an Indian Band on his own behalf and on behalf of all members of-the Opetchesaht Plaintiffs (Respondents) HER MAJESTY THE QUEEN IN RIGHT OF CANADA

' J?&'OD0 &!; ci P,(:. i/ :,,.;.,,. -. Vancouver Registry LC: 92-0911 Victoria Registry COURT 03 APPEAL And : And : an Indian Band on his own behalf and on behalf of all members of-the Opetchesaht Plaintiffs (Respondents) HER MAJESTY THE QUEEN IN RIGHT OF CANADA BRITISH COLUMBIA HYDRO & POWER AUTHORITY Defendant (Respondent) Defendant (Appellant) NO. CA 016820 Vancouver Registry LC: 92-0911 Victoria Registry COURT OP APPEAL Between: THE OPETCHESAHT, an Indian Band DANNY WATTS, suing on his own behalf and on behalf of all the members of the Opetchesaht Plaintiffs (Respondents) And : BRITISH COLUMBIA HYDRO & POWER AUTHORITY Defendant (Respondent) And : HER MAJESTY THE QUEEN IN RIGHT OF CANADA Defendant (Appellant) R E P L Y JAMES D. BISSELL, Q.C. Solicitor for Her Majesty WOODWARD & COMPANY Solicitors for the Respondents The Opetchesaht & others LAWSON LUNDELL LAWSON & McINTOSH Solicitors for the Respondent/Appellant British Columbia Hydro & Power Authority G. DONEGAN, Q.C. R. S. WHITTAKER, Esq. Counsel J. WOODWARD, Esq. Counsel J.E. GOUGE, Esq. P.D. FELDBERG, Esq. Counsel

COURT OF APPEAL NO. CA 016758 Vancouver Registry LC: 92-0911 Victoria Registry Between: And : And : THE OPETCHESAHT, an Indian Band DANNY WATTS, suing on his own behalf and on behalf of all members of the Opetchesaht Plaintiffs (Respondents) HER MAJESTY THE QUEEN IN RIGHT OF CANADA BRITISH COLUMBIA HYDRO & POWER AUTHORITY Defendant (Respondent) Defendant (Appellant) No. CA 016820 Vancouver Registry LC: 92-0911 Victoria Registry COURT OF APPEAL Between : THE OPETCHESAHT, an Indian Band DANNY WATTS, suing on his own behalf and on behalf of all the members of the Opetchesaht Plaintiffs (Respondents) And : BRITISH COLUMBIA HYDRO & POWER AUTHORITY Defendant (Respondent) And : HER MAJESTY THE QUEEN IN RIGHT OF CANADA Defendant (Appellant) R E P L Y JAMES D. BISSELL, Q.C. Solicitor for Her Majesty WOODWARD & COMPANY Solicitors for the Respondents The Opetchesaht & others LAWSON LUNDELL LAWSON & McINTOSH Solicitors for the Respondent/Appellant British Columbia Hydro & Power Authority G. DONEGAN, Q.C. R.S. WHITTAKER, ESq. Counsel J. WOODWARD, Esq. Counsel J.E. GOUGE, ESq. P.D. FELDBERG, Esq. Counsel

INTRODUCTION 1. The respondents Opetchesaht and Watts ("Respondents") argue that one of the objects of the Indian Act is to protect the Indian interest in reserve land, and that the Act achieves this objective by imposing restraints on alienability. Respondents' Factum, para. 53. 2. They contend that, to guarantee this protection, the Act provides that certain transactions can only be implemented if the band surrenders the land and the Governor in Council accepts the surrender. Specifically, they argue that a surrender and cabinet approval are necessary in every case in which: (a) an interest in reserve land is granted to a non-indian, or @) an interest is granted to a non-indian which will "impact upon the h& right of possession of its reserve lands" (which includes any right to

