Breakfast With Appeal: Chippewas of Saugeen First Nation v. South Bruce Peninsula

Where does liability fall when the Crown is found to have acted dishonourably toward a First Nation? In a recent decision, the Ontario Court of Appeal found that a representative of the Imperial Crown – the federal government’s predecessor – altered the boundaries of a reserve negotiated in an 1854 treaty, in a case that has significant modern-day ramifications for both the Chippewas of Saugeen First Nation and residents of Sauble Beach (originally recorded on February 26, 2025).

Transcript

Yael Bienenstock (00:08): Welcome to Breakfast with Appeal, Torys’ quarterly series on the cases you want to know about. We offer our thoughts on the appellate law that's shaping Canadian conversations. Let's dive in.

Andrew Bernstein (00:23): Good morning, everyone. I'm Andrew Bernstein, and welcome to the Breakfast With Appeal Michelin Guide Edition. We've got a bit of an unusual configuration today because the Breakfast With Appeal panel—that's David Outerbridge, morning, David; Yael Bienenstock, good morning, Yael—

Yael Bienenstock (00:39): Good morning.

Andrew Bernstein (00:40): And Jeremy Opolsky, good morning, Jeremy.

Jeremy Opolsky (00:42): Morning.

Andrew Bernstein (00:43): —are in Toronto. But I'm coming to you live from the Torys Calgary office, where one of my Calgary colleagues was kind enough to get up very early and let me into the office at 6 AM, so all you Easterners could be done by 10 AM and get on with your day.

Jeremy Opolsky (00:59): Andrew, you've been in Calgary for like three days and you're already calling us Easterners? Does this mean that you're staying, and no one will confuse us ever again?

Andrew Bernstein (01:06): Neither of those things are true. You wish I was staying, and people continue to confuse us [laughter]. Anyway, we have a slightly different format today. There were so many interesting cases that we decided to change it all up. And in addition to all those interesting cases, there's a case about commercial tenancies.

Jeremy Opolsky (01:21): Thanks, Andrew [laughter]. That's the case that we won!

Andrew Bernstein (01:25): Well congratulations! I wonder how it got on our list, but now I understand [laughter]. 

Anyway, let's get started with a topic we don't tackle very often, which is an Aboriginal rights case. It's called Chippewas of Saugeen First Nations and South Bruce Peninsula. Yael, do you want to set this one up for us?

Yael Bienenstock (01:41): I will certainly do my best, although this one might... the setup might test my geography skills, so hopefully I get this right. We're going to use some Google Maps. 

The case involves a dispute between the Saugeen Indigenous nation of Anishinaabe people on one side and on the other side, there's the Ontario and Canadian governments, the town of Bruce Peninsula, and a number of different private landowners.

It's a dispute about the particular borders of the Saugeen Reserve, and in particular, a portion of the shoreline of Lake Huron, which is called the disputed beach in the decision, and it includes what is now known as Sauble Beach—some of you may have been to Sauble Beach, it's a beautiful beach on Lake Huron.

And so, the way this dispute evolved, we have to go back in time, back before Confederation. The Saugeen’s traditional territory includes much of what is now known as the Bruce Peninsula, and the Saugeen have a sacred relationship with the land and the water and the disputed beach, which they've traditionally used for fishing. And the dispute also involves, I mentioned before, citizens who own property that is alongside the disputed beach.

So, it's not necessarily—it’s a little unclear whether it goes up to the shoreline, but there's the beach here and then we've got some properties abutting it. Now, the reserve was established as a result of a treaty that goes back to 1854 before Confederation. And at that point in time, most of the Bruce Peninsula belonged to the Saugeen and another First Nation, the Nawash.

But the Crown had made numerous attempts to get a surrender of the Saugeen Territory because of its economic interests and increasing settler population. In 1854, the representatives of the Imperial Crown—so there's no Canada at this point—negotiate a treaty with Saugeen, and the treaty created a reserve that is delineated by specific borders. And it's written out in words in the treaty where those borders are.

