Assembly of Manitoba Chiefs v Canada Date:, 2017 MBCA 2

Citation: Assembly of Manitoba Chiefs v Canada Date: 20170104 (Attorney General) et al, 2017 MBCA 2 Docket: AI14-30-08289 IN THE COURT OF APPEAL OF MANITOBA Coram: Madam Justice Holly C. Beard Mr. Justice William J. Burnett Madam Justice Janice L. leMaistre BETWEEN : ASSEMBLY OF MANITOBA CHIEFS ) S. Green, Q.C. , ) C. R. Huband and (Applicant) Appellant ) J. A. Myers ) for the Appellant - and - ) ) LARRY PHILIP FONTAINE et al. ) L. K.

Tesar ) for the Respondents (Plaintiffs) ) ) - and - ) Appeal heard: ) November 22, 2016 THE ATTORNEY GENERAL OF ) CANADA et al. ) ) Judgment delivered: (Defendants) Respondents ) January 4, 2017 On appeal from 2014 MBQB 209 BEARD JA I. THE ISSUES [ 1 ] The applicant, the Assembly of Manitoba Chiefs (AMC), appeals the order dismissing its application to add the Teulon Residence (Teulon) as an Indian Residential School (IRS) under the Indian Residential Schools Settlement Agreement (8 May 2006), online: < www.residentialschoolsettlement.ca/IRS%20Settlement%20Agreement-%20ENGLISH.pdf > (the Agreement).

There are, in effect, two grounds of appeal: (

i) the motion judge erred in determining that Teulon was not an eligible IRS within

Schedule E to the Agreement; and (ii) the motion judge erred in applying

article 12.01 of the Agreement to determine that Teulon does not meet the test to be added to

Schedule F of the Agreement. [ 2 ] The AMC has raised two new issues. It argues that the motion judge erred in failing to rectify

Schedule F by adding Teulon as an IRS and that the Agreement is really a treaty and should be interpreted as such. These two issues were not argued before the motion judge, and it is not appropriate that they be raised for the first time in this Court. (See, for example, Samborski Garden Supplies Ltd v MacDonald (Rural Municipality) , 2015 MBCA 26 at para 27 , 315 ManR (2d) 291 .) In fact, AMC did not pursue the second issue at the hearing of the appeal. II.

BACKGROUND [ 3 ] In the 1990s, many former residential school students began suing Canada and various church entities, both individually and by way of class actions, seeking compensation for the harm that they suffered at the residential schools. Extensive negotiations involving many parties led to a Canada-wide agreement to settle all outstanding claims, the terms of which were set out in the Agreement. The Agreement was approved by the superior courts of nine provinces and territories on December 15, 2006 (the

Approval Orders), with the implementation and administration to be carried out by the courts. [ 4 ] One of the purposes of the Agreement is to provide individual compensation to former residents of an IRS. An institution is determined to be an IRS either by being included in

Schedule E of the Agreement, which is a closed list of specific institutions, or by being added to

Schedule F, which can be expanded in accordance with

article 12.01 of the Agreement. [ 5 ] There were several stages to the negotiations before the terms of the Agreement were settled, leading to an Agreement in Principle (20 November 2005), online: <www.residentialschoolsettlement.ca/AIP.pdf>. The list of IRSs that was prepared for the earlier negotiations included “Norway House (Teulon)” in List A.

Schedule E in the Agreement refers to “Norway House”, but there is no reference to Teulon. There was no evidence to explain how, when or why that reference was removed. The AMC, on behalf of the students who resided in Teulon, brought this proceeding to have Teulon recognized as an IRS under the Agreement. [ 6 ] Teulon began operating when the Presbyterian Church opened a boys’ residence in 1912 and a girls’ residence in 1918, both in Teulon, Manitoba. The United Church of Canada assumed responsibility for the residences in 1925.

The residences were administered through a separate board of directors that included church, community and school representatives. [ 7 ] From its opening until 1960, Teulon accommodated non-Aboriginal children from the interlake region of Manitoba. As local schooling improved, enrollment decreased, and Canada, through the Department of Indian Affairs (Indian Affairs), began placing students with status under the Indian Act , RSC 1985, c I-5 (treaty students) in Teulon to attend the Teulon Collegiate. This was a local public school unaffiliated with either Teulon or Canada.

