Judgments

[1993] 2 F.C. 641

A-1362-92

Canadian Pacific Limited and Unitel Communications Inc. (Appellants) (Applicants)

v.

Matsqui Indian Band and Matsqui Indian Band Council (Respondents) (Respondents)

Indexed as: Canadian Pacific Ltd. v. Matsqui Indian Band (C.A.)

Court of Appeal, Pratte, Décary and Robertson JJ.A.—Vancouver, March 25; Ottawa, April 16, 1993.

Federal Court jurisdiction — Trial Division — Tax assessment by-law enacted under Indian Act, s. 83 providing for appeal to Federal Court — Federal Court’s jurisdiction conferred by statute — Band council’s authority to provide for appeals from assessments derived solely from s. 83 — Not conferring on band councils power to extend Federal Court jurisdiction by creating right of appeal thereto — By-law creating right of appeal to Federal Court ultra vires — Judicial review of notices of assessment issued thereunder not precluded by Federal Court Act, s. 18.5 (prohibiting judicial review where express provision in federal Act for appeal to Court).

Judicial review — Appeal from order striking out application for judicial review of notices of tax assessments issued by band council under by-laws enacted pursuant to Indian Act, s. 83 on strip of land running through reserve — CP disputing taxing authorization under s. 83 as asserting ownership of land, therefore land not “in reserve” — Beyond jurisdiction of tribunals created by by-laws to determine preliminary fundamental questions of whether land in reserve, validity and nature of CP’s title — Appeal procedures provided under by-laws not effective alternative remedies.

Native peoples — Taxation — Band council issuing notices of assessment under tax assessment by-laws passed pursuant to Indian Act, s. 83 — CP asserting ownership of land, therefore not “in reserve”, not taxable — By-law purporting to give right of appeal to Federal Court ultra vires — Federal Court Act, s. 18.5 not precluding judicial review — Tribunals created by by-laws lacking jurisdiction to determine preliminary fundamental questions of whether land in reserve, validity, nature of CP’s title — Other appeal procedures provided under by-laws not effective alternative remedies.

This was an appeal from an order striking out an application for judicial review. Pursuant to Indian Act, section 83 (which authorizes a band council to make by-laws for the taxation for local purposes of land in the reserve), the Matsqui Indian Band Council adopted taxation and assessment by-laws. Subsection 83(3) requires that the taxing by-laws “must provide an appeal procedure in respect of assessments”. The by-laws provided for the assessment of all real property within the reserve, the appointment of courts of revision to hear appeals from the assessments, an assessment review committee to hear appeals from the decisions of courts of revision, and for an appeal from decisions of that committee on questions of law to the Federal Court. Notices of assessment were sent to the appellants in respect of a strip of land running through the reserve, over which CP had laid tracks and Unitel had laid fibre-optic cables for use in its communication business. The appellants commenced a judicial review application seeking to have the assessments set aside on the ground that the band had no authority to tax lands which are not in a reserve, and since it owned the strip of land, it was not in the reserve, which is defined as a “tract of land, the legal title to which is vested in Her Majesty”. The Motions Judge struck out the application for judicial review because the assessment by-law provided for an alternative effective remedy. He did not deal with the argument that the decision could not be the subject of judicial review pursuant to Federal Court Act, section 18.5, which precludes judicial review where there is an express provision in an Act of Canada for an appeal to the Court.

Held, the appeal should be allowed.

The by-law which created a right of appeal to the Federal Court was ultra vires and could not be invoked to preclude the judicial review of an assessment under section 18.1. The Federal Court’s jurisdiction is conferred by the Federal Court Act and other statutes. A by-law or regulation adopted pursuant to the Indian Act cannot extend the Court’s jurisdiction beyond the limits set by Parliament unless there is a statutory provision authorizing the adoption of such a by-law. The respondent’s authority to provide for appeals from assessments was derived solely from section 83. That section does not confer on band councils the power to extend the jurisdiction of the Federal Court by creating a right of appeal thereto.

It was beyond the jurisdiction of the tribunals created by the by-laws to determine such preliminary fundamental questions as whether the appellants’ land was “in the reserve”, the validity of CP’s title, and the nature of the right acquired thereunder. Parliament, in prescribing that the taxing by-laws to be adopted pursuant to subsection 83(3) “must provide an appeal procedure in respect of assessments made for the purposes of taxation” did not intend that the appeal tribunals to be created under the by-law be vested with such jurisdiction. With respect to those decisions, those tribunals are in the same position as inferior tribunals to which Parliament has not given the power to determine their own jurisdiction, but which must sometimes take a position on the subject. Their decisions on such issues are neither binding nor determinative. Recourse to those tribunals was not an adequate remedy for the resolution of those questions.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Federal Court Act, R.S.C., 1985, c. F-7, ss. 18 (as am. by S.C. 1990, c. 8, s. 4), 18.1 (as enacted idem, s. 5), 18.4 (as enacted idem), 18.5 (as enacted idem).

