448 EXCHEQUER COURT OF CANADA [ 1950 1949 BETWEEN : Mar. 28, 29 HIS MAJESTY THE KING on the 1950 Information of the Attorney General } PLAINTIFF; Oct. of Canada, J AND COWICHAN AGRICULTURAL r DEFENDANT. SOCIETY, Crown—Indian Act, R.S.C. 1906, c. 81, s. 51—Lease of surrendered Indian Reserve lands not valid without direction of Governor in Council-No estoppel to defeat express requirements of statute. The plaintiff sought a declaration that a lease of certain lands, dated October 16, 1912, and made by the Superintendent General of Indian (Affairs to the defendant, was null and void on the ground that it had been made without the direction of the Governor in Council. The lands are at Duncan on Vancouver Island in British Columbia and formed part of the Indian Reserve of the Somenos Band of , Cowichan Indians. They had been surrendered by the Indians on June 29, 1888, on certain conditions and leased for 21 years by the Superintendent General to the defendant to enable it to erect an agricultural hall and lay out the grounds to hold annual exhibitions. The lease was renewed on November 29, 1905, for a further period of 21 years and subsequently a new lease, dated October 16. 1912, for 99 years was made. The surrender was accepted by the Governor in Council by Order in Council P.C. 1880, dated August 16, 1888, which gave authority for the issue of a lease to the defendant but no Order in Council was ever passed with reference to the lease of October 16, 1912. Held: That section 51 of the Indian Act requires a direction by the Governor in Council before there can be a valid lease of surrendered Indian lands, that the responsibility for controlling the leasing of such lands thus vested in the Governor in Council cannot be delegated to the Superintendent General of Indian Affairs or any one else and that a lease of such lands without the direction of the Governor in Council is void. St. Ann's Island Shooting and Fishing Club Ltd. v. The King (1950) Ex. C.R. 185; (1950) S.C.R. 211 followed 2. That there cannot be an estoppel to defeat the express requirements of a statute, particularly when they are designed, as section 51 of the Indian Act is, for the protection of the interests of special classes of persons. ACTION for a declaration that a lease of surrendered Indian Reserve lands made without the direction of the Governor in Council is null and void. The action was tried before the Honourable Mr. Justice Thorson, President of the Court, at Victoria. F. A. Sheppard K.C. and A. H. Laidlaw for plaintiff. D. M. Gordon for defendant.
Ex.C.R.1 EXCHEQUER COURT OF CANADA 449 The facts and questions of law raised are stated in the 1950 reasons for judgment. Tan KING THE PRESIDENT now (October 21, 1950) delivered the Cow C . HAN following judgment: AGRI- CULTURAL This is an action for a declaration that a lease of certain SOCIETY surrendered Indian Reserve lands made by the Superin- Thorson P. tendent General of Indian Affairs to the defendant, dated — October 16, 1912, is null and void. The facts have been agreed upon in a statement with supporting documents. The defendant was incorporated in 1888 under the name of Cowichan and Salt Spring Island Agricultural Society and changed its name to its present form in 1913. The lands in question are on Vancouver Island in British Columbia in what is now the City of Duncan and form part of the Indian Reserve of the Some-nos Band of Cowichan Indians. On March 24, 1888, the defendant applied to the Department of Indian Affairs for a lease of the lands, comprising 5 acres more or less, to enable it to erect an agricultural hall and lay out grounds to hold annual exhibition shows. On June 29, 1888, the Chief and principal men of the Somenos Band of Cowichan Indians surrendered the lands to Her Majesty the Queen subject to the following conditions: TO HAVE AND TO HOLD the same unto Her said Majesty THE QUEEN, her Heirs and Successors forever, in trust to lease and surrender the same to the Cowichan and Salt Spring Island Agricultural Society upon such terms as the Government of the Dominion of Canada may deem most conducive to our welfare and that of our people. AND upon the further condition that all moneys received from the lease and surrender thereôf, shall, after deducting the usual proportion for expenses of management, be placed at interest, and that the interest money accruing from such investment shall be paid annually or semi-annually to us and our descendants forever. By Order in Council P.C. 1880, dated August 16, 1888, the said surrender was accepted by the Governor in Council and authority was given for the issue of a lease to the defendant, "at a nominal rental, but on the condition that the Indians of the Somenos Band shall have the right to use the grounds should they at any time wish to hold an Agricultural Exhibition." In November, 1888, the Superintendent General of Indian Affairs executed a lease of the lands to the defendant for a term of 21 years to be computed from September 1, 1888, at a rental of $1.00 per year,
