Federal Court of Appeal Upholds Lower Court's Decision on Motion to Strike

Date: 20260427 Docket: A-122-25 Citation: 2026 FCA 83 CORAM: [NAME] J.A. LOCKE J.A. WALKER J.A. BETWEEN: HIS MAJESTY THE KING IN RIGHT OF [NAME] as represented by THE [NAME] OF [NAME] Appellant and [NAME] on behalf of himself and all other members of [NAME] and [NAME] and HIS MAJESTY THE KING IN RIGHT OF CANADA as represented by THE [NAME] OF CANADA Respondents Heard by online video conference hosted by the Registry on April 27, 2026. Judgment delivered from the Bench at Ottawa, Ontario, on April 27, 2026.

REASONS FOR

JUDGMENT OF THE COURT BY: [NAME] J.A. Date: 20260427 Docket: A-122-25 Citation: 2026 FCA 83 CORAM: [NAME] J.A. LOCKE J.A. WALKER J.A. BETWEEN: HIS MAJESTY THE KING IN RIGHT OF [NAME] as represented by THE [NAME] OF [NAME] Appellant and [NAME] on behalf of himself and all other members of [NAME] and [NAME] and HIS MAJESTY THE KING IN RIGHT OF CANADA as represented by THE [NAME] OF CANADA Respondents

REASONS FOR

JUDGMENT OF THE COURT (Delivered from the Bench at Ottawa, Ontario, on April 27, 2026). [NAME] J.A. [ 1 ] [NAME] appeals the Federal Court’s decision dated March 18, 2025: 2025 FC 492 ( per Strickland J.). In admirably detailed, complete and cogent reasons written with depth, precision and skill, the Federal Court struck portions of the respondents’ statement of claim against [NAME] and left certain other portions of the claim in place. [ 2 ] [NAME] says the Federal Court should have struck the entire claim. We disagree. In our view, the Federal Court committed no reversible error. [ 3 ] The Federal Court correctly followed the law on motions to strike. It read the claim “holistically and practically” to “gain ‘a realistic appreciation’ of the [claim’s] ‘essential character’” : Canada (National Revenue) v. J.P. Morgan Asset Management (Canada) Inc., 2013 FCA 250 at paras. 49-50; Canadian National Railway Company v. Canada (Transportation Agency), 2023 FCA 245 at para.

