Among the Japanese Canadians of Saltspring Island who were dispossessed of their property during WW2, the Iwasaki family had the largest property, 598 acres that stretched along about a mile of waterfront on the north end of the island, the area that is today known as ‘Sunset Drive’. Moreover, the Iwasaki property was unique in that after the war, it ended up in the hands of the Agent for the Custodian of Enemy Property for the southern Gulf Islands, Gavin Mouat. After the war many Japanese Canadians who had lost property were given a small (and wholly insufficient) amount of extra compensation in addition to the money they had previously received that derived from the sale of their property, but Torazo Iwasaki steadfastly refused to cash the cheques that were sent to him, in protest against the unreasonably small compensation that was offered by the government for his very valuable property. Later, when the family was facing destitution he was forced to cash the cheques, but in 1967, Canada’s centennial year, he decided take the government to court in an effort to get his land back, or receive fair compensation for his loss.

The following is an excerpt from the book, As if They Were the Enemy: The Dispossession of Japanese Canadians on Saltspring Island by Brian Smallshaw. The book is available from the publisher, the University of Victoria.

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Twenty-two years after his property was taken from him and despite being 86 years old, Iwasaki decided to go to court to get his land back, or failing that, $1.5 million in compensation.
Young Vancouver lawyer Ray MacLeod launched the case with a letter to Secretary of State Judy LaMarsh on 18 May 1967. After giving the legal description of the property and then a summary of the events surrounding the sale of the Iwasaki property by the Custodian, MacLeod wrote:

We have reviewed the facts concerning the confiscation of the subject property and we have reviewed the legislation under which the confiscation was effected and after much consideration, we are of the opinion and have advised our clients that their property was illegally confiscated.

Then, after acknowledging that the property had been subdivided since it was confiscated and therefore difficult for the government to restore title, MacLeod suggested that as an alternative Iwasaki should be compensated for his loss in accordance with current property values. He closed by saying that if the government could come to some kind of decision within the next 60 days, that he would advise his clients to initiate legal proceedings.

Over the next few months the case got a significant amount of press coverage. An article appeared in the Vancouver Sun on June 23rd entitled ‘Couple Asks for $1.5 Million’ and subtitled ‘Appeal to Canada’s Conscience’. Going into considerable detail, the story was told of how Torazo came to Canada in 1901, made a down payment on his property on Saltspring and paid it off in 1940 just before the war and the Japanese Canadian uprooting. The article named Gavin Mouat as the Custodian’s agent on Saltspring, and Salt Spring Lands with Mouat as its president was identified as the eventual owner of the property. Amid the national pride of Canada’s centennial year, the story of an elderly Japanese Canadian couple having their land sold off against their wishes found a sympathetic audience.

Receiving no response from the government, on 5 September 1967 MacLeod and Small filed their Petition of Right in the Exchequer Court of Canada in Vancouver, arguing that the Secretary of State acted in excess of his jurisdiction and in a breach of trust in filing the Vesting Order on the property and conveying the land to the Secretary of State, and acted unlawfully and beyond his jurisdiction in conveying the property to Salt Spring Lands. They asked that the property be returned to Iwasaki, or failing that, that he be paid damages of $1.5 million.

The Civil Litigation Section of the Department of Justice, led by R.W. Law, went to work crafting its response, and on October 10th filed its Statement of Defence on behalf of Her Majesty the Queen. It argued that the property in question was within the ‘protected area’ as defined by Order in Council P.C. 2483 and the Suppliant (Torazo Iwasaki) is a person of the Japanese race and as such was required to leave the protected area, after which his property was vested with the Custodian. Under Order in Council 469, pursuant to the War Measures Act, the land was sold to Salt Spring Lands Limited. It also stated that ‘at no time material to the Petition of Right herein was the said Custodian an agent or servant of Her Majesty’ As well, it stated that the Suppliant had signed a release, which released the Crown and Custodian from all claims. Furthermore, by his laches (lack of diligence in making a legal claim) in making a claim that the sale of his property was invalid, and because of the Statute of Limitations, his right to challenge the legality of the sale had expired.

None of these arguments are too surprising, although it would seem that if it were true that the Custodian really wasn’t an agent of the Crown, there would have been no need for any of the other arguments; i.e., the case was being made against the wrong party and that should be the end of the matter. This argument seems a bit silly, since the Custodian of Enemy Property was always represented as being a part of the Secretary of State, yet this point was pursued throughout the trial; that the Custodian was legally separate from the Crown.

The case caused the government considerable embarrassment at a time when it was proclaiming the openness and inclusiveness of Canada, while its neighbour to the south was beset with civil strife that erupted into race riots the following year. On Saltspring, a front-page story in the 29 June 1967 issue of the local Gulf Islands Driftwood newspaper explained that the Iwasaki’s had owned a large property in the Sunset Drive area, which they lost and were seeking compensation of ‘over one million dollars’. The article makes no mention of Gavin Mouat.

In September an article appeared in MacLean’s magazine entitled ‘Canada’s day of infamy on Salt Spring Island’, outlining the story and the case that MacLeod would shortly be bringing to court.

The article made a point of the ‘curious fact’ that the land ended up in the hands of the agent of the Custodian, and that in a single day it had passed to the Secretary of State and then to Salt Spring Lands. The article was sympathetic to the Iwasaki’s and depicts their lawyers as fighting the good fight against an uncaring, and even corrupt, government.

Over the years, Torado wrote several protest letters to Ottawa officials and received no satisfactory answers. Then, last January, two young Vancouver lawyers took on the case, because, says one of them, “It had a hell of a strong moral issue… It became our Centennial project.” Predictably enough, Ray MacLeod and Dan Small got the Ottawa runaround until June when they presented a claim to the office of the Secretary of State. The suit has since been referred to the Department of Justice. MacLeod hopes to argue the case before the Exchequer Court of Canada, and he thinks that it could lead to a flood of appeals for realistic compensation to Japanese-Canadians.