-2- perpetual possession of such lands). Respondents' Factum, esp. paras. 53, 66 & 67. 3. The Respondents point out that s. 28(2) empowers the Minister, with band council consent, to authorize non-indians to use or occupy reserves or to exercise rights on reserves for a period exceeding one year. They argue that s. 28(2) must be read in such a way as to exclude all transactions in which non-indians acquire interests in reserve land or which impact on the band's right of possession. Otherwise, the Indian interest would not receive the protection contemplated by the Indian Act: consideration and approval by a majority of the adult members of the band and by the federal cabinet. Respondents' Factum, esp. paras. 63 & 67 4. Her Majesty agrees that one of the purposes of the Indian Act is the protection of the Indian interest in reserve lands, and that the restraints on alienability which are

-3- imposed by the Act are intended to provide protection. 5. Her Majesty does not agree, however, that such protection requires that all grants to non-indians of interests in reserve land or interests which impact on the band's possession must be the subject of a surrender by the band and approval by the Governor in Council, or that the 1952 Act so provided. PROTECTION OF INDIAN INTEREST IN RESERVES 6. Contrary to the Respondents' assertions, the 1952 Act provided for the protection of the Indian interest in a variety of transactions by which non-indians acquired rights to or interests in reserve land simply by requiring that such transactions be implemented by the Minister or the Governor in Council as representative of the Crown: (a) Section 58(1)@) and (c) provided that the Minister, with band council consent, could grant leases for agricultural or grazing purposes: no surrender was required;

@) Section 58(3) provided that the Minister, upon application by the locatee, could grant a lease of locatee lands: no surrender was required; (c) Section 18(2) provided that the Governor in Council could take lands in a reserve for Indian Schools, health projects, Indian administration or for "any other purpose for the general welfare of the Band: no surrender was required; (d) Section 35 provided for the taking or use of lands or an interest in lands, or the transfer or grant of such lands for public purposes: no surrender was required, nor was band or band council consent necessary; (e) Section 28(2) provided that the Minister could by permit authorize the occupation or use of a reserve or the exercise of rights upon a reserve: no surrender was required; (f) Section 110(2), (3) & (4) provided that in certain circumstances the Minister, with band council consent, could cause a grant to be made to enfranchised Indians of lands of which they were in lawful possession

-5- prior to enfranchisement: no surrender was required. Crown Factum (Appendix), pp. 80, 88, 85 93 & 94. In most of the above situations, the 1952 Act provided for the protection of the Indian interest by conferring on the Minister a discretion as to whether the transaction should proceed, coupled by a requirement for band council consent. In the case of expropriation, the Indian interest was left to be protected by the Governor in Council with no statutory requirement for band representation. 7. The involvement of either the Minister or the Governor in Council in transactions in which non-indians could acquire interests in or rights over reserve lands is consistent with the theme which was first articulated in the Royal Proclamation of 1763, namely, that any dealings involving reserve lands by the public must be carried out through the Crown. Smith v. R., [I9831 1 S.C.R. 554 at 575 & 576.

8. In para. 57 of their factum, the Respondents argue that, "from the beginning", the India Aa provided that non-indians were not to settle, reside upon, or occupy reserve lands. This is simply not so. Since 1886, at least, various versions of the Indian Act have permitted the Superintendent General to authorize non-indians to reside, occupy or use reserve land. References: Indian Act, R.S.C. 1927, c. 98, s. 34; Indian Act, R.S.C. 1906, c. 81, s. 33(1); Indian Act, R.S.C. 1886, c. 43, s. 22. 9. In para. 66 of their factum, the Respondents contend that a band vote is required where an interest in land is granted, or where any interest is granted which will impact on the Band's right to possession. The Respondents are in error in this contention: none of the 6 classes of transactions listed in para. 6 of this Reply require a band vote, yet most would normally involve the grant of an interest in reserve land to a nowindian and all would normally have a material impact on the band's right to possession of its reserve.

