Canada: Blood Indian Band v. Canadian Pacific Railway Limited, 2017 ABQB 292, Alberta Court Of Queen's Bench (Strekaf J.), 28 April 2017

The Alberta Court of Queen's Bench summarily dismissed various claims made by the Blood Indian Band against Canada and the Canadian Pacific Railway Limited on the basis that they were statute-barred by provincial limitations legislation. The claims related to damages for breach of fiduciary duty, and claims for an accounting, arising from the historic taking of reserve lands for railway purposes. The Court rejected the Band's constitutional argument that the provincial limitations legislation was inapplicable.

The Blood Indian Band (also known as the Kainaiwa or Blood Tribe) is an adherent to Treaty 7. In February 1999, the Band commenced a Federal Court action against Canada in regards to three parcels of land taken from Blood Indian Reserve No. 148 and transferred to predecessors of the Canadian Pacific Railway Company (CP Rail). The lands were taken in 1898, 1903, and 1928 for railway purposes – specifically, lines in southwestern Alberta, and lands for the station grounds at Cardston.

Based upon an agreement between the parties, the Federal Court action was discontinued, and a new claim was commenced in the Alberta Court of Queen's Bench in October 2002. Other defendants named in the litigation included CP Rail and Encana.

The claim relating to the 1898 appropriation was dismissed by court order in 2016. In regards to the remaining lands, the Band alleges that Canada breached its fiduciary duty when granting the rights-of-way, and failing to ensure that interests in the lands reverted for the Band's interest. There were also claims for compensation and a declaration that Canada failed to consult them. The Band alleged that they had been deprived of the use, occupation, possession and ownership of the lands, and have been denied the revenues generated from the lands. Further, the Band claimed that the expropriated lands formed part of the Reserve, and sought damages for environmental damage and other loss.

Canada and CP Rail applied for summary dismissal of some of the Band's claims on the basis that they were statute-barred by limitations legislation. This application pertains to the Band's claims relating to the initial taking of the Reserve lands. The defendants conceded that certain claims, such as those pertaining to declaratory relief, must go to trial (an 11-week trial is set for February 2018). In response, the Band filed a Notice of Constitutional Question in which they seek a declaration that the provincial limitations legislation is not applicable to their claims.

Strekaf J. (now a justice of the Alberta Court of Appeal) reviewed the evidence concerning the lands taken in 1903 and 1928. Canada appropriated 69.4 acres in 1903 for a line between Stand Off and Cardston, and for the station grounds at Cardston (the 1903 Lands). In 1928, Canada appropriated 278.5 acres from the Reserve for a line between Cardston and Glenwood, as well as to add to the station grounds at Cardston (the 1928 Lands). CP Rail is the current registered owner of these lands, except for one portion of the 1903 Lands (known as Block B) which was transferred back to Canada in 1928 and later added to the Reserve in December 1969. Operation of the 1928 line was discontinued in December 1979, and the 1903 line was later discontinued in 2000. Portions of the Cardston station grounds have been leased to third parties (for non¬railway purposes) since at least 1969.

The Band, since the 1890s, has expressed dissatisfaction about the use of Reserve lands for railway purposes. When the Town of Cardston proposed annexation of some of the lands in 1969, the Band expressed concern that CP Rail owned the lands. In 1978, the Chief of the Band wrote to Canada stating that the issue of the Cardston right-of-way and grounds was "still unsettled", noting that the lands were taken without the Band's consent. He stated that the Band's position was that the lands should be reacquired once they are no longer being used by CP Rail.

The Band and Canada created a task force which issued a report on these issues in August 1982. In regards to the 1928 Lands, which were no longer being used for railway purposes by this time, the task force recommended that they be reconveyed to the Band. The report referred to an agreement for the "gifting back" of these lands to Canada as trustee for the Band. The task force also recommended that the station grounds be gifted back to Canada for the benefit of the Band, or otherwise revert to the Crown. At the time of this report, the 1903 Lands were still being used for railway purposes. The task force suggested that it would be desirable to obtain the acknowledgement of CP Rail that when the 1903 Lands are no longer used for railway purposes, they will revert to the Crown for the benefit of the Band. In the alternative, it may be necessary to pursue litigation and obtain a declaratory order.

Subsequent to the 1982 task force report, there were meetings between the Band and Canada. In August 1983, counsel for the Band wrote "it appears an action will have to be commenced" if the Band hopes to obtain the station grounds. In 1984, counsel for the Band again raised the prospect of litigation due to the slow pace of negotiations. Meanwhile, Canada continued to take steps with the "gifting agreement" for the right-of-way lands taken in 1928 (and no longer used for railway purposes). A draft of the agreement was sent by Canada to the Band in 1989. Negotiations about the gifting agreement ultimately "fell apart" in 1994.

The Court referred to the applicable test for summary judgment in Alberta. The applicants Canada and CP Rail had the onus of establishing that their defence is so compelling that the likelihood it will succeed is very high. Summary dismissal on the basis of a limitation defence does not mean that the underlying claim has no merit, but only that it was brought outside the prescribed period of time.

Strekaf J. referred to the Band's arguments about section 88 of the Indian Act, and how this provision does not relate to "lands reserved for the Indians". The Band submitted that section 88 does not referentially incorporate Alberta's limitation legislation as it relates to Indian land. Strekaf J. rejected the relevance of this submission:

Limitations legislation does not relate to the "use of" reserve lands. It is provincial legislation "relating to" when a defendant is entitled to defend against an action on the basis that the plaintiff should have brought the action earlier.

