Greetings from the Chair By John Rowinski New Section Chair, John Rowinski, introduces the first edition of this Executive’s newsletter and highlights recent and upcoming activities of the Aboriginal Law Section.
Aboriginal Law Section Hosts Successful Forestry Program By John Rowinski On September 12, 2006, the Aboriginal Law Section hosted an interactive dinner program on “Partnerships in Sustainable Development: Relations with First Nations in Ontario’s Forest Industry.” John Rowinski, who chaired the program, reports.
Ontario’s New Draft Consultation Policy By Bradford W. Morse
The Government of Ontario released the Draft Guidelines for Ministries on Consultation with Aboriginal Peoples Related to Aboriginal Rights and Treaty Rights on June 26, 2006. Brad Morse examines the effectiveness of the Guidelines and compares Ontario’s progress to that of other provinces.
National Class Action Settlement: A Brief Progress Report By Eugene Meehan, Q.C. The National Residential School Settlement Agreement is now before the Courts. Eugene Meehan, Q.C., co-counsel on the Plaintiff-side of the Settlement, provides an update on its progress.
Whitefish Lake Appeal to be Heard in January 2007 By John Rowinski The Ontario Superior Court decision, released on January 24, 2006, ruled on the issue of damage assessment for breach of fiduciary duty. This decision has since been relied on by the Crown in the context of both litigation and claims negotiation with First Nations across the country. John Rowinski, co-counsel to Whitefish Lake, reports on the case.
Ontario Bar Association | Association du Barreau de l'Ontario
The Ontario branch of the Canadian Bar Association | La division ontarienne de l'Association du Barreau canadien
Aboriginal Law is published by the Aboriginal Law Section of the Ontario Bar Association. Members are encouraged to submit articles or suggest story ideas.
The articles that appear in this publication represent the opinions of the authors. They do not represent or embody any official position of, or statement by, the OBA except where this may be specifically indicated; nor do they attempt to set forth definitive practice standards or to provide legal advice. Precedents and other material contained herein are intended to be used thoughtfully, as nothing in the work relieves readers of their responsibility to consider it in the light of their own professional skill and judgment.
Greetings from the Chair John Rowinski*
Welcome to the Fall 2006 OBA Aboriginal Law Section Newsletter, which we are sure you will find interesting and informative. As always, we hope that we can continue to increase the number and variety of contributors to our newsletters to help us better serve our membership. If you would like to make a contribution to our next issue, please contact our Editor, Annie Thuan at athuan@willmsshier.com.
Section Membership
As has been the trend in recent years, our Section membership has once again increased and continues to draw from a broad cross-section of practitioners. Our diverse membership includes sole practitioners, members of firms, government lawyers, academics and even non-lawyers whose work has aboriginal law components.
Our Section Executive meets on a monthly basis for discussion and planning purposes. We have a number of exciting initiatives under way for this year and we invite our members to join and participate in the Executive. If you would like to become a member of the Executive, please feel free to contact me at jrowinski@torkinmanes.com.
Institute 2007
The Aboriginal Section will again be presenting a program at the 2007 OBA Institute. Our Section’s program, “Hot Topics & Development in Aboriginal Law in 2006,” will be held on Tuesday, February 6, 2007 from 9:00 a.m. to noon.
We have assembled a diverse panel of speakers to discuss topics such as the use and protection of natural resources on and off reserves, access to justice and dispute management in the context of blockades and occupations. Registration forms have been mailed out and are also available on the OBA website. We hope that you will be able to join us for the program and will spread the word to your friends and colleagues!
Section Listserv
In the very near future, you will be receiving an email inviting you to subscribe to a Section listserv. The intent of the listserv is to be a resource for all of our Section members. The listserv will give our members a forum in which to exchange ideas, discuss hot topics relevant to our area of law and be a resource for those who have questions, concerns, or may simply need to pick one another’s brains on a difficult problem with which they are faced. A number of OBA Sections are making use of listservs and we are excited to be able to offer this to our membership. I strongly encourage you to subscribe once you have received the invitation from the OBA.
