Nunavut Tunngavik Incorporated v Canada (Attorney General), 2014 NUCA 02

In the Court of Appeal of Nunavut Citation: Nunavut Tunngavik Incorporated v Canada (Attorney General), 2014 NUCA 02 Date: 20140423 Docket: 08-12-007-CAP Registry: Iqaluit Between: The Inuit of Nunavut as Represented by Nunavut Tunngavik Incorporated Respondent (Plaintiff) - and - The Attorney General of Canada Appellant (Defendant) - and - The Commissioner of Nunavut as Represented by Government of Nunavut and The Government of Nunavut Third Parties _______________________________________________________ The Court: The Honourable Madam Justice Constance Hunt The Honourable Mr.

Justice Clifton O’Brien The Honourable Mr. Justice Frans Slatter _______________________________________________________ Reasons for Judgment Reserved of the Honourable Mr. Justice Slatter Concurred in by the Honourable Mr. Justice O’Brien

Dissenting Reasons for Judgment Reserved of the Honourable Madam Justice Hunt Appeal from the Order by The Honourable Mr. Justice E.D. Johnson Dated the 27th day of June, 2012 ( 2012 NUCJ 11 , Docket: 08-06-713-CVC) _______________________________________________________ Reasons for Judgment Reserved of the Honourable Mr. Justice Slatter _______________________________________________________ [ 1 ] The appellant, the Government of Canada, appeals the partial

summary judgment granted against it by the case management judge: Nunavut Tunngavik Inc. v Canada (Attorney General), 2012 NUCJ 11 , [2012] 3 CNLR 210 . The underlying action alleges numerous breaches by Canada of the Nunavut Land Claims Agreement. The partial

summary judgment relates to a breach of one clause of that agreement (Article 12.7.6) regarding the implementation of an informational monitoring plan. The live issues on this appeal are:

a) whether Canada owes the respondent fiduciary duties under or parallel to

Article 12.7.6 of the Land Claims Agreement,

b) whether restitutionary (as opposed to only expectation) damages are available for the breach, and

c) whether the record on the quantum of damages was sufficiently clear to permit

summary judgment. Background Facts [ 2 ] The Inuit have resided in the eastern Arctic for many generations. They never entered into any treaty arrangements with the British Crown. Negotiations for a comprehensive treaty commenced in the 1970s, and culminated with the signing in 1993 of the Nunavut Land Claims Agreement. The Land Claims Agreement is over 200 pages long, and covers virtually every conceivable subject; it bears no resemblance whatsoever to the simple aboriginal treaties of the Victorian era: see the text at nlca.tunngavik.com.

One of its central components is the surrender by the Inuit of their traditional aboriginal land claims in exchange for title to large tracts of land, and the many other benefits set out in the Land Claims Agreement. Parallel to the implementation of the Land Claims Agreement, an entirely new political jurisdiction was carved out of the Northwest Territories.

This resulted in the creation in 1999 of the Territory of Nunavut, a new unit of government in Canada. [ 3 ] The respondent, Nunavut Tunngavik Incorporated, is a corporation without share capital established to represent the interests of the beneficiaries of the Land Claims Agreement. It is, among other things, the “Designated Inuit Organization” that holds title to the lands granted to the Inuit under

Article 19.3.1 of the Land Claims Agreement. It also has various other rights and responsibilities, including under

Article 2.14.1 which authorizes it to enforce the covenants in the Land Claims Agreement. [ 4 ] The Inuit ratified the Land Claims Agreement by vote, as contemplated by

Article 36.2.1.

Article 36.3.1 contemplated that Canada would sign the Land Claims Agreement, and ratify it by statute as detailed in that Article. That statute is the Nunavut Land Claims Agreement Act, SC 1993, c. 29 . The Act recites the negotiation of the Land Claims Agreement, and in its

preamble sets out the perceived purposes of that Agreement: WHEREAS Her Majesty the Queen in right of Canada and the Inuit of the Nunavut Settlement Area have negotiated an Agreement based on and reflecting the following objectives: to provide for certainty and clarity of rights to ownership and use of lands and resources and of rights for Inuit to participate in decision- making concerning the use, management and conservation of land, water and resources, including the offshore, to provide Inuit with wildlife harvesting rights and rights to participate in decision-making concerning wildlife harvesting, to provide Inuit with financial compensation and means of participating in economic opportunities, to encourage self-reliance and the cultural and social well-being of Inuit; Section 4(1) of the Act declares that the Land Claims Agreement is “ratified, given effect and declared valid”. [ 5 ] The Act goes on to provide some principles by which it and the Land Claims Agreement should be interpreted.

Section 4(3) provides:

(3) For greater certainty, any person or body on which the Agreement confers a right, privilege, benefit or power or imposes a duty or liability may exercise the right, privilege, benefit or power, shall perform the duty or is subject to the liability, to the extent provided for by the Agreement. Section 6(1) provides that the Land Claims Agreement prevails in the face of any inconsistency between it and “any law, including this Act”. The Land Claims Agreement [ 6 ] The Land Claims Agreement is at the heart of this litigation. The entire Statement of Claim and the

summary judgment application were premised on it. It is pled in para. 3 of the Amended Statement of Claim, and “admitted” in para. 4 of the Defence. Both the parties and the case management judge were well aware of its admitted existence and content. The fact that the parties did not photocopy the lengthy Agreement and include it in the Appeal Books is of no consequence. It is available for review on line. The Land Claims Agreement is a document with constitutional status, it was tabled in Parliament, it has been ratified by statute, and was admitted in the pleadings.

It is artificial to suggest it is not a part of this record. It is axiomatic that an agreement must be interpreted as a whole, and all the provisions of the Agreement must be considered when deciding what duties flow from it. [ 7 ] As noted, the Land Claims Agreement covers many topics. It contains some guides to its

interpretation, including a “whole agreement” clause that complements the statutory provisions just discussed: 2.9.2 The Agreement shall be the entire agreement and there is no representation, warranty, collateral agreement or condition affecting the Agreement except as expressed in it.

Article 2.9.3 negates the contra proferentum presumption. Read as a whole, it is clear that the Land Claims Agreement was carefully and professionally drafted in accordance with modern contractual drafting conventions. [ 8 ] The Land Claims Agreement also deals with the creation of the new governmental and quasi-governmental organizations that complement it, and the implementation of the many covenants in it. Implementation was to be accomplished through an Implementation Plan, under the supervision of an Implementation Panel, in part through the mechanism of an Implementation Contract. The concept was outlined in

Article 37.1.1: 37.1.1 The following principles shall guide the implementation of the Agreement and shall be reflected in the Implementation Plan: (

a) there shall be an ongoing process for Inuit and Government to plan for and monitor the implementation of the Agreement which shall mirror the spirit and intent of the Agreement and its various terms and conditions; (

b) implementation shall reflect the objective of the Agreement of encouraging self-reliance and the cultural and social well-being of Inuit; (

c) timely and effective implementation of the Agreement with active Inuit participation, including those provisions for training, is essential for Inuit to benefit from the Agreement; (

d) to promote timely and effective implementation of the Agreement, Inuit and Government shall (

i) identify, for multi-year planning periods, the implementation activities and the level of government implementation funding which will be provided during any planning period, and (ii) allow flexibility through an implementation panel to reschedule activities, and consistent with government budgetary processes, to re-allocate funds within the planning period; and . . . This

Article contemplates the joint participation by the Inuit and the Government of Canada in the implementation process. To some extent the provisions are possibly no more than an “agreement to agree”. [ 9 ] The specific covenant at issue in this appeal concerns the creation of a monitoring plan:

ARTICLE 12,

PART 7, MONITORING 12.7.6 - General Monitoring There is a requirement for general monitoring to collect and analyse information on the long term state and health of the ecosystemic and socio-economic environment in the Nunavut Settlement Area. Government, in co-operation with the NPC [Nunavut Planning Commission], shall be responsible for developing a general monitoring plan and for directing and co-ordinating general monitoring and data collection. The NPC shall: (

a) in accordance with the plan, collate information and data provided by industry, government departments and agencies, amongst others; (

b) in accordance with the plan, report periodically on the ecosystemic and socio-economic environment of the Nunavut Settlement Area; and (

c) use the information collected under Sub-sections (

a) and (

b) to fulfill its existing responsibilities under

Article 11. It is the now admitted breach of this covenant that formed the basis of the

summary judgment. [ 10 ] The Implementation Contract contains a number of Schedules, including

Schedule 1, “Implementation Worksheets”. The purpose of

Schedule 1 was set out in

section 2.3: 2.3 In

Schedule 1:

a) the text in each worksheet under the heading “Obligation, Activity, Project: constitutes the primary provisions of the Agreement to which the activities in that worksheet relate but are not intended to represent the only relevant provisions in relation to those activities;

b) the inclusion of the text under the headings “Participant/Liaison” and “Referenced Clauses” is intended solely to facilitate the utilisation of

Schedule 1 as a planning tool and is not to be used to affect or interpret the obligations of the parties under the Contract;

c) the Planning Assumptions shall be of interpretive value only; and

d) any qualification in the Nunavut Final Agreement relating to any obligation described in the

Schedule shall apply to that obligation.

