Previously published in Law360 Canada (April 11, 2025, 10:41 AM EDT).
In a recent ruling, the Ontario Court of Appeal upheld a lower court's decision in Chippewas of Saugeen First Nation v. South Bruce Peninsula (Town), [2024] O.J. No. 5607, a case that addresses key issues in the interpretation and application of Indigenous treaties. This decision examines important legal principles regarding treaty interpretation and the rights of landowners. Here's a closer look at the case and its key takeaways.
Background
The case arose from a dispute between Chippewas of Saugeen First Nation and several defendants including the Town of South Bruce Peninsula, private landowners, and both the provincial and federal governments. The dispute centres around the interpretation of Treaty 72 of 1854 and the boundaries of the Saugeen Indian Reserve No. 29, specially a 1.4-mile strip of coastline (disputed beach), which the Saugeen claimed was improperly excluded from their reserve. The Saugeen claim that a portion of their coastline was excluded due to a surveying error by Charles Rankin in 1855, breaching the Crown's fiduciary duties and the honour of the Crown.
The Saugeen consistently objected to the boundary over the last century with their earliest documented complaint made in 1877. Saugeen sought a declaration that the excluded coastline is part of the reserve and that no third parties have any interest in the disputed beach. Unlike the town, province and private landowners, Canada supported the conclusion that the disputed beach was part of reserve land, although it had a differing opinion on the underlying facts and the secondary issues.
The lower court ruled in favour of the Saugeen, declaring that the disputed beach was part of the reserve and that the Crown breached its fiduciary duties. Further, the bona fide purchaser defence did not apply to the private landowners and their land would be returned to the Saugeen. The defendants then appealed, arguing that the trial judge misinterpreted the treaty, misapprehended the bona fide purchases defence and erred by dispossessing landowners as a remedy for the Crown's breach.
The Court of Appeal's decision
The Court of Appeal for Ontario dismissed the appeals, upheld the trial judge's decision and found no error in the lower court's conclusions regarding the disputed beach. It did allow Canada's cross appeal regarding pre-Confederation liability and referred it back to the trial court. In dismissing the appeals, the court addressed several key issues:
Principles of treaty interpretation: Ontario argued that the trial judge made errors in treaty interpretation, primarily that the trial judge erred by choosing an interpretation that favours the Saugeen rather than choosing an interpretation that best reconciles the interests of both parties, and that the trial judge gave excessive weight to the Treaty text. The Court of Appeal rejected both arguments. The decision explained that courts when interpreting a treaty must consider both the words of the treaty and the historical and cultural context. The court found that the trial judge looked for the common intention of both parties, which at the time was that the Saugeen wanted to retain coastline for fishing and the Crown wanted to secure land bordering the Sauble River to build a mill. The court affirmed that the principles of treaty interpretation from Justice Beverley McLachlin's dissent in R. v. Marshall, [1999] 3 S.C.R. 456 adopted into law in Ontario (Attorney General) v. Restoule, [2024] S.C.J. No. 27, and that the trial judge did not err by using them.
Factual errors: Ontario alleged that the trial judge made factual errors in her analysis of the cultural and historical record. The decision reaffirmed that trial judges do not need to expressly refer to every piece of evidence in their reasons. The court found that all findings made by the judge were open to be made and there was no basis to disturb the factual findings.
Bona fide purchaser defence: The Court of Appeal found that the trial judge erred when she found that the private owners inherited the properties and therefore could not avail themselves of the bona fide purchaser defence; however, the court found that the defence was not absolute and found no basis to interfere with the trial judge's decision not to apply the defence. The court referred to its finding in Chippewas of Sarnia that treaty claims and the rights of innocent purchasers should be considered on a case-by-case basis. Chippewas of Sarnia was distinguished in that case the court had found that the First Nation had accepted the terms of the land surrender, which was not the case here. The court reaffirmed that reserve lands are not fungible commodities that can be easily replaced and that holding the defence as absolute would be inconsistent with the decision in Chippewas of Sarnia, the unique nature of Indigenous land interests and reconciliation.
Key takeaways
This ruling underscores several important legal principles:
- Treaty interpretation: The court affirmed that interpreting a treaty must consider both the words of the treaty and the historical and cultural context; and the principles in McLachlin's dissent in R v. Marshall have been adopted as law.
- The rights of private citizens when the Crown breaches its duties: The bona fide purchaser defence is not absolute, and the court will decide on a case-by-case basis whether an innocent third party may be dispossessed of their land due to the historical wrongs of the Crown.
Ultimately, the Court of Appeal's decision in Chippewas of Saugeen First Nation v. South Bruce Peninsula (Town) serves as an important precedent in Indigenous treaty interpretation, emphasizing Indigenous perspectives and the honour of the Crown. It highlights the complexities of reconciling historical treaties with modern legal principles. This case will proceed to Phase 2 at the trial court level to address remaining issues including the allocation of liability between the provincial and federal governments.
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