2019 QCCA 877, 2019 QCCA 877

Delisle Shea c. Diabo 2019 QCCA 877 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-026661-173 (505-17-005248-119) DATE: MAY 17, 2019 CORAM: THE HONOURABLE FRANÇOIS DOYON, J.A. GUY GAGNON, J.A. SIMON RUEL, J.A. JANET DELISLE SHEA APPELLANT / INCIDENTAL RESPONDENT - Defendant v.

HEATHER MARIE DIABO RESPONDENT / INCIDENTAL APPELLANT - Plaintiff JUDGMENT [ 1 ] On appeal from a judgment of the Superior Court, District of Longueuil (the Honourable Brian Riordan), rendered on January 30, 2017, ordering the appellant / incidental respondent to pay the respondent / incidental appellant the sum of $300,000 as compensatory damages. [ 2 ] For the reasons of Ruel J.A., with which Doyon and Gagnon, JJ.A. agree, THE COURT : [ 3 ] DISMISSES the principal appeal, with legal costs; [ 4 ] DISMISSES the incidental appeal, with legal costs. FRANÇOIS DOYON, J.A. GUY GAGNON, J.A. SIMON RUEL, J.A.

Mtre Stephen Ashkenazy HAMILTON COOPER ASHKENAZY For the appellant / incidental respondent Mtre Andrew Wallace Bird ASSISTENZA Mtre Steven Korda KORDA & ASSOCIÉS For the respondent / incidental appellant Date of hearing: March 20, 2019

REASONS OF RUEL, J.A. Background [ 5 ] The appellant/incidental respondent (hereinafter “Ms. Shea”) and the respondent/incidental appellant (hereinafter “Ms. Diabo”) are appealing a judgment rendered on January 30, 2017 by the Superior Court, District of Longueuil (the Honourable Brian Riordan), ordering Ms. Shea to pay Ms. Diabo the sum of $300,000 as compensatory damages. [1] [ 6 ] The trial judge summarized the relevant facts. I am only painting the broad strokes necessary for a better understanding of the present judgment. [ 7 ] Ms. Shea is Ms. Diabo’s mother.

Both women are part of the Mohawk community and live on the Indian reserve of Kahnawake. [ 8 ] In 2005, Ms. Diabo and her husband had a building constructed at their own expense on part of Ms. Shea’s land, with the latter’s permission, in order to expand a tobacco cutting operation. The parcel of land in question is lot 42-6. [ 9 ] Ms. Shea had inherited that parcel of land from her mother, Violet Delisle, on the condition, stipulated in paragraph 2(

B) of the will, that in the event it were sold, the proceeds would be divided equally between Ms. Shea and her daughter, Ms. Diabo. This paragraph also provided that lot 42-6 would go to Ms. Diabo upon Ms. Shea’s death. [ 10 ] The parties eventually entered into a lease, dated March 8, 2006, in which Ms. Diabo agreed to pay a specific amount of rent to Ms. Shea for the use of the portion of the lot in question, as well as the building. [ 11 ] A dispute arose between the parties in 2007, following which Ms.

Shea decided to lease the portion of the land and the building to Linda Curotte, who was involved in the tobacco cutting business. [ 12 ] In 2008, Ms. Diabo sent a demand letter to Ms. Shea demanding she pay her $925,000 (representing all the sums invested in the construction of the building, as well as the cost of the improvements made on Ms. Shea’s property), or give back the use of the building to her and her husband. [ 13 ] On April 20, 2011, Ms. Diabo filed a motion to institute proceedings against Ms.

Shea, in which she asked the Superior Court to enjoin the Minister of Indian Affairs and Northern Development [2] (hereinafter the “Minister”) and the Mohawk Council of Kahnawake Land Management from proceeding with any sale, transfer, division or partition of lot 42-6. Ms. Diabo also asked the Superior Court to condemn Ms. Shea to pay her several amounts for damages suffered as a result of Ms. Shea’s conduct, including $1,200,000 as compensation for the unjust enrichment received by her. [ 14 ] On April 29, 2011, in the days following the introduction of the claim, Ms.

Shea, with the cooperation of her brother, Louis Delisle, agreed to transfer lot 42-6-2 (which represents the subdivision of lot 42-6 on which the building used for the tobacco cutting operation was located), adjacent lot 42-5 (belonging to Mr. Delisle), and all the buildings located thereon, to Pat Nolan, Ms. Curotte’s business partner. The price was $700,000. [ 15 ] The promise to purchase indicated Mr. Delisle as the seller and Ms. Carol Nolan, Pat Nolan’s mother, as the buyer.

