Des Roches v. Wasauksing First Nation, 2016 ONSC 6578

CITATION: Des Roches v. Wasauksing First Nation, 2016 ONSC 6578

DIVISIONAL COURT FILE NO.: DC-15-00001017

DATE: 2016-12-21

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Marrocco A.C.J.O, Thorburn, and Mullins, JJ.

BETWEEN:

Luc Des Roches Applicant

– and –

Wasauksing First Nation, Her Majesty the Queen in Right of Ontario (Ministry of Finance), Her Majesty the Queen in Right of Canada (Ministry of Aboriginal Affairs and Northern Development), Soda Rice, Jim Rice and Maquades Rice cob Mystic Loon Respondents

COUNSEL:

Christopher James Sparling, for the Applicant

T. Michael Strickland, for the Respondent, Wasauksing First Nation

Sarah Valair, for the Respondent, Her Majesty the Queen in Right of Ontario (Ministry of Finance)

Michael Beggs, for the Respondent, Attorney General of Canada

Jay Herbert, for the Respondents, Soda Rice, Jim Rice and Maquades Rice cob Mystic Loon

HEARD: October 13, 2016

DECISION ON APPLICATION FOR JUDICIAL REVIEW

[1] The applicant, Luc Des Roches seeks judicial review of decisions of the Council of the Wasauksing First Nation (“Wasauksing”) to allocate an annual quantity of unmarked cigarettes to the Rice family, who carry on a retail business called Mystic Loon. The decisions were made in 2012, 2013 and 2014. The applicant asserts that Wasauksing failed to properly exercise the statutory power conferred upon it by the Tobacco Tax Act, R.S.O. 1990, c. T.10 (“TTA”) by allowing an “off reserve” retailer to sell tax exempt cigarettes contrary to the terms in the legislation. He seeks declarations that Mystic Loon is not a “reserve retailer” within the meaning of the TTA and that Wasauksing has made unauthorized or invalid decisions. The applicant seeks an injunction to restrain Wasauksing and the Ministry of Finance from further allocating unmarked cigarettes to any business on the premises from which Mystic Loon carries on business.

[2] The respondent, the Attorney General of Canada (incorrectly named as Her Majesty The Queen In Right of Canada (Ministry of Aboriginal Affairs and Northern Development) asks for an order that it be struck as a respondent, on grounds there is neither relief sought nor any alleged wrongdoing on the part of this respondent.

[3] For the reasons that follow, we dismiss the application for lack of standing. We also decline to determine the Attorney General of Canada’s motion because there is no longer a live issue in this application.

Background

[4] Wasauksing is a First Nation located on the Parry Island reserve. In 2000, Wasauksing and the Ontario Ministry of Finance entered into a Tobacco Retailer Agreement with Wasauksing’s band Council for the purposes of the administration and enforcement of the sale of tax exempt cigarettes “to Indians who are exempt from the payment of the tax imposed by this Act”, by virtue of the fact that they are on reserve, pursuant to s. 13.5 of the TTA. Under the agreement Wasauksing is to assign the annual quantity of unmarked cigarettes among retailers doing business on the Parry Island Indian I. R. No. 16, based on the volume of the reserve retailers’ sales. The quantity given to a retailer is to continue each year, until altered or cancelled by the Council. Should the Council wish to increase the quantity of unmarked cigarettes that a retailer may purchase during a year, there must be a corresponding reduction in the quantity that another retailer or retailers may purchase during that year. Where the Council suspends or cancel’s a reserve retailer’s right to purchase unmarked cigarettes and tobacco and wishes to transfer the right to another reserve retailer, the Council may transfer only the unpurchased portion for that year. The agreement does not provide that the entire annual quantity must be distributed, or that every reserve retailer is entitled to an allotment each year. For example, between 2013 and 2014, the Council only allocated 11,467 cartons of cigarettes though it had 17, 425 cartons available to allocate.

[5] The applicant is a member of Wasauksing and resides on the Wasauksing reserve on Parry Island. Since 2007, he has operated a business located on the reserve called Rezmart Gas and Tobacco and sold, among other things, tax exempt cigarettes.

[6] The respondents, Soda Rice, Jim Rice, and Maquades Rice, own and operate a business called Mystic Loon that receives an allocation of the tax exempt cigarettes. The building in which Mystic Loon operates was purchased from Wasauksing. It is located on an old track bed of the CPR railway on Parry Island.

[7] The applicant asserts Mystic Loon is on Crown lands, not on the reserve lands, and is therefore ineligible to receive a share of the allotment of unmarked cigarettes administered by the Band under the agreement with the province.

[8] Historical documentation indicates that the land was conveyed by the Crown to the Ottawa Parry Sound Railway in 1896. A rail line was built on the land. Through a series of amalgamations, the land became the property of the Canadian National Railway (“CNR”) in the early 1920’s. The CNR conveyed the land back to the Crown in 1987.

[9] Wasauksing maintains that the lands were improperly surrendered or expropriated by the Crown and that the surrender is therefore invalid.

[10] In 1987, the Crown and Wasauksing negotiated a Memorandum of Agreement in settlement of the land claim. Pursuant to the memorandum, the land is to be returned to Wasauksing for the use and benefit of the Band. The Band has expressed an intention to make use of the land as it saw fit in a 1997 Band Council Resolution. Immediately adjacent to the Mystic Loon buildings on the same parcel of land, the Band erected a sign saying “Welcome to Wasauksing” in 2003.

Standing

[11] The Judicial Review Procedure Act, R.S.O. 1990, c. J.1, is silent as to who is able to bring an application for judicial review. According to the common law, a party must have either private interest standing or public interest standing in order to bring an application for judicial review: see Finlay v. Canada (Minister of Finance), 1986 6 (SCC).

