T-138-88
Wendy Grant, Mary Charles, Howard E. Grant,
Susan A. Point, Myrtle McKay, Marilyn Point,
and Joseph Becker, suing on their own behalf and
on behalf of all other members of the Musqueam
Indian Band (Plaintiffs)
v.
Her Majesty the Queen in Right of Canada as
represented by the Minister of Indian and North
ern Affairs and the Shaughnessy Golf and Country
Club (Defendants)
INDEXED AS: MUSQUEAM INDIAN BAND V. CANADA (MINIS-
TER OF INDIAN AND NORTHERN AFFAIRS) (T. D.)
Trial Division, Joyal J.—Vancouver, November
29, 1989; Ottawa, January 18, 1990.
Practice — Pleadings — Motion to strike — Abuse of
process — Indians surrendering land to Crown — Crown
granting golf club long-term lease — Indians recovering $10
million judgment for breach of trust — Commencing new
action for declaration surrender void — Parties must advance
entire case, not perpetuate litigation by subsequent discovery
of new causes of action — No special circumstances to justify
exercise of discretion in Indians' favour.
Practice — Res judicata — Indians surrending land to
Crown — Recovering substantial judgment for breach of trust
— Commencing further action for declaration surrender void
— Motion to strike based on res judicata or issue estoppel —
Review and exposition of law — Whether or not case covered
by doctrine, may not proceed if abuse of process — No special
circumstances to justify exercise of judicial discretion permit
ting action to proceed.
In 1957, the Musqueam Indian Band surrendered 162 acres
of reserve land in Vancouver to the Crown which then granted
a long-term lease to the Shaughnessy Golf and Country Club.
In 1984, the Supreme Court of Canada reversed a decision of
the Federal Court of Appeal and restored a Trial Judge's
finding that in negotiating the lease on terms disadvantageous
to the Band, the Crown had committed a breach of trust and
awarded the Band $10 million in damages.
In the present action, the Band sought a declaration that the
original surrender and lease were void, or, in the alternative,
their rescission. Underlying the whole issue was the Band's
conviction that it had been unjustly and inequitably deprived of
its land and that its economic interests had been severely
prejudiced. The scenario conjured up included the Indians
being deprived of their reserve lands by intrigue for the benefit
of the selected members of a golf and country club.
This was a Rule 419 motion for an order striking out the
Band's statement of claim as redundant, vexatious and an
abuse of process. It was based on the doctrine of res judicata or
issue estoppel. The Crown suggested that the Court was asked
to entertain a claim which had already been fully adjudicated
and that the settled issue between the Band and the Crown
should not be resurrected under another guise. The Band had
ample opportunity to challenge the validity of the surrender
and subsequent lease, but chose to accept them as valid and to
claim damages for breach of trust. The Band had been success
ful and was awarded $10 million in damages. That should be a
conclusion of the matter.
Held, the motion should be allowed.
A review of the case law on motions to strike made it
apparent that the various strictures historically imposed on the
application of res judicata or estoppel seemed to be slowly
withering away. When estoppel is in doubt, courts will not
hesitate in staying an action on grounds of abuse of process,
and where respect for judicial pronouncements on estoppel
creates more obstacles than solutions, a simple case of abuse of
process may be found. The special circumstances of any given
case, however, are paramount and courts will choose to allow a
case to proceed where those circumstances are sufficiently
special to justify it.
The plaintiffs have concluded, four years after the Supreme
Court settled the issue, that the $10 million award was insuffi
cient, unfair, based on erroneous assumptions, and did not take
into consideration the current value of the acreage and what
might be expected as a reasonable annual return on it. The
conclusions of the Trial Judge as to breach of trust and
damages were confirmed by the Supreme Court and there was
no reason to hold a different view in these new proceedings.
The only issue before the Trial Judge was whether the Crown
had been guilty of breach of trust. That same issue was debated
before the Court of Appeal and the Supreme Court. The
validity of the surrender or of the lease was never raised.
Parties are expected to advance their whole case and should not
be allowed, except in special circumstances, to perpetuate the
dispute by subsequently discovering new grounds for action.
Otherwise, litigation would have no end until legal ingenuity
was exhausted. Whether or not a case falls within the doctrine
of res judicata or issue estoppel with all of its historical
refinements, it should not be allowed to proceed if to do so
would constitute an abuse of process. To allow the Band to
launch a rescission claim based on facts identical to those it
relied on earlier would constitute an abuse of process.
Courts have recognized that "special circumstances" could
qualify the application of issue estoppel or res judicata or even
abuse of process and that where the circumstances are suf
ficiently particular, judicial discretion should be exercised to
allow a case to proceed. In the instant case, the alleged
inadequate compensation could not qualify as a "special cir
cumstance". The Band has not made out a case of unfairness
deserving of special considerations and which would make its
new action less abusive or more deserving of favourable treat
ment. In the measure possible within our adjudicative process,
the damages awarded were fair and reasonable.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Federal Court Rules, C.R.C., c. 663, R. 419(1).
Indian Act, R.S.C. 1906, c. 81,s. 51.
CASES JUDICIALLY CONSIDERED
APPLIED:
Hanna et al. v. Canada (1986), 9 F.T.R. 124 (F.C.T.D.);
Grandview (Town of) v. Doering, [1976] 2 S.C.R. 621;
(1975), 61 D.L.R. (3d) 455; [1976] 1 W.W.R. 388; 7
N.R. 299; Henderson v. Henderson (1843), 3 Hare 100;
67 E.R. 313; Hoysted v. Federal Commissioner of Taxa
tion (1921), 29 C.L.R. 537 (Aust. H.C.); Maynard v.
Maynard, [1951] S.C.R. 346; [1951] 1 D.L.R. 241;
Mcllkenny v. Chief Constable of the West Midlands,
[1980] 1 Q.B. 283; sub nom. Hunter v. Chief Constable
of the West Midlands Police, [1982] A.C. 529 (H.L.);
Bank of B.C. v. Singh (1987), 17 B.C.L.R. (2d) 256
(S.C.); Solomon v. Smith, [1988] 1 W.W.R. 410 (Man.
C.A.); Nigro v. Agnew-Surpass Shoe Stores Ltd. et al.;
Cummer-Yonge Investments Ltd., Third Party and 10
other actions (1977), 18 O.R. (2d) 215; 82 D.L.R. (3d)
302; 3 C.P.C. 194 (H.C.); Saskatoon Credit Union Ltd.
v. Central Park Ent. Ltd. (1988), 22 B.C.L.R. (2d) 89
(S.C.); Hoystead v. Commissioners of Taxation, [1926]
A.C. 155 (P.C.).
DISTINGUISHED:
St. Ann's Fishing Club v. The King, [1950] S.C.R. 211;
[1950] 2 D.L.R. 225.
CONSIDERED:
Beauchamp v. Coastal Corporation, [1984] 2 F.C. 511
(T.D.); Minnes v. Minnes & Rees-Davies (1962), 34
D.L.R. (2d) 497; 39 W.W.R. 112 (B.C.C.A.); Re Bullen
(1971), 21 D.L.R. (3d) 628 (B.C.S.C.); Luzi et al. v.
Municipal District of Rockyview No. 44 et al. (1980), 28
A.R. 260 (Q.B.); Lenhdorff Management Ltd. et al. v.
L.R.S. Development Enterprises Ltd. (1980), 109 D.L.R.
(3d) 729; [1980] 5 W.W.R. 14; 19 B.C.L.R. 59; 16
C.P.C. 1 (C.A.); United Shoe Machinery Company of
Canada v. Brunet, [1909] A.C. 330 (P.C.); Clough v.
London and North-Western Railway Co. (1871), L.R. 7
Ex. 26; First City Dev. Corp. v. Bekei (1986), 3 B.C.L.R.