Indian Act, R.S.C., 1985, c. I-5, ss. 2 (as am. by R.S.C., 1985, c. 17, s. 1), 83 (as am. idem, s. 10).

CASES JUDICIALLY CONSIDERED

Abel Skiver Farm Corporation v. Town of Sainte-Foy et al., [1983] 1 S.C.R. 403.

APPEAL from order striking out an application for judicial review ([1993] 1 F.C. 74 (T.D.)). Appeal allowed.

COUNSEL:

Norman D. Mullins, Q.C. and Bernard W. Hoeschen for appellants (applicants).

John L. Finlay and Susan Stonier for respondents (respondents).

SOLICITORS:

Canadian Pacific Legal Services, Vancouver, for appellants (applicants).

Cooper & Associates, Vancouver, for respondents (respondents).

The following are the reasons for judgment rendered in English by

Pratte J.A.: This is an appeal from an order of the Trial Division [[1993] 1 F.C. 74] striking out with costs an application for judicial review whereby the appellants challenged, under section 18 of the Federal Court Act [R.S.C., 1985, c. F-7 (as am. by S.C. 1990, c. 8, s. 4)], the validity of certain notices of assessment issued pursuant to the Matsqui Indian Band Property Assessment By-law, Amendment 1-1992 (the “Assessment By-law”).

Under section 83 of the Indian Act,[1] the council of a band may, with the approval of the Minister of Indian Affairs and Northern Development, make by-laws for the taxation for local purposes of land, or interests in land, in the reserve,[2] including rights to occupy, possess or use land in the reserve. These by-laws must provide for an appeal procedure “in respect of assessments made for the purposes of taxation”. In 1992, the Matsqui Indian Band Council took advantage of that provision and adopted taxation and assessment by-laws which were approved by the Minister. The Assessment By-law that was then adopted provides for the assessment of all real property within the reserve, the preparation of an assessment roll, the giving to all persons concerned of notices of assessment, the appointment of courts of revision to hear appeals from the assessments,[3] the appointment of an Assessment Review Committee[4] to hear appeals from the decisions of the courts of revision and, finally, for an appeal on questions of law to the Federal Court from the decisions of that Committee.

Pursuant to that Assessment By-law, three notices of assessment were sent to the appellants in February 1992, in respect of a certain strip of land running through the Matsqui Reserve over which Canadian Pacific Limited (“CP”) has laid tracks for the operation of its railway and Unitel Communications Inc. (“Unitel”) has laid fibre-optic cables for use in its communication business.[5]

On receipt of those notices, the appellants commenced a judicial review application in the Trial Division seeking that they be set aside on the ground that, under subsection 83(1) of the Indian Act, an Indian band has no authority to tax lands which are not in a reserve. That application was supported by affidavit evidence establishing that the strip of land here in question was, in effect, owned by CP which acquired it from the Crown in right of Canada by letters patent issued on August 25, 1891, and registered in the New Westminster Land Title Office on August 27, 1891. According to the appellants, land owned by CP is not in the Matsqui Reserve, since the Indian Act defines a “reserve” as “a tract of land, the legal title to which is vested in Her Majesty” and, as a consequence, could not be taxed by the respondents.

The respondents then brought a motion asking that the appellants’ application for judicial review be struck out on two grounds, namely:

(a) the application was directed against a decision which, pursuant to section 18.5 [as enacted by S.C. 1990, c. 8, s. 5] of the Federal Court Act,[6] could not be the subject of judicial review since the assessment by-law expressly provided for a right of appeal to the Federal Court; and

(b) the Court should decline to grant the discretionary remedies applied for because the Assessment By-law provides for an alternative effective remedy, namely, a right of appeal to a court of revision, to the Assessment Review Committee and, eventually, to the Federal Court.

That application was granted by the Judge of first instance who struck out the appellants’ application for judicial review because, in his view, the assessment by-law provided for an alternative effective remedy.

The Judge did not express any opinion on the respondents’ argument that the appellants’ application for judicial review was barred by section 18.5 of the Federal Court Act. However, as the respondents have reiterated that contention in this Court, I must, before discussing the reasons of the Judge below, say that I see no merit in it.