[12] Wasauksing challenges Mr. Des Roches’ standing to bring this application, submitting that neither common law test has been satisfied. We agree.

Private interest standing:

[13] To have private interest standing, a party must establish a sufficient private or personal interest in the matter and a causal relationship between the alleged prejudice and the challenged action: Finlay, at paras. 17 and 21.

[14] The applicant is a reserve retailer who currently received an allotment of Wasauksing’s annual quota of unmarked cigarettes. He has some special interest in the matter beyond the general interest of all members of society. However, he is not privy to the Tobacco Retailer Agreement between Wasauksing and the Ministry of Finance. Moreover, the agreement does not confer any rights on reserve retailers.

[15] There is no causal relationship between the alleged prejudice and the challenged action. Similar to the case before the Federal Court in Des Roches v. Wasauksing First Nation, 2014 FC 1125, 469 F.T.R. 1, at para. 66 (one of the applicant’s proceedings before the Federal Court) the applicant has not demonstrated to this court that he has been or will be directly affected by Wasauksing’s decisions to have allocated unmarked cigarettes to Mystic Loon. There is no evidence that depriving Mystic Loon of an allocation would result in the applicant receiving a greater share of the quota. Any effects are “too indirect, remote or speculative to be a sufficient causal relationship for standing under the general rule”: Finlay, at para. 22. If Mr. Des Roches will not likely gain some advantage or suffer some disadvantage from the adjudication of this case, he is not interested within the meaning of the rule: Finlay, at para. 25. As such, the applicant has not demonstrated that he has private interest standing.

[16] In Canada (AG) v. Downtown East Side Sex Workers United Against Violence Society, 2012 SCC 45, [2012] 2 S.C.R. 524 (“Downtown East Side”), at para. 2, the Supreme Court of Canada summarized the test for public interest standing. The test calls for a weighing of three factors: whether the case raises a serious justiciable issue, whether the party bringing the action has a real stake or a genuine interest in its outcome and whether, having regard to a number of factors, the proposed suit is a reasonable and effective means to bring the case to court. The onus is on the party seeking public interest standing to persuade the court that these interrelated factors, applied purposively and flexibly, favour granting standing: Downtown East Side, at para. 37.

[17] A serious justiciable issue is a “substantial constitutional issue” or an “important one” that is “far from frivolous” and is appropriate for judicial determination in an adversarial setting: Downtown East Side, at paras. 30 and 42. “This factor also reflects the concern about overburdening the courts with the “unnecessary proliferation of marginal or redundant suits” and the need to screen out the mere busybody”: Downtown East Side, at para. 41.

[18] The question before the court is whether Wasauksing is distributing unmarked cigarettes in accordance with the tobacco retail agreement and the statutory regime. Mr. Des Roches does not challenge the regulatory regime, but rather Wasauksing’s application of it. Under the current regulatory regime and its agreement with The Queen in Right of Ontario, Wasauksing exercises discretion over how its annual quantity of unmarked cigarettes is distributed. He argues that unmarked cigarettes are being distributed to a business that does not qualify as a “reserve retailer”, as defined in Sales of Unmarked Cigarettes on Indian Reserves, O. Reg. 649/93, s.1, to his economic detriment.

[19] The applicant has not raised a serious, justiciable issue. Whether Mystic Loon is located on reserve lands is not a serious issue affecting the public interest. In any case, we consider the lands and premised on which Mystic Loon operates to be an “Indian settlement located on Crown land” within the meaning of s. 1 of Sales of Unmarked Cigarettes on Indian Reserves, which states:

“reserve” means reserve as defined in the Indian Act (Canada) or an Indian settlement locate don Crown land, the Indian inhabitants of which are treated by the Department of Indian Affairs and Northern Development in the same manner as Indians residing on a reserve;

“reserve retailer” means a retail dealer located on a reserve and who, in the ordinary course of his or her business, sells cigarettes to Indian consumers;

[20] To have genuine interest in the application’s outcome, Mr. Des Roches must have a “real stake in the proceedings”: Downtown East Side, at para. 43. Again, there is no evidence before the court to support the allegation that Mr. Des Roches is commercially affected by Wasauksing’s decision to allocate unmarked cigarettes to Mystic Loon.

[21] Given those two conclusions, it cannot be said that this application is a reasonable and effective means of bringing Wasauksing’s decision to allocate a quota of cigarettes to Mystic Loon before this Court.

[22] As such, the applicant has not demonstrated that he has public interest standing.

[23] The fact that the applicant does not have standing to bring an application for judicial review is sufficient to dispose of this application.

The Attorney General of Canada’s motion to be struck as a respondent

[24] The motion was served on the eve of the hearing of the application, which is to say, very late. We do not consider that this respondent’s presence was necessary to adjudicate effectively and completely on the issues. The issues arose under provincial legislation and the terms of an agreement to which it was not a party. Given the late service of the motion, the application was heard first, followed by the hearing of the motion. The relief sought on the motion is rendered moot by the disposition of the application.

[25] Costs should be addressed by all parties pursuant to the directions given at the hearing.

Mr. Justice F.N. Marrocco, A.C.J.O

Madam Justice J.A. Thorburn

Madam Justice A.M. Mullins

Released: December 21, 2016

CITATION: Des Roches v. Wasauksing First Nation, 2016 ONSC 6578

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Luc Des Roches Applicant

– and –

Wasauksing First Nation, Her Majesty the Queen in Right of Ontario (Ministry of Finance), Her Majesty the Queen in Right of Canada (Ministry of Aboriginal Affairs and Northern Development), Soda Rice, Jim Rice and Maquades Rice cob Mystic Loon Respondents

DECISION ON APPLICATION FOR JUDICIAL REVIEW

Released: December 21, 2016