(2d) 175 (S.C.).
REFERRED TO:
Angle v. M.N.R., [1975] 2 S.C.R. 248; (1974), 47 D.L.R.
(3d) 544; 74 DTC 6278; 2 N.R. 397; Carl Zeiss Stiftung
v. Rayner & Keeler Ltd. (No. 2), [1967] 1 A.C. 853
(H.L.).
AUTHORS CITED
Wade, H. W. R. Administrative Law, 5th Ed., Oxford:
Clarendon Press, 1982.
COUNSEL:
M. R. V. Storrow and Maria A. Morellato
for plaintiffs.
Brian J. Wallace, Q.C. and Hugh C. Stans-
field for defendant Shaughnessy Golf and
Country Club.
Mitchell Taylor for defendant Her Majesty
the Queen.
SOLICITORS:
Blake, Cassels & Graydon, Vancouver, for
plaintiffs.
Lawson, Lundell, Lawson & McIntosh, Van-
couver, for defendant Shaughnessy Golf and
Country Club.
Deputy Attorney General of Canada for the
defendant Her Majesty the Queen.
The following are the reasons for judgment
rendered in English by
JOYAL J.:
BACKGROUND
The issue before me had its roots over thirty
years ago when the Musqueam Indian Band, com
prising at that time some 235 members, surren
dered 162 acres of its reserve lands in Vancouver
to the defendant Crown which in turn leased the
acreage to the defendant Shaughnessy Golf and
Country Club (the Club).
The terms of the lease were not agreeable to the
plaintiff Band and many years later, in 1977, it
instituted an action in damages in this Court
against the Crown.' In its statement of claim, the
Band prayed for the following relief:
(a) a declaration that the defendant Crown was
in breach of its trust responsibility in agreeing to
and executing the lease;
(b) a declaration of the amount of damages
suffered by the Band as a result of the breach of
trust and;
(c) an award of damages for the loss of revenue
suffered;
(d) further or other relief.
The action eventually came on for trial on Sep-
tember 18, 1979 before Collier J. who found that
the Crown had indeed been in breach of trust and
awarded the Band $10 million in damages.
The Crown appealed that judgment to the Fed
eral Court of Appeal which, in its unanimous
decision on December 10, 1982 [R. v. Guerin,
[1983] 2 F.C. 656], found that the Crown did not
owe a fiduciary duty to the Band and allowed the
appeal.
The Band then appealed to the Supreme Court
of Canada. In its judgment rendered on November
1, 1984 [sub nom. Guerin et al. v. The Queen et
al., [1984] 2 S.C.R. 335], the Supreme Court
allowed the appeal and restored the original trial
judgment as to both the Crown's liability and the
quantum of damages awarded. Effective that same
day, the damages, together with interest, were paid
into the Band's revenue account held by the
Crown.
And there the matter rested until January 21,
1988, when another action was instituted by the
Band before this Court against the Crown and the
Club. The facts alleged are substantially the same
as in the original action but this time, the Band's
claims are expressed as follows:
(a) a declaration that the 1956 surrender from
the Band to the Crown is void and illegal;
1 Guerin v. R., [1982] 2 F.C. 385; (1982), 143 D.L.R. (3d)
416 (T.D.).
(b) in the alternative, rescission of the surren
der;
(c) a declaration that the Band is entitled to the
exclusive use, occupation and possession of the
lands encompassed by the lease;
(d) a declaration that the lease is void;
(e) a declaration that the Band is entitled to
terminate the lease;
(f) in the alternative, rescission of the lease.
In the eyes of both the defendant Crown and the
defendant Club, this new action was not one from
which they could jauntily run away. Consequently,
the Club applied to the Court for an order pursu
ant to Rule 419(1)(a),(b),(c),(e), and (f) of the
Federal Court Rules [C.R.C., c. 663] striking out
the Band's statement of claim as being redundant,
vexatious, and otherwise an abuse of the process of
this Court. At a later date, the Crown applied to
the Court for similar relief under Rule 419 and
further alleged that the Band's claims were stat-
ute-barred and extinguished.
The two motions came on to be heard together
in Vancouver on November 29 and 30, 1989. Two
days before the hearing, however, the Band's coun
sel filed a notice of discontinuance against the
defendant Club.
This latter move provided the grounds for some
skirmishing between counsel for all three parties.
It seemed evident, however, that notwithstanding
the discontinuance, the Club's counsel should be
heard in argument for purposes of the motions.
Counsel then agreed to a procedure which would
avoid unnecessary duplication and give the Band's
counsel full opportunity to respond. In any event,
as I indicated to counsel, I would have otherwise
granted the Club intervenor status in order to
enable it to pursue its motion.
THE PLAINTIFF'S PLEADINGS
The impugned statement of claim, if I may
summarize it, recites in detail the events which
took place in October, 1957, when the Band voted
to surrender 162 acres of its reserve lands to the
Crown. This approval was on the basis that the
surrender was for the expressed purpose of leasing
the lands to the Club for use as a golf club upon
specific terms, i.e., a total lease period of 75 years
with an initial 10-year term and subsequent renew
al terms of 5 years; an amount of $29,000 for
rental for the first term with rental increases based
on fair market value at each renewal; no limitation
on rental increases, and at the lease's expiration,
reversal to the Band of all lessee's improvements.
The statement of claim alleges that the Crown
exercised undue influence on the Band, misrepre
sented the value of the land for lease purposes,
failed to disclose that other people had shown
interest in the land, refused to provide for the
Band access to legal counsel and appraisers and
eventually entered into a lease with the Club on
terms which were unknown and unacceptable to
the Band.
There is a further allegation that both defend
ants unlawfully conspired to defraud the Band, to
injure its economic interests, to deprive it of its
economic rights and to permit the Club to enjoy an
unconscionable benefit from the Crown's breach of
trust.
As a consequence, the Band claims that both the
surrender and the lease are void and unenforce
able, that the leased lands should revert to the
Band's possession and that the defendant Club
should be ejected from the premises.
THE DEFENDANTS' CASE
The defendants' motion to strike is basically
founded on the doctrine of res judicata or issue
estoppel. The Crown suggests that the Court is
asked to entertain a claim which has already been
fully adjudicated and that the settled issue be
tween the Band and the Crown should not be
resurrected under another guise by the use of
artful language in the pleadings. The Band, says
the Crown, had ample opportunity in the earlier
case to challenge the validity of the surrender and
subsequent lease. It chose, however, to accept
them as valid and subsisting and to claim damages
for breach of trust. The Band was successful in
this claim and the $10 million award is the meas
ure of damages assessed and that should be the
answer to all issues.
The proposition in law, as stated by the defend
ants, is that the principles of res judicata or issue
estoppel preclude the Band from claiming again,
over the very same issue. The action is inconsistent
and contradictory to the facts which were funda
mental to the previous action. Damages were
assessed against the Crown in that earlier case and
it is clear on reading the judgments at both the
trial and the Supreme Court level that such dam
ages were assessed on the basis of full recovery to
the Band for any loss suffered as a result of the
Crown's breach. The doctrine of restitution was
fully respected in the assessment process and the
nature of this restitution in monetary terms was to
provide the Band with the kind of compensation
for all losses, past, present and future suffered by
the Band. In essence, it is said, the action of the
Band is merely an attempt to relitigate an issue
which was fundamental to the decision in the
earlier proceedings brought by the same plaintiff.
As regards the Club's position, its absence from
the roster in the earlier proceedings is of no conse
quence. There are no new material facts pleaded in
the new action which might lead to different
results. There is no allegation that the previous
decision favourable to the Band was obtained
through fraud or misconduct and might justify a
rehearing.