Other Initiatives
The Section Executive is currently planning at least two Section events or programs for 2007, in addition to Institute. The door is not closed on ideas for topics and I invite anyone from the membership to contact me to put forward ideas which they would be interested in either helping to present or to attend.
We look forward to making the coming year a success. I hope to have the opportunity to meet each and every one of you at some point during the course of the 2006-2007 membership year!
Aboriginal Law Section Hosts Successful Forestry Program John Rowinski* On September 12, 2006, the Aboriginal Law Section hosted an interactive dinner program on issues relating to Aboriginal forestry in Ontario, titled “Partnerships in Sustainable Development: Relations with First Nations in Ontario’s Forest Industry.”
The focus of the program was on consultation, with discussion centering on the duties of the Crown, the implementation of that duty, recent experiences of First Nations related to new and ongoing forestry activities on or near Aboriginal lands, and the future of consultation in relation to forestry.
The panelists for the program represented the spectrum of perspectives in First Nation forestry issues:
Anne Giardini, Assistant General Counsel of Weyerhaeuser Company Limited, who presented the private forestry company perspective;
Sandra Gogal of the Legal Services Branch of Ontario’s Ministry of Natural Resources, who provided a government perspective; and
Harry Bombay, who kindly filled in for Lorraine Rekmans, spoke about his experiences with the National Aboriginal Forestry Association.
To increase the opportunity for non-Toronto area Section members to participate in the program, registrants had the option of attending in person or by teleconference. This was an attractive option as about half of the registrants participated by teleconference, as did all three of the panelists.
The registrants for the program also represented a healthy mix, including lawyers practicing Aboriginal law in both private practice and with the federal and provincial Crown, lawyers practicing in environmental law and natural resources law, as well as a few non-lawyers who work in Aboriginal forestry or are involved in the consultation process.
The program was lively, to say the least. Ms. Giardini and Ms. Gogal spoke positively about the progress made in the consultation process in the last couple of years and spoke frankly about the challenges faced by industry and government in carrying out effective consultation with First Nations.
Mr. Bombay also praised the progress to date but went on to make a compelling argument that progress has been slow. In general, his view is that there is still a long way to go on the road to effective, comprehensive and meaningful consultation. Effective consultation goes beyond mere “information exchange”; it involves active participation by First Nations, other Aboriginal groups and foresters. Mr. Bombay pointed out the need to reconcile often conflicting concerns of those people, either Native or non-Native, who favour sustainable resource development with the concerns of those who are opposed to resource development of any kind in the interest of conservation.
The presentations of the three panelists were followed by a question and answer session and lively interactive discussion amongst all attendees in person and by phone. The speakers fielded tough questions and the spirited debate raised some excellent ideas to improve the consultation process.
If one conclusion could be drawn from the program, it is that there is tremendous interest in the Aboriginal forestry industry on the topic of consultation and a genuine desire by all parties to make the consultation process work. Hopefully, through ongoing dialogue like that on September 12, we can eventually achieve that goal.
* John Rowinski is a lawyer with Torkin Manes Cohen Arbus LLP in Toronto practicing in the areas of Aboriginal Law and professional negligence. He is the Chair of the Aboriginal Law Section of the OBA and served as Chair of the September 12, 2006 forestry program. John can be reached atjrowinski@torkinmanes.com.