It was accompanied by a photo of the sombre-looking Iwasakis with an earnest young Ray MacLeod, and captioned, ‘Torado [sic] and Fuku Iwasaki with lawyer MacLeod: a 26-year-old tragedy and a $1.5-million skeleton in our closet.’

The article touched a nerve, at least in some quarters of the government. R.A. Bell, MP for Carleton wrote to John Turner, then Registrar General (and later Prime Minister) and member of the Privy Council in the Pearson government to say that he found the article ‘very disturbing’, particularly the fact that the property had ended up in the hands of Gavin Mouat, the government Custodian on the island.

Such allegations have a very dilaterious [sic] effect on the operations of government. Is there the slightest truth in them? What are the real facts? What action has been taken by the Custodian of Enemy Alien Property, if the facts are not true, to secure equal publicity for this particular article?

Turner acknowledged receipt of Bell’s letter, and later sent him a short note saying that since the matter was before the courts, a comment would be inappropriate.

On Saltspring there was also a strong reaction to some of the press coverage of the Iwasaki trial. A 15 October 1967 segment of the CBC program ‘The Way It Is’ that covered the story drew a strong response from the island’s Chamber of Commerce, which wired the Secretary of State, Judy LaMarch, saying:

“Strong objection re Salt Spring Island portion of The Way It Is program October 15th account guilt inference on part of Salt Spring Lands and deceased Gavin Mouat whereas legal action filed against Federal Government Stop Entire Crofton Interview and your inclusion of Horel and Bastedo interviews would have presented a more accurate picture. Demand correction immediate program. Copy of local newspaper following”.

In a 1967 news roundup at the beginning of the following year, there was an entry for October: ‘Salt Spring Island is incensed over showing of CBC film regarding the Iwasaki property and impending claim for substantial compensation by Japanese-Canadian farmer.’ It’s difficult to gauge how widespread this feeling of being ‘incensed’ really was, but the partners of Salt Spring Lands (Gavin Mouat had died six years earlier) were sufficiently offended that the national broadcaster had cast aspersions on a previous principal of the company that they retained the legal firm Pearlman & Lindholm of Victoria to see what could be done about it. They wrote to the Crown’s legal counsel on December 20th concerned about ‘the innuendo and adverse reflection cast upon the reputation of our client, Salt Spring Lands Ltd.’ The action seems to have been prompted by the CBC program. Interestingly, Lindholm asked about the nature of the position that Gavin Mouat held with the Custodian and what duties he had. He also requests copies of all the correspondence between the Custodian and Mouat, and the Secretary of state and Mouat pertaining to the sale of the property. Maxwell’s reply suggests that this request was fulfilled. We can speculate about the real purpose of hiring Pearlman & Lindholm; did they really think that they could somehow suppress the bad publicity their firm and Gavin Mouat were receiving through the court case, or was their real intention to find out more about what Gavin Mouat actually did 25 years earlier?

Examination for Discovery

The examination for discovery in the Iwasaki trial was held on two dates about three months apart in early- and mid-1968. Both the government and Iwasaki had different representation each time; for the first held on 26 March 1968 in Vancouver, the government was represented by C.R.O Munro, who did most of the questioning and R.W. Law. Iwasaki was represented by D.W. Small. A ‘Mrs. S. Ito’ was present as interpreter; as at the Bird Commission hearing, Iwasaki was handicapped by his poor understanding of English. Iwasaki was 87 years old when the first examination for discovery was held, so it needs to be understood that he was at an advanced age and reflecting on events that had happened about a quarter of a century earlier. Nonetheless, though Iwasaki’s comments as recorded in the transcript are translations and therefore not a perfect reflection of what he actually said, his comments reveal a great deal about his thinking and the lives of Japanese Canadians on Saltspring Island.

From the outset there was considerable sniping back and forth between Munro and Small; questioning during the second session between Mullins and MacLeod would be more congenial and productive. For example, when asked about when he purchased the land and what he paid for it, there is a long, confusing exchange that provided Munro with very little of the information that he desired, but gives us some interesting clues about how purchases of land were transacted on the island at the time. From Iwasaki’s son Ray we know that he moved to the island shortly after the First World War, and from this exchange we can glean an understanding of the informal land use arrangements that existed at the time. Though the only archival evidence we have is the transfer of title document dated 13 December 1940 that states that Iwasaki paid $3950 for the property, we can surmise that he made arrangements to purchase the property many years earlier and it wasn’t until 1940 that the title changed hands. In his testimony during the examination for discovery, regarding payment for the property, Iwasaki stated (through the interpreter):

He [Iwasaki] did not pay anything. He said she did not want any money. Mrs. Pottinger said she did no want any money. There was a whole bunch of timber there, and Mrs. Pottinger said that if he would pay the taxes and lawyers and everything first, but because she did not need any, she did not want any money.

This also gives us some insight into the relationship between the Japanese Canadian and white communities on the island at the time, suggesting that whatever language and cultural barriers that might have existed between Pottinger and Iwasaki, there was a degree of mutual trust.

There was a long exchange in which Mr. Munro tried to determine what facts Iwasaki was basing his ‘allegation’ that Gavin C. Mouat was the agent for the Custodian, presaging their later denial that Mouat was actually a representative of the Custodian. Interestingly, when Munro was finally able to ask Iwasaki if Mouat was an agent for the Custodian, he replied that, ‘Everybody that was on the Salt Spring Island got together and they asked Mr. Mouat to become their Agent,’ that is, Mouat was an agent of the Japanese Canadians, not the government.