Section 3.1 provides that each party would “act in good faith to honour and carry out its obligations”.

Section 5.1 confirms Canada’s obligation to provide implementational funding. [ 11 ]

Schedule 1 includes a Worksheet respecting

Article 12.7.6 of the Land Claims Agreement: Subject: GENERAL ENVIRONMENTAL MONITORING Obligation, Activity, Project: Processing of General Monitoring 12.7.6 [Set out verbatim, see supra, para. 9] Management Responsibility: DIAND Participation/Liaison: NPC Appropriate government departments Referenced Clauses*: 12.7.7;

Article 11 ACTIVITIES RESPONSIBILITY TIMING Identify government agencies involved in monitoring and data collection DIAND ASAP In cooperation with NPC, establish a process to coordinate monitoring and data collection by government agencies DIAND ASAP after NPC established In cooperation with NPC, review existing ecosystem and socio-economic monitoring programs in the Nunavut Settlement Area DIAND ASAP after NPC established In cooperation with NPC, develop a general monitoring plan DIAND ASAP after NPC established Provide information and data collected by government to NPC for collating DIAND In accordance with general monitoring plan In cooperation with NPC, direct and coordinate general monitoring and data collection

DIAND In accordance with general monitoring plan *Article 12.7.7 gives the Nunavut Planning Commission the power to delegate.

Article 11 covers many aspects of Land Use Planning. The Present Dispute [ 12 ] The Land Claims Agreement and the Implementation Agreement came into effect in 1993. Nunavut was created as of 1999. Implementation commenced; there was obviously a lot to be done. [ 13 ] Differences of opinion arose, and in 2006 the respondent issued the Statement of Claim which underlies this appeal. The Statement of Claim alleges numerous breaches of the Land Claims Agreement, including (in paras. 12(c), 43-5) a breach of

Article 12.7.6. The Statement of Claim also alleges fiduciary duties. It states that the appellant has the power to “design, select and implement such initiatives” as are required to perform its obligations under the Land Claims Agreement, and the resulting power or control, in the face of the “vulnerable position” of the respondent “give[s] rise to sui generis fiduciary obligations”. Particulars of the scope of the pleaded fiduciary duty are: 18. (

a) It [Canada] is obliged to engage in good faith negotiations with the Inuit for the purpose of reaching agreement on the funding necessary to fulfill the promises made to Inuit in the Agreement; (

b) It cannot unilaterally exercise its power over the appropriation of funds so as to erode, delay, or minimize the scope and substance of the benefits promised to Inuit in the Agreement; (

c) In the event of an impasse over the funding necessary to fulfill the promises made by the Crown in the Agreement, it is obliged to have the matter determined by submission to the arbitration procedure provided under the Agreement or by another neutral dispute resolution process agreed on by the parties; (

d) It is obliged to seek the agreement of the Inuit on Governmental initiatives it proposes to establish for the purpose of fulfilling its obligations under the Agreement; (

e) It is obliged to design governmental initiatives required by the Agreement in a manner that is intended to achieve and is reasonably capable of achieving the objectives set out in the Agreement. Paragraph 19 of the Statement of Claim then alleges numerous breaches of the fiduciary duty. [ 14 ] Significant portions of the Statement of Claim relate to allegations of “inadequate funding”. The respondent alleges (based on provisions such as

Article 37.1.1(e)(ii)) that the appellant is obliged under the Land Claims Agreement and its fiduciary duties to fund various initiatives, activities, and institutions in Nunavut.

A significant portion of the dispute relates to whether the funding that has been provided complies with the pleaded obligations. [ 15 ] The relief claimed includes numerous declarations that the appellant is in breach of the Land Claims Agreement, specific performance, continuing supervision by the Court, an order requiring the appellant to consent to arbitration, declarations that the appellant is in breach of its fiduciary duties, damages of $1 billion, and collateral relief. [ 16 ] After the usual exchange of documents, and examinations for discovery, the respondent brought this application for

summary judgment. The application is narrow, and relates only to the alleged breach of

Article 12.7.6. It is anticipated that the balance of the action will proceed to trial. The application was decided based on various admissions, affidavits sworn by the parties’ representatives, and answers given at examinations for discovery by T. Sewell, the appellant’s designated officer. Decision of the Case Management Judge [ 17 ] The appellant’s position at the

summary judgment application was that there had been no breach of

Article 12.7.6. The case management judge found otherwise, and on appeal the appellant does not challenge that finding. Since the Land Claims Agreement contains no deadline for the performance of the appellant’s obligations under

Article 12.7.6, the case management judge found that they had to be performed within a reasonable time (reasons para. 82). He concluded that, at the latest, those obligations should have been performed by 2003 (reasons paras. 83, 105(iii), (iv)), and that the appellant was in breach by not implementing monitoring until 2010 (reasons para. 196). Those findings are now uncontested. [ 18 ] After finding a breach of the Land Claims Agreement, case management judge went on to conclude that there was also a breach of fiduciary duty: 265.

I am satisfied that NTI [the respondent] has established that Canada owed a fiduciary duty to the Inuit to establish the NGMP [Nunavut General Monitoring Plan] as soon as possible after the establishment of the NPC [Nunavut Planning Commission] and no later than July 2003. That finding was largely pursued because the respondent did not seek expectation damages for the breach of covenant, but rather sought a restitutionary remedy, namely the disgorgement of the savings realized by the appellant through its delayed performance.

Since the appellant argued that only expectation or nominal damages were available for breach of covenant, the case management judge explored the existence of a fiduciary duty. The case management judge concluded that expectation damages were inappropriate for the breach (reasons para. 295, 331).

The case management judge concluded that there was a breach of fiduciary duty (reasons para. 265), that restitutionary remedies were available and appropriate for breaches of fiduciary duty (reasons paras. 275-6, 309), but in any event he concluded that the same restitutionary remedies would be available for breach of covenant (reasons paras. 333-4).

[19] The case management judge then went on to consider the quantum of damages. The appellant argued that, even if a breach wasfound, the record was not sufficiently clear to justify

summary judgment on quantum, and that the question of quantum should be sent totrial. The case management judge found, however, that the record was sufficiently clear to determine the cost savings that the appellanthad achieved by delaying performance of its obligation to implement a monitoring plan (reasons paras. 105, 146, 196). He concluded thatit was not possible to calculate expectation damages in this situation (reasons para. 201).

He referred to a Business Case which had beendeveloped for the monitoring plan, one of the options in that Business Case which had apparently been agreed to, and the budgeted costsavings that the appellant had realized by delaying performance for seven years. The case management judge determined that there wasno genuine issue for trial with respect to the quantum, and awarded damages of $14.8 million (reasons paras. 39, 354). Issues and Standard of Review [20] As noted, this appeal raises three issues:

a) Whether Canada owes the respondent fiduciary duties under or parallel to

Article 12.7.6 of the Land Claims Agreement;

b) Whether restitutionary (as opposed to only expectation) damages are available for the admitted breach; and

c) Whether the record on the quantum of damages was sufficiently clear to permit

summary judgment. To be clear, this was a

summary judgment application. The only issue before the Court is therefore whether the respondent proved itscase on this record in advance of a full trial, and demonstrated that there was no remaining genuine issue for trial. The only covenant onwhich

summary judgment was applied for was

Article 12.7.6 relating to general monitoring. Thus, the three issues just stated areengaged only with respect to a breach of that Article, and whether any breach can be established without a full trial. [21] The conclusion that restitutionary damages are available for breach of contract does not render moot any discussion about parallelfiduciary duties. The existence of such parallel fiduciary duties would define the scope of any breach by the Crown, and could have animpact on the remedies available. [22] There is clearly no unfairness in discussing the issue of fiduciary duty.

