442, at p. 447):
| It should hardly be necessary to add that "contract" or other legal institutions, such as "tort" cannot be invariably attributed to sole provincial legislative regulation or be deemed to be, as common law, solely matters of provincial law. |
[88]Contrary to the Chief Justice, I am of the view that the opinion of this Court in Oag is entirely apposite. In that case, Stone J.A. considered the claim of a plaintiff who became entitled to be released on mandatory supervision pursuant to a decision of the National Parole Board. The Board suspended his mandatory supervision on two occasions. On both occasions, the plaintiff was arrested, detained and released. He instituted an action in the Trial Division for false arrest and imprisonment. The Trial Judge struck out the statement of claim on the ground that the action was not based in "federal law" [[1986] 1 F.C. 472]. The issue on appeal was whether the Trial Division had jurisdiction to entertain the plaintiff's claims against the individual Board members. Stone J.A. found that the Penitentiary Act [R.S.C. 1970, c. P-6] and the Parole Act [R.S.C. 1970, c. P-2] constituted a "detailed statutory framework" which circumscribed and defined the plaintiff's liberty rights, and sourced his claim for wrongful imprisonment. He stated, for the Court [at pages 520-521]:
There thus appears, to use the phrase of Laskin C.J.C. in the Rhine and Prytula case, "a detailed statutory framework" of federal law under which the appellant not only acquired the right to be free but also the right to remain so. It must be emphasized that, as he remained under sentence, the quality of freedom he enjoyed was not the same as that possessed by a person not under sentence. Its limits were demarcated by federal statutes. If the torts of false arrest and imprisonment were committed as alleged, they were committed because his right to remain free thus delineated was interfered with. I do not think that law need expressly provide a remedy for such interference for the claims to be governed by it. These torts, in my view, depend for their existence upon federal law; any provable damages resulting from their commission are recoverable in the Trial Division. I have concluded that the claims are provided for in the "laws of Canada" or "federal law" [Emphasis added.]
[89]In my view, the facts of Oag are instructive in the case at bar, as the claims asserted by the respondent against the third parties are governed essentially by the detailed statutory framework created by the Act and Regulations. That the claims are expressed in terms of, inter alia, trespass and conversion, does not obviate that source in federal law.
[90]Finally, as I indicated earlier, a number of third parties are also plaintiffs in the main action. I have some difficulty with the proposition that the respondent must pursue its third party claims against these parties before a Court other than the Federal Court. In McNamara Construction the Supreme Court concluded that the Federal Court had no jurisdiction over an action by the Crown for breach of a contract of construction, as the action was not founded on federal law. However, at the end of his reasons for a unanimous Court, Chief Justice Laskin made the following remarks [at pages 663-664]:
I conclude, therefore, that the appellants' challenge to the jurisdiction of the Federal Court must succeed and that their appeals must, accordingly, be allowed with costs throughout. The judgments of the Courts below should be set aside and the statements of claim served on the appellants should be struck out. In view of this conclusion, the consequential proceedings between the co-defendants and the third party proceedings must likewise fail, and it is unnecessary to deal with the issues raised as to their validity or propriety. I would, however, observe that if there had been jurisdiction in the Federal Court there could be some likelihood of proceedings for contribution or indemnity being similarly competent, at least between the parties, in so far as the supporting federal law embraced the issues arising therein. [Emphasis added.]
[91]These remarks appear to indicate that the Federal Court has jurisdiction over the third party claims directed at Band members who are plaintiffs in the main action. The parties, both in the main action and in the third party claims, are the same, and as discussed above, the federal law supporting the main action embraces the issues arising in the third party claims. This situation comes very close to that prevailing in both the Roberts and Montana cases.
[92]In conclusion, the Act and Regulations form a detailed statutory framework which, along with federal Aboriginal common law, is essential to the resolution of the dispute between the respondent and the third parties. In my view, having regard to the particular relationship of the Crown to lands and resources held in reserve for Aboriginal peoples, the test for jurisdiction in the Federal Court as set out in ITO is met.
[93]I would therefore dismiss the appeal but, in the circumstances, I would make no order as to costs.