And it specifically sets out western, southern and eastern reserve boundaries, which now that we're looking at the map, makes a little bit of sense, because it's not—you might think of a reserve traditionally as a rectangle, but this is more like a triangle. So, there's really three borders with maybe a tiny little border at the northern tip. I've put up this map because the way that the treaty explained where that top point was going to be, it set out the western border.

And what we're seeing on this map is actually... it includes an amendment that was done later. So originally the western border, if you can see the Chippewa Hill sign, sort of near the river towards the southwest side of the map, the western border headed straight up from there. And then there was an amendment that added in a corner, kind of in the bottom left corner, or the southwest corner.

That's not what's at issue in the case. The issue in the case is the point at the top that is right around Sauble Beach. And so what the treaty actually says is that there should be a line drawn from a spot upon the coast at a distance of about 9.5 miles from the western boundary aforesaid, and running parallel thereto until it touches the aforementioned northern limits of the recently surrendered strip. So what is really at issue here is where is the spot upon the beach that—you're supposed to choose a spot upon the beach, and then go straight south to get that eastern boundary, the straight line that we see sort of running towards, on the eastern side. 

And so that's the treaty. There is kind of a rough map done at the time. It's not super detailed. And later on, the surveyor comes to actually delineate the boundaries of the reserve, and his name is Charles Rankin. And so, in 1854, he comes to, in the fall, to delineate the boundaries of the reserve.

And he finds this spot upon the beach, and he says it's actually a little further up than what we see now. This is according to Google Maps, so I'm not saying this is the right borders, but it's illustrative only. But the spot upon the map was actually further up, let's say closer to where it says Sauble Beach North.

And as you can see, the shoreline here is curved. And so, when he went further north and found his spot upon the beach, and then drew a line straight south to get the eastern border, that line was going to take you through the lake. And apparently for surveying purposes, it's not supposed to be done that way. And so, he used kind of surveying principles at the time and made an executive decision to move the spot upon the beach further south, so that when you draw a straight line going south from the spot, you're no longer going through the water.

And in the process, he basically, effectively, removed about 1.4 miles of shoreline from the reserve. So, that’s—I think we're done with the map—and therefore, a good chunk of Sauble Beach probably should have been in the reserve, but now was not. So, between 1857 and 1907, the land, including the disputed beach, was patented by governments, and then sold to private purchasers.

And today there are cottagers, there's the Sauble Beach Development Corporation and the town of South Bruce Peninsula that I believe owns the disputed beach, although it’s… I'm not sure whether they can actually own it going all the way up to the water, but we'll set that aside. Now, over the years, Saugeen had raised concerns about the border of the reserve, and at some point, they sued Canada, Ontario, the town, the private landowners, and claimed that the disputed beach actually forms part of the reserve lands.

We're going to be talking about the Ontario Court of Appeal decision. I'm just going to give some highlights from the trial decision, just to give some context for further questions. So, the trial judge interpreted the treaty in light of its text and the cultural and historical context, and in keeping with the principles of choosing the meaning that best reconciles the interests of the First Nation and the Crown.

And she concluded—and a lot of these findings I think are pretty fact-driven—she concluded that the parties had a common intention for the northern edge of the reserve to go to a particular spot, which is the particular spot we were talking about before. It's now in what something called “Lot 31”. So, they had an intention to go further up the beach to Lot 31, that was supposed to be the northern edge of the reserve.

She also found that at the time of the treaty, Saugeen knew where that spot was because they were intimately familiar with the coastline, because they did so much fishing off of that coastline. The portion of the coastline was important to Saugeen because they used the beach for fishing and launching canoes. The Crown, on the other hand, wasn't very interested in acquiring coastline other than the mouth of the Sauble River, which is at the southern end, because it was using that as a mill site and transportation route.