The Federal Court is a statutory Court. It was created by the Federal Court Act and its jurisdiction is defined by that Act and other statutes. A by-law or regulation adopted pursuant to the Indian Act cannot extend the Court’s jurisdiction beyond the limits set by Parliament unless there be a statutory provision authorizing the adoption of such a by-law. It is common ground that the respondents’ authority to adopt the Assessment By-law and provide for appeals from assessments is derived solely from section 83 of the Indian Act. That section requires an assessment by-law to provide “an appeal procedure in respect of assessments”. However, it does not confer on band councils, either expressly or by implication, the power to extend the jurisdiction of the Federal Court or other statutory courts by creating a right of appeal to those courts. It is indeed possible to provide “an appeal procedure in respect of assessments” without giving a right of appeal to those courts. It cannot be said, therefore, that, as required by section 18.5 of the Federal Court Act, “provision is expressly made by an Act of Parliament for an appeal as such to the Court”. It follows that this part of the Matsqui Indian Band Assessment By-law, Amendment 1-1992, which creates a right of appeal to the Federal Court, is ultra vires and, for that reason, cannot be invoked to preclude the judicial review of an assessment under section 18.1 [as enacted idem] of the Federal Court Act.

The Judge of first instance recognized that he had jurisdiction to hear the appellants’ application for judicial review. He recalled that judicial review is an exceptional discretionary remedy which is generally refused when the law provides for another equally effective remedy; he pointed out that, in this case [at page 82], the Assessment By-law clearly provides for a right of appeal to a court of revision on the ground that “lands or improvements …. have been wrongfully entered on … the assessment roll”. On the basis of these considerations, he exercised his discretion and chose to strike out the appellants’ application on the ground that they could obtain satisfaction by exercising their right of appeal under the By-law.

In reaching that conclusion, the Judge, in my view, erred in several material respects.

First, he failed to take into account the fact that the immediate issue raised by the appellants, namely, that their land and interests had been wrongfully entered on the assessment roll, could not be resolved without answering other more fundamental questions which are, in my view, beyond the jurisdiction of the tribunals created by the By-law. Those more fundamental questions are: (1) whether the appellants’ land and interests are “in the reserve” within the meaning of subsection 83(1) of the Indian Act so as to enable the respondents to adopt by-laws taxing them; (2) whether the title asserted by CP is valid; and (3) what is the nature of the right acquired by CP by virtue of its title, or, in other words, did CP acquire the fee simple or a mere right of way in the land in question? Those questions are not questions that the tribunals created under the By-law have jurisdiction to decide. Parliament, in prescribing that the taxing by-laws to be adopted pursuant to subsection 83(3) “must provide an appeal procedure in respect of assessments made for the purposes of taxation”, did not intend that the appeal tribunals to be created under the By-law be vested with such a jurisdiction.[7] With respect to those questions, those tribunals are in the same situation as inferior tribunals to which Parliament has not given the power to determine their own jurisdiction but which must nevertheless sometimes take a position on the subject. Everything is fine only as long as their position is correct. Their decisions on such issues are neither binding nor determinative and, for that reason, a recourse to those tribunals cannot be viewed as an adequate remedy for the resolution of those questions.

Second, after expressing the view that the adoption of taxing by-laws by Indian bands in British Columbia had in all likelihood been preceded by lengthy negotiations between the bands, the Minister of Indian Affairs and the provincial authorities so as to ensure that those authorities would withdraw from the field of taxation in which the bands were about to enter, the Judge concluded as follows [at page 92]:

I conclude that effectively, the provincial authorities, as a policy matter, have relinquished their historical field of taxation over reserve lands and, with the collaboration of the federal authorities in giving the force of law to the by-laws pursuant to section 83 of the Indian Act, have clothed the respective Indian band councils with the mantle of legitimacy in running their own system of taxation. It leads me to conclude that for purposes of settling the issue before me, it would not be in the public interest and it would not favour public policy at this time to bypass the appeal provisions in the by-laws.

In my opinion, the policy considerations referred to by the Judge are irrelevant to the resolution of the legal questions raised by the appellants’ application.

Third, while the Judge realized that it would be necessary, in order to answer the questions raised by the appellants, to introduce evidence on complex factual issues, he expressed the view [at page 93] that since “section 18 motions … are heard summarily” the tribunals created under the Assessment By-law were “a better forum to receive and consider all the evidence material to the issue.” That opinion does not take into account the fact that those who are appointed to the tribunals created by the Assessment By-law are not likely to have any experience in the difficult task of presiding over a trial and will not be governed by any rules of procedure enabling them to perform that function. That opinion also ignores that, under subsection 18.4(2) [as enacted by S.C. 1990, c. 8, s. 5] of the Federal Court Act, the Trial Division may, if an application for judicial review raises complex factual issues, order that it be treated and proceeded with as an action.

Finally, the Judge took into account the fact that the appellants, if they were to exercise their right of appeal under the Assessment By-law, would ultimately have a right of appeal to the Federal Court which would then be in a better position to settle the issues between the parties. This is incorrect since, as I already said, that part of the Assessment By-law which creates a right of appeal to the Federal Court is ultra vires.

I would allow the appeal, set aside the decision of the Trial Division and dismiss the respondents’ motion to strike. I would grant the appellants their costs of the appeal.

Décary J.A.: I agree.

Robertson J.A.: I agree.

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