450 EXCHEQUER COURT OF CANADA [1950 1950 with the condition that the defendant "will allow the THE KING Somenos Band of Cowichan Indians to have the use of V. COWICHAN the property hereby demised should they at any future AGRI- time or times wish to hold a separate exhibition." On CULTURAL SOCIETY July 9, 1894, the defendant applied to the Superintendent Thorson P. General for a Crown grant of the lands on the grounds that the defendant had put up buildings and made improvements worth $3,000 or $4,000 and that "greater encouragement would be given to the Society to improve the said property were it their own." On October 29, 1894, the Chief and principal men of the Somenos Band of Cowichan Indians surrendered the lands to Her Majesty the Queen "in trust to sell the same to the Cowichan & Salt Spring Agricultural Society". This surrender was never accepted. On January 15, 1895, the Superintendent General informed the defendant by letter that the Department of Indian Affairs could not give the defendant title in fee simple because of the unsettled question between the Government of British Columbia and the Federal Government as to the reversionary right of the former in Indian Reserves but that it would be prepared to renew the lease for as long a period as desired and follow, the same up with a patent when the general question affecting the title to Indian Reserves was disposed of. On March 8, 1904, the defendant wrote to the Indian Agent at Duncan asking, if it was still impossible to grant a patent, to have the existing lease cancelled and a new lease granted for 50 years, the reason for the request being that the defendant contemplated making extensive improvements to its Agricultural Hall and that before starting on this work it would like to have a renewal of the lease for a longer period. On June 29, 1904, the Secretary Of the Department of Indian Affairs informed the defendant that "in view of representations made that an extension of the lease is desired in view of contemplated extensive improvements to Agricultural Hall, the Department will renew the present lease at its expiration on the 1st September 1909, for a further term of twenty-one years, upon the same terms." On November 29, 1905, the Deputy Superintendent General without waiting for the expiry of the lease, extended it for a further period of twenty-one years from
Ex.C.R.] EXCHEQUER COURT OF CANADA 451 December 1, 1909, "upon the same terms and conditions" 1950 by an endorsement thereon. On a further request for a Tx N, longer lease the Assistant Deputy Superintendent General, COW CHAN on July 13, 1912, informed the Indian Agent at Duncan AGRI-TURAL that it had been decided to issue a new lease to the defend- SOCIETY ant for a term of 99 years. On September 5, 1912, the Thorson P. defendant in consideration of a new lease surrendered its — lease of September 1, 1888, and the renewal thereof. On September 9, 1912, the Cowichan Indians through their solicitors protested against a further lease of their reserve, to which the Assistant Deputy Superintendent General replied on October 11, 1912, that the surrender of the Indians was absolute and the Department was satisfied that the proposed lease was not detrimental to the interest of the Indians. On October 7, 1913, the Superintendent General wrote to the defendant asking whether it would agree to pay $450 yearly as rental for the leased lands, being on the basis of 3 per cent of their alleged value of $15,000. On October 28, 1913, the defendant replied that the suggested terms were not satisfactory. On November 28, 1913, the Deputy Superintendent General informed the defendant that "it is considered that the Company (meaning the defendant) have a vested interest in the property in question, entitling them to favourable consideration as to extension of lease, and it has, therefore, been decided to extend the lease for a term of ninety-nine years, at a nominal rental." The clause permitting use of the property by the Somenos Band of Indians in case they desired at any future time to have a separate exhibition was retained. The new lease, dated October 16, 1912, was sent to the defendant for signature and was returned signed on December 9, 1913. Shortly thereafter the lease was executed by the Deputy Superintendent General and on December 15, 1913, an executed copy was sent to the defendant. No Order in Council was ever passed with reference to the extension of the lease of September 1, 1888, on November 29, 1905, or to the lease of October 16, 1912. By provincial Order in Council No. 1036 (B.C.), dated July 29, 1938, the title to all Indian Reserve lands in the Province of British Columbia was settled in the Dominion of Canada subject to the terms and conditions thereof.