The respondents wanted to establish a fiduciary duty parallelto the covenants in the Land Claims Agreement, undoubtedly because it would be a significant advantage in the trial still to come. Theissue was pled by the respondents, was fully argued on the

summary judgment application, and was fully engaged by the casemanagement judge. The respondents’ factum discussed the issue and supported the result; there was no suggestion that the issue wasunsuitable for adjudication on a

summary judgment application. [23] Further, there is nothing that makes inappropriate the discussion of fiduciary duty, albeit in the narrow context of a

summaryjudgment application about

Article 12.7.6. The factual, historical and constitutional context in which the Land Claims Agreement wasnegotiated is not in dispute. Its terms are clear. There are numerous cases in aboriginal law discussing the Crown’s obligations, includingthe recent decision in Manitoba Métis.

In Hryniak v Mauldin, 2014 SCC 7 the Court called for “a culture shift . . . in order to create anenvironment promoting timely and affordable access to the civil justice system . . . moving the emphasis away from the conventionaltrial in favour of proportional procedures tailored to the needs of the particular case.” Merely because some legal analysis is required toresolve the issue does not preclude a decision.

As was said in Kripps v Touche Ross & Co. (1992), (BC CA), 94 DLR(4th) 284 at p. 309, 69 BCLR (2d) 62 (CA): A court might be tempted, at the present point in the development of the Canadian law of negligence, to permit every negligence claim toproceed to trial. But that would lead to a long and costly period of uncertainty, one particularly costly in the commercial world wherecertainty in the law is of considerable importance.

It seems to me that the courts would fail in their duty to the community were they todecline to exercise jurisdiction under Rule 19(24) simply because of the current state of the jurisprudence in this area of the law. It is, Ithink, important in some cases that the court make a decision at this stage concerning the extent to which recovery in negligence can beenlarged, and I believe this to be such a case. Likewise, on this

summary judgment application this Court can discuss the law of fiduciary duties running parallel to

Article 12.7.6. [24] The factual findings of the case management judge underlying the finding of a fiduciary duty are entitled to deference. However, thelegal test for the existence of a fiduciary duty is a question of law reviewed for correctness: Perez v Galambos, 2009 SCC 48 at paras.48-49, [2009] 3 SCR 247; Alberta v Elder Advocates of Alberta Society, 2011 SCC 24 at paras. 4, 22, [2011] 2 SCR 261; Housen vNikolaisen, 2002 SCC 33 at paras. 8, 10, 25, [2002] 2 SCR 235. Deciding if a particular set of facts meets a legal standard calls for thedrawing of a legal inference from those facts, which in turn calls for a “higher standard” of review: Housen at paras. 26, 28. [25] The

interpretation of the terms of the Land Claims Agreement is a question of law reviewed for correctness: Sumner v PCLConstructors Inc., 2011 ABCA 326 at para. 25, 515 AR 231; Globex Foreign Exchange Corp v Kelcher, 2011 ABCA 240 at para. 108,513 AR 101; Diegel v Diegel, 2008 ABCA 389 at para. 20, 100 Alta LR (4th) 1; 358296 Alberta Ltd. v Phoenix Marble Ltd., 2008ABCA 177 at para. 9, (sub nom Alberta Importers and Distributors

(1993) Inc. v Phoenix Marble Ltd.) 88 Alta LR (4th) 225, 432 AR173. [26] The availability of any particular type of damages for breach of contract is a question of law reviewed for correctness. Thedetermination of the quantum of damages is largely a question of fact, and should only be interfered with where the trial judge applied awrong principle of law, or the overall amount is a wholly erroneous estimate: Andrews v Grand & Toy Alberta Ltd., (SCC), [1978] 2 SCR 229 at p. 235, 19 NR 50; Herron v Hunting Chase Inc., 2003 ABCA 219 at para. 38, 330 AR 53. [27] The test for

summary judgment is a question of law reviewed for correctness. The application of that test to a particular recordinvolves a mixed question of fact and law, and the granting of

summary judgment is entitled to some deference: Hryniak v Mauldin atparas. 81-2; Diegel; Stobbe v Paramount Investments Inc., 20013 ABCA 384 at para. 10. Fiduciary Duty in Aboriginal Law

[28] A considerable portion of the reasons of the case management judge, and the argument before this Court, concerned whether theappellant owes fiduciary duties to the respondent that parallel or supplement the covenants in the Land Claims Agreement. Therespondent argued that the relationship between Canada and the Inuit is inherently fiduciary in nature, and that the execution of the LandClaims Agreement does not change that.

It points to cases where a fiduciary and a beneficiary will enter into a contract, which is built onthe platform of fiduciary duties: Strother v 3464920 Canada Inc., 2007 SCC 24 at para. 34, [2007] 2 SCR 177. [29] Some examples of the alleged fiduciary duties are helpful in providing some context to this argument. One example is theopportunity to arbitrate disputes.

Article 38.2.1(

a) of the Land Claims Agreement provides that certain disputes may be sent toarbitration, but only if both parties consent. The respondent pleads in paras. 19(k), 82-4 that the appellant has refused to consent to theresolution of some portions of the dispute by arbitration, and that the withholding of its consent is a breach of its fiduciary duties. [30] A second example relates to the pleading that the appellant has a fiduciary duty to fund various activities or institutions, and hasfailed to do so.

The Land Claims Agreement contains some express covenants to fund certain activities, sometimes in fixed amounts, andsometimes in amounts within certain general parameters. In addition to these contractual duties, the respondent pleads in para. 18 that theappellant has fiduciary duties that place limits on how it can exercise its powers over funding. [31] Fiduciary duties have two sources. First, there are some relationships which by their very nature are fiduciary. Second, even outsidethe established fiduciary relationships the particular factual matrix of a given relationship may generate fiduciary duties.

It has long beenrecognized that the relationship between the Crown and the aboriginal peoples is one that is fiduciary in nature, with certain features thatare unique to that relationship: Guerin v The Queen, (SCC), [1984] 2 SCR 335 at pp. 383-5; Elder Advocates at paras.48-9. The issue is therefore whether there is any source of fiduciary duty at play in this appeal. [32] The law on the subject has evolved, and was most recently summarized in Manitoba Métis Federation Inc. v Canada (AttorneyGeneral), 2013 SCC 14, [2013] 1 SCR 623.

Manitoba Métis was decided after the decision of the case management judge presentlyunder appeal, and accordingly was not available to him. Manitoba Métis sets out several principles: 1. While overall the relationship between the Crown and aboriginal peoples can be described as fiduciary in nature, not all aspects ofthat relationship are governed by fiduciary obligations (at para. 48). As stated in Wewaykum Indian Band v Canada, 2002 SCC 79 atpara. 81, [2002] 4 SCR 245, the fiduciary duty “does not exist at large but in relation to specific Indian interests”. 2.

There are two ways that a fiduciary duty can arise in the aboriginal context: (

a) Where the Crown administers lands or property in which Aboriginal peoples have an interest, such a duty may arise if there is (

i) a specific or cognizable Aboriginal interest, and (ii) a Crown undertaking of discretionary control over that interest (at para. 51). The interest must be a communal Aboriginal interest in land that is integral to the nature of the community and their relationship to theland (at para. 53). It must be predicated on historic use and occupation, and cannot be established by treaty or by legislation (at para. 58). (

b) A more general fiduciary duty may arise (at para. 60), if there is: (

i) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary, coupled with a duty of loyalty that wouldinvolve subordinating the interests of all others in favour of the beneficiary (at para. 61), (ii) a defined person or class of persons vulnerable to a fiduciary's control; and (iii) a legal or substantial practical interest of the beneficiary that stands to be adversely affected by the alleged fiduciary's exercise ofdiscretion or control. 3. Where a fiduciary duty exists, the scope and content of that duty will vary depending on the circumstances (at para. 49).

Does the application of these principles demonstrate a fiduciary duty in this case with respect to the obligation to provide statisticalmonitoring? Administration of Aboriginal Lands [33] It will immediately be apparent that no fiduciary duty can arise under the first branch of the test: where the Crown administers landsor property in which Aboriginal peoples have an interest. In Manitoba Métis the Supreme Court clearly stated (at para. 58) that thenecessary foundational rights cannot arise by treaty, because in that event the Crown’s duties are defined by the treaty, not anothercognizable Aboriginal interest.

