Musqueam Band - Guerin (1984)

In 1956, the prestigious Shaughnessy Golf & Country Club needed to find a new location for its golf course (1). The Club was an exclusive private club whose membership was drawn from the Who’s Who of the City of Vancouver. The Club representatives went to the Department of Indian Affairs and made a proposal to lease the best 162 acres of our reserve (2), located on the west side of the City of Vancouver, overlooking the Fraser River. The Department could only give the Club the lease if we, the Musqueam Band, consented in a formal surrender process under the Indian Act. We were denied access to a lawyer of our own while the lease was negotiated between the Department and the Club, and were excluded from most of the negotiations. However, to obtain our consent to lease, the Department promised us that the lease to the Club would contain certain terms and would produce rental revenue for our benefit. After obtaining our consent on those terms and without seeking our approval, on Janurary 9, 1958, the Department leased the land to the Club on substantially different terms. All of the changes benefited the Club at our expense.

For example, we were told by the Department that the land would be leased at a low rent (3) (about a quarter of the fair market rent) for the first 15 years, but for the rest of the 75 year lease, the rents would be adjusted to fair market rates every 10 years. That’s what we were promised, but it’s not what we got. Without asking us, the Department changed the subsequent renewal periods from 10 years to 15 years. But more seriously, the rent during renewal periods was not fair market rent. Instead, the lease provides that renewal rent is to be calculated on the assumption that the land could only be used as a golf course (which works out to about 10% of the real fair market rent based on the actual highest use of the land, which is residential), and unbelievably, the lease restricted the rent increase after the initial period to 15% of the initial low rent. As our lawyer Marvin Storrow, Q.C. later explained the deal to us, “The Golf Club got the gold and you guys got the shaft!”

We didn’t learn of the Department’s betrayal for 12 years. The lease was kept from us until 1970 when an honest and courageous Department employee, Graham Allen (now a well-known Vancouver lawyer), allowed our Chief, Delbert Guerin, to examine and make a copy of the lease.

Chief Guerin and the Band Council were appalled at the prejudicial changes they found in the lease document. The Band decided to seek legal advice on how to sue the government. What we learned at first was discouraging. All the lawyers we went to were sympathetic and agreed that the government had wronged us, but they warned that no Indian Band had ever successfully sued the government and they told us that our claim was likely time-barred by the Limitations Act. The fact that we didn’t find out what the Department had done until after the limitation period had expired might not make any difference, they told us.

It took 5 years to find a lawyer, but finally, in 1975, Marvin Storrow, Q.C. a lawyer with Davis & Company (now with the Vancouver firm of Blake Cassels) agreed to take our case. Litigation is expensive, and we could not afford to pay regular legal fees. Fortunately, Marvin Storrow was so offended by the injustice done to us that he agreed to a contingency arrangement under which we would not have to pay more than what we could afford if we lost.

The case was filed in December 1975. It was heard by three levels of court. The pre-trial process and the trial took a long time. Finally, on July 3, 1981, Mr. Justice Collier of the Federal Court, Trial Division found in our favour and awarded us $10 million compensation (4), but the Federal Court of Appeal allowed the government’s appeal (5) and set the award aside. The Court of Appeal said that the government did not owe us any legally enforceable trust obligation when dealing on our behalf with our reserve land. Any obligation owed by the government, the Court said, was only a “political trust” (6). The Court also said that the Department’s oral promises about the Golf Club lease terms didn’t count because they were not incorporated in the formal surrender document that the Department had prepared. We appealed to the Court of last resort, the Supreme Court of Canada.

The Supreme Court heard our appeal in the summer of 1983. On November 4, 1984 (7), the Supreme Court ruled in our favour and reinstated the trial award. The compensation that came to us as a result of the decision has been important to our community, but the legal precedent established by the case for all aboriginal people, not just in Canada but around the world, has been far more important.
The Supreme Court of Canada first decided that our reserve was not public property belonging to the Crown which the Department was free to do with as it pleased, which in effect was what the government had argued. The Court said that we had a pre-existing aboriginal title to our reserve, and that these rights existed independently of any recognition or action by government. The judges said our rights to our reserve were the same as our aboriginal title to our traditional territory.

The second major point that came out of the case is the Court’s ruling that the government owes a unique, legally enforceable fiduciary duty (8) to first nations when dealing with reserve lands. This duty placed the government under a legal duty to take the same care with the management of our lands as would be taken by a prudent person when dealing with his own property. The Court ruled that the government had breached its fiduciary duty by making the lease on different terms from what had been promised without coming back to us and asking whether we approved of the changes.

Lastly, the Court rejected the government’s limitations defence to our claim. The Court said the government had been guilty of “fraudulent concealment” and “equitable fraud” by not providing us with a copy of the lease. Therefore, the limitation period did not begin to run until we had obtained knowledge of the government’s breach in 1970.

Since Guerin, many first nations have been able to make successful claims against the government for breaches of fiduciary duty. The broad ruling in favour of our aboriginal title to the reserve was very significant. According to UBC Law Professor Douglas Sanders, the Supreme Court was “clearly signaling the seriousness with which it regarded aboriginal title claims”. This part of the decision was especially encouraging because the Canadian Constitution was amended in 1982 to include, in section 35, a recognition and affirmation of existing aboriginal and treaty rights. Before the Guerin decision was handed down in November 1984, Musqueam had already begun the Sparrow case, a case that we took to obtain a judicial ruling that section 35 constitutionally protected our aboriginal fishing rights from infringement by government.

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