Teulon continued to be owned and operated by the United Church through the board of directors, and Indian Affairs paid for the cost of room and board for the treaty students. [ 8 ] Throughout the 1960s and 1970s, the boarding capacity of Teulon remained at around 40 residents, divided between boys and girls. While the majority of the students during this period were treaty students, there were also some non-Aboriginal students placed by the Province of Manitoba and some private students, who were not funded by Canada. Canada stopped placing treaty students at Teulon in approximately 1980/81. III.

THE MOTION JUDGE’S DECISION [ 9 ] AMC’s first argument was that

Schedule E should be read to include Teulon. The motion judge found that the wording of the Agreement was not ambiguous. He stated that the definition of “Indian Residential School” referred to Schedules E and F, and Teulon was not listed in either schedule. He noted that the definition also refers to List A, but found that it was an extraneous reference that could not prevail over the clear terms of the Agreement. In coming to that conclusion, he relied on

article 1.09 of the Agreement, which states that the schedules “are incorporated into and form part of [the Agreement] as fully as if contained in the body of [the] Agreement”.

Schedule E contains a list of residential schools, but it does not refer to List A. [ 10 ] Thus, he concluded that the Agreement could not be interpreted to include Teulon as an IRS under

Schedule E. [ 11 ] The motion judge then considered whether Teulon should be added to

Schedule F by the application of

article 12.01 of the Agreement. After looking at the operation of the residence and the nature of Canada’s involvement as disclosed by the affidavits and many documents that were filed, he concluded that Teulon did not meet the criteria and he refused to add it to

Schedule F. IV. THE AGREEMENT [ 12 ] The relevant provisions of the Agreement state as follows: 1.01

Definitions . . . “Indian Residential Schools” means the following:

(1) Institutions listed on List “A” to OIRSRC’s Dispute Resolution Process attached as

Schedule “E”;

(2) Institutions listed in

Schedule “F” (“Additional Residential Schools”) which may be expanded from time to time in accordance with

Article 12.01 of this Agreement; and,

(3) Any institution which is determined to meet the criteria set out in

Section 12.01(2) and (3) of this Agreement: 1.09 Schedules

The following Schedules to this Agreement are incorporated into and form part of it by this reference as fully as if contained in the body of this Agreement: . . .

Schedule E – Residential Schools

Schedule F – Additional Residential Schools . . .

Schedule O-3 – The Catholic Entities Church Agreement

Schedule O-4 – The United Church of Canada Agreement 12.01 Request to Add Institution

(1) Any person or organization (the “Requestor”) may request that an institution be added to

Schedule “F”, in accordance with the criteria set out in

Section 12.01(2) of this Agreement, by submitting the name of the institution and any relevant information in the Requestor’s possession to Canada;

(2) The criteria for adding an institution to

Schedule “F” are: (

a) The child was placed in a residence away from the family home by or under the authority of Canada for the purposes of education; and, (

b) Canada was jointly or solely responsible for the operation of the residence and care of the children resident there.

(3) Indicators that Canada was jointly or solely responsible for the operation of the residence and care of children there include, but are not limited to, whether: (

a) The institution was federally owned; (

b) Canada stood as the parent to the child; (

c) Canada was at least partially responsible for the administration of the institution; (

d) Canada inspected or had a right to inspect the institution; or, (

e) Canada did or did not stipulate the institution as an IRS. V. STANDARD OF REVIEW [ 13 ] AMC argues that the standard of review, being that for the

interpretation of the terms of a contract, is correctness for

the first ground of appeal and palpable and overriding error for the second ground of appeal, while Canada says that it is reasonablenessfor both grounds. [14] The applicable standard of review is determined by the nature of the ground of appeal. The nature of the ground ofappeal when dealing with the