The only source of the duty to monitor is the Land Claims Agreement, which is clearly a treaty. In anyevent, as discussed below, the necessary fiduciary elements of discretionary control and subordination of interest are absent here. [34] That makes moot any search for a “cognizable aboriginal interest”, which is a part of the test for the first category of fiduciary duty.In any event, there is no sufficient land or property interest involved in

Article 12.7.6 that would qualify; there is no evidence on thisrecord of an aboriginal property or other interest in “ecosystemic and socio-economic monitoring”. As discussed, infra paras. 42-48, thenow surrendered aboriginal land claim cannot be the necessary interest. The contractual entitlement to monitoring, like the statutoryproperty rights involved in Manitoba Métis, is not sufficient to support a fiduciary duty under the first branch of the test.

Fiduciary Duty by Undertaking [35] A second possible source of a fiduciary duty is through the other branch of the test, which requires an undertaking of loyalty,directed to a defined group, related to a “practical interest of the beneficiary that stands to be adversely affected by the alleged fiduciary'sexercise of discretion or control”.

Undertaking and Loyalty [36] The first part of the test requires that the proposed fiduciary undertook to act in the interests of the beneficiary, to the extent that itwould subordinate its own self interest, and that of any other group, to those of the beneficiary. [37] The Land Claims Agreement was negotiated by two parties, each of which had access to sophisticated advice, in an arm’s lengthcontext: Beckman v Little Salmon/Carmacks First Nation, 2010 SCC 53 at para. 9, [2010] 3 SCR 103.

The Government of Canada, inthe public interest, and having regard to its obligations to aboriginal peoples, negotiated a surrender of the Inuit’s claim to traditionalland rights. In exchange for that, Canada vested in the Inuit fee simple title to tracts of land, and other benefits set out in the Land ClaimsAgreement. There is no indication in the Act or the Land Claims Agreement, or in the underlying arrangement, that Canada agreed to“relinquish its own self-interest and act solely on behalf of the Inuit”.

Neither the Act nor the Land Claims Agreement contain anelement of “loyalty” and “subordination of interest” that is the key to finding fiduciary responsibilities. [38] In this respect Canada’s supposedly subordinated “self-interest” is the public interest. Canada has an obligation to discharge itsobligations to various aboriginal communities, but Canada also has a broader obligation to the public at large.

In Elder Advocates theCourt pointed out that governments are only fiduciaries in “limited and special circumstances” (at para. 37), because of the wide-rangingduties they owe: 44 Compelling a fiduciary to put the best interests of the beneficiary before their own is thus essential to the relationship. Imposing sucha burden on the Crown is inherently at odds with its duty to act in the best interests of society as a whole, and its obligation to spreadlimited resources among competing groups with equally valid claims to its assistance: Sagharian (Litigation Guardian of) v.

Ontario(Minister of Education), 2008 ONCA 411, 172 C.R.R. (2d) 105, at paras. 47-49. The circumstances in which this will occur are few. TheCrown’s broad responsibility to act in the public interest means that situations where it is shown to owe a duty of loyalty to a particularperson or group will be rare: see Harris v. Canada, 2001 FCT 1408, [2002] 2 F.C. 484, at para. 178.

The Court noted that if the fiduciary duty is said to arise from statute, the language of the legislation must clearly support it (at para. 45).There is no indication in the Act or the Land Claims Agreement that Canada agreed that the public interest would in all cases besubordinated to the interests of the Inuit, and that Canada would assume the role of a fiduciary in discharging its covenants under theAgreement. [39] The obligation of governments to balance the interests of many competing groups in society has been recognized even in the contextof aboriginal rights.

As the Court noted in Wewaykum Indian Band at para. 96, the Crown is entitled to balance aboriginal rights withbroader public rights: When exercising ordinary government powers in matters involving disputes between Indians and non-Indians, the Crown was (and is)obliged to have regard to the interest of all affected parties, not just the Indian interest. The Crown can be no ordinary fiduciary; it wearsmany hats and represents many interests, some of which cannot help but be conflicting. . . .

In R. v Nikal, (SCC), [1996] 1 SCR 1013 at para. 92 the Court adopted with approval the comment in R. v Agawa(1988), (ON CA), 65 OR (2d) 505 (CA) at p. 524: . . . Indian treaty rights are like all other rights recognized by our legal system. The exercise of rights by an individual or group is limitedby the rights of others. Rights do not exist in a vacuum and the exercise of any right involves a balancing with the interests and valuesinvolved in the rights of others. . . .

When entering into and performing its obligations under the Land Claims Agreement, Canada was entitled to have regard to the broaderpublic interest, not just the interests of the Inuit. [40] It follows that the first part of this test for fiduciary duty is not met. There is no obvious reason why Canada would agree in theLand Claims Agreement to subordinate the larger public interest, and act “solely on behalf of the Inuit”, and there is nothing to be foundin the Land Claims Agreement to suggest otherwise.

A “Practical Interest” [41] While the first type of fiduciary duty identified in Manitoba Métis requires, in part, a “cognizable aboriginal interest”, the secondtype requires a “practical interest of the beneficiary that stands to be adversely affected”. The difference between the two is not clearlydefined, although a “practical interest” is perhaps wider than a “cognizable aboriginal interest”. The necessary interest was described inElder Advocates at para. 51 as “a pre-existing distinct and complete legal entitlement”. The particular interest involved in this appeal isan interest in having monitoring done.

There is no evidence on this record of a pre-existing aboriginal interest in monitoring that wouldsupport

summary judgment being granted on that issue. This is not a case where a fiduciary and beneficiary in a known fiduciaryrelationship entered into a contract to regulate an implied or background aspect of that relationship. [42] The respondent sought to tie all of the obligations in the Land Claims Agreement back to the Inuit’s traditional claim to the landsthey had occupied for generations. Following on this argument, all the covenants in the Land Claims Agreement, including theagreement to set up a monitoring program, related to “aboriginal title”, or “aboriginal lands”.

Since aboriginal land claims have been oneof the most clearly protected aboriginal interests, this was said to be a suitable basis to ground any fiduciary claim, even one over somundane a function as collecting statistics. Since the statistical data collected might be helpful to the Inuit in enjoying the land they nowown, the collection of statistics could be categorized as a sufficient property based aboriginal interest to found fiduciary duties. [43] The case management judge (not having the guidance from Manitoba Métis) embraced this argument as follows: 262

Article 12.7.6 is not an interest in land and its rights and obligations did not exist before the NLCA came into force. However, itwas a part of the aboriginal title that the Inuit surrendered in exchange for the promise from the Crown to set up the NGMP. It was asignificant promise because of the large percentage of land retained by the Inuit that would be governed by the NGMP and the massive

areas where wildlife harvesting and fishing would take place. The Inuit understandably wanted the best information available to make the highest quality decisions about their land and hunting areas. There are several problems with this line of analysis. [ 44 ] A word is appropriate first on the uncertain term “aboriginal title”. That term is best reserved for the type of collective interest that aboriginal communities had in the lands they traditionally occupied before the arrival of the European settlers. The Inuit asserted such a claim during the negotiations, but in

Article 2.7.1 of the Land Claims Agreement they surrendered those rights: 2.7.1 In consideration of the rights and benefits provided to Inuit by the Agreement, Inuit hereby: (

a) cede, release and surrender to Her Majesty The Queen in Right of Canada, all their aboriginal claims, rights, title and interests, if any, in and to lands and waters anywhere within Canada and adjacent offshore areas within the sovereignty or jurisdiction of Canada; and (

b) agree, on their behalf, and on behalf of their heirs, descendants and successors not to assert any cause of action, action for a declaration, claim or demand of whatever kind or nature which they ever had, now have or may hereafter have against Her Majesty The Queen in Right of Canada or any province, the government of any territory or any person based on any aboriginal claims, rights, title or interests in and to lands and waters described in Sub-section (a). In exchange,

Article 19.3.1 vested in the respondent “fee simple title” over large areas of land. Other rights (such as the right to harvest) were given over other areas. As a result, the Inuit exchanged their unconfirmed and ill-defined “aboriginal title” for the legally recognized “fee simple title”, and other contractual rights. Therefore, it is now somewhat out of context to refer to “aboriginal title” when discussing land rights in Nunavut. [ 45 ] The first problem with the reasoning adopted by the case management judge is an inconsistency in the underlying assumptions.