Ontario’s New Draft Consultation Policy Bradford W. Morse* Background
The Supreme Court of Canada has been making clearer to federal and provincial governments since the Sparrow1 decision in 1990 that Aboriginal peoples should be consulted, at the very least, before their s. 35(1) rights can be affected. The Court returned to this theme, in passing, when dealing with aboriginal title issues in Delgamuukw2 in 1997. In November 2004, in the Haida Nation3 and Taku River Tlingit First Nation4 cases, the Court expressly concentrated upon the duty of the Crown to consult and, in appropriate circumstances, accommodate the concerns of the Aboriginal peoples of Canada when their prima facie assertions of aboriginal rights are potentially affected. Last December the Court again returned to this topic, this time in the context of hunting and trapping rights under Treaty No. 8, which were in conflict with federal road construction plans in the Wood Buffalo National Park, in Mikisew Cree First Nation.5
The Government of Ontario has been attempting to chart a new course in its dealings with First Nations and Metis communities since its election in October 2003. The McGuinty Government issued a document entitled Ontario’s New Approach to Aboriginal Affairs,6 which was released at a meeting of all major First Nations, Metis and urban Aboriginal organizations on June 7, 2005. One of the commitments the document contained was for the government to draft consultation guidelines. This promise was fulfilled when the government released the Draft Guidelines For Ministries On Consultation With Aboriginal Peoples Related To Aboriginal Rights And Treaty Rights on June 26, 2006.
While the latter document includes the label “Draft” in its title, it does not expressly suggest that there would be any discussions about its content or even invite reactions to the text, let alone give an indication that it might be changed in response to feedback. Officials at the Ontario Secretariat for Aboriginal Affairs (OSAA) have indicated that the Draft Guidelines were distributed by mail to all Ontario First Nations, as well as to Metis and other key Aboriginal organizations, Aboriginal service providers, and non-Aboriginal stakeholders in the province. The covering letters that accompanied the document did invite written responses directed to OSAA. The Draft Guidelines are also posted online, so as to be publicly available through OSAA's website [http://www.aboriginalaffairs.osaa.gov.on.ca/english/news/draftconsult.html] . In addition, the letter invited First Nations and Metis organizations, along with, apparently, a few non-Aboriginal organizations to participate in engagement sessions on the draft consultation guidelines. At the moment, OSAA is awaiting a response from the Chiefs of Ontario on how they would like to be engaged in any discussions regarding this document. The OBA was not formally contacted or invited to participate in any discussions.
Contents
The Draft Guidelines paper is obviously intended to build upon the language of the “New Approach” toward Aboriginal-Crown relationship that was promised during the last provincial election campaign by the Liberal Party of Ontario (as a suggested contrast to the behaviour of the former Conservative Party government). Premier McGuinty acted quickly on his promise to appoint the Ipperwash Inquiry but things quickly slowed down thereafter. The June 2005 position was a welcome contribution. Although thin on substance, the paper did shape the provincial attitude toward the national discussions that culminated in the Kelowna Accord in November of last year. This latest salvo talks in terms of “vision,” “new relationship” and a “new course” to be followed “based on mutual respect and …improved opportunities for all Aboriginal peoples.”
The government declares that “more effective consultation processes” are one of its priorities as these processes will translate into “clearer communication, better decisions, and lasting outcomes that benefit both Ontario and Aboriginal peoples.” The government has articulated 4 key principles in this regard: (1) respect for all Aboriginal peoples living in Ontario; (2) meet constitutional obligations to consult; (3) establish effective and efficient consultation processes; and (4) Aboriginal participation in developing the final guidelines for provincial ministries.
The discussion paper attempts to provide some background to the entire duty to consult topic by attempting to explain why the duty exists and when the duty will arise in the context of a summary of what aboriginal and treaty rights encompass. These four pages provide a thin sketch of this vital framework and they stand in marked contrast to the efforts of some other governments in this regard. The document then enters upon the first of its two main objectives, namely, describing what officials or departments may need to do with respect to the existence of a duty as well as when these groups must take action. Again, the document is very vague in addressing these issues as it is intended to be a first cut effort that would potentially affect all government ministries. These guidelines are expressly stated as guidance that should be used by individual ministries that would then develop their own “specific consultation processes within their mandates.” As such, a directive that is meant for government-wide impact, triggering more concrete practices reflecting particular statutory or program responsibilities, will inevitably utilize fairly general instructions. In addition, the document had received no meaningful Aboriginal input before its release, as the paper was designed to provide something on which to react.