interpretation and application of a contract was settled by this Court in King v Operating EngineersTraining Institute of Manitoba Inc, 2011 MBCA 80 at paras 19-29, 270 ManR (2d) 63, which was cited with approval by the SupremeCourt of Canada in Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 at paras 42-55, [2014] 2 SCR 633. [15] In Sattva, Rothstein J, for the Court, stated that the historical approach of dealing with the determination of the legalrights and obligations of the parties under a written contract as a question of law should be abandoned (see para 50). Instead, he foundthat the current approach to contractual

interpretation had moved to a consideration of the terms of the contract together with thecontextual factors as known to the parties at the time of the contract. This, he said, is closer to a question of mixed fact and law, definedin Housen v Nikolaisen, 2002 SCC 33 at para 26, [2002] 2 SCR 235, as the application of the legal standard to a set of facts, which is tobe reviewed on the deferential standard. This is, of course, subject to the proviso that an extricable question of law will continue to bereviewed on the standard of correctness (see paras 33-36). (See also Sattva at paras 53-54.) [16] The Sattva analysis has been applied to appeals from decisions involving the

interpretation of the Agreement on manyoccasions, including by this Court in Fontaine et al v Canada (Attorney General) et al, 2014 MBCA 93 at paras 37-39, 310 ManR (2d)162; by the Alberta Court of Appeal in Canada (Attorney General) v Alexis, 2015 ABCA 132 at paras 16-19 (Alexis); and bythe Ontario Court of Appeal in Fontaine Estate et al v Canada (Attorney General) et al, 2016 ONCA 241 at paras 80-97, 346 OAC 321. [17] In Housen, Iacobucci and Major JJ stated that the applicable standard of review for a question of mixed fact and law isthat of palpable and overriding error (see para 36).

In King, Steel JA stated that this is the functional equivalent of “clearly wrong”,“unreasonable” or “not reasonably supported by the evidence” (at para 22). This standard was recently explained by Wagner J, for themajority, in Benhaim v St-Germain, 2016 SCC 48, as follows (at paras 38-39): It is equally useful to recall what is meant by “palpable and overriding error”. Stratas J.A. described the deferential standard asfollows in South Yukon Forest Corp. v.

R., 2012 FCA 165, 4 B.L.R. (5th) 31, at para. 46: Palpable and overriding error is a highly deferential standard of review . . . . “Palpable” means an error that is obvious. “Overriding”means an error that goes to the very core of the outcome of the case. When arguing palpable and overriding error, it is not enough to pullat leaves and branches and leave the tree standing. The entire tree must fall. Or, as Morissette J.A. put it in J.G. v. Nadeau, 2016 QCCA 167, at para. 77 , [TRANSLATION] “a palpable and overridingerror is in the nature not of a needle in a haystack, but of a beam in the eye.

And it is impossible to confuse these last two notions.” [18] The second ground of appeal relates to the inferences and conclusions that the motion judge drew from the evidence inthe case; in particular, his finding that the evidence did not support a finding that Canada was jointly responsible for the operation of theresidences within

article 12.01(2)(

b) of the Agreement. The determination of joint responsibility required the motion judge to review alarge number of documents to determine the nature and extent of Canada’s involvement in the operation of the residences. [19] The standard of review for this type of decision was considered in Housen, wherein Iacobucci and Major JJ, for themajority, stated (at paras 24-25): . . . The essential point is that making a factual conclusion, of any kind, is inextricably linked with assigning weight to evidence, andthus attracts a deferential standard of review.

Although the trial judge will always be in a distinctly privileged position when it comes to assessing the credibility of witnesses, thisis not the only area where the trial judge has an advantage over appellate judges. Advantages enjoyed by the trial judge with respect tothe drawing of factual inferences include the trial judge’s relative expertise with respect to the weighing and assessing of evidence, andthe trial judge’s inimitable familiarity with the often vast quantities of evidence.

This extensive exposure to the entire factual nexus of acase will be of invaluable assistance when it comes to drawing factual conclusions. In addition, concerns with respect to cost, numberand length of appeals apply equally to inferences of fact and findings of fact, and support a deferential approach towards both. As such,we respectfully disagree with our colleague’s view that the principal rationale for showing deference to findings of fact is the opportunityto observe witnesses first-hand.