Furthermore, according to the Club, the Band
has not only enjoyed the benefits of a $10 million
compensation package but since the very begin
ning of the lease in 1958, it has enjoyed the benefit
of the rental payments. It would be inconceivable
that after more than thirty years, the Band should
now strive to turn back the clock, dispossess the
Club and be put back into possession of the leased
lands.
THE BAND'S RESPONSE
The main thrust in the Band's argument is that
the Court is faced with a separate and distinct
cause of action. The first cause of action which
was for breach of trust lies within the realm of
private law and private policy. The new cause of
action rests in the field of public law affecting the
statutory duties and responsibilities of the Crown
in dealing with Indian lands. The Crown's action
respecting the surrender and the lease, in the light
of all the circumstances which were determined in
the earlier case, raises the issue of statutory condi
tions for the exercise of Crown powers. Such con
ditions being found wanting, there is a serious
issue that the Crown acted in excess of its author
ity or jurisdiction, resulting in a surrender and a
lease which are void ab initio and which cannot be
validated by an award of compensation or by any
antecedent, current or future action on the part of
any or all the parties involved.
Accordingly, says the Band, the fact that its new
action is based on the same set of facts as in the
previous one is not material. The issue in the new
action cannot be said to be the same. The actual
validity of the surrender and lease has not yet been
litigated.
Furthermore, the Band suggests that even
though the requisite elements of estoppel or res
judicata might be met, there are special or equita
ble circumstances in the case justifying an excep
tion to be made. The Band enumerates these vari
ous circumstances as follows:
1. There is the matter of a "conspiracy" be
tween the Crown and the Club to defraud the
Band.
2. The compensation already awarded is not a
fair remedy, keeping in mind that the Trial
Judge in the earlier action significantly reduced
the damages award on the contingency that the
Club might terminate the lease on any one of its
several renewal dates.
3. Damages were assessed in 1985 as of 1958
and no pre-judgment interest was paid.
4. The Club has been unjustly enriched to the
detriment of the Band.
5. The lands have a current value of $100 mil
lion which should yield to the Band an income of
$10 million annually, a figure far more realistic
than the $1 million received over the past thirty
years under current terms.
In this light, argues the Band, fairness requires
that the Band be permitted to proceed to trial.
There are serious issues raised and these issues
involve matters of fact and law as well as policy
considerations affecting native rights which have
evolved considerably over the past thirty years.
THE LAW
There is no dearth of cases to which reference
might be made in support of one side or the other.
Over the years, various principles have accumulat
ed respecting motions to strike in general and in
applying appropriate doctrine to the issue.
There is no doubt that any motion to strike
pursuant to Rule 419 of the rules of this Court
must be considered very carefully. Striking an
action has a draconian flavour to it and it is settled
law that it should only be used in exceptional
cases.
Rule 419, in its substantive provisions under
Rule 419(1), is clearly worded and offers no struc
tural difficulties in its interpretation. It provides as
follows:
Rule 419. (1) The Court may at any stage of an action order
any pleading or anything in any pleading to be struck out, with
or without leave to amend, on the ground that
(a) it discloses no reasonable cause of action or defence, as
the case may be,
(b) it is immaterial or redundant,
(c) it is scandalous, frivolous or vexatious,
(d) it may prejudice, embarrass or delay the fair trial of the
action,
(e) it constitutes a departure from a previous pleading, or
(J) it is otherwise an abuse of the process of the Court,
and may order the action to be stayed or dismissed or judgment
to be entered accordingly.
It is clear that the Rule provides for striking out
a whole pleading or for striking out any part of it.
It is meant to cover many situations. Its whole
purpose is to assure the orderly administration of
justice and, in the context of procedural rules and
an adversary system, to control to some degree the
kinds of cases which are deserving of the litigation
process.
I need not go into a full analysis as to how each
individual head of Rule 419 has been applied by
the Court to meet the facts and circumstances of
individual cases, limited as they are to an analysis
of a particular pleading. The pleading before me,
the statement of claim as a whole, cannot be said
to be immaterial or redundant, or prejudice,
embarrass or delay the fair trial of the action, or
constitute a departure from a previous pleading.
Nor can the Crown or the Club rely on Rule
419(1)(a) when, for striking purposes, the facts
alleged in the statement of claim are taken to be
true and no evidence is admissible thereunder. Nor
can they rely on the issue of limitations. The
general principle in that regard, if one follows
Hanna et al. v. Canada (1986), 9 F.T.R. 124
(F.C.T.D.), is that the issue of limitations should
be specifically pleaded in a statement of defence
before the Court will consider striking an action on
those grounds.
We are left therefore with the plea that the
statement of claim is scandalous, frivolous or vexa
tious or otherwise an abuse of the process of the
Court. In more articulate terms, it might be one of
issue estoppel or res judicata, two somewhat paral
lel doctrines which have been historically shackled
by judicial subtleties but which, in a more contem
porary mode, appear to adopt a more unadorned
fabric.
As between these two concepts, the case of
Hoysted v. Federal Commissioner of Taxation
(1921), 29 C.L.R. 537 (Aust. H.C.), at pages
560-561, attempts to distinguish them:
I fully recognize the distinction between the doctrine of res
judicata where another action is brought for the same cause of
action as has been the subject of previous adjudication, and the
doctrine of estoppel where, the cause of action being different,
some point or issue of fact has already been decided (I may call
it "issue-estoppel").
This is the view adopted by the Supreme Court
of Canada in Angle v. M.N.R., [1975] 2 S.C.R.
248, at page 254; (1974), 47 D.L.R. (3d) 544; 74
DTC 6278; 2 N.R. 397, which also adopted the
tests suggested in Carl Zeiss Stiftung v. Rayner &
Keeler Ltd. (No. 2), [1967] 1 A.C. 853 (H.L.), in
dealing with issue estoppel as follows: "(1) that the
same question has been decided; (2) that the judi
cial decision which is said to create the estoppel
was final; and, (3) that the parties to the judicial
decision or their privies were the same persons as
the parties to the proceedings in which the estoppel
is raised or their privies".
In Grandview (Town of) v. Doering, [1976] 2
S.C.R. 621; (1975), 61 D.L.R. (3d) 455; [1976] 1
W.W.R. 388; 7 N.R. 299, the Supreme Court of
Canada cites with approval the comments found in
Henderson v. Henderson (1843), 3 Hare 100; 67
E.R. 313, at pages 114-115 Hare:
... I believe I state the rule of the Court correctly when I say
that, where a given matter becomes the subject of litigation in,
and of adjudication by, a Court of competent jurisdiction, the
Court requires the parties to that litigation to bring forward
their whole case, and will not (except under special circum
stances) permit the same parties to open the same subject of
litigation in respect of matter which might have been brought
forward as part of the subject in contest, but which was not
brought forward, only because they have, from negligence,
inadvertence, or even accident, omitted part of their case. The
plea of res judicata applies, except in special cases, not only to
points upon which the Court was actually required by the
parties to form an opinion and pronounce a judgment, but to
every point which properly belonged to the subject of litigation,
and which the parties, exercising reasonable diligence, might
have brought forward at the time.
Again, in Maynard v. Maynard, [1951] S.C.R.
346; [1951] 1 D.L.R. 241, the Supreme Court of
Canada quotes with approval the following from
Lord Shaw's speech in the Hoystead v. Commis
sioners of Taxation, [1926] A.C. 155 (P.C.), at
pages 165-166 case, at page 359 S.C.R.:
Parties are not permitted to begin fresh litigations because of
new views they may entertain of the law of the case, or new
versions which they present as to what should be a proper
apprehension by the Court of the legal result either of the
construction of the documents or the weight of certain
circumstances.
If this were permitted litigation would have no end, except
when legal ingenuity is exhausted. It is a principle of law that
this cannot be permitted, and there is abundant authority
reiterating that principle.