10. It will be the Crown's submission in the remainder of this reply, that contrary to the suggestion of the Respondents in paragraphs 70-72, that s.37 is not exhaustive of all interests that can be acquired in reserve land. Further, viewing the Act as a whole, an interest in land sufficient to construct and maintain a transmission line, or the right to use or occupy land for the purpose of construction and maintenance of a transmission line, was available not only pursuant to s.37, but also ss.35 and 28(2). SCOPE OF SECTION 37 11. Section 37 of the 1952 Act provides that: 37. Except where this Act otherwise provides, lands in a reserve shall not be sold, alienated, leased or otherwise disposed of until they have been surrendered to Her Majesty by the band for whose use and benefit in common the reserve was set apart. Section 38(1) provides that: 38. (1) A band may surrender to Her Majesty any right or interest of the band and its members in a reserve.

12. In paras. 61 and 70 of their factum, the Respondents argue that s. 37 requires a surrender in respect of any transaction which involves the grant of interest in reserve land. The only exceptions are expropriation and leases. It is submitted that these assertions are incorrect. 13. A s. 37 surrender requires the consent of the majority of the electors of a Band prior to the transfer of title in a reserve or the grant of a lease in reserve land. However, s. 37 is subject to other provisions of the Indian Act: this is evident from its opening words, "Except where this Act otherwise provides..." Section 37 does not enumerate the other sections to which its provisions are subject, and there is nothing to suggest that these exceptions are limited to expropriations and leases, that is, s. 58 and s. 35. In fact, when the Minister was asked by the Special Committee of the House of Commons to provide a list the exceptions contemplated by the opening words of s. 37, he provided a list similar to that set forth in para. 6 of this Reply. Both lists include s. 28(2). References: 1952 Act, s. 37; Special Committee Report at 259.

14. Further, the words of s. 37 do not include all transactions by which non-indians could acquire an interest in reserve lands or rights which might impact on the band's right to possession: the section provided that reserve land "... shall not be sold, alienated, leased or otherwise disposed of..." without a surrender. If Parliament had intended that grants of any interest in reserve land required a surrender, s. 37 would not have mentioned specific types of transactions, but would have contained general words, such as those found in s.38(1). Another example of the use of general words is s. 37(2) of the 1985 Act, as amended in 1988, which provides that "... lands in a reserve shall not be leased nor an interest in them granted.... " References: 1952 Act, s. 37 & 38(1); Indian Act, R.S.C. 1985 c. 1-5, s. 37(2) (reproduced in Hydro's Factum, Appendix G). 15. A "sale" is a conveyance of title to property for money. References: Robshaw Brothers Ltd. v. Mayer, [I9571 Ch. 125; Black's Low Dictionary, 5th ed. (St. Paul Minn.: West Publishing Co., 1979).

16. An "alienation" is a transaction which involves a conveyance of title to ProPertY. Meek v. Parsons (1900), 31 O.R. 529. 17. To "dispose of" means to part with the whole of one's interest in property. Peferences: Hannan v. Gray-Campbell Ltd., [I9251 2 D.L.R. 904 (Sask. C.A.); Rhyl Urban District Council v. Rhyl Amusements Ltd., 119591 1 All E.R. 257; MacPherson v. London Loan Assets Lrd., 1193 11 2 D.L.R. 630 (Ont. H.C.). 18. A "lease" is a contract which involves the conveyance of an interest in land, characterised by a right of exclusive possession, for a certain period of time. Anger and Honsberger, Law of Real Propem, 2nd ed. (Aurora, Ont: Canada Law Book, 1985) at 225.

19. In light of s. 38(1) it is clear that a Band can surrender any right or interest it has in a reserve. This provides flexibility to the approval process, and may be required quite apart from the provisions of s. 37. However, a surrender is required only when there is a sale, lease, alienation or other disposition of reserve land. Therefore, the situations where a surrender is required are narrower than the situations where a surrender can occur. 20. The above analysis is also consistent with the guiding principles of statutory interpretation which the Supreme Court of Canada has said should be applied to the Indian Act: the provisions of the Act are to be given a broad interpretation if their object is to preserve or enhance Indian rights, and a narrow one if their aim is to limit or abrogate such rights. References: Nowegijick v. R., [I9831 1 S.C.R. 29 at 36; Mitchell v. Peguis Indian Band, [I9901 2 S.C.R. 85 at 142-47. 21. Concluding that the words sell, lease, alienate or otherwise dispose of in s. 37 are exhaustive of all interests in reserve land is detrimental to Indian rights.

