JFK Court Report: Recent Cases from British Columbia

Fiduciary obligations owed by Band Councillors to the Band

Louie v. Louie, 2015 BCCA 247

Wayne Louie, a member of the Lower Kootenay Indian Band, brought a suit against the Band for breach of their fiduciary obligations. This claim was made when members of the community found out that the Band had been given a payment by the province for use of a road through the reserve, and members of council had each issued themselves $5000 payments from these funds. The court below concluded that the $5000 payments were within the powers of the Band Council and that these honoraria for their services were not proven to have been made outside the best interests of the Band.

The Court of Appeal overturned the Chambers Judge’s ruling, concluding that the defendant councillors had acted in breach of their fiduciary duties to the Band in purporting to remunerate themselves. The court concluded that the councillors were bound by their fiduciary duties to act in the best interests of the Band and not in conflict of interest by voting on their own remuneration. Their payment was to the detriment of the Band, and having personally benefited without express permission to do so, the councillors were required to repay the $5000 they had each received.

This decision is of particular import for its emphasis on the fiduciary obligations of councillors, which is established at law, but with this case is reinforced with particular attention to the need for transparency of transactions that may benefit councillors and result in conflict or appearance of conflict.

Cases related to Independent Assessment Process under the Indian Residential Schools Settlement Agreement

Two cases have come out of the BC courts this spring dealing with issues arising from the Independent Assessment Process (IAP).

The first, Myers v. Canada, 2015 BCCA 95, is a decision of the BC Court of Appeal addressing the desire of individuals to advance claims for abuse and injuries suffered while at Residential Schools after the deadline set under the Indian Residential Schools Settlement Agreement (IRSSA). The court concluded that while “all sympathies favour the appellants”, given that the “residential schools system is one of the darkest chapters of our history and its pernicious effects continue to be felt”, the court did not have jurisdiction to give direction that the claims of the appellants be accepted. Despite the claim that the missed deadline was due to errors made by legal counsel, the court was not able to accede to the appellants’ request, finding that the intention of the settlement agreement was to impose a firm deadline for IAP claims, without contemplation of judicial extension.

The second case relating to the IRSSA is Fontaine v. Canada, 2015 BCSC 717, in which a law firm representing 1400 individuals making claims under the IAP was found, following investigation by a monitor, to have not met the standard respecting legal professionals representing clients under the IRSSA. These standards were breached where counsel failed to adequately supervise an individual who provided services to IAP clients through the firm and who was alleged to have taken advantage of some of the clients and failed to properly provide those services; extended secured loans to clients; and failed to provide an IAP practice of an adequate nature to clients. The court found that the firm is able to revise its practice, and that the 150 clients with outstanding IAP claims should not suffer the disruption of having their counsel removed. The court imposed a process for determining the amount for which the law firm would be liable for the costs of the Monitor’s investigation, for addressing the claims that some of the clients may have against the firm, and for the ongoing monitoring of the lawyer’s practice.

While the conduct was improper and blameworthy, the court concluded it did not require removal from participation in the IAP in order to ensure legitimate claims are compensated; the process has integrity, impartiality and transparency; and claimants have an opportunity for non-confrontational adjudication of their claims.