The case management judge correctly noted that the right to monitor was not “an interest in land”, but then asserted that it was “part of the aboriginal title”. These two observations cannot sit together. [ 46 ] In any event, there is no evidence on this

summary judgment record showing that statistical monitoring was ever “a part of the aboriginal title”. The aboriginal peoples lived on and derived their sustenance from their land; judicial notice cannot be taken that collecting statistics was part of their culture. This attempt to tie every covenant in the Land Claims Agreement back to the now surrendered claim to aboriginal title is artificial. [ 47 ] Further, having surrendered all of their “aboriginal title”, the previous unacknowledged existence of those asserted rights cannot found the basis of new fiduciary duties. This runs counter to the clear covenant in

Article 2.7.1(

b) that the Inuit will not make any future claim “based on any aboriginal claims” that were surrendered under the Land Claims Agreement. The Inuit cannot surrender those rights, and then assert them as a basis for finding a fiduciary duty. It follows that the respondent cannot build any fiduciary duty based on a platform of the now surrendered aboriginal land claim. [ 48 ] It is true that the traditional aboriginal land claim surrendered in the Land Claims Agreement was a part of the consideration given by the Inuit in exchange for Canada’s covenants in the Agreement.

In that respect the case management judge could describe it as “a part of the aboriginal title that the Inuit surrendered” in exchange for the promises in the agreement. But having surrendered that claim as part of the consideration it gave, the Inuit could not also continue to assert it as a basis for making new claims against Canada. The Inuit cannot both give something as consideration, and continue to enjoy it thereafter. [ 49 ] This part of the test for fiduciary duty is therefore not met. There is no “practical interest” to monitor that could support a fiduciary duty.

Discretion [ 50 ] Another important component of the second test for a fiduciary duty is a discretion in the fiduciary, which can affect the interests of the beneficiary. [ 51 ] The case management judge’s conclusion that the appellant had a discretion over a “sufficient interest” was summed up as follows: 263 Canada had broad discretion in deciding how its obligation to establish a general monitoring plan should be satisfied. Implementation of a monitoring plan required Canada’s initiative. A general monitoring plan for Nunavut could not be implemented unless Canada chose to act.

Most importantly, Canada had the sole discretion on whether to make funding available for the development and operation of a monitoring plan. Through the exercise of this discretion, Canada could unilaterally choose whether to carry out its obligation and when to carry it out. It is significant that almost immediately after this action was commenced Canada took the first steps that led to the preparation of the Business Case in December 2008. There are a number of problems with this analysis: (

a) One can accept that there were a number of different ways that Canada could perform some of the rather open-ended covenants in the Land Claims Agreement, but perform it must. It is potentially misleading to say Canada has a “broad discretion”, as its choice of the method of performance must fall within the proper

interpretation of the covenants. (

b) It is inaccurate to say that Canada could “choose to act”. Canada had covenanted to do certain things, and do them it must. If Canada could truly “choose to act”, then the respondent would not be entitled to

summary judgment, because there would be no breach. (

c) It is inaccurate to say that Canada had the sole discretion on whether to make funding available. Canada had covenanted to put in place the monitoring program, and had to fund it whether it liked it or not. If funding was in Canada’s “sole discretion”, then how could the respondent be entitled to

summary judgment for the amounts not spent?

(

d) It is inaccurate to say that Canada could “unilaterally choose whether to carry out its obligation” and it is equally inaccurate to say itcould choose “when to carry it out”. To repeat, Canada had no alternative but to perform as it had covenanted to perform, or be facedwith an action for damages. And if it had a unilateral choice as to “when” to perform, then on what basis could the case managementjudge find that the monitoring plan had to be in place by 2003? The only “choice” that Canada had was to perform its covenants, or be in breach. While there might have been some uncertainty aboutexactly what some of the covenants meant, Canada was obliged to perform them based on the proper

interpretation of the Land ClaimsAgreement, as eventually determined by the courts if necessary. Whatever level of decision making was left to Canada, it had to act in away consistent with the Land Claims Agreement. That is not a sufficient level of “discretion” to create a fiduciary duty. [52] This reasoning is also inconsistent with Elder Advocates, a case which involved the presence of fiduciary duties in the public sector,between a government and persons contracting for accommodation and care.

It could equally have been said in Elder Advocates that thegovernment had a “choice” whether to perform its duties, when to act, whether to provide services, or whether to provide funding.However, that supposed level of discretionary control was not sufficient to support fiduciary duties. [53] In addition, it must be obvious that if this line of analysis is sufficient to create a fiduciary duty, then every contracting party wouldpotentially be a fiduciary.

But as noted in Ironside v Smith, 1998 ABCA 366 at para. 79, 70 Alta LR (3d) 393: While [contracting parties] are contractually obligated to fulfill their responsibilities, participants neither relinquish their self interest, noract solely on behalf of the other parties by agreeing to do so. Parties may depend upon each other to fulfill contractual obligations,without becoming peculiarly vulnerable or at each others’ mercies. . . . In every contract, each party is exposed to the risk that the other party will not perform.

Sometimes the defaulting party may deliberatelydecide to default, and sometimes the default may be beyond the control of the defaulting party. But this element of risk (or “discretion”)in contract is not sufficient to potentially turn every contractual obligation into a fiduciary duty.

Summary [54] In

summary, the record put forward by the respondent in support of

summary judgment does not disclose a fiduciary duty under thesecond branch of the test set out in Manitoba Métis. The Land Claims Agreement does not support any undertaking of loyalty, orundertaking by the government to subordinate its interests to those of the Inuit. Further, the covenant to monitor is not a sufficientlyidentifiable interest to support a fiduciary duty under this part of the test. A Parallel Fiduciary Duty? [55] The obligation to conduct ecosystemic and socio-economic monitoring is, prima facie, found in the Land Claims Agreement.

Therespondent argued (and the case management judge accepted) that the mere existence of the express covenant to monitor did notpreclude the existence of parallel fiduciary duties. The respondent argues that the relationship between the Crown and the Inuit isfiduciary in nature, and the covenants in the Land Claims Agreement are merely a manifestation or extension of that fiduciaryrelationship. To the extent that this argument is built on the second branch of the test for fiduciary duty found in Manitoba Métis, it hasalready been dealt with.

Manitoba Métis did not suggest there is a third possible source of fiduciary duties. [56] Manitoba Métis made the point (at para. 48) that just because the relationship between the Crown and aboriginal peoples can bedescribed as fiduciary in nature, it does not follow that all aspects of that relationship (such as the Land Claims Agreement) are governedby fiduciary obligations.

Not every contract between a fiduciary and the beneficiary expands the scope of the underlying fiduciary duty. [57] Assuming that there is a third source of fiduciary duties (to be found in contracts between fiduciaries and beneficiaries), there is(specifically with respect to the breach of

Article 12.7.6) no basis for imposing such parallel fiduciary duties here. Firstly, on a properinterpretation of the Land Claims Agreement and the Nunavut Land Claims Agreement Act there is no room for such parallel duties. TheLand Claims Agreement is not a springboard for fiduciary duties and corresponding benefits between the parties. Secondly, the proposedfiduciary duties do not meet the legal test underlying such duties.

The Construction of the Agreement and the Act [58] As noted, the lengthy Land Claims Agreement was carefully drafted by professionals, it covers a great many topics, and it wasclearly intended to be a comprehensive definition of the obligations between the appellant and the respondent as set out in the LandClaims Agreement.

In the words of Little Salmon at para. 9 and Quebec (Attorney General) v Moses, 2010 SCC 17 at para. 7, [2010] 1SCR 557, the Land Claims Agreement is “the product of lengthy negotiations between well-resourced and sophisticated parties”. [59] The “whole agreement” clause in the Land Claims Agreement specifies that there are no collateral representations. The overallstructure and content of the Land Claims Agreement do not leave any room for implied covenants covering the subjects specifically dealtwith in it. Everything that the appellant agreed to do about implementing and funding monitoring is to be found in

Article 12.7.6. That isnot to say that the background fiduciary relationship between the parties might not have some impact on the

interpretation of the LandClaims Agreement (see infra, paras. 71-72 and Little Salmon at para. 69), but it is not a basis for enlarging on the contractual covenants. [60] An analogous situation arises in cases where there is concurrent liability in tort (which is imposed as a matter of law) and contract.The law recognizes such concurrent liability, but requires that the tort duty be independent of the covenants in the contract.