L 3 22. Until the Indian Aa was amended in 1988 by the introduction of the concept of 4 5 6 designated lands, it appeared that lands which were the subject of conditicnal or 7 8 qualified surrenders lost their status as reserve lands under the Indian for certain 9 10 purposes: 11 12 13 14 Prior to the 1988 amendments to the Indian Act, the word "reserve" and 15 the words "surrendered lands" were defined separately in the Act and 16 17 interpreted by the courts as distinct; "surrendered lands", even lands that 18 had been surrendered conditionally for leasing, were not a "reserve", 19 within the meaning of the Indian Act. 20 2 1 22 23 24 25 J. Woodward, Native Law (Toronto: Carswell, 1989) at 224. 26 27 28 29 30 23. As a result, conditional or qualified surrenders given prior to 1988 carried with 3 1 32 33 them certain practical disadvantages: 34 35 36 37 (a) many Band Council by-laws had no applicability to surrendered land; 38

(b) band members residing on the land were disqualified from voting in band council elections; References: 1952 Act, s.76(1); NaMm v. Canada (1986), 77 N.R. 156 (F.C.A.). (c) the personal property of an Indian or the band was no longer exempt from taxation; References: 1952 Act, s. 86(l)(b); Leonard v. R. (1984), 11 D.L.R. (4th) 226 (B.C.C.A.) leave to appeal S.C.C. refused. (d) the provisions protecting cultural property no longer applied; 1952 Act, s. 90(1). (e) band council could not impose property taxes on the occupants; Beferencp: 1952 Act, s. 82(l)(a)(i).

24. Section 35(1) of the Act provided as follows: Where by an Act of the Parliament of Canada or a provincial legislature Her Majesty in right of a province, a municipal or local authority or a corporation is empowered to take or to use lands or any interest therein without the consent of the owner, the power may, with the consent of Governor in Council and subject to any terms that may be prescribed by the Governor in Council, be exercised in relation to lands in a reserve or any interest therein. 25. Section 35 permits the two Crowns, and statutory entities with powers of taking or using lands, or any interest therein, to exercise their statutory powers in relation to reserve lands if the Governor in Council's consent is first obtained. Section 35 is non-consensual as neither the consent of the Band or Band Council is required. v. L, [I9861 1 F.C. 3, 58 N.R. 241 at 253 (C.A.) 26. Section 35 would seem to contemplate a variety of interests in land. That is, a taking of land, likely involves the acquisition of absolute title in the land. Therefore,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 2 1 22 23 24 2 5 26 2 7 28 29 30 3 1 32 33 28. The Respondents in paragraphs 77 and 78 argue that s.28 provides for only 34 35 personal, non-assignable rights similar to those granted by a license, and that interests 3 6-15- depending on the interest taken, it was likely that the land would cease to be reserve land. However, the use of land, or the taking or use of an interest in land, suggests some lesser interest in land is acquired. Title would still remain in the Crown. 27. Some utility companies lack the power to take or use land and therefore cannot use s.35. Therefore, if such a company wished to provide service to reserve residents and needed land for that purpose, according to the Respondents' argument, a surrender would be required. That is, the Respondents submit that s. 28(2) is excluded from the opening words of s. 37. It is submitted, such an interpretation of s. 37 and s. 28 should be avoided, for the reasons noted in paragraph 23 herein. SCOPE OF SECTION 28 37 38 in land can only be granted pursuant to the regime for designation and surrender. It is 39 4 o 41 respectfully submitted the Respondents are in error in these assertions.