So, they were interested in kind of commercial activity at the mouth of the Sauble River, which is at the other end and not really that interested in the northern end. She also found that when Rankin was confronted with this concave shoreline, he prioritized surveying principles over the text of the treaty. 

So, he didn't go back and say, “okay, what do I do now?” He's like, “well, I'm a surveyor. I'm going to do my survey job, and I'm going to move it.” And this led to a reduction of the reserve coastline by about 1.4 miles. And the trial judge found that there was a breach in the treaty. 

She also dealt with Crown liability. She found that the Imperial Crown had promised to protect the reserve from encroachment, and that this promise engaged the honour of the Crown and gave rise to a fiduciary duty.

The Crown acted in a manner contrary to that duty by failing to ensure that Rankin properly followed the treaty-defined reserve boundaries, and then, she said, on Confederation, all of that liability fell to Canada, not Ontario. The town and the landowners had relied on a bona fide purchaser for value defense, which I think we'll get into, and this was largely rejected for a variety of reasons.

The trial judge said the town couldn't rely on the defense because it had notice of Saugeen’s claims when it acquired deeds to the land alongside the disputed beach. Two of the private landowners had inherited the land, so she said they weren't actually purchasers for value, and a third family had paid consideration, so was not barred. But then, for all the private landowners, she applied the principles in a First Nations case and engaged in a balancing exercise, balancing the First Nations rights in the land with the rights of the innocent landowners. And she ultimately concluded that it would be inequitable to apply that to feds. And Ontario, Canada, and the town appealed.

Andrew Bernstein (10:31): Okay, so this is a complicated case with a lot of different issues [laughter]. Thanks, Yael. David, I know you've done some work for Indigenous groups. Can you tell us what the Court did on the interpretation of the treaty? And did the Court do it right? Do you—do you have beef here?

David Outerbridge (10:50): Sure, so—

Yael Bienenstock (10:50): Are you sure you have beef?

David Outerbridge (10:52): Sure, I will be happy to respond to your question, Andrew. So, Ontario was the lead appellant here on the treaty interpretation issues, and they alleged two essential errors by the trial judge in her interpretation of this treaty from 1854. One was that she made a mistake in concluding that it was appropriate to favour the interpretation of the treaty that was favourable to First Nations, as opposed to reflecting the common intention of the parties.

The second argument was that the trial judge had given excessive weight to the words of the treaty itself, and had not given enough weight to the surrounding circumstances that existed in 1854. Now I will break the suspense that the Court of Appeal had had time to deal with these arguments, but they really had no time for these arguments. They didn't find them having any basis whatsoever, for the principles of treaty interpretation are well established by the Supreme Court of Canada, by the Ontario Court of Appeal.

They are similar to, but not the same as, the principles that apply to contract interpretation. The basic rule is you look for the common intention of the parties as you would in the case of a contract, but in doing that, you start from the premise that the Crown, when negotiating the treaty, intended to act honourably, and in accordance with the principle of the honour of the Crown, which is an interesting interpretive principle in the sense that it is a principle that is often counterfactual, in the sense that, you know, at the time when these treaties were negotiated, we know from history that, you know, at least in some cases, the Crown was not intending to act honourably.

They were intending to achieve what was best for them from their perspective at that time, and best for colonist settlers and not interested in what was best for the First Nations, or even what was fair and equitable for everyone. But the principle of, the honour of the Crown principle of interpretation, requires the court to assume that the Crown did intend to act honourably, and to look for an interpretation that reflects that.

So that is a key difference from contract interpretation ordinarily. Another governing principle, as with contracts, is that you look at the text of the contract (or the treaty in this case), and you look at it in the context of the surrounding circumstances that existed at the time. 

And the third principle, which is pertinent here, is that when there's an ambiguity in a treaty between the Crown and First Nations, it is appropriate for the Court to resolve that ambiguity in favour of the First Nations.