Lord Shaw goes on to state in Hoystead [at
page 166]:
Thirdly, the same principle — namely, that of setting to rest
rights of litigants, applies to the case where a point, fundamen
tal to the decision, taken or assumed by the plaintiff and
traversable by the defendant, has not been traversed. In that
case also a defendant is bound by the judgment, although it
may be true enough that subsequent light or ingenuity might
suggest some traverse which had not been taken. The same
principle of setting parties' rights to rest applies and estoppel
occurs.
And further [at page 170]:
It is seen from this citation of authority that if in any Court
of competent jurisdiction a decision is reached, a party is
estopped from questioning it in a new legal proceeding. But the
principle also extends to any point, whether of assumption or
admission, which was in substance the ratio of and fundamental
to the decision.
In Mcllkenny v. Chief Constable of the West
Midlands, [1980] 1 Q.B. 283 (C.A.); sub nom.
Hunter v. Chief Constable of the West Midlands
Police, [1982] A.C. 529 (H.L.), the Court was
faced with an action for damages for assault by six
people who had been convicted of murder in a
terrorist explosion.
The allegations of assault had been made in the
course of their murder trial when the admissibility
of certain statements to the police was brought in
question. The Trial Judge had ruled that the state
ments were admissible and the jury itself, left with
the option of deciding that those statements were
worthless, nevertheless convicted the six people.
On the subsequent action for damages for assault,
Lord Denning M.R., at page 316, said this:
In seeking to strike out these actions, the police rely first on
the law as to issue estoppel. They say that the six men are
estopped from raising again an issue which was decided by
Bridge J. Secondly, if that be wrong, the police say that these
actions are an abuse of the process of the court. Now of these
two propositions, I feel that priority should be given to issue
estoppel .... If they are to be stopped, it must be by way of an
estoppel of some kind or other.
At page 323, Lord Denning went on to say:
It cannot be right that these actions should go any further.
They should be struck out either on the ground that the six men
are estopped from challenging the decision of Bridge J. or
alternatively that it is an abuse of the process of the court.
Whichever it is, the actions should be stopped.
Another opinion in the same appeal was
expressed by Goff L.J. at page 330:
... the court clearly has a discretionary power to stay an action
on the ground that the plaintiff is seeking to raise again a
question already judicially decided against him, where he has
had a full opportunity of presenting his whole case, even
although the parties are different so that there is technically no
estoppel. In my judgment also this power can be exercised at an
early stage on application to strike out, although its exercise
then calls for great caution ....
In Bank of B.C. v. Singh (1987), 17 B.C.L.R.
(2d) 256 (S.C.), mortgagors had complained
against the bank and its appraisers that they had
been negligent and in breach of fiduciary duty in
connection with the forced sale of a property at a
price of $330,000 which had later been resold for a
considerably larger sum. The mortgagors had
objected to the order approving the sale but had
been unsuccessful. When the bank claimed against
the mortgagors to make good on their personal
covenants, the mortgagors counterclaimed against
both the bank and the appraisers and again alleged
breach of trust and fiduciary duty. The bank
applied to have the counterclaim struck. In allow
ing the application, Harding L.J.S.C., said this at
page 265:
In this case the appraisers were not party to the original
action ... It would, however, be an abuse of process to allow
the action against the appraisers. The Singhs seek judgment
against the appraisers on exactly the same facts and issues as
were dealt with by Cowan L.J.S.C. To hold against the apprais
ers I would have to hold that Cowan L.J.S.C. was wrong.
In Solomon v. Smith, [1988] 1 W.W.R. 410
(Man. C.A.), the plaintiff had repudiated his offer
to purchase some 24 town-houses in Winnipeg on
grounds of misrepresentations. The negotiations
had been through Smith and Montreal Trust as
agents for the vendor. An action in damages was
then commenced by the vendor in Alberta and the
court there found for damages in the amount of
$129,032. The vendor and the purchaser later
settled for $85,000. The purchaser then com
menced an action against the agents Smith and
Montreal Trust in Manitoba claiming the same
amount as indemnity.
In striking the action, Lyon J.A. for the majori
ty of the Court of Appeal stated the following, at
pages 419-420:
Plaintiff's counsel argues that the breach of a fiduciary duty
allegedly owed by the defendants to Mr. Solomon transforms
the Manitoba action into a new and non-adjudicated issue. At
first blush that argument is persuasive, save for the plaintiff's
pleading in para. 10 of the statement of claim that the fiduciary
duty had been "breached by making the said misrepresenta
tions". The breach of fiduciary duty, therefore, derives its sole
vitality, as the pleadings state, from the allegation of "misre-
presentations". And that allegation, to complete the circle, has
already been decided against Mr. Solomon and declared
untrue. That being so, to permit it to be retried in a vain
attempt to sustain his action against Montreal Trust and Mr.
Smith would constitute, in the circumstances of this case, an
abuse of process.
Lyon J.A. went on to say at page 421:
I agree with Philp J.A. that a plea of issue estoppel is not
available. However, to permit the statement of claim to proceed
would be an abuse of process and that is the principle appli
cable. In considering this doctrine, it seems to me prudent to
avoid hard and fast institutionalized rules such as those which
attach to the plea of issue estoppel. By encouraging the deter
mination of each case on its own facts against the general
principle of the plea of abuse, serious prejudice to either party
as well as to the proper administration of justice can best be
avoided. Maintaining open and ready access to the courts by all
legitimate suitors is fundamental to our system of justice.
However, to achieve this worthy purpose, we must be vigilant to
ensure that the system does not become unnecessarily clogged
with repetitious litigation of the kind here attempted. There
should be an end to this litigation. To allow the plaintiff to
retry the issue of misrepresentation would be a classic example
of abuse of process—a waste of the time and resources of the
litigants and the court and an erosion of the principle of finality
so crucial to the proper administration of justice.
In a similar case where res judicata was pleaded
in defence of a second action, Weatherston J. in
Nigro v. Agnew-Surpass Shoe Stores Ltd. et al.;
Cummer-Yonge Investments Ltd. Third Party and
10 other actions (1977), 18 O.R. (2d) 215; 82
D.L.R. (3d) 302; 3 C.P.C. 194 (H.C.), stated at
page 218 O.R.:
Because this is a rule of public policy, in which the Court
exercises its inherent jurisdiction to prevent an abuse of its
process, I think I am entitled to take a rather broader view of
the matter than by simply applying the doctrine of res judicata
in its narrow sense.
Substantially the same view that the principle of
res judicata in its various manifestations had
become far too complicated was adopted by Chief
Justice McEachern of the Supreme Court of Brit-
ish Columbia in Saskatoon Credit Union Ltd. v.
Central Park Ent. Ltd. (1988), 22 B.C.L.R. (2d)
89 where he said at pages 95-96:
There is no doubt the traditional approach to estoppel per
rem judicatam operates only between the same parties or their
privies: Hollington v. Hewthorn & Co., [1943] 1 K.B. 587,
[1943] 2 All E.R. 35 (C.A.) (which Lord Denning M.R. said
was wrongly decided: Mcllkenny, supra, at p. 703); Thoday v.
Thoday, [1964] P. 181, [1964] 2 W.L.R. 371, [1964] 1 All
E.R. 341 (C.A.); and Carl Zeiss Stiftung v. Rayner & Keeler
Ltd.; Rayner & Keeler Ltd. v. Courts, [1967] 1 A.C. 853,
[1966] 3 W.L.R. 125, [1966] 2 All E.R. 536 (H.L.).
