Chippewas of Saugeen First Nation v. South Bruce Peninsula (Town), 2024 ONCA 884
On December 9, 2024, the Ontario Court of Appeal (ONCA) issued its decision in Chippewas of Saugeen First Nation v. South Bruce Peninsula (Town) (the Saugeen ONCA Decision).1
As detailed below, the Saugeen ONCA Decision affirms the holding in the trial decision (the Trial Decision) that the constitutionally-protected interest of the Chippewas of Saugeen First Nation (the Saugeen) in its unceded reserve lands can displace the fee simple rights of certain private landowners.2 In addition, the Saugeen ONCA Decision:
- reiterates and further clarifies Supreme Court of Canada (SCC) guidance on historic treaty interpretation; and
- touches on a novel and unresolved constitutional issue regarding the allocation of liability for pre-Confederation breaches of Aboriginal rights, referring this issue back to the trial court for determination in the second phase of the litigation (Phase 2).
Facts
The Imperial Crown signed Treaty No. 72 (the Treaty) in 1854 with several First Nations, including the Saugeen. Under the Treaty, the Saugeen surrendered all of its territory except for two reserves.
The Saugeen ONCA Decision concerns the beach at the north end of the Saugeen's Indian Reserve 29 (IR 29), referred to as Chi-Gmiinh or Sauble Beach (the Disputed Beach), and whether the parties intended for the Disputed Beach to form part of IR 29 under the Treaty. The Disputed Beach was originally excluded from the Saugeen's reserve by the Provincial Land Surveyor at the time the boundaries of the reserves were marked. The Imperial Crown later issued Crown patents for the lots along the Disputed Beach, which eventually came into the possession of the Town of South Bruce Peninsula (the Town) and certain private landowners in fee simple.
The Saugeen brought an action against Canada, Ontario, the Town, and the private landowners seeking various declarations, particularly that (i) the Disputed Beach is part of IR 29, (ii) the Crown breached its fiduciary duty and acted in a manner inconsistent with the honour of the Crown by failing to reserve the Disputed Beach for the Saugeen, and (iii) the Saugeen are entitled to exclusive possession of the Disputed Beach.
Trial Decision
The trial judge applied principles of historic treaty interpretation and found that the common intention of the parties under the Treaty was to include the Disputed Beach as part of IR 29. The trial judge held that the Crown acted in a manner contrary to the honour of the Crown and breached its fiduciary duties to the Saugeen by not ensuring that the reserve lands were properly surveyed and failing to protect and preserve the Saugeen's reserve entitlement.
The trial judge also held that the Saugeen's interest in its unceded reserve lands was not extinguished by the Crown patents, nor was its claim to the Disputed Beach barred by the doctrine of laches or statutory limitations. In response to the Saugeen's claim for the return of the Disputed Beach, the private landowners advanced the defence of bona fide purchasers for value, but the Trial Decision held that this defence did not apply since the private landowners had inherited their lands. In any case, the Trial Decision concluded that the principle of reconciliation rendered the strict application of this defence inequitable, as such an application would defeat the Saugeen's constitutionally-protected interests in and spiritual connection to the Disputed Beach.
The Saugeen ONCA Decision
The ONCA dismissed all the appeals, except for the cross-appeal brought by Canada on the issue of the Crown's pre-Confederation liability, which the ONCA allowed. In summary, the ONCA held:
- The bona fide purchaser defence is not absolute: The trial judge erred in finding that the bona fide purchaser for value defence is inapplicable to those that inherit land. However, the ONCA agreed with the trial judge's holding that this defence is not absolute, and declined to interfere with the Trial Decision on the basis that the strict application of this defence – in the particular circumstances of this case – should not operate so as to defeat the Saugeen's otherwise unceded and constitutionally protected interest in its reserve lands.
- The trial judge did not err in interpreting the treaty: The trial judge had applied the correct legal test for the interpretation of historic treaties, and had not made any palpable and overriding factual errors.
- The trial judge denied procedural fairness by deciding on a constitutional issue without submissions from Canada and Ontario: The trial judge's determination that only Canada holds pre-Confederation liability was set aside for Phase 2.