A little later, there was this exchange between Munro and Iwasaki (through the interpreter):

Q: So Mr. Mouat was the Agent of the people residing on Salt Spring Island?
A: Yes. He was an agent for Japanese people when they were moving. Q: Yes, what was he supposed to do for the Japanese people?
A: Not very much, he was sort of an Interpreter. Q: I see?
A: He took the orders from the Government and he told the people what to do. Q: Was he an Agent for the Government?
A: No, he was an Agent for the Japanese, and he told whatever they had to tell to the Government. Q: I see, what sort of things did Mr. Mouat tell the Government on behalf of the Japanese?
A: There was nothing that he told the Government from the Japanese. All he told was what the Government told them to do.
After a short spat between Messrs Munro and Small the questioning resumed: Q: Mr. Iwasaki, did the Japanese people ask Mr. Mouat to find out for them what the Government wanted?
A: They never asked, but he came around saying that the Government said this and the Government said that, so “you should do this,” and “you should do that.” Q: Did Mr. Mouat ever take possession of his lands on Salt Spring Island?
A: Yes, he did. Q: When?
A: Yes, right about the month after everybody came to buy the land, but Mouat did not sell it. Q: A month after what?
A: It was at the time that they were supposed to be moving. All the big shots of the white men came around to buy the land, but Mouat said, “If you do sell the land, you are going to go to jail.”

There is an exchange about Mr. Ueda, a Japanese Canadian who lived near Iwasaki, about whom little is known.

Q: Mr. Ueda was Japanese, was he?
A: He was, yes, Japanese. Mr. Ueda’s property and Mr. Iwasaki’s property were right next to each other, Gavin, he wanted to have all the property for himself.
Q: Mr. Mouat lived right next to Mr. Iwasaki?
A: Yes, the property was right next to each other. Q: Mr. Mouat lived there next door?
A: Yes, but the property was large, so there was more than one mile distance between them.
Q: Why was Mr. Mouat chosen by the Japanese people to speak for them?
A: He used to run the store, and he knew everybody and everybody thought he will be the right man.

Though this sequence of answers must be understood to be coming from a very elderly man recalling the events of decades earlier, it reveals some interesting things about Mouat’s position in the community, and his relationship to the Japanese Canadian members within it. In Iwasaki’s view, Mouat was chosen by the Japanese Canadians on the island to be their agent in dealing with the government, he wasn’t given that authority by the government, and he was chosen because of his stature as a prominent business owner in the community. Thus, in Iwasaki’s eyes, Mouat’s acquisition of his property was not simply a bit of underhanded dealing, it was a betrayal of trust that had been placed with him by the community.

There is some archival evidence that Mouat enjoyed a degree of respect in the Japanese Canadian community on the island. In 1939, several years before Pearl Harbor, the people of Saltspring were raising money for the construction of a new school on the island that would bring the students and teachers at a number of different smaller schools together under one roof in what would come to be known as the ‘Consolidated School’. Mouat was fundraising for this effort, and in the 19 July 1939 issue of the Saanich Peninsula & Gulf Islands Review, there’s a little article noting that just before press time they’d received the news about some new donations. In a list of 14 donations, it was noted that they’d received money or labour from: N. Ito, Mr. and Mrs. K. Murakama (sic), Mr. and Mrs. M. Murakama (sic), Mr. and Mrs. K. Okano, Mr. and Mrs. S. O’Haro (sic), Mr. and Mrs. M. Mikado, N. Numajiri, Mr. and Mrs. T. Iwasaki, and Mr. and Mrs. T. Murakama (sic).

In Iwasaki’s reponses to questions in the Examination for Discovery there is the suggestion that Mouat had designs on acquiring Iwasaki’s property from before the uprooting, and that he even went to the point of dissuading the Japanese Canadians from selling their properties to others, telling them they would go to jail if they did. It is possible that this was a point of view developed with the benefit of hindsight on the events as they eventually unfolded, and we have no other evidence that offers to purchase were made for the Japanese Canadian properties on Saltspring. Nevertheless, given what we do know about the D.K. Wilson appraisal, the bidding process, and the purchase by Mouat of the large property adjoining his own, Iwasaki’s suggestion that he had designs on it from the beginning is not implausible.

Later in the examination for discovery, suggesting that this would be an important part of the government’s defence, Munro again challenges Iwasaki on his understanding that Mouat was acting as an agent for the Custodian, ‘Mr. Iwasaki, have you informed yourself from all persons representing you in these proceedings of the facts indicating whether Mr. Mouat was an Agent for the Custodian?’ It seems that Iwasaki didn’t fully comprehend what Munro was asking, and Small did his best to defend him from what seems to be an attack on his credibility. After a testy exchange about proper procedure between the two lawyers, Munro again asks, ‘Mr. Iwasaki, are there any other facts that you are aware of, indicating that Mr. Mouat was an Agent of the Custodian?’ Iwasaki answers, ‘He was present at the trial at Grand Forks’, referring to the Bird Commission hearing.

In the trial itself, the government would argue, that the Custodian was entirely separate from the government and that all responsibilities for managing the Japanese Canadian properties were his alone. In the examination for discovery, Munro seemed to be trying to draw a second line of separation between the Custodian and Mouat, although we know that for at least part of the duration of the war Mouat drew a salary from the Custodian’s office in Vancouver, and for its full duration collected commissions on the rental of Japanese Canadian properties and their eventual sale, including the Iwasaki property when it was sold to Salt Spring Lands, a company he partly owned.

Refuting that the Custodian was holding Japanese Canadian property ‘in trust’ and that Mouat was agent of the Custodian was part of the government’s defence in the trial. Later in the examination for discovery, Munro returned to it in his questioning of Iwasaki:

Q: Mr. Iwasaki, in Paragraph 3 of the Petition of Right, and perhaps you would hand him the Petition of Right, would you? It is alleged that Gavin C. Mouat took custody of the aforesaid lands and premises in trust for you. On what facts do you rely for this allegation that Mr. Mouat took custody of the lands in trust for you?
A: Because he always wanted this land, because they were next to each other, so he wanted this land.
Mr. Small: Would you repeat the question? There is a misinterpretation…
…A: Because he said he was an agent, so everybody thought he was Custodian for the land. Q: Who did he say he was the agent of?
A: Because he was friends of all the Japanese there, and they asked him to become an agent.