More recently, however, a number of English authorities,
particularly Lord Denning, have suggested that the principle of
abuse of process prevents a party from relitigating a question
which has been fairly decided against him. This received grudg
ing approval in the House of Lords in Hunter v. Chief Con
stable of the West Midlands Police, [1982] A.C. 529 at 540,
[1981] 3 W.L.R. 906, [1987] 3 All E.R. 727.
In the United States as early as 1927 it was held that no one
can have an issue retried unless the original finding was
obtained by fraud or some similar ground of invalidity: Eagle,
Star & Br. Dom. Ins. Co. v. Heller, 140 S.E. 314 (1927). Then,
in 1971, the United States Supreme Court stated they would
not be mechanically bound by rules of mutuality or of mutual
ity of estoppel but, rather, that trial courts ought to have a
broad discretion to determine whether issue estoppel should be
applied. Fairness seems to be the test they applied: Blonder-
Tongue Laboratories Inc. v. Univ. of Illinois Foundation, 402
U.S. 313, 28 L. Ed. 2d 788, 91 S. Ct. 1434 (1971), and
Parkland Hosiery Co. Inc. v. Shore, 99 S. Ct. 645 (1979).
On the other hand, case law submitted by the
parties refers to any number of decisions where
various grounds for refusing an application to
strike were raised.
In Beauchamp v. Coastal Corporation, [ 1984] 2
F.C. 511 (T.D.), a plaintiff had advised the
defendant that he was abandoning his claim for
specific performance on a contract and would only
proceed on damages for breach. When he claimed
for specific performance in his action, the defend
ant moved to have it struck out. Reed J. of this
Court reviewed the authorities, raised the issue as
to whether or not the information given by the
plaintiff to the defendant constituted an election in
the absence of any material detriment to the
defendant and refused the application. At page
514 of her reasons, she said this:
On the basis of the authorities cited to me by counsel for the
plaintiff I do not think the issue is so clearly beyond doubt.
There is an issue of law which should be fully canvassed at trial
and not dealt with in a summary fashion on an interlocutory
application such as this.
In Minnes v. Minnes & Rees-Davies (1962), 34
D.L.R. (2d) 497; 39 W.W.R. 112, the British
Columbia Court of Appeal, in a majority decision,
refused to strike an action by a spouse seeking a
declaration that her divorce, as well as her subse
quent remarriage, were null and void on grounds
that the divorce had been obtained by fraud and
through collusion between all parties to the divorce
action. The Court found that the situation involved
breach of statute and raised questions of public
interest which justified the matter proceeding even
though the plaintiff herself had been a party to the
fraud.
In Re Bullen, a British Columbia Supreme
Court decision reported at (1971), 21 D.L.R. (3d)
628, refused an application to strike on grounds of
res judicata when it was not clear on what princi-
ple or principles of law the earlier decision had
been based.
In Luzi et al. v. Municipal District of Rock-
yview No. 44 et al. (1980), 28 A.R. 260, the
Alberta Court of Queen's Bench decided that alle
gations of bias and non-disclosure of essential
information in an earlier decision was a bar to the
application of the doctrine of res judicata.
In Lehndorff Management Ltd. et al. v. L.R.S.
Development Enterprises Ltd. (1980), 109 D.L.R.
(3d) 729; [1980] 5 W.W.R. 14; 19 B.C.L.R. 59;
16 C.P.C. 1, the Court of Appeal found that where
special circumstances exist, an application to strike
on grounds of res judicata will be refused.
Some general observations may now be made on
what the courts have said, or permitted themselves
to say, in dealing with the various factual situa
tions when motions to strike were being enter
tained. I observe, for example, that the various
strictures historically imposed on the application
of res judicata or estoppel seem to be slowly
withering away. In the Hunter case (supra), Lord
Denning had no hesitation in striking the plain
tiffs' claim even though the parties to the second
action were not the same. It could be suggested
that on the face of the action taken by six convict
ed murderers, the issue was so scandalous that his
Lordship might not be found wanting in boldly
stating that whether it was a case of estoppel or an
abuse of process, the action should be stopped.
It would also appear, as in Solomon (supra),
that when estoppel is in doubt, a court will not
hesitate in staying an action on grounds of abuse
of process. There again, the parties were not the
same.
The comment of Chief Justice McEachern in
the Saskatoon Credit case (supra), is in my mind
quite appropriate. He paraphrases Lord Denning's
colourful observations in indicating how needlessly
confusing has been the issue of res judicata or
estoppel.
I have also quoted Lyon J.A. in the Solomon
case (supra) and I conclude that he also adopts the
view that where respect for judicial pronounce
ments on estoppel creates more obstacles than
solutions, a simple case of abuse of process may be
found.
There is finally the constant, underlying exercise
of judicial discretion whenever a motion to strike is
entertained. Whatever expressions a court may
adopt in giving its reasons, or in quoting reasons
for judicial pronouncements in support, the final
tip of the scale either way becomes not very much
more than a reasoned judgment call.
I should therefore conclude that on the state of
the law, as contemporaneously expressed, the
individual and indeed the special circumstances of
any given case are paramount and it is not neces
sary to rely on confused principles of res judicata
or estoppel when in the eyes of the court, the case
is one of abuse of process.
With these somewhat gratuitous observations in
mind, I should now return to the issue before me
and review case law cited by the parties, more
particularly related to leases and to Indian lands.
In the case of United Shoe Machinery Company
of Canada v. Brunet, [1909] A.C. 330, Privy
Council held that as the respondents had not repu
diated certain leases on machinery after the dis
covery of alleged false representations but had
continued to work the machines and had paid
royalties thereon, they had elected to treat the
leases as subsisting and could not afterwards avoid
them. Lord Atkinson, at page 339, quotes the rule
laid down in Clough v. London and North-West
ern Railway Co. (1871), L.R. 7 Ex. 26 as follows:
"If with knowledge of the forfeiture he, by the
receipt of rent or other unequivocal act, shews his
intention to treat the lease as subsisting, he has
determined his election for ever, and can no longer
avoid the lease."
A similar conclusion was reached by Lysyk J. of
the British Columbia Supreme Court in the cele
brated case of First City Dell. Corp. v. Bekei
(1986), 3 B.C.L.R. (2d) 175 where he stated, at
page 198:
Where one party seeks to avoid a contract on the basis of the
other party's failure to comply with statutory requirements, the
approach taken by the court may be influenced by the conse
quence of such non-compliance. Does it render the contract
void (as in Home Assur.) or voidable (as in Dorsch) or, as in
the present case, merely unenforceable? Waiver, for example,
may be available if the transaction is voidable but not if it is
void: Springer Del , . Corp. v. Rogers (1984), 52 B.C.L.R. 169 at
181 (S.C.). The question of whether one party may be preclud
ed from relying upon the other's non-compliance with govern
ing legislation as a defence to an action on the contract can be
framed in more than one way. While the choice of doctrine and
vocabulary varies, the central issue posed may be much the
same: has the party invoking the statute affirmed the contract
unequivocally by his words or conduct in circumstances making
it unfair or unjust for him now to resile from that contract?
The answer to that question, in the instant case, requires an
examination of Mr. Bekei's actions between the time he signed
the contract documents on 16th December 1981 and his
repudiation of the contract some 15 1 / 2 months later on 4th April
1983.
The case of St. Ann's Fishing Club v. The King,
[1950] S.C.R. 211; [1950] 2 D.L.R. 225 contains
elements of facts related to the leasing of Indian
lands and the provisions of the Indian Act, R.S.C.
1906, c. 81 relating thereto. Section 51 of the
statute provided as follows:
51. All Indian lands which are reserves or portions of
reserves surrendered, or to be surrendered, to His Majesty,
shall be deemed to be held for the same purpose as
heretofore; and shall be managed, leased and sold as the
Governor in Council directs, subject to the conditions of
surrender and the provisions of this Part.