The Draft then seeks to outline how a department should develop an approach to consultation by listing factors the department must consider. Fourteen questions are identified that should be asked at the beginning of any process, so that the ministry can proceed in an effective manner to involve the appropriate Aboriginal communities and possibly third parties.
Assessment
The 18 page Draft Guidelines is rather disappointing as a first effort, given that Haida and Taku were released by the SCC 19 months earlier and examples from other provinces go back at least 8 years. The draft fails to identify any provincial agencies or departments that are clearly subject to the duty to consult at present or list any legislative processes that are susceptible to the duty. The guidelines also give no illustrations of how an agency might respond properly to this duty or describe examples of current efforts to fulfill this obligation. The paper does declare that this is a constitutionally protected obligation on the Crown in right of Ontario and includes some quotations from Chief Justice McLachlin in Taku and Haida, as well as from Justice Binnie in Mikisew Cree, to lend some weight to this assertion. Nevertheless, the document still leaves the impression that departments can proceed as they have in the past while the government is developing formal instructions.
On the other hand, the federal government has not even released a draft of any guidelines for discussion purposes. An interdepartmental committee was struck in 2005 that engaged in considerable internal work to identify which departments might be affected by the aftermath of Haida and Taku and how the federal government might proceed. This committee was followed by a low-key series of discussions with the Assembly of First Nations and regional First Nations associations, as well as with provincial governments across the country regarding what the parameters and structure might be for a more formal process to follow, which would be on how best to discuss the development of a future consultation policy. This initiative seems to have dropped from sight with the change in the federal government, such that the second anniversary of the SCC’s clear directions that governments should have consultation policies has passed with silence from the Government of Canada.
In contrast, the British Columbia government has had a policy in place since 1998 that has been updated on two occasions and was further refined by the New Relationship Accord of April 13, 2005 signed by Premier Campbell and the political representatives of all BC First Nations. This province has also developed more detailed consultation guidelines in a number of specific sectors (e.g., forestry, mining, energy, environmental assessment, treaty negotiations, and crown assets disposal).
Similarly, the Government of Alberta issued its seven page First Nations Consultation Policy on Land Management and Resource Development7 on May 16, 2005, following a process of discussions with First Nations that commenced in September of 2003. More recently, a 76 page elaboration of this policy was released by the Alberta government on September 1, 2006.8 The Quebec Minister Responsible for the Secrétariat aux affaires autochtones issued the Interim Guide for Consulting the Aboriginal Communities9 on April 11, 2006 on behalf of Cabinet. It was developed over a number of months by an interdepartmental committee, expressly to implement the SCC’s directions. While this document is open for discussion, it was also proclaimed as being immediately in force by Minister Geoffrey Kelley and effective upon “every government department, agency and corporation when an action being envisaged can encroach on the rights claimed by the Aboriginal communities.”10 Discussions have been underway in Saskatchewan since 2005 on this topic, while the unpublished draft consultation policy issued by the New Brunswick government last year does not appear to have moved forward.
Conclusions
The Government of Ontario should be recognized for releasing its Draft Guidelines as a discussion paper. This is a positive step and does place Ontario ahead of the federal government, as well as many other provincial governments, in this regard. On the other hand, Ontario clearly lags behind BC, Alberta and Quebec, as Ontario still has not issued any formal instructions to the province’s officials that the three key Supreme Court judgments over the past two years on this topic do in fact bind the Ontario government. Further, Ontario has not provided even preliminary directions as to how to achieve this requirement. Obviously, departments are being advised internally to consult their Legal Services Branch to obtain guidance on how to deal with specific cases. This is not, however, a substitute for a government-wide position. The government has also not mandated OSAA, the Attorney General’s Department or anyone else to co-ordinate the overlapping activities among departments. Furthermore, the issue of financial and human resources to enable First Nations and Metis communities to engage effectively in any specific consultation process, is only mentioned in passing as an issue that a proponent department will need to consider.
