Action for breach of fiduciary duties and treaty obligations was not certified

Federal court | Civil Procedure


Action for breach of fiduciary duties and treaty obligations was not certified

Between 1871 and 1921 Canada negotiated 11 treaties with various First Nations. Treaties provided Canada with large tracts of land in exchange for promises made to First Nations. Canada agreed to pay annual annuity to each member of Treaty Bands. In 1875 amount of annuity payments in first two treaties was increased from $3 per person to $5 per person. Plaintiffs alleged that Canada had not adjusted amount of annuity payments in any of treaties since that time and, as result, annuity payments had been reduced in value to point that they no longer contributed to welfare of individual recipients. Plaintiffs claimed that provisions in treaties that provided for annuity payments entitled recipients to amount that was to be annually adjusted to reflect inflation and changes in purchasing power in order to maintain value that was equal to its buying power at time treaty was made. Plaintiffs claimed Canada was in breach of obligations under treaties and its fiduciary duties and sought damages and compensation in amount equal to present value of losses sustained by individual beneficiaries as result of Canada’s failure to adjust annuity payments over time. Plaintiffs brought motion to certify action as class proceeding. Motion dismissed. Plaintiffs pleaded two causes of action, breach of treaty obligations and breach of fiduciary duty. It was not plain and obvious that plaintiffs had no standing such that claim could not succeed as class action. It was not plain and obvious that pleadings did not disclose reasonable cause of action for breach of treaty if it was intention of parties at time treaties were signed that annuity would provide certain level of comfort to Indians and adjustment clause was not negotiated because parties did not foresee that purchasing power of annuity might be significantly eroded. It was not plain and obvious that pleadings did not disclose reasonable cause of action for breach of fiduciary duty to beneficiaries of annuity payments. Pleadings disclosed reasonable cause of action. There was identifiable class of two or more persons. However, plaintiffs failed to establish that there were common issues or facts that related to all individual members of proposed class, given differences in treaties. Treaty interpretation was fact driven and must be done on treaty-by-treaty basis. Representative action might be more appropriate procedure. Neither plaintiff was appropriate representative.
Horse Lake First Nation v. R. (Oct. 15, 2015, F.C., Russel W. Zinn J., File No. T-1784-12) 260 A.C.W.S. (3d) 221.

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