Government in conflict on fiduciary obligation

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Academics and others with expertise in fiduciary law attended a two-day forum on fiduciary relationships sponsored by the London-based Association of Iroquois and Allied Indians (AIAI) and the Law Commission of Canada on June 19 and 20.

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Judges, law professors from Canada, the United States, New Zealand and Australia, as well as lawyers, government officials, chiefs and councillors attended.

While many of the presentations dealt with the minutiae of a very obscure and little understood area of the law and looked at ways of making reluctant governments live up to the spirit of their fiduciary obligations, one Osgoode Hall Law School assistant professor had a different take on the issue.

Gordon Christie, an Inuvialuit from Inuvik who has a doctorate in philosophy from the University of California, Santa Barbara and a law degree from the University of Victoria, now teaches tort law and Aboriginal law at York University's Osgoode Hall in Toronto.

He questioned the value of focusing a lot of energy on the government's fiduciary obligation. In a 27-page paper he presented at the forum, Christie looked at the issue from a unique perspective.

In a complex but elegant analysis of the realities of fiduciary law, Christie argued that even though the courts have decided the Crown's actions have created fiduciary or trust-like obligations in certain cases, fiduciary law as it would apply to two private parties must be applied differently when the government is one of the parties involved.

"[U]sually a clear and indisputable sign of the breach of a fiduciary duty is the existence of conflict of interests. In the Crown-Aboriginal context, conflict between the Crown's public duties and its fiduciary obligations is tolerated," he said, meaning that courts will back away from judging the government harshly when the fiduciary duty "impacts on government acting as the government."

While many experts believe the courts will eventually come to grips with the fact that the Crown has an obligation as a fiduciary to put the interests of Aboriginal beneficiaries before its own, Christie doesn't really believe that day will ever arrive. He believes Canadian courts will always be limited because they're part of the Canadian system and can't think outside of that orientation. Plus, the Crown has a unique position in its relationship with Aboriginal people because the Crown and only the Crown has the power to interfere with Aboriginal and treaty rights. This unique power creates a weakened and very unusual fiduciary obligation, he argued, because the Crown is said to have a duty to protect rights that only the Crown has the power to violate.

"But how can this be? How can it be that Aboriginal title holders are said to have certain legally recognized (indeed constitutionally recognized) property rights, but these rights (are) entirely vulnerable to the exercise of the discretionary power of the Crown?" he asked.

Christie concludes that using fiduciary doctrine in the Crown-Aboriginal context is completely inappropriate.

"It is not simply a matter of courts misunderstanding fiduciary doctrine so that if they better understood the doctrine they could appropriately apply it to the Crown-Aboriginal dynamic. Similarly, it is not simply a matter of the courts misapplying fiduciary doctrine that if they better understood how to do this, fiduciary doctrine could have a role to play in the Crown-Aboriginal context. Nor, of course, is it simply a combination of these two shortcomings," he argued. "Rather, it is that fiduciary doctrine, no matter how twisted, tweaked or perfected, cannot be meaningfully applied to Crown-Aboriginal relationships. The basic point is clear enough: the Crown cannot simply be held to the standard principles of fiduciary doctrine, for it cannot act, given its public duties . . . to promote in an appropriate manner the best interests of Aboriginal peoples."

Christie said the government is in an impossible situation andcan never be trusted or expected to act as a fiduciary - as someone who will put Aboriginal interests ahead of the interests of the large society. He suggested the courts are well-positioned to monitor the Crown as it struggles with inherent conflict of interest, but he isn't even sure the courts could disentangle themselves from this snarl of conflicting interests.

"When federal power is tempered by federal duty . . . it is the judiciary that decides the extent to which the power is tempered, and so the extent to which Aboriginal interests are impacted," he said. "Can the courts, however, escape the problems attendant on holding the government responsible for acting in the best interests of peoples living on these lands prior to the existence of either this state or this judiciary? While the record certainly suggests that they act in concert, or at least through the same eyes as, the Crown, they are certainly not strictly beholding to the general public, and (are) bound by the highest law of the law, the Constitution. Whether they would have the courage, however, to uphold the honorable position of fiduciary, with only themselves to monitor their own actions, would have to wait to be seen."

He believes putting faith in the idea that, somewhere down the line, Canadian authorities will see the light and begin behaving as proper fiduciaries, is a risky and expensive strategy. Instead, he suggested, approaching issues with eyes open and pointing out the inherent problems in pursuing fiduciary doctrine as a solution to Crown-Aboriginal conflict, may allow Aboriginal negotiators to convince federal authorities that the honor of the Crown can best be served by recognizing the process is inherently flawed and needs special attention.

Former Ontario ombudsman, Roberta Jamieson, also believes new institutions need to be established that have clearly defined roles related to making the Crown-Aboriginal relationship conform to the law without the adversarial atmosphere of courtroom or a negotiating table.

"It's quite bizarre that we would ask the courts to determine for First Nations what are the essential elements of First Nation cultures," she said. "The courts declare winners and losers. They're not about maintaining relationships for the future."

She suggested Native legal issues should be included in all law school curricula.

"Having said that, what we really need to deal with these issues are new institutions. Both to deal with the disputes from the past and also to move forward when dealing with the fiduciary relationship," she said. "First, they need to have the confidence of First Nations and governments alike. And they can only have that confidence if they're created jointly."

She said there were things that could be done easily and immediately to start a better process, if the political will was there.

"Specifically, we need an order-in-council passed to create a facilitation instrument to assist governments to finalize agreements for their relationships for the future, to conclude treaties. That institution should be capable of facilitation and mediation and it could be done by order-in-council next week if we wish to do that. It doesn't require legislation. Second, we do need legislation to create a monitoring agency that will review how well the government of Canada, and if you wish the provincial governments, . . . to review how well . . . how are they doing."

When Jamieson was a member of the committee that produced the Penner report on Indigenous issues 20 years ago, she said, the committee made that recommendation.

"We likened it to an Aboriginal ombudsman," she added.

Various reports have done a lot of the work that is necessary to improve the way things work, she said.

Jamieson, a lawyer by training, also said there should be an independent court set up to resolve disputes where First Nations allege the government has a conflict of interest. She also said First Nations need to find a way to make Canada'sinternational obligations enforceable. Many human rights activists claim that Canada, and especially the provinces, don't live up to United Nations conventions Canada has signed.

AIAI Grand Chief Larry Sault hosted the gathering. He said leaders are too busy to look at legal issues and are often forced to react when new decisions come along. He said the chiefs have to get busy and educate the general public about the legal realities of Native people, saying "I can't expect the government to do that for me."

He urged leaders to start using the media to get the message out.

It was suggested during the forum that an Aboriginal attorney general could be appointed to police the federal government and keep the unique legal rights and identities of First Nations in the spotlight as the government went about its work. Sault said he approved of that idea but he thought First Nations needed to go even further.

"Maybe we need to have a circle of leaders and academics, First Nation leaders and legal people put together with a mandate to deal with our issues," he suggested. "Maybe that body, if we do that, needs to be independently funded."

A lawyer in the audience told the forum the Indigenous Bar Association has looked at setting up "a mechanism to ensure that the Crown is monitored to fulfill its fiduciary duty."

"From the Indigenous Bar Association's point of view, we've often talked about setting up an independent advocacy office, something like the Native American Rights Foundation in the United States. Something that's independently funded and separate from government. That's something I think we should give serious consideration to," he added.

Sault suggested corporations or foundations could be approached, a strategy that American tribes have had some success with.

He also suggested that it's time for First Nations to set up a national institution to co-ordinate legal action so First Nations didn't unwittingly work against each other. He urged all First Nations