It also stipulated that transfer of possession of these lots, which requires the approval of the Minister pursuant to the Indian Act , [3] could not occur until the purchase price had been paid in full. [ 16 ] On September 29, 2014, Ms. Shea transferred possession of lot 42-6-2 to Mr. Delisle for one dollar, so that he could subsequently sell it to Mr. Nolan, and complete the whole transaction. [ 17 ] On October 1, 2014, Ms. Diabo re-amended [4] her motion to institute proceedings. She mentioned therein the sale of lot 42-6-2 to Mr.

Nolan, alleging that she had learned of this sale [or the anticipated sale] in the summer of 2014. [ 18 ] In November 2014, in accordance with

section 20 of the Indian Act and notwithstanding the legal proceedings that had been instituted, the Minister issued two certificates of possession: one bearing number 403024986 for lot 42-6-2, in the name of Mr. Delisle, and another bearing number 403024985, in the name of Ms. Shea, confirming her right to be in possession of lot 42-6-1, on which her house was situated. [ 19 ] On December 7, 2016, Ms.

Diabo once again amended her motion to institute proceedings, to ask the court to invalidate the transfer of lot 42-6-2, as well as certificates of possession #403024986 and #403024985, and grant her possession of the lot. [ 20 ] The trial judge concluded that Ms. Shea had committed a fault by transferring possession of the building built on lot 42-6-2 and condemned her to pay the sum of $300,000 to Ms. Diabo as compensatory damages. [ 21 ] According to the judge, Ms.

Shea sold something that did not belong to her. [ 22 ] The judge considered that the dispute involved a “division of the subject of the right of ownership of an immovable” , [5] and was therefore of the opinion that Ms. Diabo had a right of superficies in the building she had had built on lot 42-6. [ 23 ] Consequently, the judge found that Ms. Shea had usurped her daughter’s rights in the building by illegally selling it to Mr. Nolan.

[ 24 ] The judge specified that the Superior Court had jurisdiction over this matter, because Ms. Shea had committed a civil fault, which had nothing to do with the application of the Indian Act . [ 25 ] The trial judge, however, was of the opinion that the Superior Court did not have the authority to rule on the validity of the disputed certificates of possession, because this matter fell within the exclusive jurisdiction of the Federal Court, pursuant to paragraph 18(1) (

a) of the Federal Courts Act . [6] [ 26 ] For the same reason, the judge found that the Superior Court did not have jurisdiction to grant possession of the disputed building to Ms. Diabo. [ 27 ] The judge considered the amount of the damages. He found it difficult to assess the amounts put forth by Ms. Diabo, because everything had been done “informally” and in cash, without proof of payment. He concluded that, “in light of the evidence that we do have, it appears just that [Ms. Diabo] should be compensated for half the apparent amount of her initial investment: $300,000.” [7] [ 28 ] Ms. Shea is appealing. The essential questions she raises are as follows:

(1) Did the judge err by concluding that Ms. Diabo should be compensated for the transfer of the building situated on lot 42-6-2?

(2) Did the judge commit a palpable and overriding error by awarding Ms. Diabo an amount of $300,000 as compensatory damages? [ 29 ] Ms. Diabo has filed an incidental appeal asking whether the judge erred by concluding that the Superior Court did not have jurisdiction to rule on the validity of certificates of possession #403024985 and #403024986. Analysis [ 30 ] The principal appeal and the incidental appeal must fail. Here are the reasons.

The Principal Appeal [ 31 ] The judge did not have to consider the application of the Civil Code of Québec rules of superficies to lands situated on an Indian reserve in order to resolve the dispute. [ 32 ] The judge correctly held that the Superior Court had jurisdiction to determine compensation in connection with a civil remedy. [ 33 ] In this case, Ms. Shea enriched herself at the expense of Ms. Diabo, which gave rise to indemnification under

article 1493 of the Civil Code of Québec : 1493. Celui qui s’enrichit aux dépens d’autrui doit, jusqu’à concurrence de son enrichissement, indemniser ce dernier de son appauvrissement corrélatif s’il n’existe aucune justification à l’enrichissement ou à l’appauvrissement. 1493. A person who is enriched at the expense of another shall, to the extent of his enrichment, indemnify the other for the latter’s correlative impoverishment, if there is no justification for the enrichment or the impoverishment. [ 34 ]

Article 1493 of the Civil Code of Québec does not trench on the exclusive federal power over lands situated on Indian reserves, nor does it conflict with the Indian Act , because indemnification for unjust enrichment does not deal with the right of ownership or possession of an immovable on an Indian reserve. [8] [ 35 ] In this case, Ms. Diabo and her husband paid for the entire construction of a building on land occupied by Ms. Shea, which necessarily increased the value of the property. Ms. Shea did not assume any costs for the construction of the building. [ 36 ] In April 2011, when Ms.