Bona Fide Purchaser Defence
Although the ONCA held that the trial judge had erred in concluding that the bona fide purchaser for value defence is not available to those who have inherited lands,3 the ONCA noted that this defence is not absolute and that "[t]here is no principled reason that a treaty-protected reserve interest of a First Nation should, in every case, give way to the property interest of a private purchaser, even an innocent, good faith purchaser for valuable consideration."4 The ONCA thus found "no basis to interfere" with the trial judge's discretionary decision to not apply the defence.5 In doing so, the ONCA stated the following:
- reconciling Aboriginal title and treaty claims with the rights of innocent purchasers should be considered on a "case-by-case basis";6
- there may be circumstances where the denial of the Aboriginal right is substantial or egregious and the rigid application of the "good faith purchaser for value defence" would constitute an unwarranted denial of a fundamental right;7
- due to the sui generis nature of a First Nation's interest in reserve land, the doctrinal rules of property law do not necessarily apply without modification;8 and
- when this sui generis interest is competing against later acquired rights "it is incumbent on the court to weigh the equities and specifically to consider the conscionability of upholding the legal rights of the bona fide purchaser in the circumstances."9
In declining to invoke the bona fide purchaser for value defence, the ONCA emphasized "how significantly the competing interests in Chippewas of Sarnia, where the equities clearly favoured the private landowners, differ from those in the present case."10 In particular, the ONCA noted that:
- the private landowners' "attachment to their properties is largely rooted in their cottages," located across the street from the Disputed Beach;
- the decision would not alter the private landowners' rights to their cottages;
- the portions of these lots located on the Disputed Beach – which portions were subject to the declaration issued by the trial judge – were used by the private landowners as parking lots for tourists, and were thus primarily commercial in nature; and
- the private landowners would not be left without a remedy, as their claims for compensation will be determined in Phase 2 of the trial.11
Against these interests, the ONCA weighed the Saugeen's "constitutionally protected treaty right to exclusive possession of its reserve territory," and "cultural connection...[to] the land and water, which is sacred."12 After balancing the competing rights of the private landowners and the Saugeen, the ONCA agreed with and upheld the conclusion of the trial judge: "[t]he constitutionally-protected, spiritual connection of Saugeen to its unceded Reserve land outweighs the commercial interests of the [private landowners]."13
Treaty Interpretation
The ONCA held that the trial judge correctly applied the following two-step treaty interpretation process outlined in McLachlin J.'s dissent in Marshall, which was recently endorsed by the SCC in Restoule:14
- Step one: the words of the treaty clause at issue should be examined to determine their meaning, in so far as this can be ascertained. This exercise will lead to one or more possible interpretations and the objective, at this stage, is to develop a preliminary framework for an inquiry and analysis of the historical context;
- Step two: the wording of the treaty right must be considered against the treaty's historical and cultural backdrop, and the court must determine the interpretation that comes the closest to reflecting the parties' common intentions.15
Importantly, the ONCA rejected Ontario's argument that these principles, articulated by McLachlin J. in dissent in Marshall "do not reflect the law", noting the SCC's reliance on and affirmation of these principles in Restoule.16 In sum, the ONCA held that the trial judge "applied the correct legal principles" of treaty interpretation, had not given "undue weight to the text of the Treaty over the cultural and historical context,"17 and had not made any palpable and overriding factual errors in determining the intended boundaries of the Reserve.18
Pre-Confederation Crown Liability
Notably, the ONCA characterized the allocation of pre-Confederation liability between the federal and provincial Crown defendants as a "matter of constitutional significance"19 and made the following observations:
- it does not necessarily follow that because Canada has been held responsible for post-Confederation breaches it must also be responsible for the acts of Imperial Crown officials;
- although after Confederation, Canadian officials failed to recognize the Saugeen's reserve interest in the Disputed Beach, it does not necessarily follow that Ontario is entirely free from responsibility for the breaches of the Imperial Crown;
- neither Ontario nor Canada committed the initial breaches, agents of the Imperial Crown did; and
- Canada and Ontario were entitled to make submissions about how liability should be apportioned for acts committed before either Canada or Ontario existed.20
The ONCA held that the trial judge's conclusion that "liability rests squarely with Canada and not with Ontario at all" – without informing the parties of this intention or inviting submissions on this issue – was a breach of procedural fairness, and referred the issue back to the trial court for determination in Phase 2.21
Key Takeaways
The Saugeen ONCA Decision provides several important takeaways in relation to historic treaty interpretation, balancing Aboriginal and non-Aboriginal interests, and Crown liability, including:
- it represents the first instance in which the bona fide purchaser for value defence has been defeated by an Aboriginal interest in reserve lands;
- it holds that constitutionally protected and sui generis Aboriginal interests in reserve land will not automatically give way to private property interests in every case, as doctrinal rules of property law do not necessarily apply without modification in this context;22
- it affirms the two-step process of treaty interpretation, first articulated by McLachlin J. in her dissent in Marshall, and provides clarity on how trial judges should apply these principles; and
- it touches on an unresolved and constitutionally significant issue regarding the proper allocation and apportionment of pre-Confederation liability, referring it back to the trial judge for determination in Phase 2.
Footnotes
1. Chippewas of Saugeen First Nation v Town of South Bruce Peninsula (Town), 2024 ONCA 884 [Saugeen ONCA Decision].
2. Chippewas of Saugeen First Nation v Town of South Bruce Peninsula et al, 2023 ONSC 2056 [Trial Decision].
3. Saugeen ONCA Decision at para 230.
4. Saugeen ONCA Decision at para 241.
5. Saugeen ONCA Decision at para 229.
6. Saugeen ONCA Decision at para 236-238.
7. Saugeen ONCA Decision at para 236, citing Chippewas of Sarnia Band v Canada (AG), 2000 CanLII 16991 (ONCA) at para 309 [Chippewas of Sarnia].
8. Saugeen ONCA Decision at para 239.
9. Saugeen ONCA Decision at para 239.
10. Saugeen ONCA Decision at para 240. See also Chippewas of Sarnia, wherein the ONCA applied the bona fide purchaser defence to preclude the Chippewas from asserting their claim against private landowners.
11. Saugeen ONCA Decision at paras 240—242.
12. Saugeen ONCA Decision at para 240, citing Trial Decision at para 593 and 595.
13. Saugeen ONCA Decision at para 240.
14. Ontario (Attorney General) v Restoule, 2024 SCC 27 at para 80.
15. Saugeen ONCA Decision at para 80, citing R v Marshall, [1999] 3 SCR 456 at paras 82—83.
16. Saugeen ONCA Decision at para 99-100.
17. Saugeen ONCA Decision at paras 98-114.
18. Saugeen ONCA Decision at para 117.
19. Saugeen ONCA Decision at para 262.
20. Saugeen ONCA Decision at para 268.
21. Saugeen ONCA Decision at para 269.
22. Saugeen ONCA Decision at paras 239 and 241.
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