As was saidin Central Trust Co. v Rafuse, (SCC), [1986] 2 SCR 147 at p. 205: . . . the nature and scope of the duty of care that is asserted as the foundation of the tortious liability must not depend on specificobligations or duties created by the express terms of the contract. It is in that sense that the common law duty of care must beindependent of the contract. The distinction, in so far as the terms of the contract are concerned, is, broadly speaking, between what is tobe done and how it is to be done.

A claim cannot be said to be in tort if it depends for the nature and scope of the asserted duty of care onthe manner in which an obligation or duty has been expressly and specifically defined by a contract. . . . (Emphasis added)

It follows that while it is possible for there to be concurrent fiduciary and contractual duties, the extent of the fiduciary duty cannot arisesolely from the covenants in the contract to do particular things. [61] The comprehensive and overriding nature of the Land Claims Agreement is confirmed by the Nunavut Land Claims Agreement Act.It states that the covenants in it shall be performed “to the extent provided for by the Agreement”.

Again, there is no room in thiswording for the suggestion that there are parallel fiduciary duties that somehow expand the obligations of the appellant with respect tothe topics specifically covered in the agreement. The Act goes on to state that in case of conflict between the Land Claims Agreementand “any law, including this Act”, the contract prevails. In this context “any law” must include the common law, and to the extent thatthe Land Claims Agreement modifies or defines the inherent fiduciary obligations of the appellant, the Land Claims Agreement mustprevail.

Again, there is no scope for any parallel duties covering the same topics as are covered by the express covenants in the LandClaims Agreement. Parallel Fiduciary and Contractual Duties [62] There are occasions when contractual obligations can either

a) create fiduciary duties, or

b) be related to the exercise of pre-existingfiduciary obligations. For example, a contract between a solicitor and client builds on, and will reflect, the underlying fiduciary nature ofthat relationship: Strother at para. 34. Not every contract will have those characteristics.

The respondent argues that in this case the LandClaims Agreement is built upon the foundation of the fiduciary relationship between the Crown and aboriginal peoples, and so the LandClaims Agreement is infused with fiduciary obligations that extend beyond the covenants themselves. [63] A leading case is Hodgkinson v Simms, (SCC), [1994] 3 SCR 377, in which an investor retained an accountant foradvice on tax sheltered investments. The accountant provided that advice, but did not disclose that he was also acting for the developersof the investment, meaning he had a conflict of interest.

The investor sued the accountant for breach of contract and breach of fiduciaryduty. The Supreme Court confirmed at p. 407 that there could be parallel contractual and fiduciary obligations, but pointed to certainindicia that must be present: (

a) the fiduciary has agreed to act in the beneficiary’s best interests (at p. 407), (

b) the fiduciary has relinquished its own self-interest and has a duty to act solely in the interests of the other party (at pp. 409-10, 428),and (

c) a “reasonable expectation” that the fiduciary will act in the best interests of the beneficiary (at pp. 409, 413). This decision also explores the usual presence of a discretionary power that can affect the interest of the beneficiary, and a vulnerabilityto the exercise of that power. Those concepts are essentially the same as those set out in the second part of the test in Manitoba Métis.

Aspreviously discussed, that test is not met here. [64] Elder Advocates, the case involving the presence of duties in the public sector between a government and persons contracting foraccommodation and care, confirmed at paras. 29-32 the principles in Hodgkinson v Simms. In Elder Advocates the Court held thatfiduciary duties did not exist, notwithstanding that the persons in care were dependent on the government for many of their fundamentalneeds.

Elder Advocates was cited as a source of the test developed in Manitoba Métis (at para. 50), and does not provide any further basisfor imposing a fiduciary duty. [65] Further, even though fiduciary duties and contractual obligations can coexist and complement each other, the terms of the contractwill prevail in case of inconsistency. As was said in Hospital Products Ltd. v United States Surgical Corporation (1984), 156 CLR 41 atp. 97 (HCA): That contractual and fiduciary relationships may co-exist between the same parties has never been doubted.

Indeed, the existence of abasic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situationsit is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties.The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, andconforms to, them.

The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which thecontract was intended to have according to its true construction. The same point was made in Cadbury Schweppes Inc. v FBI Foods Ltd., (SCC), [1999] 1 SCR 142 at para. 36: Just as a contractual term can limit or negative a more general duty implied by the law of tort, so too can a contractual term that dealsexpressly or by necessary implication with confidentiality negate the general obligation otherwise imposed by equity . . .

Even where equitable duties run parallel to contractual duties, the equitable duties generally will not override those duties: SharbernHolding Inc. v Vancouver Airport Centre Ltd., 2011 SCC 23 at para. 143, [2011] 2 SCR 175; Central Trust Co. v Rafuse at p. 206; BowValley Husky (Bermuda) Ltd. v Saint John Shipbuilding Ltd., (SCC), [1997] 3 SCR 1210 at para. 114; Boulting vAssociation of Cinematograph, Television and Allied Technicians, [1963] 2 QB 606 at pp. 636-7 (CA). [66] The specific examples identified supra, paras. 29-30, will illustrate the point. As noted,

Article 38.2.1(

a) of the Land ClaimsAgreement provides that certain disputes may be sent to arbitration, but only if both parties consent. The respondent pleads in paras.19(k), 82-4 that the appellant has refused to consent to arbitration, and that this is a breach of its fiduciary duties. The respondenteffectively argues that even though the Land Claims Agreement gives the appellant a right to withhold consent, it cannot actually refuseto consent because of its fiduciary duties. That effectively amends the Land Claims Agreement.

Since the Land Claims Agreementspecifically provides that arbitration is only available with consent, even if there are parallel fiduciary duties, they cannot create anobligation to consent where consent is required by the contract but withheld. [67] The same reasoning applies to the second example, noted supra, para. 30, relating to the pleading that the appellant has a fiduciaryduty to fund various activities or institutions, and has failed to do so. If the Land Claims Agreement contains a covenant to do something,

the appellant is obliged by that covenant to do it. It has never been a defence to breach of contract that: “Sorry, we ran out of money”, or“Sorry, we never included that in our budget”. If the covenant in the Land Claims Agreement requires a fixed amount of funding, thatamount must be provided. If the covenant creates an obligation to fund, but without a fixed amount, the amount must be determined inaccordance with the proper

interpretation of the covenant (possibly, a “reasonable” amount). If the covenant in the Land ClaimsAgreement requires the appellant to do something, the appellant must find the necessary funds to perform. Thus, having agreed to put inplace a monitoring program, the appellant must provide the necessary funding. Asserting a “fiduciary duty to fund” adds nothing to thesecovenants. [68] The obligation to fund is based on the covenant to perform, not on any “reasonable expectation” of the other contracting party thatsuitable funding will be made available.

Most specifically, no fiduciary duty can exist that obliges the appellant to provide more fundingto perform the covenants in the Land Claims Agreement than the Land Claims Agreement itself obliges it to provide.

Any failure by theappellant to provide funding it has contracted to provide is a breach of covenant, not a breach of fiduciary duty: Beattie v Canada, 2004FC 674 at paras. 78-9, [2004] 4 FCR 540 (Proth), affm’d 2005 FC 715, 274 FTR 12; Southeast Child and Family Services v Canada(Attorney General), (MB KB), [1997] 9 WWR 236 at para. 22, 120 Man R (2d) 114 (CA). [69] In this context, it also adds nothing to say “it is always assumed that the Crown intends to fulfil its promises”. If the “promise” is abinding covenant in a contract, no “assumption” is needed, because the law will enforce those covenants.

This expression, as used incases like Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73 at para. 20, [2004] 3 SCR 511, refers to pre-treatypromises that are not enforceable as contracts. Further, in this context it does not assist to invoke the “honour of the Crown”, because asManitoba Métis shows that is not an independent source of fiduciary duty. [70] It is of no consequence that the covenants in the Land Claims Agreement may differ from the fiduciary obligations that might beimplied in equity.

As long as the contract is not unenforceable (e.g., for unconscionability, or undue influence), the fiduciary and thebeneficiary can alter the terms of their relationship by contract: Jirna Ltd. v Mister Donut of Canada Ltd., (SCC), [1975]1 SCR 2 at p. 3; Alberta Union of Provincial Employees v United Nurses of Alberta, 2009 ABCA 33 at paras. 33-6, 1 Alta LR (5th) 217leave refused [2009] 1 SCR v. (There may be some situations where the fundamental nature of the fiduciary relationship cannot bealtered for public policy reasons, as in Strother at para. 34.) Having expressly been “declared valid” by federal statute, there cannot beany suggestion that the Land Claims Agreement is for any reason unenforceable.