452 EXCHEQUER COURT OF CANADA [ 1950 1950 On April 11, 1944, the defendant wrote to the Indian Corn- THE LINO missioner for B.C. referring to the letter from the Deputy V. COWIC HAN Superintendent General, dated January 15, 1895, and AGRI- requesting that, since the general question affecting Indian CULTURAL SOCIETY Reserves had been disposed of and the Department was Thorson P. now in a position to issue patents, means should be taken — to grant the defendant a patent. On May 30, 1944, the Indian Commissioner for B.C. informed the defendant that the only valid surrender was that executed by the Indians in 1888, that such surrender was in trust to lease the lands, and that the Crown could not under the circumstances give title to the defendant without a further surrender from the Indians giving consent to such a transfer. It was further agreed in the statement of facts that the defendant built a hall and other improvements on the leased lands in 1889, and built a new and larger hall in 1914 at a substantial cost, the funds being largely raised by the sale of debentures, that the Indian Agent at Duncan knew of these improvements, that the defendant had no notice until 1944 that the plaintiff or any one on his behalf questioned the validity of any of the leases to the defendant, and that the rents due under the respective leases had at all times been kept up by the defendant and accepted by the Indian Department. Counsel for the plaintiff submitted that there were two reasons for finding that the lease of October 16, 1912, was void, the first being that it was not directed by the Governor in Council and consequently not authorized as required by section 51 of the Indian Act, R.S.C. 1906, chap. 81, and the second that it was a condition of the surrender of June 29, 1888, that the proceeds from any lease should be invested for the Indians, which connoted a lease at a substantial rent, and that since the lease was only for a nominal rental there had been a breach of this condition. Whether effect should be given to the first reason depends on the construction to be placed on section 51 of the Indian Act of 1906, which read as follows: 51 All Indian lands which are reserves or portions of reserves surrendered, or to be surrendered, to His Majesty, shall be deemed to be held for the same purpose as heretofore; and shall be managed, leased and sold as the Governor in Council directs, subject to the conditions of surrender and the provisions of this Part.
Ex.C.R.] EXCHEQUER COURT OF CANADA 453 The section was in substantially the same form in the 1950 1886 Revision, R.S.C. 1886, chap. 43, section 41, and THE KING remained unchanged in the 1927 Revision, R.S.C. 1927, COWICHAN chap. 98, section 51. AGRI- LTURAL Counsel for the defendant argued that no specific Order SOOTY in Council was required for the 1912 lease, that section 51 Thorson P. contemplated merely a control by the Government of — general matters of policy affecting surrendered Indian Reserve lands and that this did not extend to administra- tive details such as the issue of a particular lease, that the Order in Council of August 16, 1888, accepting the sur- render, gave authority for the issue of a lease to the defendant and that this gave the Superintendent General of Indian Affairs authority to issue not only the lease of September 1, 1888, but also successive leases, such as the extension of November 29, 1905. and thé 99 year lease of October 16. 1912, and that consequently this lease was valid although there was no specific direction for its issue by the Governor in Council. I am unable to agree that the statutory requirements imposed by section 51 of the Indian Act are subject to the limitation implied in this argument. In my judgment, the decision in St. Ann's Island Shooting and Fishing Club Ltd. v. The King (1) is conclusively against such a narrow view of the section. There the claimant sought a renewal of a lease of certain surrendered Indian lands in the County of Kent in Ontario, dated May 19, 1925, made by the Superintendent General of Indian Affairs to trustees for the claimant, pursuant to a provision in the lease for such renewal, but the validity of the lease was called in question on the ground that there had been no Order in Council directing it, although an earlier lease, dated May 30, 1881, had been confirmed by an Order in Council. The issue before the Court was thus the same in principle as that now under discussion. And the claimant's arguments in support of the validity of the lease were similar to those advanced in this case. These were carefully considered by Cameron J and rejected He was of the opinion that section 51 of the Indian Act was imperative in its require- ments that only by a direction of the Governor in Council could surrendered Indian lands be validly managed, leased (1) (1950) Ex C R 185 ( 1950) S (' R 211
