2012 QCCA 1872, 2012 QCCA 1872

Leclaire c. Québec (Sous-ministre du Revenu) 2012 QCCA 1872 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-023010-127 (500-05-006143-943) DATE: OCTOBER 22, 2012 PRES IDING: THE HONOURABLE NICHOLAS KASIRER, J.A. JACK W. LECLAIRE JOHN BEAUVAIS PATRICIA CHARLENE WALLS ELIZABETH DIABO PAUL SELINA ETIENNE GLEN JOSEPH DELARONDE MERRICK GOODLEAF MATTHEW MIKE LOUIS LESTER PATRICK NOLAN GEORGE NORTON JOHN LOUIS STEVEN RICE WALLACE STACEY PETITIONERS – plaintiffs v.

SOUS-MINISTRE DU REVENU DU QUÉBEC AGENCE DU REVENU DU QUÉBEC ATTORNEY GENERAL OF QUEBEC ATTORNEY GENERAL OF CANADA RESPONDENTS – defendants and SYLVIA GRÉGOIRE THOMAS DONNA DE LARONDE LEAH DIOME KYLE DIABO BOBBIJO DELORMIER DEBRA GOODLEAF SHEILA LAZARE JOHN McCOMBER LEE JACOBS DEREK WHITE Voluntary interveners

JUDGMENT [ 1 ] Petitioners seek leave to appeal from an interlocutory judgment of the Superior Court, District of Montreal (the Honourable Louis Crête), rendered on September 4, 2012, which refused to allow certain amendments to their "Re-Re-Amended Motion for Declaratory Judgment and Suspension". They are Native persons involved in the sale of petroleum products on the Mohawk reserve of Kahnawake.

The disputed amendments allege breaches of a fiduciary duty owed by the Crown that have particular consequences for the petitioners (specifically paragraphs 123 to 147 and conclusions 7 to 9 of the motion). [ 2 ] They argue that the judge's decision to strike the amendments cannot be remedied by final judgment and that the pursuit of justice requires that leave be granted . *** [ 3 ] The parties agree that the judge presented the chronology of this case, dating back to 1994, with precision and clarity in paragraphs [2] to [13] of his reasons. [ 4 ] As it stood prior to the amendments, the petitioners’ motion asked for a declaration that the fuel tax, QST and GST are illegal, contrary to the Indian Act and inapplicable to them as Native persons.

A further declaration was sought that the petitioners not be required to comply with the administration and enforcement procedures under the applicable fiscal rules, pursuant to the Royal Proclamation of 1763. [ 5 ] The petitioners say that these fiscal issues cannot be decided without due regard to what they describe now as the "Aboriginal issue" that is highlighted by the addition of the amendments. [ 6 ] In paragraphs 123 to 147, the amendments set forth how the Crown’s assumption of control over Aboriginal peoples, including the Mohawks of Kahnawake, gave rise to fiduciary duties and obligations grounded in the "honour of the Crown".

Citing notably Guerin v. Canada , [1] and Osoyoos Indian Band v. Oliver (Town) , [2] the petitioners say that the Crown in right of Canada and the Crown in right of Quebec violated those duties by deliberately locating road and marine transport systems and a private golf club in Kahnawake without proper regard for their interests, resulting in the influx of non-natives onto land set aside for the Mohawks. The urbanization of Indian land was undertaken by the Crown in breach of this duty of loyalty and honour to the Mohawk people and is the root of the existing fiscal conflict.

Establishing this breach of the Crown’s fiduciary duty, say the petitioners, is thus both useful and necessary to the resolution of the fiscal issue placed before the Court in 1994. [ 7 ] In paragraph 146 of the proposed amendments, it is alleged that the "perpetual disregard for the interest of the Mohawks of Kahnawake, including the Petitioners, has caused and continues to cause substantial damages to the Petitioners and other Natives". On this point, the petitioners further allege: 147.