To the extent that it is inconsistent with any commonlaw fiduciary duty, the Land Claims Agreement must prevail. [71] Further, there is a fundamental difference between imposing, identifying or declaring a duty, and interpreting the scope of a duty.There are numerous cases that have made the point that a treaty is not an “ordinary contract”, and that because of the special relationshipbetween the Crown and the aboriginal communities, different approaches to

interpretation will apply. This same point has been madeusing different phraseology: (

a) A treaty must be “interpreted and applied in a manner that upholds the honour of the Crown”: Little Salmon at para 12. (

b) The Crown is obligated to act honourably in implementing treaties: Haida Nation at paras. 17, 19. (

c) The Crown must endeavor to ensure its promises are carried out “in a way that pursues the purpose behind the promise”: ManitobaMétis at paras. 79-80. It is, however, circular to use these techniques of interpreting an existing duty to impose a different duty. [72] The interpretive principles outlined in these cases may have some role to play in interpreting the appellant’s covenants in the LandClaims Agreement, but not in creating parallel fiduciary or other duties. Principles of

interpretation cannot be taken so far that theycompel the appellant to do more than what has been agreed to, nor to create new obligations that are not in the Land Claims Agreement.A treaty is not an empty vessel to be filled up using interpretive principles with whatever covenants one of the parties or the court thinks,with hindsight, would be a “good idea”, “fair”, or “consistent with the honour of the Crown”: R. v Marshall, (SCC),[1999] 3 SCR 456 at para. 14; Mitchell v Peguis Indian Band, (SCC), [1990] 2 SCR 85 at p. 143; Reference re PublicService Employee Relations Act (Alta), (SCC), [1987] 1 SCR 313 at p. 394. Since a breach of

Article 12.7.6 is nowadmitted, in this context saying that a “treaty is not an ordinary contract” adds nothing.

Summary [73] The

interpretation of the Land Claims Agreement, the

interpretation of the statute, and outlining the legal test for the existence of afiduciary duty all attract the correctness standard of review. A proper

interpretation of the Land Claims Agreement and the Act revealthat they were intended to be a comprehensive exposition of the specified rights and obligations of the appellant and the respondent. It isinconsistent with the entire legislative and contractual package to superimpose supplementary or parallel fiduciary duties to monitor overthe express covenants in the Land Claims Agreement. Even if the background relationship between the Crown and aboriginal peoples isfiduciary in nature that does not mean that there are parallel fiduciary duties to every covenant entered into by the Crown.

In any event,any fiduciary duty cannot be inconsistent with the express covenants in the agreement. [74] On this record in support of

summary judgment, the respondent has not demonstrated a common law, equitable, fiduciary, oraboriginal right to “ecosystemic and socio-economic monitoring”, nor a corresponding duty on the Crown to monitor. The duty tomonitor found in

Article 12.7.6 is entirely a creation of the Land Claims Agreement. The scope of that obligation is to be found withinthe four corners of the Land Claims Agreement. On this

summary judgment record, the respondent has not demonstrated a fiduciaryobligation to “monitor” parallel to that arising out of the Land Claims Agreement. The case management judge’s finding to the contraryat para. 265 cannot be sustained. [75] As was noted in Little Salmon at paras. 10-2, modern aboriginal law is informed by the overriding objective of the reconciliation ofpre-existing aboriginal societies with the assertion of Canadian sovereignty.

In that regard the Crown (with or without the invocation ofthe “honour of the Crown”) should be expected to fulfill its contractual promises found in the treaties it enters into. If the Crownbreaches those treaties, appropriate remedies should be granted.

[76] However, it adds nothing to superimpose a fiduciary cloak over what is essentially a contractual relationship. In this case theasserted fiduciary duties are ill defined, open-ended, and in many respects inconsistent with the wording of the Land Claims Agreement.If such fiduciary duties exist, neither the appellant nor the respondent could know with certainty what they encompass. This isinconsistent with the purposes of modern treaties, which are summed up in Little Salmon at paras. 10-12: 10.

The reconciliation of Aboriginal and non-Aboriginal Canadians in a mutually respectful long-term relationship is the grand purposeof s. 35 of the Constitution Act, 1982. The modern treaties, including those at issue here, attempt to further the objective of reconciliationnot only by addressing grievances over the land claims but by creating the legal basis to foster a positive long-term relationship betweenAboriginal and non-Aboriginal communities. . . . The treaty is as much about building relationships as it is about the settlement ofancient grievances.

The future is more important than the past. . . . 12. . . .

Modern comprehensive Land Claim Agreements . . . while still to be interpreted and applied in a manner that upholds thehonour of the Crown, were nevertheless intended to create some precision around property and governance rights and obligations.Instead of ad hoc remedies to smooth the way to reconciliation, the modern treaties are designed to place Aboriginal and non-Aboriginalrelations in the mainstream legal system with its advantages of continuity, transparency, and predictability. . . . (emphasis added) The uncertainty and unpredictability created by the asserted fiduciary duties can only lead to more disagreements, and more litigation,which can only undermine the ultimate objective of reconciliation: Eastmain Band v Canada (Federal Administrator), (FCA), [1993] 1 FC 501 at pp. 518-9, 99 DLR (4th) 16 (CA).

Imposing such vague fiduciary duties on the contractual obligations willnot aid in building positive future relationships. Any appropriate remedies can be fashioned from the law of contract. [77] Canada should be encouraged to settle outstanding aboriginal claims through new treaties. As Lamer, CJC said in Delgamuukw vBritish Columbia, (SCC), [1997] 3 SCR 1010: 186 Finally, this litigation has been both long and expensive, not only in economic but in human terms as well.

By ordering a new trial,I do not necessarily encourage the parties to proceed to litigation and to settle their dispute through the courts. . . . Ultimately, it isthrough negotiated settlements, with good faith and give and take on all sides, reinforced by the judgments of this Court, that we willachieve what I stated in Van der Peet, supra, at para. 31, to be a basic purpose of s. 35(1) -- “the reconciliation of the pre-existence ofaboriginal societies with the sovereignty of the Crown”. Let us face it, we are all here to stay.

It does not assist the treaty making process to send a signal that every new treaty carries with it ill-defined parallel fiduciary duties.Canada will be better positioned to enter into modern treaties if it knows that its obligations are to be found within the four corners of thetreaty, based on recognized principles of

interpretation of such covenants, and that surrendered aboriginal claims will not still exist insome ephemeral state to impose additional, possibly inconsistent, fiduciary obligations. There is no compelling policy reason to find afiduciary duty in this case. Restitutionary Damages in Contract [78] The appellant now acknowledges a breach of the covenant in

Article 12.7.6. The case management judge concluded that thecalculation of expectation damages would not be feasible. He also concluded that nominal damages would not be an appropriate responseto the breach, and therefore awarded a restitutionary remedy. That remedy was a damage award equivalent to the amount the appellant“saved” by delaying implementation of the monitoring plan until 2010.

The second issue on this appeal is, therefore, whetherrestitutionary remedies of this type are available for breach of contract. [79] The appellant correctly points out that “expectation damages” are the normal measure of damages for breach of contract. Thegeneral rule is that the plaintiff in a breach of contract case is entitled to be put into the position it would have been in if the contract hadbeen performed: Bank of America Canada v Mutual Trust Co., 2002 SCC 43 at para. 26, [2002] 2 SCR 601.

In most cases this amountsto giving the plaintiff the benefits of the bargain it made. [80] Notwithstanding the presumption in favor of expectation damages, the law recognizes that expectation damages are not always theappropriate measure, and that justice in some cases requires a different approach. As was said in Bank of America Canada at para. 25: 25 Contract damages are determined in one of two ways. Expectation damages, the usual measure of contract damages, focus on thevalue which the plaintiff would have received if the contract had been performed.

Restitution damages, which are infrequentlyemployed, focus on the advantage gained by the defendant as a result of his or her breach of contract. Restitutionary damages are available in exceptional cases, where the expectation damages are difficult or impossible to calculate, orwhere expectation damages would effectively allow the breaching party immunity notwithstanding the breach. [81] An unusual example is Attorney General v Blake, [2001] 1 AC 268 (HL) where a former employee of the English SecretIntelligence Service had published a memoir in breach of his covenants of confidentiality.