The Supreme Court of Canada held in that case,
and I quote from the headnote, "that section 51
imposed an imperative requirement of a direction
by the Governor in Council before surrendered
Indian land could be validly leased; and in the
absence of an authorizing Order in Council, a
lease with a private Club entered into by the
Superintendent General (of Indian Affairs) was
not binding. It was immaterial that a prior lease
had been authorized by Order in Council since the
efficacy of the Order was exhausted on the termi
nation of that lease. No estoppel could arise in the
face of section 51 even though the Superintendent
General held himself out as authorized to execute
a lease and as a result money was expended by the
Club in improving the property."
At pages 219-220 S.C.R., Rand J. had this to
say:
But I agree that s. 51 requires a direction by the Governor in
Council to a valid lease of Indian lands. The language of the
statute embodies the accepted view that these aborigenes are, in
effect, wards of the State, whose care and welfare are a
political trust of the highest obligation. For that reason, every
such dealing with their privileges must bear the imprint of
governmental approval, and it would be beyond the power of
the Governor in Council to transfer that responsibility to the
Superintendent General.
But the circumstances here negative any delegation of au
thority. The Order in Council approved a lease for a definite
period on certain stipulations; by its terms, it would come to an
end, even with renewal, within ten years; and the efficacy of the
Order was exhausted by that instrument.
It was argued that the Crown is estopped from challenging
the lease, but there can be no estoppel in the face of an express
provision of a statute: (Gooderham & Worts Ltd. v. C.B.C.,
[1947] 1 D.L.R. 417; [1947] A.C. 66); and a fortiori where the
legislation is designed to protect the interest of persons who are
the special concern of Parliament. What must appear—and the
original trustees were well aware of it—is that the lease was
made under the direction of the Governor in Council, and the
facts before us show that there was no such direction.
On the issue of estoppel when facing a void as
against a voidable transaction, or on the issue of
lack of jurisdiction whenever a matter of public
law is raised, the plaintiff Band refers to Wade's
Administrative Law, Fifth Edition, Clarendon
Press, Oxford, at page 33:
In public law the most obvious limitation on the doctrine of
estoppel is that it cannot be invoked so as to give an authority
powers which it does not in law possess. In other words, no
estoppel can legitimate action which is ultra vires. Thus where
an electricity authority, by misreading a meter, undercharged
its customer for two years, it was held that the accounts it
delivered did not estop it from demanding payment in full; for
the authority had a statutory duty to collect the full amount,
and had no power to release the customer, expressly or other
wise. Where a local planning authority served an invalid dis
continuance notice, the landowner's acquiescence could not
estop him from later denying its validity. Nor could a parish
council, which had no power to undertake to allow a neighbour
ing district to make use of its sewers, be estopped by its long
acquiescence from terminating such an arrangement. Where a
minister took possession of land under statutory powers of
occupation which did not extend to the grant of leases, he was
not estopped from denying that he had granted a lease, even
though he had expressly purported to 'let' the land to a `tenant'.
The result was the same where the supposed landlord was a
local authority which had failed to obtain the requisite consent
from the minister, so that the lease was void. Accordingly the
local authority were at liberty to deny the validity of their own
`lease', contrary to the rules which govern private lettings. No
arrangement between the parties could prevent either of them
from asserting the fact that the lease was ultra vires and void.
There is also the observation of Tysoe J.A. in
the case of Minnes v. Minnes, (supra at page 505
D.L.R.) on the application of 0. 25, r. 4 of the
British Columbia Supreme Court Rules:
In my respectful view it is only in plain and obvious cases
that recourse should be had to the summary process under O.
25, r. 4, and the power given by the Rule should be exercised
only where the case is absolutely beyond doubt. So long as the
statement of claim, as it stands or as it may be amended,
discloses some questions fit to be tried by a Judge or jury, the
mere fact that the case is weak or not likely to succeed is no
ground for striking it out. If the action involves investigation of
serious questions of law or questions of general importance, or
if facts are to be known before rights are definitely decided, the
Rule ought not to be applied.
Finally, I should note to what extent "special
considerations" and "fairness" have been men
tioned in jurisprudence in deciding whether an
action should be struck. Such qualifiers may be
found in Henderson v. Henderson (supra); in
Lehndorff Management Ltd. et al. v. L.R.S. De
velopment Enterprises Ltd.; in Hunter v. Chief
Constable of the West Midlands Police (supra). I
mention these matters because the Band has
stressed the unfairness in Collier J.'s award of
damages in the earlier case and the relatively
meagre return on rent as compared to its potential
return on the alleged current market value of the
leased lands. These special circumstances, accord
ing to the Band, are of a nature that all other
things being equal, the Band should now be given
another chance to seek substantial justice, a goal
which would only be achieved by evicting the Club
and obtaining immediate possession of the lands.
A REVIEW OF THE FACTS
Every case cited by the parties has of course a
factual base. It is within the parameters of this
factual base that full meaning and proper interpre
tation may be given to doctrine as expressed from
time to time by the courts. As the Supreme Court
of Canada is wont to say, statutes cannot easily be
interpreted in a vacuum. Neither, in my respectful
view, can judicial doctrine.
The factual base with respect to the surrender
and the lease may be found in the lengthy and
considered reasons for judgment of Collier J. fol
lowing trial of the original action. I shall refer to
this judgment as it appears in [ 1982] 2 F.C. 385.
In the findings which he had to make at that trial,
Collier J. had to focus his mind on events which
had occurred some twenty-five years earlier. He
had to sift through the testimony of witnesses who
had to recall these events. He had to weigh various
statements made by survivors attributable to wit
nesses who were now deceased. He had to interpret
the events, as incompletely as they were set out for
him, in the social and economic clock of 1957. The
clock had not stopped ticking in 1982. Collier J.
necessarily had to face history revisited, taking
care of course that in the process, he should not be
revising it.
Concurrently, the participants' view of their own
motivation and involvement with respect to events
as recounted a whole generation later involved
risks of vagueness, or obscurity, or ambiguity, or
the transposition of a more current value system
with respect to Crown and Indian relationships to
that existing in 1957.
Collier J. admittedly had difficulties in coming
to term with these problems, yet on his findings of
fact and on credibility issues, he did not waffle. He
gave weight and credence to the testimony of the
Band members. He found no element of recon
struction or hindsight. He found that although the
project of a lease of 162 reserve acres for golf club
purposes was foremost in the minds of the Band
and of the Crown, other people had expressed an
interest in the lands but the Band had not been
informed of this. He reviewed at length the valua
tion placed on the lands of some $5,500 per acre
and the evidence of the appraiser, Mr. Howell,
with respect to a fair return to the Band based on
the 3.75% bank rate applicable at that time. Col
lier J. found specifically that the Band was not
informed of various spreads as to the estimated
annual rent prior to the first renewal term, of the
fifteen-year term, of the limits imposed with
respect to the annual rent payable at the end of the
first fifteen-year term, of the proviso in the lease
that all improvements would not revert to the
Band and that the Club reserved the right to
terminate the lease at the end of each fifteen-year
term.
At page 413, Collier J. further finds that on a
balance of probabilities, the majority of the Band
members who voted on surrender on October 6,
1957, would not have assented to it had they
known of all the terms of the lease entered into
between the Crown and the Club on January 22,
1958. He also found, and this is equally important,
that the Club would not have entered into a lease
otherwise.
At page 415, Collier J. concludes that on all the
facts before him, the Crown was liable for breach
of trust.
Collier J. then entered into the problem of
assessing damages. He cites at page 420, the leas
ing experience respecting Musqueam Recreations
Ltd. with respect to some 58 additional acres of
reserved lands which had been advertised for ten
ders. A lease agreement had been concluded in
1963. This lease called for
(a) fixed annual rents for the first, second and
remaining eight years of the first 10-year term;
(b) fixed annual rents for the subsequent
10-year terms to be negotiated; failing agree
ment, the rents to be determined under the
provisions of the Exchequer Court Act [R.S.C.