- 16-29. Section 28(2) provides for the occupation or use of a reserve, or the residing or otherwise exercising rights on a reserve with ministerial consent for period not exceeding a year, and with ministerial consent and Band Council consent for longer periods. The evidence or this statutory authority is a "permit". 30. There is no reason to think that s. 28(2) is limited to personal rights, and that it is essentially a form of license. If Parliament had wished so to confine the scope of s. 28(2) it would have employed the word "licence", as was done in s. 57(a): 57. The Governor in Council may make regulations (a) authorizing the Minister to grant licences to cut timber on surrendered lands, or with the consent of the council of the band, on reserve lands. The absence of any such language indicates that the rights which may be authorized pursuant to s. 28(2) are more extensive than those available under a licence. 31. Finally, the designated land provisions of the Indian were not enacted till 1988. Therefore, in construing the word period in s. 28(2), the Court should consider

- 17- the Act in force in 1959, not the statute in force some thirty years later as suggested by the Respondents. 32. In the alternative, even if the Respondents are correct in saying that s. 37 prohibits the grant of any interest in reserve land without a surrender other than leases and transfers to expropriating authorities, it does not follow that the Permit is invalid. Section 28(2) could be construed to authorize the grant of rights which are purely statutory. Parliament may create sui generis rights or interests not recognized in property law. Worherspoon v. C. P. Ltd., [I9871 1 S.C.R. 952 at 998 & 999; Lunenburg (Town) v. Lunenburg (Municipality), [I9321 1 D.L.R. 386 (N.S.S.C.); Tuff vale Railway Co. v. Card#Railway Co., [I9171 1 Ch. 299 at 317-318. 33. It is further submitted that the distinction between proprietary and personal rights and the imposition of common law property labels is inappropriate in the context of s.28(2). That is, Parliament has referred to leases, licences and sales, common law property labels elsewhere in the Act. The absence of such common law

- 18- labels in s. 28(2) suggests one is dealing with sui generis statutory rights. 1952 Aa, ss. 37, 54, 57 and 58 34. One major advantage of the alternative interpretation suggested in para. 32 of this Reply is that land affected by purely statutory rights would maintain its reserve status with the Indian interest intact, available for Indian use but subject to the statutory rights of the permit holder. This also means that, at common law, no sale, alienation or other disposition occurs pursuant to s. 28(2). 35. That is, a sale or alienation involves the passing of title, see paragraphs 15 and 16 herein, which means more than the right to occupy or use a reserve or reside or otherwise exercise rights on a reserve. Likewise, a disposition involves parting with the whole of one's interest in property, and therefore goes beyond the rights available pursuant to s.28(2).

INDIAN ACT IS NOT NEATLY COMPARTMENTALIZED 36. One underlying premise of the Respondents' argument is that the Indian Act is neatly compartmentalized. In paras. 77 and 78 of their factum, the Respondents contend that certain sections deal exclusively with proprietary rights, while other sections deal with personal rights. There is, however, a great deal of overlap among various sections and the same type of rights can be granted under more than one section of the Act: (a) Leases can be granted pursuant to s. 58 and 37 (in conjunction with s. 53(1)); (b) Grants or transfers of land can be made pursuant to s. 37, s. 35(3) and s. 1 lo(4); (c) The use of reserve land may be permitted pursuant to s. 280) and s. 35. It is submitted that this overlap is apparent when one considers the same word appearing several times in a statute is presumed to mean the same thing whenever it is

found. Purves v. A.G. of Cada (1990) 54 C.C.C. (3d) 355 at 364 (B.C.C.A.) 37. For example, a band could, pursuant to s. 38(1), give a surrender for the purpose of enabling the Governor in Council to grant an easement for a transmission line. Section 37 would not require a surrender for this purpose because an easement does not constitute a sale, lease, alienation or other disposition of land. Likewise, the Governor in Council could, pursuant to s. 35 and without a surrender, grant to an expropriating authority the right to use reserve land for the purpose of a transmission line. Finally, rights to use or occupy land for the purpose of erecting and maintaining a transmission line could be provided by the Minister with band council consent pursuant to s. 28(2). 38. In this manner, the 1952 Indian Act provided alternative means of achieving the same objective. In a given case, the band or its representatives and the representatives of the Crown could choose the method of implementation deemed most suitable in the circumstances. The statutory requirement, present in most cases, that the band or

