Summary

Keywords

Aboriginal law - Fiduciary duty - Breach - Remedy of equitable compensation - Trial judge awarding First Nation equitable compensation for breach of fiduciary duty committed by federal Crown in connection with flooding of part of reserve - Award upheld on appeal - How should principles of equitable compensation, together with legal principles applicable to the Crown-Indigenous relationship, be applied to compensate Lac Seul First Nation for Canada knowingly and fundamentally breaching its fiduciary duty to Lac Seul First Nation by flooding its reserve land, without adhering to Indian Act requirements, depriving Lac Seul First Nation of the flooded reserve lands forever, and seriously and detrimentally affecting Lac Seul First Nation’s way of life?

Summary

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch). Please note that summaries are not provided to the Judges of the Court. They are placed on the Court file and website for information purposes only.

In an action initiated in 1991, the Lac Seul First Nation (“LSFN”) claimed damages from Her Majesty the Queen in right of Canada (“Canada”) for losses caused to it and its members as a result of the flooding of a part of its reserve following the construction of a dam where Lac Seul drains into the English River. The dam was completed in 1929, after Canada, Ontario and Manitoba had signed the Lac Seul Storage Agreement. As a result of the construction of the dam and the resulting flooding, nearly one-fifth of the Lac Seul reserve was rendered unusable - the water covers approximately 17 percent of the reserve. Timber was lost, graves were desecrated, homes and fields were destroyed, and portions of the reserve were severed from one another. Canada did not seek LSFN’s consent to surrender the land, nor did it take (or expropriate) the land. The Federal Court awarded the appellants $30 million in equitable compensation for breach of fiduciary duty committed by Canada. LSFN appealed, contending that the Federal Court erred in the assessment of the equitable compensation awarded, namely in the value it attributed to the flooded land. The majority dismissed the appeal. A dissenting judge would have allowed the appeal and remitted the assessment of equitable compensation for redetermination.

Lower Court Rulings