Shea agreed to transfer part of her land and the building situated thereon to Mr. Nolan, she did not raise the matter with Ms. Diabo or her husband. As part of a larger transaction, on September 29, 2014, Ms. Shea transferred possession of lot 42-6-2, including the building, to Mr. Delisle. Ms. Shea’s share of the transaction was $375,000. [ 37 ] Ms. Shea clearly enriched herself to the detriment of Ms. Diabo. There is no justification for her enrichment and the impoverishment of Ms. Diabo. [ 38 ] While the lease signed on March 8, 2006 indicates that Ms.

Diabo is leasing part of her mother’s land, as well as the building situated thereon, Ms. Diabo explained in testimony that she was convinced that lot 42-6 would remain in the family or, that upon its sale, she would receive half of the proceeds, in accordance with Violet Delisle’s last wishes. This is why she did not take exception when the lease was signed. [ 39 ] In fact, Violet Delisle’s will expressly states that, upon the sale [transfer] of lot 42-6, Ms. Diabo is entitled to half of the proceeds. The will also provides that, upon Ms. Shea’s death, lot 42-6 is to be bequeathed to Ms.

Diabo. [ 40 ] Considering these circumstances, having made a large financial contribution to the construction of the building on Ms. Shea’s property, Ms. Diabo was justified in expecting compensation if the property were to be transferred to a third party. This is particularly so considering that she had testamentary rights in the property in question. [ 41 ] In any event, the judge would also have been entitled to find Ms. Shea liable for abuse of right, [9] because her conduct towards Ms.

Diabo was unreasonable and contrary to the requirements of good faith. [ 42 ] The judge’s conclusion to award an amount of $300,000, namely, half of Ms. Diabo’s apparent investment in the building, is not tainted by a palpable and overriding error warranting the Court’s intervention. That amount corresponds to Ms. Diabo’s impoverishment . [ 43 ] In arriving at this amount, the judge considered all of the evidence and the difficulties relating to the exactness of the amounts put forth by the parties.

[ 44 ] In addition, Ms. Diabo’s right of action was not prescribed, because, as the trial judge determined, the $300,000 in compensatory damages stemmed from the transfer of the building, not from her and her husband’s expulsion in 2007 . [ 45 ] The promise to purchase the properties (lots 42-6-2 and 42-5) was made with the Nolans on April 29, 2011. Lot 42-6-2, on which the building is situated, was formally transferred to Mr. Delisle on September 29, 2014 . [10] [ 46 ] On October 1, 2014 , Ms. Diabo re-amended her motion, alleging that she had learned of the sale [or the anticipated sale] in the summer of 2014.

She once again amended her motion on December 7, 2016 , asking the Court to invalidate the transfer of lot 42-6-2 as well as the certificates of possession and grant her possession of the lot, or condemn Ms. Shea to pay damages. [ 47 ] The judge therefore made no error on the issue of prescription. The Incidental Appeal [ 48 ] Ms. Diabo had asked the Superior Court to invalidate the transfer of lot 42-6-2, as well as the certificates of possession, and grant her possession of the lot in question. [ 49 ] The trial judge found that the Superior Court did not have jurisdiction over these matters.

He did not err in this regard. [ 50 ] Firstly, as the judge indicated, a number of affected persons were not called as parties to the proceedings (Mr. Delisle, Carol Nolan, Pat Nolan) and, in fairness, the Superior Court could not make orders affecting the rights of those parties. [11] [ 51 ] Secondly, under

section 27 of the Indian Act , the Minister may cancel any certificate of possession that in his opinion was issued through fraud or in error. [12] [ 52 ] Paragraph 18(1) (

a) of the Federal Courts Act provides that the Federal Court has exclusive jurisdiction “to issue an injunction, writ of certiorari , writ of prohibition, writ of mandamus or writ of quo warranto , or grant declaratory relief, against any federal board, commission or other tribunal”. [13] [ 53 ] A “federal board, commission or other tribunal” is defined as “any body, person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under

an Act of Parliament or by or under an order made pursuant to a prerogative of the Crown […]”. [14] Thus, when the Minister exercises his jurisdiction to cancel certificates of possession, he acts as a federal board. [15] [ 54 ] Consequently, the Superior Court does not have jurisdiction to order the Minister to cancel certificates of possession #403024985 and #403024986 or issue a certificate of possession. [16] [ 55 ] Ms.

Diabo argues that the Superior Court could nevertheless declare that these certificates are inapplicable to her. [17] [ 56 ] As indicated, the Federal Court has exclusive jurisdiction to grant declaratory relief against the Minister in relation to certificates of possession. Counsel for Ms. Diabo conceded that if the Superior Court were to make such a declaration, it would only be advisory in nature and not biding on the Minister. [ 57 ] However, even if the Court did have jurisdiction to grant the declaratory relief sought, it could not do so in this case, in the absence of the affected persons – Mr.

Delisle, Ms. Carol Nolan and Mr. Pat Nolan. [ 58 ] It is for these reasons that I would dismiss the principal appeal, with legal costs, and dismiss the incidental appeal, with legal costs. SIMON RUEL, J.A.