So, Ontario argued that the Crown or the trial judge had misstated these principles, and they relied very heavily on one sentence in her reasons. And just to put this in perspective, her reasons were hundreds and hundreds of paragraphs long, including, you know, dozens of paragraphs on treaty interpretation. The Ontario argument was focused upon one sentence where the trial judge had said that it was appropriate to favour the interpretation of the treaty that was favourable to First Nations and the Crown said, well, look, she made a mistake, she's supposed to look at the common intention of the parties. What Ontario didn't really focus upon was the fact that—two things, number one, the trial judge repeatedly, over and over again, said that her task was to find the common intention of the parties and then that one sentence when she was talking about the interpretation that favoured First Nations, she footnoted to six cases that all dealt with how you resolve ambiguities, and that you're supposed to resolve ambiguities in favour of the First Nations.

So, the Court of Appeal found that the trial judge had articulated the treaty interpretation principles 100% in line with the governing Supreme Court of Canada, and Ontario Court of Appeal authorities, and the idea that they would overrule the trial judge because one sentence didn't have a few words to clarify that one has to look at the footnote to see what she was talking about, it wasn't very persuasive to them. 

So, the other thing Ontario argued was that the trial judge got the principles of treaty interpretation wrong because she had relied upon the dissenting reasons of former Chief Justice McLachlin in the Marshall case on treaty interpretation principles. The Court of Appeal took the surprising approach of looking at whether those dissenting reasons by Chief Justice McLachlin had been subsequently endorsed by majorities of the Supreme Court of Canada thereafter, and found that, lo and behold, they had and therefore it was the governing law of Canada, and that was not an error for the trial judge to have relied upon that.

So, I won't get into the details—Ontario also made a bunch of arguments about how the treaty had been wrongly interpreted, because the trial judge had got into mistakes in reviewing the historical facts, etc.—I won't get into all that now, but the Court had ultimately little time for that either, didn't conclude that the trial judge made any palpable and overriding error in reviewing those facts.

Did they get it right? My sense is that they, you know, as far as a judicial analysis is concerned, they couldn't have got it more in line with the governing principles.

Andrew Bernstein (15:20): Okay. That sounds like something less than a full-throated endorsement, but an endorsement, nevertheless [laughter]. Jeremy, you're Mr. Equity on this panel. There's a really interesting issue here about the landowners whose land are part of the treaty claim and whether they're bona fide purchasers for value. The trial judge said at least some of them couldn't be bona fide purchasers for value because they had inherited the property, so they weren't purchasers at all.

That struck me as at least a little surprising, since somebody who they inherited it from had purchased them. But the Court of Appeal ultimately found that they maybe were, or they could be bona fide purchasers, but it couldn't help them. Can you discuss this issue?

Jeremy Opolsky (16:02): Sure. But, Andrew, I've been waiting for about five years while David was Mr. Criminal Law and Mr. Torts and Mr. Smarter-than-the-rest-of-us [laughter], so I'll take Mr. Equity, I think [laughter].

Andrew Bernstein (16:13): I’m going to use AI to generate one of those book titles from the ‘70s. You know—

Jeremy Opolsky (16:18): Great.

Andrew Bernstein (16:18): Mr. Happy and Mr... [laughter]

Jeremy Opolsky (16:20): Great, I look forward to being a two-dimensional—

[laughter]

Andrew Bernstein (16:23): But you know, it's not all upside because—

Yael Bienenstock (16:25): What colour are you going to be? [laughter]

Andrew Bernstein (16:27): Because David has sometimes been Mr. Negligence [laughter].

Jeremy Opolsky (16:33): So this case had a fascinating treatment of bona fide purchasers for value without notice. So, we're not on Kitsilano yet, we're still on the Chippewas case. And it addresses really two interesting issues. Firstly, is the defense available to those who inherit land instead of buying it? And does the defense apply against treaty claims and how does it apply?