454 EXCHEQUER COURT OF CANADA [ 1950 1950 or sold, and that the disposition of such lands was thereby THE KING placed directly under the control of the Government. His CowiCHAN conclusion was that the section required an Order in AGRI- Council as the necessary preliminary to the validity of the CULTURAL SOCIETY 1925 lease and that since there was no Order in Council Thorson P referable to it there had been non-compliance with the — imperative provisions of the section and the lease and the provisions for renewal therein were void. In the Supreme Court of Canada the judgment of this Court was unanimously affirmed. Kerwin J. agreed with the opinion of Cameron J., and Taschereau J., speaking also for Locke J., took the same wide view of section 51 of the Indian Act and held that although the original lease of 1881 had been approved by an Order in Council this did not authorize the Superintendent General of Indian Affairs to make the lease of 1925 and the imperative terms of section 51 required a new Order in Council for its validity. And Rand J., speaking also for Estey J., agreed that section 51 required a direction by the Governor in Council for a valid lease of Indian lands. At page 219 he gave a convicing reason for the wide view that ought to be taken of the section: The language of the statute embodies the accepted view that these aborigines are, in effect, wards of the State, whose care and welfare are a pohtical trust of the highest obligation. For that reason, every such dealing with their privileges must bear the imprint of governmental approval, and it would be beyond the power of the Governor in Council to transfer that responsibility to the Superintendent General. It was his opinion that the efficacy of the Order in Council confirming the original lease was exhausted by it and that before a new lease could be considered valid it must appear that it was made under the direction of the Governor in Council. The principles thus laid down in the St. Ann's case (supra) ought to be applied in this one. It must, I think, be considered settled law that section 51 of the Indian Act requires a direction by the Governor in Council before there can be a valid lease of surrendered Indian Reserve lands, that the responsibility for controlling the leasing of such lands thus vested in the Governor in Council cannot be delegated to the Superintendent General of Indian Affairs or any one else and that a lease of such lands with-
Ex.C.R.] EXCHEQUER COURT OF CANADA 455 out the direction of the Governor in Council is void. It 1950 follows that since the lease of October 16, 1912, was made THE KING without a direction by the Governor in Council it is void COW CHAN and the Court so declares. AGRI- CULTURAL This finding makes it unnecessary to deal with the second SOCIETY reason advanced for submitting that the lease was invalid. Thorson P. Moreover, the question whether a lease at a nominal rental — was inconsistent with the conditions of the surrender of 1888 and, therefore, void could properly be the subject of judicial determination only if there were a lease at a nominal rental that had been made under the direction of the Governor in Council and such is not the case here. There remains only the submission by counsel for the defendant, which he made one of his main arguments, that by reason of standing by and allowing the defendant to proceed with substantial improvements on the lands in question the Crown is estopped from contending that the lease is invalid for non-compliance with the requirements of section 51 of the Indian Act. I have considered the authorities submitted to me, including Ramsden v. Dyson (1), and the doctrine of equitable estoppel of which it was said to be the source, but have come to the conclusion that the authorities upon which the defendant relied do not apply to the facts of this case and that the defendant cannot set up any estoppel. In my judgment, there can- not be an estoppel to defeat the express requirements of a statute, particularly when they are designed, as section 51 of the Indian Act is, for the protection of the interests of special classes of persons. I follow the opinion on this subject expressed by Rand J. in the St. Ann's case (supra), although there was no argument on the subject of estoppel in that case when it carne before the Supreme Court of Canada, and the views of Cameron J. in this Court who held, after full argument on the subject, that the Crown could not be estopped from alleging that the requirements of section 51 of the Indian Act had not been complied with. For the reasons given there will be judgment declaring that the lease of October 16, 1912, is null and void. The plaintiff is also entitled to costs. Judgment accordingly. (1) (1866) 1 HL 129
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.