This is a somewhat belated beginning, but at least it does present a foundation on which to build. The Ipperwash Inquiry has indicated its intention to comment on this discussion paper in its final report. The views of Justice Sidney Linden in this regard will no doubt prove to be enlightening and may galvanize a greater sense of urgency.
* Bradford W. Morse is a Professor of Law at the University of Ottawa who has worked as a negotiator, scholar and policy maker on Aboriginal legal issues for over 30 years. Brad can be reached at bmorse@uottawa.caor (613) 562-5800 ext 3008.
National Class Action Settlement: A Brief Progress Report Eugene Meehan Q.C.* Introduction: biggest in Canada, possibly biggest globally
The legal work to come to a National Residential School Settlement has taken more than a decade, depending on when you start counting.
The Settlement covers both individual actions and class actions across Canada, throughout nine jurisdictions. Certification and approval of the Settlement is currently being “argued” in each of the nine jurisdictions at this time1 with a view to a national court-approved joint settlement. Much time, effort, perspiration and midnight oil has gone into this case on all sides. Even since the Agreement in Principle being reached last fall, the Settlement Agreement has gone through twenty-seven drafts before coming to the present final draft currently before the Courts.
Lead counsel for the Merchant Law Group is Anthony Merchant Q.C. (Merchant Law Group, Saskatchewan) and lead counsel for the Baxter National Consortium is Kirk Baert (Koskie Minsky, Toronto).2
Kirk Baert has indicated to the Courts that this class action settlement is certainly the biggest in Canada – possibly in North America and possibly globally. The uncontroverted affidavit evidence before the Courts was that the total amount of the complete package (including funds not going directly to victims, but going to such matters as healing, commemoration, federal government administration) is in the $4-5 billion dollar range.
Main components of the Settlement
The following are the main components of the Settlement:
Common Experience Payment (i.e. if the claimant attended a federally-recognized aboriginal residential school): $1.9 billion, survivors being entitled to the same compensation without proof of personal damage or injury on the basis of their years of attendance ($10,000 for the first year and $3,000 for each subsequent year at residential school)
Healing fund (to support psychological and culturally appropriate healing mechanisms): $125 million
Truth and Reconciliation (to permit alleged abusers to come forward and meet with victims): $60 million
Monuments (to allow visible recognition of damage done by some residential schooling) : $20 million
Independent Assessment Process: no specific amount is estimated, the number and extent of future claims is difficult to predict, but most counsel believe this figure would be in the range of $1-2 billion with this compensation based on individual assessment of a claimant’s injuries and consequences of attending residential school.
Key date: May 20, 2005
The Federal Representative, the Honourable Frank Iacobucci Q.C. (former Justice of the Supreme Court of Canada) was appointed on May 30, 2005. This date has been adopted as the date by which surviving claimants become eligible to qualify for the Common Experience Payment.
Legal fees: high risk, fair compensation
Most of the lawyers and law firms involved in this case, whose perseverance, professionalism and commitment (and at great financial and professional risk) was necessary to bring these negotiations to its conclusion, have contingency agreements with clients in the range of 30% of recovery, which they have agreed to give up in favour of a fixed fee for a Common Experience Payment for their clients. Should the Baxter National Consortium and the Merchant Law Group each receive $40 million and independent counsel $20 million, as requested in the Court application, their fee drops to 5% of the Common Experience Payment. Based on a total recovery of $4 billion, the lawyers’ fee drops to 2.5% and if $5 billion, down to 2%.