It is our view that the trial judge enjoys numerous advantages over appellate judges which bear on allconclusions of fact, and, even in the absence of these advantages, there are other compelling policy reasons supporting a deferentialapproach to inferences of fact.

We conclude, therefore, by emphasizing that there is one, and only one, standard of review applicable toall factual conclusions made by the trial judge -- that of palpable and overriding error. [20] The application of the standard for reviewing inferences of fact was explained by the Supreme Court of Canada in HL vCanada (Attorney General), 2005 SCC 25, [2005] 1 SCR 401. Fish J, for the majority, stated (at para 74): . . . Not infrequently, different inferences may reasonably be drawn from facts found by the trial judge to have been directly proven.

Appellate scrutiny determines whether inferences drawn by the judge are “reasonably supported by the evidence”. If they are, thereviewing court cannot reweigh the evidence by substituting, for the reasonable inference preferred by the trial judge, an equally—oreven more—persuasive inference of its own. . . . VI. ANALYSIS (

i) The First Ground of Appeal

[21] The first ground of appeal relates to the question of whether Teulon should be found to be an IRS under

Schedule E ofthe Agreement. [22] AMC’s position is that the reference to List A in the definition of an IRS in the Agreement means that List A is to befollowed and, to the extent that

Schedule E is inconsistent with it, List A must be the governing list. It argues that there is an absence ofevidence to explain that the inclusion of Teulon in List A was an error and that, in the absence of an explanation by Canada for itsremoval from

Schedule E, the motion judge should have concluded that its removal was an inadvertent error. [23] The determination of what the parties intended in relation to the contents of

Schedule E is a question or conclusion offact. The motion judge reviewed the wording of the definition of an IRS in the context of the entire Agreement and came to theconclusion that

article 1.09 incorporated the schedules into the Agreement “fully as if contained in the body of [the] Agreement” (at para22), with the result that the wording of

Schedule E should prevail over the wording of List A. This being a question of fact, it is to bereviewed on the standard of palpable and overriding error. I am of the view that this finding was open to the motion judge and that themotion judge did not make any palpable and overriding error in his conclusion that the wording of

Schedule E should prevail. [24] There is a further issue to consider regarding this ground of appeal. The motion judge referred to supplementarymaterial provided by Canada regarding the contents of related agreements with various religious organizations that were attached asschedules to the Agreement. He noted that these agreements include

definitions of IRSs that do not include List A and that refer to“Norway House Indian Residential School” but not to Teulon (at para 24). While the motion judge referred to this material and madesome observations, he also stated that he was not relying on it as he was able to resolve this issue based on his

interpretation of theAgreement, without this material. [25] That said, that material was before the motion judge for his consideration. While AMC argues that it is irrelevant, I donot agree. Being schedules to the Agreement,

article 1.09 makes them part of the Agreement and, therefore, part of the factual matrix. These scheduled agreements are consistent with other documents, also before the motion judge, that confirm that the United Churchoperated a residential school in Norway House from 1900 to 1967. List A refers to only one institution by the name of “NorwayHouse”.

There is no evidence to explain which institution was intended to be included in List A, the one in Norway House or the one inTeulon. [26] AMC argues that, in the absence of some explanation by Canada, the motion judge should have concluded that Teulonwas inadvertently omitted. This ignores the fact that all of the parties approved the Agreement, including

Schedule E. I count a total of141 signing entities. The burden of proof is on AMC to demonstrate on a balance of probabilities that the reference to Teulon wasremoved in error and should be added back. It having provided no evidence to explain the removal of the reference to Teulon,particularly in light of the existence of a residential school in Norway House, I would find that it has not met its burden. (ii) The Second Ground of Appeal [27] The second ground of appeal deals with whether the motion judge erred in finding that Teulon is not an IRS withinarticle 12.01 of the Agreement.

As the motion judge correctly found, the question of whether an institution should be added to ScheduleF turns on the facts of the case under consideration.