Munro tried to get Iwasaki to answer a number of questions that were really questions of law, and Small successfully pushed back and the questions were dropped. Finally, Munro asked a question to which Iwasaki replied, and his reply goes to the heart of his case against the government:

Q: Mr. Iwasaki, in Paragraph 4 of the Petition of Right, it is alleged the figure of the Exhibit 10 was contrary to the laws of natural justice. I want to know what facts you rely on for that allegation?
A: It was because they [the Japanese Canadians] were Canadians and it was wrong to take their land away.
Q: Thank you, also in paragraph 4, Mr. Iwasaki, it is alleged that the figure of Exhibit 10 was contrary to the provisions of the British North America Act. I would like to know on what facts you rely for that allegation?
A: What is the British America Act? That is not the law, is it?
Mr. Munro: Yes.
Mr. Small: Yes, it is.
Mr. Munro: The British North America Act.
Mr. Small: That is the constitution.
A: They made him [the interpreter is translating] an enemy and they tried to take it away from him.
Mr. Small: I don’t know whether that is --
Mr. Munro: Just a minute, that is the answer to the question?
Mr. Small: I agree.
A: That is the answer to the question, yes. He says he thinks it is wrong, because they made him an enemy and tried to take the land away from him. He went to the United States after and he saw there the American Government gave everything back to them, even the broken glass was fixed and it was given back to them.

Iwasaki was making a plainspoken, eloquent appeal for natural justice from the government in a court convened by that same government, a government that was intent on using its own strict interpretation of the law to deny him justice.

Munro persisted with his line of legal questions for Iwasaki, asking him about a point within the Petition of Right in which it is alleged that his land was sold contrary to the provisions of the Land Registry Act. This led to another testy exchange between Munro and Small that culminates in:

Mr. Small: Ask the question.
Mr. Munro: I did ask the question. Would you please read that question back?

(QUESTION 101 READ BY THE REPORTER)

A: He is naturalized to this Country, and the land should not be taken away from him. Q: Thank you?
A: In the United States, people were not allowed to naturalize, and still they got their property back. Q: I see. Mr. Iwasaki, in Paragraph G on page 5 of…

Iwasaki may have understood that he stood little chance of prevailing in a court battle with the government, but he had the courage to stand up and be heard. Although ignored by the court, his contention that things were different in the United States was mostly correct. In the U.S., Executive Order 9066 under which Japanese Americans had been incarcerated was rescinded on 2 January 1945, before the end of the war, and they were then permitted to return to their homes. Japanese Americans did not have their property vested by a Custodian, or sold off against their wishes, but many suffered serious property losses, either because they sold it quickly before being incarcerated, or because of damage and neglect in their absence. Iwasaki was correct in pointing out that Japanese immigrants to the U.S. were not allowed to naturalize; that would only change with the passage of the Walter-McCarran Act of 1952 which abolished the provisions of the Naturalization Act of 1790 which had restricted naturalization to ‘free white persons, of good moral character’.

The three-hour hearing concludes rather abruptly, before resuming after a three-month hiatus. The examination for discovery continued on 5 July 1968 with different legal counsel on both sides; Ray MacLeod was present for Iwasaki, and Norman Mullins and B.J. Hiytsak for the Crown, with the former doing the questioning. The one-hour session was following by a three-hour evidence on commission session, with the same people present. Charles Emil Fox served as the interpreter. Overall, the tone was much more civil than in the March session, but Mullins is more aggressive in his questioning than Munro.

Mullins commenced his questioning by going straight back to the issue of Mouat’s role as agent for the Custodian. Like Munro had earlier, he sought to cast doubt on the idea that Mouat was actually an official representative of the government. He repeatedly asked how Iwasaki knew Mouat was an agent for the government, if he saw any papers confirming it, who else heard it, where he heard it, was it indoors or out, if he heard it in English and if there were translators present.

Mullins also questioned Iwasaki repeatedly on his contention that Mouat had promised him that his land would be returned to him after vesting. Again, it appears his goal was to disavow what Mouat did or said, to separate Mouat from the Custodian.

Q: Did any representative of the Government other than Mowat (sic) tell you that the property would be returned to you within six months?
A: There was no one else who said that.
Q: Your understanding that the land would be returned to you is based only on what Gavin Mowat told you?
A: Only from Mr. Mowat’s say-so. Mr. Mowat took all my property, including my trucks and everything.

It’s interesting that the government was so committed to distancing itself from Mouat, when the issue of whether or not he was a part of the Custodian’s office ultimately had no bearing at all on the outcome of the case. It was ultimately ruled that there was no trust between the Custodian and those who had their property vested, so there could be no breach of trust. Even if had been determined that Mouat was legally a representative of the Custodian, whatever he said to the owners of vested property, or whatever he did with their property didn’t matter. Perhaps at this point the government’s counsel was not so confident of that outcome, or perhaps they were just looking for a fallback in case it was found that a trust existed between the Custodian and the Japanese Canadians who had their property vested.

The Evidence on Commission hearing was held on the same day, 5 July 1968, and it gave Iwasaki’s legal counsel, Ray MacLeod, the opportunity to question his client under oath. He goes over the basic facts of his case; when he purchased his land, when he was uprooted and moved to Greenwood, if he understood that Gavin Mouat was an agent for the Custodian, when he learned that his land had been sold, and whether not anybody asked for permission to sell his land. He is also asked if he received a cheque in payment for his property, and confirms that he did, and that he returned it uncashed four times. He was asked if he finally cashed it, and confirms that he did, saying that, ‘I received a letter that if I don’t accept that cheque I won’t get any cheque, money or the property.’

There is no record of this letter, but a letter accompanying a cheque was sent to Iwasaki in October 1948 around the time the Bird Commission was beginning that had stated that acceptance of it would not compromise his claim for greater compensation for the loss of his property. It seems that MacLeod was unaware of its existence, though even if he had it might not have altered the outcome of the trial.