1970, c. E-11];
(c) the annual rent payable at any time would
never be less than 10% of the gross revenue of
the lessee;
(d) no increase or decrease of rent arrived at in
respect of a new 10-year period would exceed
15% of the fixed annual rent of the preceding
10-year period;
(e) any improvements to the leased lands
reverted to the Band.
At pages 430 et seq., his Lordship elaborates on
the various expert analyses of the values of the
lands, of their highest and best possible use, which
he finds to be 99-year leases for residential pur
poses. He breaks down the various rental values
per annum, finds that the original valuation placed
on the lands of $5,500 per acre in 1956 was not a
breach of trust and later analyzes the various
levels of estimated losses otherwise suffered by the
Band. He then refers to a Master Plan Survey,
prepared by the British Columbia Lands Services
in December, 1956 and recommending massive
development of the well-known University Endow
ment Lands adjacent to the Musqueam Indian
reserve.
Although Collier J. refers only briefly to that
Report, the whole of it was filed for purposes of
the motion before me. It runs through some 125
pages and is the cumulation of the work of half a
dozen British Columbia government departments
and of some 100 consultants and collaborators. I
provide here a summary of that report.
The lands involved contained some 1740 acres
and it was the report's conclusion that to ensure a
perpetual endowment for the University of British
Columbia at the highest rate of return, the solu
tion called for 99-year leases for residential hous
ing, shopping plazas and other supporting uses.
At page 100 of the report, after noting an
implementation period for the scheme of 15 years,
it is stated:
It is estimated that the revenue directly attributable to land,
when fully developed, should be in excess of $1,000,000
annually.
I observe that the University Endowment Lands
comprise in excess of ten times the acreage
involved in the lease between the Crown and the
Club. I further observe that all the data and
calculations set out in the report are based on 1956
values. There is no retrospection there, no hind
sight, no ex post facto interpolations.
FINDINGS
Underlying the whole issue before me is the
Band's conviction, whether it is of more recent or
more remote vintage does not matter, that it has
been unjustly and inequitably deprived of its 162
acres and that its economic interests have been
severely prejudiced. The events surrounding the
negotiations and communication between the Band
and the Crown and the disclosure of the lease
terms some twenty years later conjure images of
intrigue, indulgence and condescension on the part
of the Crown to deprive the Band of its rights in
the reserve lands. These images are also brought
into focus by the current use of the reserve lands
as a golf and country club whose selected members
alone enjoy the privileges of roaming over some
162 acres of lush greens and rolling fairways.
No comment which I might make in that regard
will eliminate this troubling and sombre perspec
tive nor remove the continuing suspicion that once
again the Band's individual and collective rights
made all the more evident by increasing levels of
group consciousness, have been denied. The Band's
only recourse is to find some means of getting
more money, or better still, to have the current
lease cancelled, obtain possession of the lands and
proceed afresh with their development.
The position taken by the Band at the hearing
before me is quite clear on this. The Band has
concluded, some four years after the Supreme
Court of Canada had finally settled the issue, that
the award of $10,000,000 in damages was not
sufficient, that it was unfair, that it was based on
erroneous assumptions, that it did not take into
consideration the current values of the acreage and
what might be expected as a reasonable ânnual
return on it.
There is no doubt that viewed in current eco
nomic terms, the reserve lands have a present-day
value far beyond the appraised value in 1957, a
value, I need repeat, which the Trial Judge found
fair and reasonable for that particular period.
There is also no doubt that some of the terms of
the current lease are not favourable to the Band or
at least, are not the terms which the Trial Judge
found the Band could reasonably have expected. I
have in mind in this regard the 15-year as against
the 10-year renewal periods, the restrictions on the
rental adjustments during the first renewal term
and the loss of reversionary interest in leasehold
improvements.
On the other hand, the surrender was for pur
poses of a golf club and that was respected. Fur
thermore, the 75-year term was agreed upon and
so too the principle of rental adjustments at each
renewal term either by consensus or arbitration.
The annual rent for the first term, as I interpret
the Trial Judge's findings, was also the subject of
agreement.
I have not overlooked the proviso in the lease
where the 15-year renewals are effectively on an
option basis exercisable by the lessee. I can only
observe that such a clause is far from unknown in
a long-term lease when the leased lands require
considerable capital improvements and where the
rent is periodically reviewed. If such a proviso is
not available to the lessor, it is simply because the
risk is borne exclusively by the lessee. In any event,
the irony of it all is that the Band would now be
perfectly happy if the Club were to exercise its
option and abandon the lease.
In the foregoing observations, I should not be
attempting to propound a balanced view of the
tugs and pulls of lease negotiations. The Trial
Judge's finding, at page 430, is that "The Indian
Affairs Branch personnel in entering into the golf
club lease acted, in my opinion, honestly. There
was no deliberate or wilful dishonesty towards the
Band. But the personnel, and ultimately the
defendant, did not act reasonably in signing the
lease without first going back to the Band".
This finding by the Trial Judge is consonant
with the finding of an equitable breach of trust by
the Crown. He adopts the test of reasonableness to
the whole transaction and concludes that the
Crown was not guilty of fraud in the usual sense of
the term, but did not give to the negotiations that
degree of care or attention which is expected of a
good trustee.
The issue facing the Trial Judge, one would
always remember, was to determine if there were a
breach of trust and if so, what would be the
appropriate amount assessed as damages to put the
Band in as close a financial situation as it would
otherwise have enjoyed.
In so doing, the Trial Judge had to face the fact
that the freehold value of the leased lands had
increased ten times over the twenty-year period
between 1958 and 1978. He also had to face and
analyze any number of hypotheses advanced by
several expert appraisers and to adopt the view
that the measure of damages had to be calculated
on the best possible use formula, i.e. 99-year leases
for residential purposes. At pages 441-442 of his
reasons, he lists several factors and contingencies
which guided him in arriving at a $10 million
award of damages. These are as follows:
(a) The difficulty in determining when the 162
acres would have been developed, in what way,
and at what monetary return. This, on the basis
the present lease would never have been
consummated.
(b) The contingency that the area might not,
even today, be satisfactorily developed, or pro
viding a realistic economic return.
(c) The astonishing increase in land values,
inflation and interest rates since 1958, and the
fact no one could reasonably, in 1958, have
envisaged that increase.
(d) The counter-factor to (c) as that those same
tremendous increases must be taken into
account in any damage award.
(e) The possibility the present lease would
remain in effect until its expiry in 2033.
(f) The very real contingency, in his view, that
the lease might be terminated at a future rental
review period.
(g) The money which the plaintiffs have
received to date under the present lease or what
might be received in the future if the lease
remains.
(h) The value of the reversion of the improve
ments, whether at the end of prepaid 99-year
residential leases, or at the end of the golf club
lease.
If the Supreme Court of Canada could not find
fault with this particular approach to damages,
neither can I.
CONCLUSIONS
As a preamble to my conclusions, I might cite
the comments of Le Dain J.A. in the Federal
Court of Appeal's judgment of December 10,
1982, and reported in [1983] 2 F.C. 656, at page
687; (1982), 143 D.L.R. (3d) 416: His Lordship
states that:
It is important to keep in mind that this is an action which is
based on breach of trust and only on breach of trust. It is not an
action to set aside a surrender, and a disposition of surrendered
land pursuant thereto, on the ground of fraud or non-fulfilment
of the conditions of the surrender. It is not an action for
negligence in the exercise of a statutory authority with respect
to the disposition of land in a reserve. It is not an action for
rectification of the terms of a surrender of land in a reserve.