So let me first remind our viewers what a “BFPVWN” or “buff-puh-vuh-vuh-wuhn” is[laughter]. I think “BFP” is easier. Bona fide purchasers are viewed as really equity’s darling and it is an exception to the idea that you can't get anything more than the person you buy from has. If you have a bona fide a purchaser for value without notice defense, then you can defend against claims from, against the rest of the world.

But to do that, you have to be a bona fide purchaser. So, you have to buy something, and that has to be an exchange of consideration that is fair, right? It can't be a dollar, it can't be a peppercorn. It has to be fair, and it has to be without notice of the claim that is being asserted against you.

It's often, historically in the case law, cases of fraud or other title defects. But here, obviously not, it's about Aboriginal title. So here the trial judge held that two of the families were not eligible to claim BFP status because they inherited the land. And because they inherited the land, they didn't purchase it for value while their parents who did purchase it could have claimed the status and the defense, they could not.

The Court of Appeal disagreed with this, which I think is consistent with our intuition, and they said it would be a perverse result if a claimant could simply wait for the bona fide purchaser to die before commencing a claim and have a better claim after they died than before they died.

BFP an equitable defense and the Court of Appeal held that what passes to the heirs is the same as what the parents had. And while they can't have a better claim than the testator had, they also don't have a worse claim. They have the same claim, as long as the testator was a bona fide purchaser of value, so would they. But that's not the whole story here.

The families argued that bona fide purchaser defense was absolute. If it applied, if they met the elements, game over, and the Court of Appeal disagreed. The bona fide purchaser defense is not absolute. It must yield when fairness demands it, and you have to balance the equities. And while traditionally the bona fide purchaser defense as equity’s darling was the highest of the equities—right, here's a stranger who comes in, has paid real value without notice—that's not the case when Indigenous interests are at play. And here the equities weighed heavily in favour of the First Nations. The families’ attachment to the property was largely to their cottages. And if you remember Yael’s introduction, those cottages weren't at play here. What was at play for the families was across the road: a land that was used as a parking lot for commercial reasons, for, for people to visit the beach, for tourists to visit the beach.

So, when you balance the commercial interests in a parking lot for the families versus the First Nations’ constitutionally protected and spiritual connection to the land, the Court of Appeal said the balance was easy. It was in favour of the First Nations. The bona fide purchaser defense could not apply.

Andrew Bernstein (19:57): And at least I had the impression that that doesn't preclude claims by these families against the Crown for kind of selling them some bad title. Did you have that impression too?

Jeremy Opolsky (20:09): Absolutely. And that's kind of the Phase 2 of this trial. But in terms of the Phase 1, in terms of their proprietary interests in the land, that defense couldn’t apply.

Andrew Bernstein (20:20): Okay. So, Yael, you're Mrs. Federalism, everyone's getting a nickname today. So, as I understand it, as you said, the wrongdoing to the Saugeen was done before Confederation. The trial judge said the liability instantly falls on Canada, but not Ontario. What even is this question? And what happened to her conclusion?

Yael Bienenstock (20:42): So, what even is this question is a good question. I think the answer, the short answer to that one, is not a question that the trial judge should have answered. [laughter] And I will explain why, as Jeremy mentioned, and I think I should have mentioned at the outset, but didn't. The trial was actually divided into two phases, and there were different things that were going to be decided at different phases.

And so included in Phase 1 was liability of the imperial crown to Saugeen for any breaches of fiduciary duty or duties flowing from the honour of the Crown. What was not included in Phase 1, what was put in Phase 2 is how do you deal with that liability post-confederation, and how do you apportion liability as between Canada and Ontario? 

The parties—Canada—complained about this, I think rightly so, because they said we didn't even have notice, we didn't put in any arguments about this, you weren't supposed to deal with this now, this was supposed to be a question for another day. And so, they appealed, first of all, on basis of procedural fairness. Second of all, they had substantive arguments about why she got it wrong. 