The prolonged systemic and deliberate breach of the honour-bound duties imposed on the federal and provincial Crowns give rise to a just and equitable compensation for the Petitioners alone that can easily be estimated at FIVE HUNDRED MILLION DOLLARS ($500,000,000). [ 8 ] Importantly, the petitioners proposed to add the following paragraphs seven, eight and nine to the conclusions of their original motion for declaratory judgment: DECLARE that the federal and provincial Crowns have deliberately and systematically failed in their duties of honour towards the Mohawks of Kahnawake, including the Petitioners; DECLARE that those failures and omissions of the federal and provincial Crowns have caused and continue to cause serious and lasting prejudice to the Petitioners; DECLARE that the Petitioners are entitled to a just compensation for the federal and provincial Crowns' systemic failures in their honour-bound duties [...]. *** [ 9 ] In carefully-written reasons, the judge gave four general grounds for refusing the amendments pursuant to the rules at articles 199 et seq.

C.C.P . [ 10 ] First, he was of the view that the amendments result in an entirely new cause of action designed to obtain compensation from the Crown. This cause of action is unconnected to the existing motion for declaratory judgment on the fiscal dispute brought originally in 1994. The new allegations of historical wrongs of the Crown relating to the urbanization of Kahnawake would substantially deflect the dispute from the fiscal questions that petitioners themselves had brought before the Court. [ 11 ] Second, the proposed amendments violated the judicial contract between the parties.

Establishing the evidentiary basis of the alleged violations of the Crown’s fiduciary duty would require the Superior Court to undertake a protracted fact-finding process that would be something akin to a "royal commission of inquiry".

Given the limits on judicial resources, this venture would do a disservice to the ends of justice in that it would violate the principle of proportionality that should guide the orderly and effective proceedings before the courts. [ 12 ] Thirdly, insofar as the petitioners claim to have an entitlement to reparations that they evaluate at $500,000,000, they have effectively transformed a motion for declaratory judgement into an action in damages.

In addition to calling for evidence that goes well beyond the judicial contract set between the parties, this claim is also a demand that, by its nature, is unsuited to being framed in a

declaratory judgment. [ 13 ] Fourthly, the judge noted the late character of the new allegations and conclusions, presented as they have been after the filing of all the expert reports. The grievances spoken to in the amendments are ancient ones and nothing had stood in the way of the petitioners presenting them at an earlier stage in the eighteen year-old proceedings. The petitioners’ proposal again violates the principle of proportionality. *** [ 14 ] In seeking leave, the petitioners argue that the judge erred in characterizing the amendments as giving rise to a wholly new cause of action.

They contend instead that the amendments merely clarify the legal basis of the existing action claim and make no additional claims not already before the Superior Court. They dispute the judge’s conclusions that the amendments violate the judicial contract and are untimely. Given that, as a general rule, amendments should be allowed where they are useful and relevant, they say the judge erred in striking paragraphs 123 to 147 and conclusions 7 to 9 from the motion for declaratory judgment. *** [ 15 ] The motion for leave to appeal should be dismissed.

Even if one assumes, for the purposes of argument, that striking the amendments amounts to ordering something that cannot be remedied by final judgment, in my opinion the pursuit of justice does not require that leave be granted. [ 16 ] In a case management setting such as this one, a judge is generally afforded a wide discretion to decide matters such as the usefulness of amendments as part of his or her task of properly managing the proceedings.

The petitioners have not convinced me that the judge failed in his exercise of this discretionary power in a manner that would allow review on appeal. [ 17 ] In particular, I see no reviewable error in the judge’s conclusions that the amendments speak to an entirely new cause of action.

Asking for a declaration that the "Petitioners are entitled to a just compensation for the federal and provincial Crowns’ systemic failures in their honour-bound duties" is nothing like the declarations sought in the proceedings to date. [ 18 ] By casting the new conclusions in the language of entitlement, the petitioners call upon the Superior Court to declare the existence of a legal right (a droit subjectif ) to compensation and that they hold that right. This is a radically distinct proposition from declaring the fiscal rules to be illegal or inapplicable to the petitioners.

It is true that the precise amount of the entitlement, which the petitioners currently estimate at $500,000,000, is left for a later day. But while the re-re-amended motion for declaratory judgment may not have all the characteristics of a full-blooded action in damages, the amendments sought would require the petitioners to bring proof of this entitlement to compensation to justify the new conclusions. This appears to me to be the primary purpose of the amendments and, in this sense, the judge was not mistaken to characterize them as raising an entirely new cause of action under

article 199 C.C.P. that would substantially change the proceedings as contemplated to date. [ 19 ] The allegation that the urbanization of Kahnawake was undertaken in the interest of the Crown and not in keeping with its fiduciary duty to the Mohawks is clearly proposed to sustain the argument as to the existence of an entitlement to compensation.