- 21 - band council consent to the transaction and that the government representative implement it required that the method chosen had the support of all, and that the Indian interest received the protection required by the statute. RIGHTS GRANTED IN THE CASE AT BAR 39. The Respondents in paragraphs 75 and 79, deal with the nature of the rights obtained by Hydro in the case at bar. It is respectfully submitted that at common law, a power line running across one's land creates no exclusive or permanent occupation of land to create a proprietary interest in land. In short, at common law, the right is only that of an easement, with rights of occupation being given to B.C. Hydro, but the proprietary rights remaining in the Crown. The absence of any exclusive occupation is also apparent from a review of the permit itself: paragraph 7. Card v. Transalta Utilities Cop. (1987), 57 Alta. L.R. (2ndj 155 (Q.B.) Tany v. West Kwte~y Power and Light Co. (1905), 1 W.L.R. 186, 11 B.C.R. 229 (S.C.) ShelfHoldings Ltd. v. Husky Oil Operation Ltd. et a1 (1989). 56 D.L.R. (4th) 193 at 195 and 201 (Alta. C.A.) Permit A.B p.91 & p.92

40. It is submitted in the case at bar, if one accepts the alternative interpretation that s. 28(2) provides statutory rights, then one is not dealing with a common law interest in land, but rights created by statute. The statute provides the right to occupy the land, but creates no ownership or proprietorship in Hydro in the land. No legal or equitable interest or an easement is created in favour of Hydro, pursuant to the statutory permission provided by s. 28(2). References: Newcastle-under-Lyme Corporation v. Wolstanton Ltd., [I9471 ALL E.R. 218, [I9471 Ch. 427 at 457 41. The best description of the effect of the statutory rights in the case at bar is that the land in question remains reserve land subject to the statutory rights of Hydro. Since we are dealing with statutory rights under s.28(2), the court need not be concerned to give those rights a common law label. Town of Lunenburg v. Municipality of Lunenburg, supra

- 23-42. It is further submitted, contrary to the Respondents' suggestion in paragraph 75, that no disposition of land has occurred in the case at bar.' As noted in paragraph 39 herein, the entire interest in the reserve has not been parted with. 43. The Respondents in paragraphs 53, 63, and 67 have emphasized that it could not have been the intention of Parliament that Band Council and the Minister tie up the lands in perpetuity. It is submitted the distinction between use in perpetuity and temporary use is a distinction of degree. That is, the Minister with Band Council consent pursuant to s.58(l)(b) and (c), can grant leases for agricultural or grazing purposes. Such leases, if for a long enough term, 99 years, would be beyond the remaining life-span of most adult Band members. Yet no Band vote is required. The same situation arises with locatee leases under s.58(3). The effect of such long term leases for adult Band members would be analogous to a transaction in perpetuity. 44. It is also submitted that the Act already provides in s. 1 lo(2)-(4) that band council and the Minister can grant perpetual interests in land. That is, s. 1 lo(2)-(4) provides that the Minister with band council consent can grant land to an enfranchised Indian. Clearly, a grant of absolute title is a grant in perpetuity.

45. The Respondents in paragraphs 80-81 suggest that the effect of granting a permit for an indefinite period is to preclude any other person in the future from being granted a right to use or occupy these lands. The Respondents submit that the effect of this is that the Minister has divested himself of a discretionary power under s.28(2). 46. It is respectfully submitted that the foregoing argument is without merit. That is, any time the Governor-in-Council were to choose to accept a surrender of an easement, he may also be precluding anyone else from exercising similar rights on the lands. Clearly that is permissible. It is illogical to suggest the Governor in Council may fetter his discretion but not the Minister. All of which is respectfully submitted. DATED at Vancouver, British Columbia, this3/j;r day of January, 1994. G. DONEGAN, Q.C. R.S. WHITTAKER Counsel for Her Majesty