MacLeod asked him if, at the time he made his claim for the Bird Commission, if he knew of any other way to either get more money for his property or get it back. Iwasaki replies, ‘If I had the property back to me I wouldn’t have any other problems to work on the land. But aside from that, I never had any alternative to put the claim in.’

After MacLeod was finished with his questioning, Mullins questions Iwasaki. After asking about his early years on Saltspring, he asked if he filled out a government form listing his assets. Iwasaki replied that he did, and that Mouat provided the form and it was returned to him after being filled out. Mullins asked if he ever tried to sell his land before 1942, how much of it had been cleared prior to 1942, what buildings had been erected, and so forth. After asking him about his future plans for the property had he not been uprooted, Mullins questioned Iwasaki in considerable detail about when he learned his land had been sold, and how and when he sought the help of a lawyer in contesting the sale of his property.

Then Mullins turned to the release form that Iwasaki signed, first trying to determine how he received it and if he remembered signing it. He asked in considerable detail if Iwasaki understood the document, and if anybody explained it to him. Iwasaki responded that nobody explained it to him, but that he figured it out with dictionaries and help from his family. Finally, Mullins asks and Iwasaki replies:

Q: Did anyone tell you that if you did not sign the paper you would lose your property or lose any compensation for your property?
A: No one told me that I would lose my land if I did not sign the document.
MacLeod interrupts, concerned that Iwasaki doesn’t fully understand, and Mullins reframes the question:
Let me put it this way: Did anyone tell you that if you did not sign that paper you would lose your property and get no money for it either?
A: No one said that I would lose my property, but I accepted the cheque because I was running out of funds.
Q: Did anyone tell you that you were required to or that you were being forced to sign the document?
A: No. I was not told to sign the document under pressure.

After the Bird Commission concluded, Iwasaki did accept the $8083.50 he was offered, and did sign the release form. That fact, and his testimony in the Evidence on Commission hearing indicating that he was fully aware of the implications of what he was signing were used in the judgment against him. In 1950, given the treatment he’d received over the previous eight years it would have been easy for him to believe that had he not signed the release form he might have received nothing at all, but if that were the case, he didn’t say anything about it in the hearing.

Mullins concluded his questioning by asking Iwasaki why he took so long before bringing legal action against the government. He replied that he’d intended to do it soon, ‘but just couldn’t bring matters to a head earlier.’

The Trial

The trial began on 30 September 1968 in the Vancouver courthouse of the Exchequer Court of Canada with Justice Sheppard presiding. It ran for four days and attracted a fair amount of press coverage in the Vancouver papers and across the country. It was also brought up in the House of Commons debates by a Mr. Woolliams, who related that Iwasaki had had his property taken from him and was paid $5,000, and that an agent of the Secretary of State, Gavin C. Mouat, stood to make $1,450,000 out of the property. His main point was not the injustice suffered by Iwasaki, but that it was far too costly for an average citizen to bring cases against the government, with the result that there was one law for the rich and another for the poor.

In court MacLeod argued that the Order in Council that had ordered the sale of Iwasaki’s property (469) breached the previous Order in Council (1665) that had vested it with the Custodian, because both orders-in-council were passed under the War Measures Act which states that no order passed under the act shall revoke any right or liability granted under a previous order.

‘I submit there was a right owing Iwasaki to have his property returned to him and an obligation on the Secretary of State acting as custodian to hold his property for him,’ said MacLeod.

The order-in-council ordering the sale of the property (469) was void, because the earlier order-in-council (1665) had placed on the Custodian a responsibility to hold the lands in trust for their owners. ‘That trust was breached by the sale of the property, and the sale by the secretary-of-state to Saltspring Lands Ltd. amount to a fraud’,’ MacLeod said.

MacLeod also asserted that Gavin C. Mouat acted fraudulently, as he was a director of and shareholder in Salt Spring Lands, Ltd., the firm that purchased the property, while acting as an agent of the Secretary of State.

In the trial MacLeod also challenged the legality of the discrimination based on race that was part of orders-in-council 1665 and 469 (among others) that referred to ‘persons of the Japanese race’. He did so by contending that the government had failed to define persons of the Japanese race and ‘that particular term is so ambiguous that it makes the order-in-council inoperable’. The trial took place about half a year after the of race riots that occurred in the US following the assassination of Martin Luther King, and racial discrimination was very much on peoples’ minds. By this point, the concept of race was being questioned, and in his court challenge MacLeod was taking a more modern approach to the idea of race than the framers of the orders-in-council during the war, who took it to be so self-evident that no definition was required.

On the government’s side, Norman Mullins argued that the case was being brought against the wrong party, that it should have been against the Custodian, and not the Queen. He also contended that the legislation did not create a trust relationship between Iwasaki and the Custodian, so there could be no breach. He said that under the authority of the orders-in-council, the land became the absolute property of the Custodian, not the Crown. Mullins stated:

The vesting happened as a matter of law. The custodian had unlimited powers. He could even give back the land or the proceeds if he so chose. This was unlimited discretion, not a trust.

In addition to pleading that a 20-year limitation on court actions of this kind disqualified the case, Mullins also argued that the fact that Iwasaki had signed a release after receiving the payment after the conclusion of the Bird Commission inquiry was reason enough for his case to fail. Apparently neither he or MacLeod were aware of the letter that had accompanied the cheque sent to Iwasaki that had stated that acceptance of it would not compromise his claim for greater compensation for the loss of his property.

Countering Mullins’ argument that the release was sufficient reason for the case to fail, MacLeod asserted that the orders-in-council had deprived Iwasaki of his rights, and because they were not restored until well after the cessation of hostilities Iwasaki could not legally sign a document releasing the government of all responsibilities because he had no civil rights at the time. Said MacLeod:

At the time the release was signed, Iwasaki had no rights. He didn’t get any rights back until 1952.

Mr. Justice Sheppard opted to reserve judgment, handing it down about a month later on October 29th, ruling against Iwasaki.