Paragraph 146 and paragraph 8 of the conclusions of the re-re-amended motion quoted above make this abundantly plain. [ 20 ] I hasten to say that the issue is not whether the petitioners have a valid cause of action relating to the manner in which the transportation system on the Kahnawake reserve has been developed by government authorities. They may or may not have an entitlement to just compensation based on the violation of a fiduciary duty.

At present, however, the question is whether the judge erred in holding that this cause of action, whatever its validity, was entirely new as against the existing motion for declaratory judgment. [ 21 ] The judge decided that the issue as to whether urbanization may have exacerbated the so-called fiscal issue was insufficient as a basis for allowing the amendments. Whatever impact the influx of non-residents by reason of the transportation system might have on the reserve, he wrote that the allegations "ne sont pas reliées au litige dont le tribunal a été saisi depuis 1994" (paragraph [19]).

In his role as case management judge, he struck the allegations that, in his view, would transform the proceedings into a "vast" inquiry relating to a new cause of action, with a different evidentiary emphasis, undertaken some 18 years after the initial motion for declaratory motion was brought on the fiscal issue. He considered that this would violate

article 199 C.C.P. and the principle of proportionality that he was bound to observe as a case management judge pursuant to

article 4.2 C.C.P . [ 22 ] This decision appears to me to fall squarely within the discretion that the judge was called upon to exercise for the proper management of the case.

The petitioners have failed to show a reviewable error that would allow the Court to disturb this discretionary finding. [ 23 ] In a comparable setting, [3] my colleague Gagnon, J.A. helpfully identified the principles a judge in chambers should bear in mind in considering whether the pursuit of justice required that a motion for leave be granted: [6] Il est vrai qu'en matière d'amendement, la permission est la règle dès que la pertinence est vraisemblable. Il est également vrai que l'amendement qui a pour effet de conférer compétence à un autre tribunal n'est pas un obstacle à son autorisation.

Toutefois, depuis la réforme de 2003, le droit d'amender une procédure est aussi modulé en fonction du contrat judiciaire intervenu entre les parties selon les articles 151.1 et suivants C.p.c. et les règles énoncées aux articles 4.1 et 4.2 C.p.c. [7] La juge avait le devoir de veiller au bon déroulement de l'instance et de s'assurer que les actes de procédures choisis soient, eu égard au coût et au temps exigés, proportionnés à la nature et à la finalité de la demande principale et de la demande reconventionnelle; [8] À cet égard, la juge de première instance jouissait d'une grande discrétion au moment de considérer l'application judicieuse de la règle de la proportionnalité tout comme elle avait le devoir de s'assurer que le contrat judiciaire intervenu entre les parties soit respecté; [...]

[ 24 ] Where a judge has explained carefully why the principle of proportionality and a sensible deployment of judicial resources weigh against allowing amendments, leave to appeal should be denied where no significant error has been demonstrated [4] .

This is consonant with cases where this Court has held that a judge’s view on proportionality, and in particular the usefulness and the timeliness of amendments, should not readily be disturbed. [5] [ 25 ] The clear reasons the judge gave for refusing the amendments, in particular in respect of the new cause of action brought some eighteen years after the initial motion was instituted, are thus deserving of deference on appeal. So too are his objections relating to the disproportionate time and effort the amendments would require for new evidence insufficiently connected to the existing action.

All of this suggests strongly to me that the pursuit of justice pursuant to

article 511 C.C.P. does not justify granting leave. [ 26 ] FOR THESE REASONS , the undersigned: [ 27 ] DISMISSES the motion for leave to appeal, with costs. NICHOLAS KASIRER, J.A. Mtre Timothé R. Huot Mtre Boriana Christov BCF For the petitioners Mtre Patrice Peltier-Rivest Mtre Marc Richard Lesage André Pomianowski, stagiaire LARIVIÈRE MEUNIER For the respondents Sous-ministre du Revenu du Québec, Agence du Revenu du Québec and Attorney General of Quebec Mtre Nancy Bonsaint JOYAL LEBLANC For the respondent Attorney General of Canada Date of hearing: October 11, 2012