This adopts the approach taken to similar applications by Winkler CJO in Fontaine vCanada (Attorney General), 2011 ONSC 4938 at para 6 ; by Gabrielson J in Fontaine et al v Canada (Attorney General) et al,2013 SKQB 323 at para 77, 429 SaskR 100; and by Nation J in Fontaine v Canada (Attorney General), 2014 ABQB 7 at para 11, affirmed by the Alberta Court of Appeal in Alexis at para 24. [28] While these cases provide some guidance as to the application of the terms of the Agreement, the outcome isnecessarily determined by the facts of each case. [29] AMC does not argue that the motion judge erred in his findings of fact, but rather in the inferences and conclusions thathe drew from those facts.

In essence, it argues that, having found that Canada had some involvement in the welfare of the students, heerred in finding that the involvement did not meet the criteria of

article 12.01, being a finding of joint responsibility. [30] There are three criteria in

article 12.01(2) that must be met before an institution qualifies as an IRS: that the child wasplaced in a residence by Canada (article 12.01(2)(a); that Canada was jointly or solely responsible for the operation of the residence(article 12.01(2)(b)); and that Canada was jointly responsible for the care of the children while at the residence (article 12.01(2)(b)). Thefirst criterion was conceded by Canada. [31] The second two criteria are to be determined by looking at the facts and circumstances, which include the indicators setout in

article 12.01(3). This is, as Nation J stated in 2014 ABQB 7, a non-exhaustive list of indicators that is neither a checklist norindividually determinative. They are to be considered in the context of the case to get an understanding of the relationship in issue. Theweight of each will be dictated by the circumstances of the indicator in question (see para 12).

I would add that the individual indicatorscould support different findings, and it is for the motion judge to weigh all of the evidence to come to a conclusion as to whether theinstitution is, or is not, an IRS under the Agreement. [32] AMC is arguing for a different outcome—that is, that the motion judge should have found that the facts andcircumstances, in totality, demonstrated that Canada was jointly responsible for both the care of the children and the operation of theresidence. I am satisfied that the motion judge took into account all of the evidence and the issues raised by AMC.

He acknowledgedthe role that Canada played in connection with both the students and the residences. He concluded (at para 43): While [AMC] has shown that Canada has a limited role to play in the educational development of the children, I do not consider thisfact alone to constitute “administration of the institution” (emphasis added), which suggests a role in the management of the residenceitself. As Canada points out, there is no evidence of any involvement by Canada in any of the key aspects of the administration of theTeulon residences.

Financial administration, property management, and personnel decisions were all under the authority of the Board,which was an independent body. To be sure, the fact that Canada had the final say over disciplinary matters, such as whether a studentcould be expelled, does tend to indicate administrative involvement. But this factor on its own does not satisfy the test.

[33] The motion judge acknowledged that there were to be fire and safety inspections of the school, but these were to bedone with advance notice. He found that these minimal inspections were not sufficient to lead to the conclusion that Canada was jointlyresponsible for the operation of the residences.

These inspections are in contrast to those referred to in 2011 ONSC 4938, wherein, inaddition to fire and safety inspections, Canada conducted both scheduled and unscheduled visits of the facilities that lasted several days(see paras 46-47). [34] AMC points to the fact that, in the later years, Canada provided approximately 80 per cent of Teulon’s funding, which itargues supports a finding that it had joint responsibility for the operation of the residence. I do not agree with that position.

All treatystudents who were placed by Canada in schools outside of their communities were funded by Canada, but not all of those placementsqualify as IRSs. If that had been the intention, there would have been no need for

article 12.01 of the Agreement. [35] In my view, to the extent that Canada had any involvement beyond funding, that involvement related to the care of thestudents. In that category I would include the provision of a counsellor and a nurse, making student travel arrangements to and from theirhome communities and requiring fire and safety inspections. [36] There is no evidence that Canada had any involvement in the operation of the residences. As noted above, thePresbyterian Church built the residences in the early 1900s to accommodate students from the interlake region, which did not involveAboriginal students.

This continued for almost 50 years. It was only around 1960 that Canada began sending Aboriginal students to theresidences, and even then there were also non-Aboriginal students, albeit they were in the minority. Canada never had any ownershipinterest in the property. [37] The treaty students attended public school, so Teulon had no involvement in their education.