To speak plainly, how risky was it? Well, no one else took the risk and did not take the work. Many law firms across Canada, and individual lawyers, could have issued class actions and taken individual claims, but only these individual law firms and only these individual lawyers did. If they had not, and had not stuck with that risk over a decade, there would be no Settlement and no effective remedy for many of these victims – and at the government’s current pace, the present review-of-claims-process is estimated to take 53 years; with the new independent review process, it is estimated it will be completed within 5 years.
The total estimated number of aboriginal claims is in the 75,000 to 80,000 range.
All nine jurisdictions are being asked to approve the Settlement Agreement, including legal fees.
Urgency: diminishing group of claimants
There are 14,000 members of the class who are more than 65 years old. These claimants are dying at a rate of approximately five or six a day. Since the 2001 Census, the number of claimants has dropped by approximately 6,000. Two individuals in excess of 90 years of age have been examined for discovery (at the government’s request), one de bene esse.
The urgency is important too because it is not the job of the lawyers to attend clients’ funerals – yet they do. It is a tough thing for a lawyer to go to the funeral of a client before their file is resolved, with that very real person dying, not knowing whether matters are resolved, and their lawyer having to tell surviving family members: “I’m sorry the justice system moved too slowly to give you the family, or your loved one, access to that justice.”
Lawyers are gladiators for justice
Do I, simply because I am a lawyer, think that all lawyers everywhere on every file in every area of law do a great job and every single one of them are gladiators for justice? No.
Not every lawyer is a perfect lawyer, just as not every dentist is a perfect dentist (a few years ago my dentist almost pulled the wrong tooth, and when I insisted he double check my chart – even though I was half-loopy with Demerol – he double checked, and sure enough I was right, and the wrong tooth was not pulled).
But the bottom line is that rose-coloured glasses and hindsight make everything crisper and clearer: as the lawyers in this case slogged their way up Everest, other interested observers may have sat back at Base Camp with binoculars and brandy. And when the lawyers came down off the mountain, some say ‘that couldn’t have been so bad, you got down OK didn’t you?’
But the reality is:
not everyone came back – there are bodies still up there on either side of the trail, both clients and lawyers
not everyone has all of their digits intact – there are digits up on the trail too
not everyone has a marriage left
not everyone has the law practice they had before all this legal work started
not everyone has the money to fly back home and get out of Base Camp: solvency is an issue for some, and insolvency has been an unwanted obligation.
Life ain’t perfect and neither is any settlement – that is why it is a settlement. One would be whistling for a long time in the dark waiting for perfection in an imperfect world, but the reality is that actual victims, real clients, have been beaten, bruised and bloodied – literally, and been treated unjustly. They could have gone away, but they did not, and they came back to the courts to ask for justice. They deserve fairness. Their lawyers too, have often times been beaten, bruised and bloodied and they deserve fair treatment as well. Just as the aboriginal victims deserve full and fair treatment, their legal representatives who advocated and litigated to get them to this Settlement, deserve full and fair treatment as well.
Conclusion: dying to get this Agreement approved
I’ll close with the last words I used in the Saskatchewan Court of Queen’s Bench hearings on this Settlement, on September 21, 2006:
“With five or six claimants dying a day, people are literally dying to get this Settlement Agreement approved, all of it approved. Let this Settlement Agreement be approved – all of it.
Let those who have died, rest in peace, let those alive today, find their peace – through the courts of justice of Canada, dispensing just that, justice. Tatamien.”
* Eugene Meehan Q.C. is Chair of the Supreme Court of Canada Practice Group at Lang Michener, Ottawa.
He can be reached atemeehan@langmichener.ca.
Editor’s note: Eugene Meehan Q.C. is co-counsel on the Plaintiff-side on the National Class Action Settlement, assisted (together with many other counsel) during the negotiations, and appeared before the Saskatchewan Court of Queen’s Bench September 18-21, 2006, in Regina. Mr. Meehan was also co-counsel with Mr. Merchant Q.C. in the S.C.C. decision H.L. v. Canada, [2005] 1 S.C.R. 401.