14. Then it instructed itself correctly (at paras. 10 and 60) on the law on motions to strike, including Rule 221 of the Federal Courts Rules , S.O.R./98-106 and the principle that a claim “will only be struck if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action” : R. v. [COMPANY]., 2011 SCC 42 at para. 17. [ 4 ] And in applying these correct legal principles, the Federal Court did not commit any palpable and overriding error. Palpable and overriding error is a high standard that is rarely met: [NAME] v. Canada (Citizenship and Immigration) , 2017 FCA 157, [2018] 2 F.C.R. 344; and see Canada v. [NAME] , 2012 FCA 165 at para. 46, adopted by the Supreme Court in Benhaim v. St‑[NAME] , 2016 SCC 48, [2016] 2 S.C.R. 352 at para. 38. [ 5 ] In their claim, the respondents allege that [NAME] did not fulfill its obligations to consider the respondents’ requests favourably, to act in good faith and to perform its obligations in the Settlement Agreement consistent with the honour of the Crown: see paras. 70, 74-75, 81, 84 and 91-92. The Federal Court did not strike these allegations. In doing so, it did not err: there is law upon which these claims can succeed. Among other things, the Settlement Agreement provides that [NAME] must give the respondents’ requests favourable consideration, the Supreme Court has recognized an organizing principle of good faith and the duty of honest performance in contract law ( [NAME] v. [NAME], 2014 SCC 71 at paras. 63, 73-75; [COMPANY]. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 at paras. 48-56) and the Supreme Court has held that where there is a contract between the Crown and an Indigenous group, entered into “by reason and on the basis of the group’s Indigenous difference” and that “has reconciliation as its backdrop” , the honour of the Crown requires “a standard of conduct that is higher than in the context of an ordinary contractual relationship” ( Quebec ([NAME]) v. Pekuakamiulnuatsh Takuhikan, 2024 SCC 39 at paras. 161-163, 187, 190-192). [ 6 ] In oral argument, [NAME] submitted that the Supreme Court did not intend in these cases to make motions to strike more difficult. Whether intended or not, that may well be the effect of these cases. [NAME] also submitted that the Court cannot rewrite the agreement. That is true. But given the obligations mentioned above, what the agreement means is a live issue. The Federal Court held that resolving that issue needs evidence. We cannot say that that holding is wrong in law or is a palpable and overriding error. [ 7 ] [NAME] submits that the respondents’ claim is doomed to fail because of [NAME] v. [NAME] , 2016 SKQB 73, [NAME] v. [NAME] ([NAME]) , 2023 FCA 105 and [NAME] v. [NAME] , 2022 SKCA 41. The Federal Court correctly distinguished these cases (at paras. 61-81), noting that they are summary judgment cases based on evidence that was filed—not motions to strike where the parties file no evidence and the Court takes the allegations in the pleadings as true. [ 8 ] Likewise, we see no reversible error in the Federal Court’s analysis (at paras. 82-92) of the Settlement Agreement. Articles 4.06 and 5.03(b) do confirm that [NAME] is not required to sell any particular lands or minerals. But this misses the point of the allegations in the claim: the respondents allege that in the process of deciding not to sell, [NAME] fell short of the standard of conduct required under the Settlement Agreement and the law alongside of it, referred to in paragraph 5 above. [ 9 ] [NAME] disputes paragraph 33 of the claim. There, the respondents allege that [NAME] exercised its discretion under the Wildlife Habitat Protection Act, S.S. 1983-1984, c. W-13.2, in a discriminatory manner. [NAME] adds that because of articles 4.07(a) and 20.08 of the Settlement Agreement and various provisions in the Wildlife Habitat Protection Act and its accompanying regulations, the respondents’ allegations must be wrong. But this is a pleadings motion where the Federal Court had to take the factual allegations as true, as unparticularized as they are. The Federal Court correctly did so. And the Federal Court said that it needs evidence to decide them on their merits, such as on a summary judgment motion or trial. We agree. [ 10 ] Later in this case, depending on the state of the evidence, summary judgment might be live. But at this early stage, the Federal Court was dealing with a motion to strike where it had to take the factual allegations as true. On this, we see no reversible error in the Federal Court’s decision. Indeed, we substantially agree with Federal Court’s decision for the reasons it gave. [ 11 ] Accordingly, we will dismiss the appeal with costs. “[NAME]” J.A. FEDERAL COURT OF APPEAL NAMES OF COUNSEL AND SOLICITORS OF RECORD DOCKET: A-122-25 STYLE OF CAUSE: HIS MAJESTY THE KING IN RIGHT OF [NAME], AS REPRESENTED BY THE [NAME] OF [NAME] v. [NAME] ON BEHALF OF HIMSELF AND ALL OTHER MEMBERS OF [NAME] AND [NAME] AND, HIS MAJESTY THE KING IN RIGHT OF CANADA AS REPRESENTED BY THE [NAME] OF CANADA PLACE OF HEARING: BY VIDEO CONFERENCE DATE OF HEARING: April 27, 2026

REASONS FOR

JUDGMENT OF THE COURT BY: [NAME] J.A. LOCKE J.A. WALKER J.A. DELIVERED FROM THE BENCH BY: [NAME] J.A. APPEARANCES : [NAME], K.C. For The Appellant [NAME] For The Respondent [NAME] on behalf of himself and all other members of [NAME] and [NAME] for the respondent, his majesty the king in right of canada as represented by the [NAME] of canada SOLICITORS OF RECORD : [NAME], K.C. Regina, [NAME] For The Appellant [NAME], Alberta For The Respondent [NAME] on behalf of himself and all other members of [NAME] and [NAME] of Canada for the respondent, his majesty the king in right of canada as represented by the [NAME] of canada