Reasons for Judgment

In his Reasons for Judgment, he began by reviewing all of the orders-in-council that related to the dispossession of Japanese Canadian land. He began with the War Measures Act, which gave the government absolute power unrestrained by Parliament:

The Governor in Council may do and authorize such acts and things, and to make from time to time such orders and regulations, as he may by reason of the existence of real or apprehended war, invasion or insurrection deem necessary or advisable for the security, defence, peace, order and welfare of Canada;…

These orders and regulations have the full force of law, and moreover, they may be expanded or modified at will:

All orders and regulations made under this section shall have the force of law, and shall be enforced in such manner and by such courts, officers and authorities as the Governor in Council may prescribe, and may be varied, extended or revoked by any subsequent order or regulation…

Many of the actions taken by the government against the Japanese Canadians during and after the war were done so as orders-in-council from the Privy Council, amending the Defence of Canada Regulations and the Consolidated Regulations Respecting Trading with the Enemy, sets of regulations enacted under the War Measures Act. Sheppard begins by citing a previous case in which the government’s right to enact what orders-in-council it deems necessary was found to be valid.

Sheppard then takes each of the orders-in-council in turn, dividing them into two groups; the first being those that relate to people, and the second those that relate to lands. He cited Order in Council 5295, which gave the government the power to declare a protected area, Order in Council 365 which amended 5295 to give the government the power to require all or any enemy aliens to leave that area, Order in Council 9760, which declared a protected area in all land west of the Cascades, which included Saltspring Island, and Order in Council 1486 authorizing the government to require all persons of the Japanese race to leave the protected area.
The second group related to the lands in question. Order in Council 1665 established the BC Security Commission and stipulated that all property within the protected area belonging to ‘persons of the Japanese race’ would be vested with the Custodian. Order in Council 2483 amended 1665 by defining a person of the Japanese race as:

‘Person of the Japanese race’ means any person of the Japanese race required to leave any protected area of British Columbia by Order of the Minister of Justice under Regulation 4, as amended, of the Defence of Canada Regulations (Consolidation) 1941.

Thus, a ‘person of the Japanese race’ was defined as any ‘person of the Japanese race’ who had been required to leave the protected area. MacLeod challenged the term ‘persons of the Japanese race’ as being so vague as to be inoperable, yet he did not specifically refer to this tautological definition of a ‘person of the Japanese race’. Sheppard continued, citing Order in Council 469, empowering the Custodian to sell property of persons of the Japanese race.

The judge turned to the facts of the case, giving an overview of the events surrounding the sale of the Iwasaki property, and the claim that he made under the Bird Commission, and then listed the allegations in the Petition of Right:

I. A Trust – Secretary of State, the Custodian, took custody in trust for and in the interest of Suppliant.
II. A Breach – The lands were vested in the Custodian and sold and conveyed by him to Salt Spring Lands Ltd.
III. That such breach imposed liability on the Crown.

In relief, Iwasaki was asking for:

(a) That the Crown return the lands or
(b) Alternatively, pay damages of $1,500,000.

He says these pleadings may be taken to allege:

I. A trust in the Custodian to the Suppliant under Orders-in-Council 1665 and 2483.
II. The breach thereof in part by reason that Order-in-Council 469 authorizing a sale is alleged ultra vires, therefore there was a breach in the trustee having sold and conveyed to Salt Spring Lands Ltd.
III. For such breach the Crown is responsible in account.

Saying the allegations ‘had not been made good’, Sheppard notes that the Suppliant contended that in Orders-in-Council 1665 and 2483 that ordered the vesting of his property ‘as a protective measure only’, ‘the control and management of the Custodian’ was limited in his application of the Consolidated Regulations to being ‘for the purpose of protecting the interests of the owner or other person’.

In his judgment, Sheppard relies heavily on the ruling of P. Thorson in Nakashima v. The King (1947), and here he quotes him:

In my opinion even if this were conceded, it would not alter the character of the Custodian’s powers and duties. His discretionary powers might be more limited in scope than in the case of alien enemy property but the difference would be one of degree rather than of kind. He would still have very wide, free discretionary powers in the field of control and management. And if Order-in-Council P.C. 469 of January 19, 1943 is valid there would be no difference at all in the scope of the Custodian’s discretionary powers as between alien enemy property on the one hand and Japanese evacuee property on the other.[emphasis mine]

He again cites Thorson (p. 504) who found that Order-in-Council 469 was legally enacted, and so concludes:

It therefore follows that the Custodian is under no trust in favour of an alien enemy, but all the rights and powers of the alien enemy in the property are vested in the Custodian, and the Custodian is in the same position with reference to evacuee property. [emphasis mine]

Those ‘Japanese evacuees’ were not Japanese, they were Canadian citizens, but according to Thorson in the Nakashima case, whether the Custodian could legally liquidate their property in the same way that it could alien enemy property was not a matter for the court to decide. Under the War Measures Act, the Governor in Council had the same powers as Parliament itself. As Thorson says in paragraph 15 in his Reasons for Judgment, citing a court decision in Reference re Chemicals Regulations and Administrative Orders, ‘The Court made it clear that the authority vested in the Governor in Council is legislative in character and of the same nature and subject to the same limitation as that possessed by Parliament itself.’ Quoting Rinfret J. at page 17, he says,

Within the ambit of the Act by which his authority is measured, the Governor in Council is given the same authority as is vested in Parliament itself. He has been given a lawmaking power.

Thorson wrote that to validly enact the War Measures Act, there must be ‘a real or apprehended war, invasion or insurrection’, and secondly, that the enactment of the War Measures Act must be necessary for ‘the security, defence, peace order and welfare of Canada’. Most importantly, he said, ‘It is to be noted that the objects specified are not confined to the prosecution of the war.’