I might also refer to the comments of Dickson
J., as he then was, in his reasons for judgment in
the Supreme Court of Canada, reported at [ 1984]
2 S.C.R. 335, at page 371:
The plaintiffs based their case on breach of trust. They
asserted that the federal Crown was a trustee of the surren
dered lands. The trial judge agreed.
Such was the issue before the Trial Judge. The
same issue was debated before the Court of
Appeal. It was again debated over three days of
argument before the Supreme Court of Canada.
The disposition ultimately made was to compen
sate the Band for the damages suffered and to
assure its members a level of economic return they
would otherwise have enjoyed.
At no time during trial, or on successive appeals,
on my reading of the several judgments on the
issue, was the question of the validity of the sur
render, or of the lease ever raised. At no time did
anyone of a dozen judges who became seized of the
case at one level or another, advance, hypothetical
ly or otherwise, the validity issue.
I should subscribe to the views expressed in
Henderson v. Henderson and the Hoystead case
(supra) that parties are expected to bring forward
their whole case and should not be allowed, except
in special circumstances, to perpetuate the dispute
by discovering new grounds for action. As Lord
Shaw stated, if this were permitted, litigation
would have no end except where legal ingenuity is
exhausted.
I should also subscribe to later views expressed
by Lord Denning in the Hunter case, by Lyon J.A.
in the Solomon case and by Chief Justice
McEachern in the Saskatoon Credit Union case,
to the effect that whether or not a case falls into
the complex issue of res judicata or issue estoppel
with all of its historical refinements, it should not
be allowed to proceed, if to do so, it would consti
tute an abuse of process.
In the case before me, the Band's approach was
to claim damages for breach of trust. It did not
claim anything else, in the alternative or otherwise.
It claimed damages and was awarded damages.
The Band has enjoyed the benefits of the lease
for over thirty years. It has enjoyed the benefits of
$10 million award for five years or more. In the
same period of time, the Club has paid its annual
rent and has expended substantial sums of money
on course layout and club facilities. Should the
Band now be given leave to start from scratch on a
rescission claim based on facts identical to those it
relied on earlier? In my opinion, the answer must
be in the negative. In my opinion, it would consti
tute an abuse of process.
The jurisprudence I have cited appears to quali
fy the application of the doctrine of issue estoppel
or res judicata or for that matter abuse of process
by directing a regard for "special circumstances".
I interpret these terms, as they are found in the
Henderson case as imposing a degree of care
whenever a Court is urged to apply the doctrine
and stop a case from going further. Some special
circumstances often surround particular cases and
some of these circumstances, as case law tells us,
are such as to invite a court, in the exercise of its
discretion, to let a particular case proceed.
Counsel for the Band has advanced a case for
special circumstances on the grounds that the
damage award of $10 million is far from adequate
compensation. Counsel suggests that the current
value of the leased lands approaches the $100
million mark which, on a perpetual yield basis,
should provide the Band with $10 million in
annual income, an amount far above current or
projected rental income.
In my respectful opinion, nothing flows from
this. If credence is to be given to such calculations,
one could with equal force, suggest that a $10
million award in 1984 with interest at ten per cent
compounded annually over the remaining term of
the lease, would have a value in the year 2033 of
$1,280 billion. Even on a straight yield basis, a $10
million fund provides a beneficiary with a perpetu
al annual income of $1 million and to which must
be added the ever-increasing value of the rever-
sionary interest. In either case, it might not be an
inconsiderable patrimony to leave to one's
progeny.
I venture to suggest that annual yield on rentals
when dealing with long term leases are concomi
tant factors to the value of any reversionary inter
est in the freehold. It may be expressed as an
element of short-term pain mixed with an element
of longer term gain. Such a mixture depends of
course on the financial policies of the beneficiary
and on how he decides to administer the capital he
has on hand, spend it or compound its revenue in
whole or in part. How provident or improvident
such a beneficiary might be, in any given case, is
of course of no concern in these proceedings.
I have gone to some lengths in these reasons to
refer to the various analyses and findings of the
Trial Judge relating to the highest desirable use of
the lands, to the value per acre in 1956 and to the
rapidly increasing land values over the first
twenty-odd years of the 75-year lease. The Trial
Judge found as a fact that $5,500 per acre in 1956
was a reasonable figure. He also found that the
best possible use of the lands was for residential
purposes on a 99-year lease basis. His analysis of
the quantum of damages is firmly based on these
premisses.
I have also referred to the Master Plan Survey
published in 1956 and relating to the future de
velopment of the University Endowment Lands on
Point Grey. That plan also fixes acreage value,
propounds a 99-year scheme for residential hous
ing and generally provides a scenario for the crea
tion of a perpetual endowment to the University of
British Columbia. The estimated return under this
formula, if funding be provided for the develop
ment of services and other projects is $2 million
minimum annually. Revenue directly attributed to
land, as I have already noted, would be in excess of
$1 million annually. One may observe that $1
million annually is in relation to a land area in
excess of 1700 acres. One may also observe that
the damage award of $10 million also yields $1
million annually on a perpetual basis but is in
relation to an acreage of 162 acres, less than ten
per cent of the acreage contained in the University
Endowment Lands. The comparison is striking.
Apart from the substantial income earned from
the $10 million compensation package, the Band is
also entitled to an annual rent adjusted on a
15-year renewal basis. I was told by counsel that
the parties are negotiating for the fixing of an
annual rent for the 15-year term beginning 1987.
Failing agreement, the rent will be fixed by arbi
tration. Whatever be the amount fixed, it will
accrue to the Band as an additional annual benefit.
These comments should not be construed as
establishing that the Band members should be
quite happy with what they have. I only need to
state that, in my respectful view, the Band has not
made out a case of unfairness deserving of special
considerations and which would otherwise make its
new action less abusive or more deserving of
favourable treatment. I should find that in the
measure possible in our adjudicative process when
ever a court is called upon to deal with monetary
compensation for financial grief or prejudice, the
damage award appears to me, as it did to the Trial
Judge and to the several judges of the Supreme
Court of Canada, to be fair and reasonable.
I have not overlooked Band counsel's argument
that the action raises new grounds of public law
and public authority and that the Court is now
invited to consider the surrender and the lease as
being void ab initio on the strength of the Supreme
Court of Canada judgment in St. Ann's Fishing
Club case (supra), there can be no estoppel in the
face of an express provision of a statute.
This might be true, as far as it goes. One recalls,
however, that in that case, the Indian Act provided
in clear terms that no Indian lands could be leased
except under the authority of an Order in Council,
a statutory disposition which has long since been
amended. One also observes that the Court's deci
sion was on the basis of an original action and not
of a subsequent one.
I will concede that were the Court, in the face of
an original action as is now framed, asked to strike
it under Rule 419(1)(a) as disclosing no reason
able cause of action, the Court would have little
hesitation in letting the action proceed. Such, how
ever, is not the case before me and my disposition
of the case is not on those grounds.
Furthermore, I am not satisfied that the issues
raised in this action are new in the sense intended
by Band's counsel. The whole of the previous
action, in my view, constituted formalized debate
on public law and public authority and was posited
by the Band itself on the premiss that both the
surrender and the resulting lease were valid, bind
ing and enforceable instruments. Whether or not,
had their validity been raised in the earlier action,
the course of events would have been different, is
not for me to decide. From my perspective, that
issue can no longer be an issue deserving of the
attention of the Court. Any interest one might
have in it is now hypothesis, speculation and
conjecture.
In my view, the action by the Band is, in all the
circumstances which I have described, in the lan
guage of the law, an abuse of process and it should
not be allowed to proceed. The statement of claim
is therefore struck, with costs to the defendants if
demanded.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.