Ontario sort of tried to—which, who I guess is pretty happy about all of this—tried to defend her decision to address this in Phase 1. And they had a variety of different arguments, none of which were that persuasive. They said, first of all, the judgment just says that the liability for the Imperial Crown's dishonourable conduct falls to Canada. It doesn't say Canada is going to pay for everything, and Ontario won't have to pay anything. Ontario said, we can still deal with that in Phase 2.

And the Court of Appeal kind of said, what does “liability falls to Canada mean” if it doesn't mean that Canada is on the hook here and you are not? So, they didn't buy that argument. Ontario also argued that at Phase 2, it could be directed to reimburse Canada for the amount that Canada has to pay. So, in that way, the trial judge wouldn't be offside the kind of procedural phasing order and the Court of Appeal rejected that too. 

Fundamentally, the court was pretty convinced, and I think rightly so, that there's a real procedural fairness problem here, when the parties did not actually argue the point. And so, I won't go through all of Ontario's arguments that they made about this and why they were rejected, but really, there was a procedural fairness problem, and the Court of Appeal said, no, she shouldn't have dealt with it. She should deal with it in Phase 2. An, and we're not going to address the substance of this. Although I guess it's safe to say that Canada knows it'll have an uphill battle on this point in Phase 2.

Andrew Bernstein (23:17): Interesting. I mean, the whole idea of kind of what happens to the obligations or rights of the Imperial Crown when the Imperial Crown gets split between Canada and Ontario is an issue that pops up from time to time, but not exactly an everyday issue.

Yael Bienenstock (23:35): And one that needs real briefing [laughter].

Andrew Bernstein (23:38): Yes, indeed [laughter]. David, last word, but I'd ask you to keep it kind of brief. These treaty cases are all a little different. This one seems a little juicier than most of them. Is there anything in particular we should take away from this case, or is this just another complicated treaty case decided on it's facts?

David Outerbridge (23:58): Yeah, I think there are a few takeaways. I mean, as Jeremy highlighted this—the striking part about this case is that you're balancing essentially two innocent parties, the First Nation, who has Aboriginal title and has had a wrong done to it, and these private colonist successors, or people owning private property and, you know, their understandable desire not to be dispossessed of their land and neither is a wrongdoer, but somebody has to prevail.

So, from my perspective, the key takeaways are, number one, I was struck and not necessarily surprised, but struck by the lengths that Ontario went to try to make sure the First Nations did not get their reserve expanded. You know, if you read the decision, it's just argument after argument from Ontario and all sort of batted away by the Court of Appeal, it’s not very powerful arguments, trying to defeat First Nations title that one wonders, you know, whether that's a good use of resources, but not necessarily an unusual thing to see. The second takeaway is that, you know, the case is reflective of an ongoing judicial shift in favour of protecting First Nations title and Aboriginal rights. You know, it's been going on for decades, but the Crown has not caught up with the courts and this is, I would say, of, you know, further, part of the gradual progression towards recognition of First Nations’ Aboriginal rights. I don't think the decision—I don't think at all—the decision, was the result of Justice George being himself a First Nations judge. But I think it is perhaps notable that there are very few First Nations judges in Canada, even fewer at the appellate level.

Justice George is one of them. But, you know, I think this decision would have been reached the same way by anyone, whether First Nations or not. 

I guess the last takeaway for now is just that, you know, one wonders why this had to be a zero-sum game in court. Like, you know, millions and millions of dollars are spent on these parking lots and a beach where, you know, from a First Nations perspective, the desired outcome would have been an agreement that works for everyone, whereas this was fought out in the courts at great length, great expense.

And some would say, you know, excessively and, you know, it's a striking that... you know, good results don't necessarily come out of judicial outcome, a big picture perspective.

Andrew Bernstein (26:02): That about wraps up our conversation. Before we go, I want to remind our listeners that they can find the webinar version of this edition of Breakfast With Appeal, along with previous episodes on Torys.com, and that our BWA program is eligible for one substantive hour of continuing professional development. Thanks again for joining us and take care.