Thus, in Thorson’s view in Nakajima v. the King, which Sheppard cited in his judgment in Iwasaki v. The Queen, the question as to whether the Custodian was properly exercising it’s powers in liquidating Japanese Canadian property or not was beyond the court’s jurisdiction. He says,

The only authority that can validly challenge the exercise by the Governor in Council of the legislative powers entrusted to him is Parliament itself. If Parliament considers that he has acted erroneously the corrective power is in its hands—it does not lie with the Courts.

It was, therefore, within the power of the Governor in Council to pass Order in Council P.C. 469, of January 19, 1943, embodying the terms against which the suppliants protest and they were validly enacted. The Custodian has, therefore, the lawful right to liquidate, sell, or otherwise dispose of the property vested in him, including the properties of the suppliants.

Only a brief reference need to be made to another argument advanced on behalf of the suppliants. It was contended that they handed their properties over to the Custodian voluntarily on the strength of the first two Orders in Council under which they were to be vested in him as a protective measure only for his control and management; that this fact constituted a contract with the Crown under which rights had accrued to the suppliants that the Crown would hold the properties for them pursuant to the Orders in Council; and that it was not competent for the Governor in Council to authorize the Custodian to sell the properties since this would affect accrued rights and would amount to a breach of contract. Apart altogether from my view that the counsel for the suppliants has taken too narrow a view of the words “as a protective measure only” in the Order in Council I find no merit in law in this argument based on contract and accrued rights. In my view, there was no contract, express or implied, between the suppliants and either the Crown on the Custodian by reason of the signing of the “JP” forms. The properties became vested in the Custodian not by any contract but pursuant to the Orders in Council and would have vested in the Custodian whether the suppliants has signed the forms referred to or not. Moreover, I repeat, the vesting was the result of a legislative enactment, not of an executive act. The Crown never held the properties and no rights against the Crown had ever accrued to the suppliants in respect of them.

According to Thorson, the courts cannot rule on the validity of the Orders in Council because they are equivalent to laws passed by Parliament. At that the time, Canada did not have a Constitution against which laws or orders in council could be tested. In his view, the court was limited to determining whether or not the Custodian acted within the rules set down in the orders in council. Under the War Measures Act, the Governor in Council was permitted to enact whatever orders in council it felt were necessary, and it enacted Order in Council 469 which authorized the vesting of Japanese Canadian property with the Custodian. Contrary to the Suppliants’ claims, the words ‘as a protective measure only’ had no legal meaning, and there was no contract between the Custodian and those who had their land vested with him. In his Reasons for Judgment in Iwasaki v. The Queen, Sheppard cited Thorson in Nakajima v. R. in ruling that in the vesting process no trust was established between the Custodian and those who had their property vested.

In their Statement of Defence in Iwasaki v. The Queen, counsel for the government argue that the case is being brought against the wrong party, the Crown instead of Custodian, recalling the last sentence in the passage above from Thorson’s judgment, ‘The Crown never held the…’ This is an error of fact, as shown in the legal document transferring ownership of the Iwasaki property to Salt Spring Lands, Limited. It reads,

This Indenture, Made in 1st day of March in the year of our Lord one thousand nine hundred and forty-five.

In Pursuance of the “Short form of Deeds Act”

Between

THE HONOURABLE THE SECRETARY OF STATE OF CANADA Acting in his capacity as Custodian under the Revised Regulations Respecting Trading with the Enemy (1943) (hereinafter called the “Grantor”)

AND

SALT SPRING LANDS, LIMITED, a company duly incorporated under the alws of the Province of British Columbia. of Ganges, in the Province of British Columbia.
       (hereinafter called the “Grantee”)

The Secretary of State may have been acting in his capacity as Custodian, but it was the Secretary of State who sold Iwasaki’s property to Salt Spring Lands. Also refuting the argument that the Custodian was not part of the government was the fact that a great deal of the written correspondence coming out of his office was on letterhead that had the words ‘Canada’ and ‘Department of the Secretary of State’ above the words ‘Office of the Custodian’.

In ruling that no trust existed between the Custodian and those whose lands were vested with him, Sheppard depends heavily on the Nakashima v. The King case of 1947. Since this part of his ruling goes to the heart of the question of whether a trust existed, it’s worth quoting in full.

The Nakashima case refers to Consolidated Regulations Repsecting [sic] Trading with the Enemy (1939) contained in Order-in-Council P.C. 3959 of 27 August, 1940 (Ex. 95)…. …The Custodian is vested with the property (Sec. 21 (1)) and all the rights of the enemy (here evacuee) (Sec. 21 (2) and Sec. 22), with power of sale (Secs. 38, 40 (1)), with discretion to release (Sec. 39) and to deal with property (Secs. 21(2), 38, 39); vested property is excepted from attachment (Sec. 49); the Custodian is not liable for charge or tax (Sec. 50) and may deduct his charges (Sec. 44). There appears to be no material lessening of the powers of the Custodian by the Revised Regulations (1943) and hence it is immaterial whether there is applicable to the Custodian the Consolidated Regulations P.C. 3959 referred to in the Nakashima case or the Revised Regulations (1943). Both depend upon the War Measures Act, R.S.C. 1927, Cap. 206, Sec. 3(2) and hence are conditioned that once the Governor-in-Council has considered “that the order is necessary or advisable for any of the purposes mentioned that is the end of the matter” Nakashima case, p. 504. [underlines in original, bold emphasis mine]

Many of the orders in council related to the uprooting of the Japanese Canadians and the dispossession of their property included the phrase ‘persons of the Japanese race’ and in his case against the Crown, Iwasaki challenged its legality by arguing that ‘that particular term is so ambiguous that it makes the order-in-council inoperable’. In his Reasons for Judgment, Sheppard responds to this charge, firstly by noting that the validity of the orders in council had been challenged in Nakashima v. The King and other cases. Since they had been found to be valid, Sheppard says ‘the words must be taken to be not vague or indefinite and not affecting the validity of the Orders-in-Council.’