1 Time of writing, October 8, 2006. 2 The two principal lawyers in the Baxter National Consortium being Jon Faulds Q.C. (Field, Edmonton), and Craig Brown (Thomson Rogers, Toronto). Merchant Law Group is a Western Canada law firm, and National Consortium is a group of plaintiff-side law firms.
Whitefish Lake Appeal to be Heard in January 2007 John Rowinski* In the summer of 1886, the members of the Whitefish Lake First Nation surrendered to the Crown the rights to harvest timber on its Reserve, located southwest of Sudbury, Ontario. In the autumn of the same year, the Crown sold those rights for $4 per square mile, or $316 in total. The timber licence for Whitefish Lake was sold to a political ‘ally’ of the governing party of the day, partly in satisfaction of a debt owed by the federal government to the purchaser.
The timber licence was sold without the benefit of professional valuation of the available timber, a competitive sale process such as an auction or even negotiation aimed at establishing fair market value.
The same timber licence was re-sold twice between November 1886 and June 1887. Reports in the popular press and lumber industry journals, at the time, suggested that the re-sale prices ranged between $40,000 and $55,000. By 1901, all of the merchantable pine timber on the Whitefish Lake Reserve had been harvested: some 50 million board feet of timber.
In 1995, Whitefish Lake commenced a specific claim in relation to the Crown’s improvident sale of the timber licence. When the specific claim failed to advance in any way for nearly seven full years, the Band sued the Crown for, among other things, breach of the Robinson-Huron Treaty and breach of fiduciary duty. In the summer of 2004, the Ontario Superior Court heard a motion for partial summary judgment brought by the Band on the issue of liability only.
The motion was settled after three days of argument, on the basis that the Crown would waive ‘technical’ defences to the action and acknowledge its fiduciary duty to Whitefish Lake. Ultimately, the Crown obtained an expert report, which showed that, at a minimum, the value of the licence was 40 times the $316 received by Whitefish Lake. As such, the Crown had no choice but to admit that it had breached its fiduciary obligation to sell the surrendered timber rights “for the sole benefit, and to the best advantage” of Whitefish Lake as required by the Treaty. The Crown’s admission on the issue of liability was delivered a few days before the commencement of trial, which was scheduled for November 2005.
Given the Crown’s admission of breach of fiduciary duty, the two outstanding issues for determination at trial were the:
fair market value of the licence in 1886: this ranged from the Crown’s $12,000 to the Band’s $50,0000 to $55,000, and
amount of damages to be awarded for the Crown’s admitted breach of fiduciary duty.
Whitefish Lake’s Position on Damages
Whitefish Lake took the position that it ought to be compensated in the form of equitable damages; that is, by the award of damages for the lost use of money that the Crown admitted it ought to have received for the Band in 1886.
Numerous cases have held that the court’s obligation is to assume the “highest and best use” of money, assets or opportunity lost as a result of a breach of trust or fiduciary duty. Based on that principle, the Band argued in favour of a Band Trust Account model to assess its claim for equitable compensation against the Crown, based on the following:
the money received would actually be deposited into the trust account and, in fact, the $316 that was received was deposited into the account
the account represented a secure investment which accrued interest at a rate that was comparable, and sometimes more favourable, than the bond market, therefore earning a conservative but nonetheless reasonable return on money. In other words, the trust account represented the best of all worlds: the money was growing, the principal was secure and the investment retained the liquidity of a bank account
there is no other reasonable method to measure the actual lost use of money over time. The evidence was that the Band requested money over the years for things such as medicine, food, steel, farming and building implements, better clothing, books for school, other educational resources, and materials for infrastructure. Most such requests were denied by the government based on a lack of available funds, a problem that would have been at least partially solved by a provident sale of the timber licence in 1886 since it would have resulted in money being invested and earning returns in the trust account, and
since the account earns compound interest, it captures the time value of money by addressing risk, opportunity cost and the erosion of purchasing power (inflation).
