Executive Summary: Key Legal and Evidentiary Issues

• The Plaintiff sought to amend the Statement of Claim to add breach of contract and breach of contractual duties claims against Canada in a class proceeding involving rejected Qalipu Mi'kmaq Band membership applications.

• Standing under the principled exception to the doctrine of privity of contract was contested, with the AGC arguing that the 2008 Agreement did not intend to confer third-party benefits.

• Limitation periods were disputed, with the AGC asserting claims were time-barred under both the two-year provincial limitation period and the six-year federal limitation period.

• Whether the 2013 Supplemental Agreement validly amended membership criteria under Section 2.15 of the 2008 Agreement remained a central factual and legal dispute.

• The Court addressed whether Rule 201 permits amendments adding new causes of action arising from substantially the same facts when limitation periods may have expired.

• Certification criteria under Rule 334.16 were analyzed to determine if additional common issues should be added to the existing class proceeding.

Background of the case

This class proceeding involves individuals whose applications for membership in the Qalipu Mi'kmaq First Nation Band were rejected following the implementation of the 2013 Supplemental Agreement. The action was certified as a class proceeding by the Federal Court of Appeal on November 4, 2019. The class is defined as "all individuals whose applications for Qalipu Band membership were rejected in accordance with the 2013 Supplemental Agreement."

The 2008 Agreement and 2013 Supplemental Agreement

Under the Agreement for the Recognition of the Qalipu Mi'kmaq Band (2008 Agreement), Canada and the Federation of Newfoundland Indians recognized the Qalipu Mi'kmaq First Nation Band and established criteria for membership, an Enrolment Committee to assess applications, and an Appeal Master to rule on decisions. In response to an unexpectedly high number of applications for membership received, Canada and the FNI amended the membership criteria through the 2013 Supplemental Agreement to make it more difficult to qualify for membership and removed the right to appeal. As a result, many who had or would have qualified as Band members under the 2008 Agreement no longer qualified.

The proposed amendments

The proposed amendments to the Statement of Claim fell into three categories: amendments that introduce a new cause of action for breach of contract and breach of contractual duties and associated damages, amendments that clarify and particularize the Plaintiff's existing claims and align the pleading with the discovery evidence, and housekeeping amendments. The Plaintiff asserted that the Plaintiff and the Class are third-party beneficiaries of the 2008 Agreement, specifically concerning the eligibility criteria and the enrolment process provisions, and that Canada owed contractual duties to administer and implement the enrolment process in accordance with the terms of the 2008 Agreement.

The AGC's opposition

The Attorney General of Canada opposed the amendments, arguing the proposed claims for breach of contract and breach of contractual duties have no reasonable prospect of success because the Plaintiff does not have standing to enforce the provisions of the contract at issue, and the proposed causes of action are time-barred. The AGC contended that the 2008 Agreement does the exact opposite by virtue of Section 2.5, which expressly limits the rights, privileges and obligations set out under the 2008 Agreement to only the parties thereto, namely, Canada and the FNI.

Analysis of standing

The Court considered the principled exception to the doctrine of privity of contract recognized by the Supreme Court of Canada in Fraser River Pile & Dredge Ltd v Can-Dive Services Ltd, which applies where the parties to the contract intended to extend the benefit in question to the third party and where the activities performed by the third party are the very activities contemplated as coming within the scope of the contract. The Court found it cannot find that it is plain and obvious that the 2008 Agreement cannot support the Plaintiff's interpretation that it was intended to confer a benefit to the Plaintiff and the Class, noting the various references throughout the 2008 Agreement to what the Plaintiff asserts amounts to benefits to Class Members.

Analysis of limitation periods

There is a live issue between the parties as to whether the new causes of action are time-barred. The AGC asserted the new causes of action are time-barred under both the two-year limitation period in Newfoundland and Labrador's Limitations Act and the six-year limitation period under the Crown Liability and Proceedings Act. The Plaintiff asserted that his breach of contract claim only crystallized when he received a final decision, which occurred on December 29, 2017, when his previously accepted application was reconsidered and rejected under the new evidentiary criteria. The Court noted there is contradictory case law from this Court on when limitation periods are tolled in class proceedings and the Federal Court of Appeal has made no pronouncement on this issue, declining to make a determination on this motion.

Certification requirements analysis

Given the findings on the motion for leave to amend, the Court was satisfied that the Plaintiff has demonstrated that the breach of contract and breach of contractual duties claims are not doomed to fail. The Court agreed with the Plaintiff that the commonality of the three proposed common issues is clear and similar in nature to those common issues already certified by the Federal Court of Appeal, as they turn on the interpretation of the 2008 Agreement, the interpretation of the 2013 Supplemental Agreement and Canada's conduct in implementing the 2013 Supplemental Agreement.

The ruling and outcome

The Court was satisfied that leave should be granted to the Plaintiff to amend the Statement of Claim in the form proposed and ordered that additional common issues be added to the Certification Order. The Certification Order was amended to add the Plaintiff's proposed additional common issues, together with limitation period common issues addressing: which limitation period applies (two years under Newfoundland and Labrador's Limitations Act versus six years under the CLPA), when the limitation period began to run, when it was suspended by virtue of the proceeding, and whether the Court can make a curative nunc pro tunc order. The Court ordered that a 21-day window from the date of the Order for the delivery of an Amended Statement of Defence is sufficient. As a result of Rule 334.39(1) of the Federal Courts Rules, the parties did not seek a cost award on this motion, and accordingly, no costs will be awarded. No specific damages amount was determined at this stage, as the matter proceeds to address the common issues at trial.