Responding to the Suppliant’s contention that there is no evidence that Iwasaki is of the Japanese race, Sheppard says, ‘In the Suppliant’s examination for discovery (Q. 1 &2) he have his name as Iwasaki Torazo, or, in English, Torazo Iwasaki. That is not an English name’, as though a person’s name could somehow be used as proof of race.

He follows that with a more surprising argument: when ordered to register as a person of the Japanese race and when ordered to leave the protected area, he did so. His lands were vested with the Custodian. Finally, when a commission was convened to investigate claims by Japanese Canadians, he responded and received compensation. Sheppards’ reasoning is rather distasteful considering that non-compliance with some of those orders would likely have been taken as proof of disloyalty, and the consequences of that are unpleasant to consider.

Finally, Sheppard turned to the charge that Mouat’s purchase of the Iwasaki property was a conflict of interest, and ruled that there wasn’t one. In Sheppard’s words:

The difficulty in the case at Bar is in seeing what is the conflict, that is, between what interest and what duty. The Custodian sold to Salt Spring Lands Ltd. but the Custodian had no interest in that company and was not selling to himself. Hence there was no conflict on the part of the Custodian. G.C. Mouat was not selling. There is no evidence that Mouat’s duty as agent was in any wise [sic] inconsistent with his purchasing in person the lands in question or that his minority interest in the company was inconsistent with that company buying, because Mouat was not selling, and his being agent may have had nothing to do with buying or with selling.

The argument that Mouat was not the Custodian is valid, but because Mouat was a salaried employee within the Custodian’s office and acting as his agent in the Gulf Islands means he was not completely separate either. It is true that the Custodian sold to Salt Spring Lands, but we know that the sale was based on a compromised appraisal; the appraiser was a former employee of Salt Spring Lands (and possibly even a current one). Other questions must also be asked: Because of his connections to the Custodian’s office, was Mouat aware of what the other bids were? Since the two highest bidders were invited to resubmit bids after the appraisal was completed, why wasn’t the other bidder, Captain Smith asked if he’d like to further increase his bid after Salt Spring Lands had submitted its bid of $5250? Nobody outside of Salt Spring Lands and D. Keith Wilson were likely aware that the appraiser was a former employee of the company, and Sheppard certainly wasn’t, but the fact that Mouat was in regular communication with the Custodian’s office should have raised concerns about the fairness of the bidding process. From the archive we also now know that Mouat himself was concerned that the sale might be considered unethical, and from a search of the property titles we know that within a year and a half after being sold to Salt Spring Lands it was sold to Gavin Mouat. We have no way of knowing for sure if this was done to try to conceal the fact that the Mouat was buying the property for himself, but it is another suggestion that Mouat had some concerns that his purchase of the property might not be considered completely ethical.

In his ruling against Iwasaki, Sheppard summarizes his conclusion: Nakashima v. R. established that there was no trust between the Custodian and those who had their property vested, so it could not be breached; and Iwasaki’s claim that the lands were of greater value than that realized by the Custodian and the Commissioner fails because he signed a release of all his claims.

MacLeod & Small appealed the case on 24 December 1968, and it was heard in the Supreme Court of Canada on 13, 16, 17 February 1970. The ruling was handed down on 23 April 1970, and it was dismissed with costs assessed at $2857. Following the trial, the government tried to recover costs. When they weren’t forthcoming, they sent private investigators to try to determine if Iwasaki had assets that could be seized to cover the amount. Their report is very sad reading. They found Torazo, now 90 years old, living in a small apartment in Vancouver with his wife Fuku for which his son paid $125 per month. He was reported as walking extremely slowly, his wife Fuku went out in a wheelchair, and ‘their furnishings are very skimpy and limited and of little or no value.’

Total expenses for the Exchequer Court and Supreme Court trials came to $6845.15, more than half of what he received for his property, though of course those are 1970 dollars. After receiving the report from the investigators R.W. Law of the Department of Justice’s Civil Litigation Section wrote to his superiors suggesting that while it was unlikely they’d have any success in recovering costs, they could issue a writ that might be filed so that they could collect something from Iwasaki’s assets when he died. In the event Law’s other option was selected; the costs were deemed ‘uncollectable’ and the file was closed.

It was a sad end to a remarkable story. Despite his advanced age, Iwasaki showed admirable courage and determination in taking on the Government of Canada. It was hardly surprising that the government won the legal battle, the laws under which it sold his property were passed under the War Measures Act when the government had virtually unlimited power to do whatever it wanted. The court was there to determine whether or not laws had been broken, laws that had been enacted specifically to enable the sale of Japanese Canadian properties. Whatever the strength of Iwasaki’s moral argument and whatever unsound motivations had guided the government’s actions in taking Iwasaki’s land, it was all irrelevant to judges confined to making a legal ruling.

In the court of public opinion it was a different matter. Press coverage during the trials was generally sympathetic to Iwasaki. The Maclean’s article mentioned above likely had the widest readership, and the title alone, ‘Canada’s day of infamy on Salt Spring Island’, indicates which side it was on in discussing what it referred to as ‘a skeleton in Canada’s closet’. A 1969 CBC radio segment also opened with a reference to the skeleton, but it was followed by an interview with Ray Macleod who talks about receiving phone calls from strangers upset about the fact that he’s ‘handling the Jap case’. He talks about he and his partner’s initial interest in the case, ‘the social injustice that was apparent to us’, a thing that he viewed separately from the legal injustice and something that needed to be addressed. On Saltspring, where one man’s loss was another’s gain, local newspaper coverage suggested the island was ‘incensed’ at the suggestion that a prominent local businessman had somehow acquired a large tract of land improperly, but that feeling was likely far from universal.

Iwasaki lost his court case and died a bitter man. The legality of the dispossession had been decided, but the moral case was far from settled and the Iwasaki trial was an important precursor to the redress movement of the 1980s. Fifteen years later there would still be Canadians who believed the uprooting of Japanese Canadians was justified, but far fewer of them would be prepared to defend the dispossession of their property.