On the Band’s model, had the $50,000 been deposited into the Band Trust Account in 1886 and allowed to remain in the account untouched until the date of trial, the account would have had approximately $40 million.
Whitefish Lake’s request at trial was that the Trial Judge use $40 million as his starting point and ‘adjust’ that amount in a principled way, as he had the discretion to do, in determining the appropriate award of damages.
The Crown’s Position on Damages
The Crown took the position that Whitefish Lake’s proposed method of assessing damages amounted, notwithstanding the Band’s clear position at trial that it was seeking an equitable remedy to an equitable claim, to a request for compound pre-judgment interest.
The Crown argued that pre-judgment interest could not be awarded against the Crown prior to 1992 pursuant to s.31(6) of the Crown Liability and Proceedings Act, and that only simple pre-judgment interest could be awarded thereafter.
Although the Crown put forward several alternative damage assessment theories, the Crown argued that the most appropriate method of determining damages was to assess the value of the 1886 loss in 1992 dollars based on inflation, and to award simple interest on that amount from 1992 to the date of trial. Based on the Crown’s proposed method of assessing damages, the Whitefish Lake’s damage award would have been $554,880, a drastically lower amount than the $40 million under the Band’s Band Trust Account model.
The Decision
The trial was heard by Justice Blenus Wright over parts of six days. In addition to oral history evidence called by Whitefish Lake, both sides tendered expert evidence on the fair market value of the timber licence in 1886 and on the most accurate measure and calculation of damages as of the trial date. At the trial judge’s request, closing arguments for both sides were made in the form of extensive written submissions.
In brief reasons for judgment in Whitefish Lake Band of Indians v. Attorney General of Canada, released on January 24, 2006, Justice Wright held that the value of the licence in 1886 was $31,600. This value was determined based on evidence of comparable contemporaneous timber licence sales in the same geographic region as Whitefish Lake. The trial judge rejected the Crown’s submission that the value of the licence should be determined based on a weighted average of comparable sale prices, and instead based the value on the highest comparable sale price, being $400 per square mile.
Justice Wright rejected Whitefish Lake’s use of the Band Trust Account model of equitable damage assessment for the reasons put forth by the Crown. He instead accepted the Crown’s theory that damages ought to be assessed based on the combination of the inflationary increase in the value of a dollar to 1992, plus simple pre-judgment interest from 1992 to the date of trial. Using calculations provided by a Crown expert, Justice Wright awarded damages to Whitefish Lake in the amount of $1.1 million.
The Band appealed the trial decision on both the value of the licence and amount of damages. The Crown has cross-appealed Justice Wright’s assessment of the 1886 value of the licence. The hearing before the Ontario Court of Appeal is scheduled for January 8 and 9, 2007.
Needless to say, the Court of Appeal’s ruling on the issue of damage assessment for breach of fiduciary duty by the Crown will have a substantial impact. The issue affects every existing and future Aboriginal claim for breach of fiduciary duty. The Crown has already raised Justice Wright’s decision in the context of both litigation and claims negotiation with First Nations across the country. Stakeholders will no doubt be watching closely for the Court of Appeal’s decision.
* John Rowinski is a lawyer with Torkin Manes Cohen Arbus LLP in Toronto practising in the areas of Aboriginal Law and professional negligence. John is co-counsel to Whitefish Lake. He is the Chair of the Aboriginal Law Section of the OBA. John can be reached at jrowinski@torkinmanes.com.
Volume 12, No. 1 - December/Décembre 2006 
Welcome to the Fall 2006 OBA Aboriginal Law Section Newsletter, which we are sure you will find interesting and informative. As always, we hope that we can continue to increase the number and variety of contributors to our newsletters to help us better serve our membership. If you would like to make a contribution to our next issue, please contact our Editor, Annie Thuan at 
Background
Introduction: biggest in Canada, possibly biggest globally