The Court held that provincial limitations legislation falls within the provinces' legislative jurisdiction over "property and civil rights" under section 92(13) of the Constitution Act, 1867. Further, it is "a law of general application", and applies by its own force (ex proprio vigore) to the Band. Strekaf J. also noted recent cases, such as Canada (Attorney General) v Lameman, 2008 SCC 14, which confirm that provincial limitations legislation applies to Aboriginal claims for personal remedies.

Canada sought dismissal of the Band's claims relating to the initial taking of the Reserve lands. For instance, Canada sought summary dismissal of claims relating to damages for breach of fiduciary duty, damages for breach of the duty to consult, and an accounting for lost income. Canada argued that the Band knew of these claims no later than the task force report in 1982.

Strekaf J. concluded that the claims against Canada at issue in this summary dismissal application are all premised on Canada breaching fiduciary duties owed to the Band. In consequence, the applicable limitation period is six years pursuant to section 4 of Alberta's 1980 Limitation of Actions Act. In regards to the accounting claim, the limitation period is "six years from the discovery of the action". Strekaf J. rejected the Band's argument that section 40 of the 1980 Act applies, which exempts claims by beneficiaries against a trustee from limitation defences. Section 40 only applies to express trusts, and therefore has no application here.

The determinative question is whether the Band had discovered, or ought to have discovered, these claims before February 1993. In regards to the initial taking of the lands in 1903 and 1928, the Band was well aware of the facts by at least 1978. Any claims relating to Block B was also known by the time that these lands were reconveyed to the Reserve in 1969. Accordingly, these claims were statute-barred.

In regards to the 1928 Lands used for the right-of-way, the Court rejected the application for summary dismissal. These lands were the subject of negotiations in the 1980s for a "gifting agreement", and correspondence continued until 1994. The Court held:

Given the foregoing, at least until early 1994 when the proposed Gifting Agreement fell apart, the Blood Tribe could reasonably have believed that Canada was discharging its fiduciary duty as regards the reconveyance of the 1928 Lands railway right-of-way.

In other words, Canada has not established that in February 1993 the Blood Tribe discovered or could have discovered the cause of action — breach of Canada's fiduciary duty in relation to its obligation to revert the lands back to Reserve status—by the exercise of reasonable diligence. At that time Canada was still in the process of negotiating the reversion of the 1928 Land's right-of-way and mineral rights to Reserve status, and it has not been established that any fiduciary breach had yet occurred and that the limitation period had commenced to run.

CP Rail applied for summary dismissal of the accounting claims against it. In the alternative, CP Rail submitted that claims prior to October 2000 (two years prior to the commencement of the action against it) were statute¬barred.

The Court held that the substance of the claims being made against CP Rail related to restitution and unjust enrichment. CP Rail did not owe any fiduciary duties to the Band, and there were no contractual relationships. Since the action against CP Rail was commenced in October 2002, the new Limitations Act applies. The Court rejected the Band's argument that no limitation period applies due to CP Rail being in adverse possession of Crown property. The doctrine of adverse possession does not arise on the facts. CP Rail is not estopped from bringing this limitation defence due to a previous denial about whether the lands were being used for railway purposes. The Court also rejected the Band's argument that CP Rail holds revenue earned from leases of the lands upon a constructive trust. A proprietary remedy is not appropriate, as there is nothing to suggest that a monetary remedy would be inadequate.

The accounting claim against CP Rail would require a disgorgement of the gains made by CP Rail by leasing or using the lands. The Band had knowledge by 1969, or at least 1982, that CP Rail was not using a portion of the station grounds for railway purposes, and was leasing the lands to third parties. The accounting claim is not a "continuing cause of action", as no express trust had been created. However, the Court held that the claim for unjust enrichment is ongoing, as payments derived from the leases constitute a repetitive action, not a single act with continuous effects. The Band's claim for an accounting for the period prior to October 2000 was dismissed as statute-barred, but the claim thereafter can proceed to trial.

At the end of the judgment, Strekaf J. turned to the Notice of Constitutional Question filed by the Band. Since the Court had concluded that certain claims against Canada and CP Rail should be summarily dismissed, it was necessary to consider the constitutional question. The defendants and Alberta (as intervenor) referred to decisions such as Lameman and Wewaykum Indian Band v. Canada, 2002 SCC 79 for the proposition that a claim involving personal remedies is subject to limitations legislation even if it involves Aboriginal land. The Band argued that these cases had been "overtaken" by the Manitoba Métis decision and the United Nations Declaration on the Rights of Indigenous Peoples, which marked a "significant development in the law and a change in circumstances fundamentally shifting the parameters of the debate on limitations periods applying to Aboriginal claims".

Strekaf J. reviewed the decision in Manitoba Métis and concluded that the Supreme Court of Canada did not intend to depart from the law as stated in Wewaykum and Lameman. These precedents are binding upon the Court. She stated:

The Supreme Court has definitively concluded that an action for monetary relief brought by those claiming Aboriginal title is subject to provincial limitations legislation.

The Court again rejected the relevance of section 88 of the Indian Act. No constitutional question therefore arises.

In summary, the Court allowed Canada's application for summary dismissal in regards to various damages and accounting claims relating to the initial taking of lands and Block B. Canada's application was dismissed in relation to the Band's claims for damages and an accounting in relation to the 1928 Lands right-of-way. The Court also summarily dismissed the accounting claims against CP Rail for period before October 2000.

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