It was essentially impossible to measure anyexpectation loss suffered by the government, yet an award of nominal damages would have permitted the former employee to breach hiscovenant with impunity. As a result, damages were measured by the profits he made from publishing the memoir. [82] Another interesting example is Dolly Varden Mines Ltd. (N.P.L.) v Sunshine Exploration Ltd., (SCC), [1970] SCR2. In this case the defendant had covenanted to do some development and exploration work with respect to a mining prospect.

The workwas never done, but the defendant argued that the plaintiff was only entitled to nominal damages because the mining project hadeffectively been abandoned, and the plaintiff had lost nothing by the breach. The Court held that by agreeing to do the work, andreceiving the consideration for doing it, the defendant had effectively acknowledged that the value of the work was at least equal to itscost. As a result, it was appropriate to measure damages by the amount that the defendant had saved by not doing the work.

DollyVarden did not address the issue from a restitutionary perspective, but it demonstrates the flexibility of the common law in measuring the“expectation” of the parties when calculating damages. Sometimes the savings of the breaching party are the foundation of a fair remedy. [83] The courts will generally award only expectation damages for breach of contract, in order to avoid discouraging what is known as

“efficient breach”. As explained in Bank of America Canada at para. 31: 31 Courts generally avoid this measure of damages so as not to discourage efficient breach (i.e., where the plaintiff is fully compensatedand the defendant is better off than if he or she had performed the contract) (Waddams, supra, at p. 473). Efficient breach is whateconomists describe as a Pareto optimal outcome where one party may be better off but no one is worse off, or expressed differently,nobody loses. Efficient breach should not be discouraged by the courts.

This lack of disapproval emphasizes that a court will usuallyaward money damages for breach of contract equal to the value of the bargain to the plaintiff.

So, if the plaintiff effectively “got its bargain”, it is generally not relevant that the defendant might also have profited from the contractor the breach. [84] The flexibility of the common law approach was recently confirmed in IBM Canada Limited v Waterman, 2013 SCC 70 at para. 36,[2013] 3 SCR 985: 36 Considerations other than the extent of the plaintiff’s actual loss shape the way the compensation principle is applied and there arewell-established exceptions to it.

For example, the rule that contract damages compensate only the plaintiff’s actual loss is not the onlyrule that applies to assessing contract damages. As a leading English case put it, “Damages are measured by the plaintiff’s loss, not thedefendant’s gain. But the common law, pragmatic as ever, has long recognised that there are many commonplace situations where astrict application of this principle would not do justice between the parties. Then compensation for the wrong done to the plaintiff ismeasured by a different yardstick”: Attorney General v. Blake, [2001] 1 A.C. 268 (H.L.), at p. 278.

In some cases, for example, an awardof damages in contract may be based on the advantage gained by the defendant as a result of the breach rather than the loss suffered bythe plaintiff: see, e.g., Bank of America Canada v. Mutual Trust Co., 2002 SCC 43, [2002] 2 S.C.R. 601, at para. 25. The rule thatdamages are measured by the plaintiff’s actual loss, while the general rule, does not cover all cases.

In addition, through the doctrines ofremoteness and mitigation, the compensation principle gives way to considerations of reasonableness in relation to whether the plaintiff'sexpectations of the contract and his or her conduct in response to the breach of it were reasonable. Thus, there is no absolute rule that restitutionary damages are not available for breach of contract. [85] To summarize, the calculation of damages in a breach of contract case is governed by the following principles:

a) The presumptive rule is that the plaintiff is entitled to expectation damages: Bank of America Canada at paras. 25-6. The plaintiff isto be put in the position it would have been in if the contract had been performed.

b) Exceptionally, where damage is shown but expectation damages are not readily quantifiable, or where the circumstances of the casecall for a different measure of damages to provide an effective remedy:

i) where the anticipated “bargain” was non-financial or intangible, then damages can be assessed and awarded at large to reflect theexpectations of the parties, for example where the contract is not commercial in nature, or the damages are not liquidated: Fidler v SunLife Assurance Co. of Canada, [2006] 2 SCR 3 at paras. 44-5, 2006 SCC 30; Honda Canada Inc. v Keays, 2008 SCC 39 at paras. 55, 59,[2008] 2 SCR 362; Jarvis v Swan Tours Ltd., [1973] QB 233 (CA). ii) in some cases a restitutionary remedy (disgorgement of some benefit achieved by the defendant from the breach) is a potentialremedy.

Some exceptional circumstances are required (as in Blake, and the facts in Dolly Varden) to justify this approach. The trialjudge should give consideration to the concept of “efficient breach”, and the effect that has on the calculation of damages: Bank ofAmerica Canada at paras. 31-3; Dasham Carriers Inc. v Gerlach, 2013 ONCA 707 at paras. 29-30. For these purposes “not readily quantifiable” does not just mean that the plaintiff has not marshaled the evidence necessary to prove whatwould be provable.

c) Where breach is shown, but no damage is evident, nominal damages should be awarded: B.M.P. Global Distribution Inc. v Bank ofNova Scotia, 2009 SCC 15 at para. 90, [2009] 1 SCR 504; Métis National Council Secretariat Inc. v Dumont, 2008 MBCA 142 at paras.40-6, 305 DLR (4th) 356; Place Concorde East Limited Partnership v Shelter Corp. of Canada Ltd. (2006), (ONCA), 270 DLR (4th) 181 at para. 78, 211 OAC 141 (CA). In this appeal the case management judge concluded that expectation damages could not realistically be calculated, and that nominaldamages would not be an effective remedy.

Those conclusions are entitled to deference on appeal. [86] In this appeal, the particular nature of the breached covenant is important. The covenant to establish a system of statisticalmonitoring is not truly commercial in nature, and there is no obvious way of measuring its value in economic terms. In the Land ClaimsAgreement the appellant covenants to provide a number of what might be described as “social” or “public” services, not because theyhave any commercial value, but because they are perceived to have inchoate social advantages.

Exactly what benefit could be made ofthe statistical data that results from the monitoring program is difficult to predict or calculate. The benefits that accrue from the statisticaldata would be indirect, and would benefit the general Inuit population in ways that could not easily be measured. [87] There is very little authority in this area.

Most public services are provided by statute, and generally no private cause of action arisesbecause the statutory duty is owed to the public at large, and is not actionable in the hands of any individual even if they were one of theintended beneficiaries of the statute: X (Minors) v Bedfordshire County Council, [1995] 1 AC 633 at pp. 731-2 (HL); Phelps vHillingdon London Borough Council, [2001] 2 AC 619 at p. 652 (HL). As a result, the issue of quantification of damages in this type ofsituation rarely arises. In this appeal the statistical monitoring services were similarly aimed at a disparate group.

However, here theywere provided for by covenant, and the respondent was specifically nominated in

Article 2.14.1 of the Land Claims Agreement as thebody with the ability to enforce those covenants. Thus, the issue of quantification must be tackled. [88] The appellant received valuable consideration for the covenant to establish a system of statistical monitoring. If it could simplyrefuse to perform that covenant, and argue that it need not pay any damages because none could readily be established, it would

potentially deprive the Inuit of many of the intended benefits of the Land Claims Agreement. In the context of a land claims treaty, insulating the contracting government from any consequences of a breach of a covenant like this is legally unacceptable. As a result, the case management judge was correct in concluding that the respondent is not limited to a claim for nominal damages. Some appropriate measure of damages must be found.

The “savings” achieved by the appellant in not performing are different in character from the profits recovered in Blake, but roughly analogous to the saved expenses in Dolly Varden, and are a relevant consideration. [ 89 ] As a result, the decision of the case management judge that restitutionary remedies were available for this breach of covenant discloses no reviewable error.

Summary Judgment on Damages [ 90 ] The final issue is whether the record was sufficiently clear to enable the case management judge to award

summary judgment for the admitted breach. The parties are in agreement that the test for

summary judgment is whether there remains a “genuine issue for trial”, or whether the record is sufficiently clear to enable a fair adjudication on the issue of damages. The appellant argues that gaps in the record require that the quantum of damages be remitted to trial. [ 91 ] As previously noted, this

summary judgment application had no prospect of resolving the entire dispute between these parties. It was brought on one very narrow aspect of the dispute, relating specifically to

Article 12.7.6. It was brought at a time when both p

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