Any involvement thatCanada had in that regard was, therefore, unrelated to the operation of the residence. [38] The residences were always managed by an independent board of directors, some members being involved throughtheir outside employment (such as the principal of the Teulon Collegiate) and others being appointed by the church pursuant to the by-laws of the residence. None were appointed by Canada, and Canada did not have a voting member on the board.

The board was solelyresponsible for the budgeting, hiring and supervision of personnel and maintenance of the buildings and furnishings and the services forthe children, such as laundry, meals, shopping, outings, daily supervision and contact with family. There was no provision forinspections by Canada of any of those aspects of the operation of the residences.

While Canada’s counsellors occasionally passed onconcerns raised by the students, the board was responsible to deal with those concerns as it saw fit. [39] While I have referred to a number of the arguments raised by AMC, the determination of whether Teulon was an IRSrequired a review and weighing of all of the evidence together, not just a consideration of individual pieces of evidence.

In my view,AMC has not identified any palpable and overriding error in the motion judge’s weighing of the evidence or in his findings and ultimateconclusion that Canada was not jointly responsible for the operation of Teulon. [40] While that finding is determinative of this ground of appeal, there is one further issue that needs to be addressed. AMCargues that the Teulon students were removed from their home communities and families and, therefore, suffered the same dislocation,discrimination and disadvantages as did the students in the IRSs.

As a result, it argues that they should also be entitled to the samecompensation as the students who were sent to an institution recognized as an IRS. It points out that Cuthbert Munroe, who was astudent at Teulon and who filed an affidavit in this matter, was offered the choice of going to either the Portage La Prairie IRS, which isa

Schedule E institution, or to Teulon, which is not. It argues that his experience would have been the same regardless of whichinstitution he chose, but that he has been denied compensation because he chose Teulon, rather than Portage La Prairie. It argues thatthis is unfair to him and not in keeping with the underlying purpose of the Agreement, that being to arrive at a lasting resolution of thelegacy of the IRSs and to promote healing. [41] This issue was addressed by Brown J in Fontaine v Canada (Attorney General), 2014 BCSC 941 .

That casedealt with the definition of “institution”, within the definition of an IRS, because the word “institution” is not, itself, defined in theAgreement. The argument was that the term should be interpreted to include ancillary facilities, such as boarding and group homesaffiliated with an IRS, because the students in those facilities suffered from the same enforced separation from home, family, culture,community and language as the students in an IRS. [42] Brown J looked at the history of the negotiations between the parties and the compromises that were accepted to arriveat the Agreement.

She rejected the argument that the word “institutions” should be given a wide and generous

interpretation in keepingwith the purpose of the Agreement, finding that (at paras 59-60): Counsel to the parties to this agreement also made reference to this compromise and were clear that in order to secure the SettlementAgreement, the Billeted Students had to be excluded. Thus, Mr. Phillips, counsel to the Assembly of First Nations, was very clear thatBilleted Students were excluded: There’s no question that the boarding school children are not included in this deal… This is the best possible deal for theresidential school survivors.

If you tinker with it and the government walks away from it, I will describe for you the scenario that mayresult … On behalf of the National Chief, we ask you to recognize this deal for what it is. It is, in fact, a compromise but it’s the best possible in

the circumstances. This extrinsic evidence is persuasive. Combined with the factual matrix in which the agreement emerged, specifically, that there was to be a separate mechanism to compensate non-residents, interpreting institutions to include ancillary facilities would be contrary to the intentions of the parties. The parties clearly intended for residence at an IRS to be the sine qua non of eligibility for CEP. [ 43 ] In this case, not only did Cuthbert Munroe not live at an IRS, but he did not live in a residence affiliated with an IRS.

He attended a public school with local, non-Aboriginal students that was run by a local school board unconnected with either Canada or an IRS. [ 44 ] Thus, for the reasons set out in Brown J’s decision, it is clear that the Agreement was not intended to include students living at residences like Teulon. VII. CONCLUSION [ 45 ] In my view, the motion judge did not make any palpable and overriding error in his determination that Teulon is not an IRS under the Agreement. [ 46 ] The appeal is, therefore, dismissed. JA I agree: JA I agree: JA