Date: 20010530
Docket: T-462-01
Neutral Citation: 2001 FCT 558
BETWEEN:
RITA SUNBERG for herself and acting in her capacity
as CHIEF OF THE KWAKIUTL NATION BAND
and DAVID J. HUNT, WILFRED HUNT, RENE HUNT
and ALEXANDER WILSON for themselves
and acting in their capacity as
COUNCILLORS OF THE KWAKIUTL NATION BAND
Applicants
and
FRED ANDERSON, LUCILLE BROTCHIE,
DAVID T. HUNT JACOBSON, GEORGE HILL,
TOMMY D. HUNT, RUPERT WILSON SR.,
ELIZA BROTCHIE, ALBERT WILSON, DEANE CLARK
Respondents
REASONS FOR ORDER
McKEOWN J.
[1] The Respondents seek an interlocutory injunction preventing the Applicants from acting as Chief or Council of the Kwakiutl Nation Band, preventing the Applicants from interfering with the Respondents carrying out the usual duties and functions of the Kwakiutl Chief or Council and restraining the Applicants from conducting the by-election for three Council positions to be held on Friday, June 1, 2001 until this Court has determined the legitimacy of the election held March 12, 2001. Furthermore, the Respondents also seek an Order declaring the Respondents to be the sole and only authority for the carrying on the usual duties and functions of the Chief and Band Council.
Issues
[2] The issues are whether the Respondents have shown there is serious issue to be decided; whether the Respondents have shown that they will suffer irreparable harm; and whether the balance of convenience favours the granting of the injunction. With respect to the declaratory relief, the issue is whether this Court has jurisdiction to grant the Order of declaratory relief and if it does have the Respondents shown that there are appropriate circumstances in this case to do so.
Facts
[3] The Kwakiutl Nation Band is a small Indian Band located at Fort Rupert, on Vancouver Island, near Port Hardy, B.C. The Applicant, Rita Sundberg, was duly elected to the office of Chief, and the Applicants, Wilfred Hunt and Alexander Wilson were elected to the office of Councillors at a general election held on November 12, 1999. Their term of office expires on November 9, 2001. At that time, Thomas L. Nelson was also elected to the office of Councillor, but he resigned from the office of Councillor in May, 2000. The Applicant, Rene Hunt was elected to the office of Councillor at a special election which took place on June 16, 2000. The Applicant, David J. Hunt was elected to the office of Councillor along with Respondents, Fred Anderson and Lucille Brotchie, at a general election held on May 26, 2000. Their term of office expires on May 10, 2002. No appeals have ever been filed with respect to any of these three elections. There is no issue that the general elections of November, 1999 and May, 2000, and the June, 2000 special election, were each validly held.
[4] Discussions concerning the establishment of the Kwakiutl Economic Development Corporation (the "Development Company") took place at a general meeting of the Band members in November, 1999.
[5] Subsequent to the General Meeting of the Band members, the Band Council retained the services of legal counsel to properly incorporate the Development Company under the laws of British Columbia. It was agreed at the General Meeting of the Band members that the shares of the Development Company would be held in three equal parts by Band members and that those shares would be held in trust for the entirety of the Band members. It was decided that the shares of the Development Company would be held by Alfred Dallas "Hutch" Hunt, Julia Annie Nelson and Chief Sundberg in trust for the Band members.
[6] The Development Company's Board of Directors is made up of 3 persons from the Band Council, 3 persons from the community and 2 persons from the business community. The current directors of the Development Company are:
Anthony Peter Gill - community
Alfred Dallas Hunt - community
Helen Constance Wilson - community
James Cox - business community
Allan Okabe - business community
Alexander G. Wilson - Band Council
Wilfred James Hunt - Band Council
David J. Hunt - Band Council
As Chief of the Kwakiutl Nation Band, Rita Sundberg is an ex-officio member of the Board of Directors.
[7] On November 6, 2000 a motion was passed to stop the Development Company from continuing any business until certain conditions were met. The first condition was that the present Board members are removed from the Economic Development Corporation. Another was that the Band members decide on who sits on the board. The Band members were advised that the directors cannot be removed by motion of the Band members and that the motion was not valid, but the directors could be removed by the shareholders and not re-elected at the next annual general meeting of the Development Company.
[8] On February 5, 2001 a General Band Meeting was called by the Band Council. The motion of non-confidence regarding the Applicants in their capacity as Chief and Council was moved, seconded and carried. The motion of non-confidence was based on the fact that the Chief and Council had not taken steps to remove the present Board of Directors from the Development Company as set out in the motion made at the November 6, 2000 meeting. The Applicants submit that the motion of non-confidence was moved and seconded after the General Band Meeting lost quorum and was adjourned.
[9] On February 19, 2001 the Band Council issued a memo to the Band members advising that:
(a) the motion to have the current Band Council removed or resign was moved after quorum was lost and was therefore out of order; and
(b) the proper procedure for Band members to remove Council is through the regular election process.
[10] Although the Respondents, Fred Anderson and Lucille Brotchie, were part of the Band Council that was purportedly "removed" from office at the February 5, 2001 General Band Meeting, on February 27, 2001, they appointed themselves as the Interim Band Council to the exclusion and in place of Chief Sundberg and other Councillors. They issued a Notice purporting to open nominations on March 2, 2001, purporting to call an all candidates meeting for March 5, 2001, and purporting to call a general election for March 12, 2001.
[11] On March 12, 2001 the Applicants advised the Respondents that it was their position that there was no basis to remove the Chief and Council and that the March 12, 2001 election was null and void and that the existing Chief and Council would not participate in or recognize the March 12, 2001 election.
[12] On March 15, 2001 the Applicants filed a Notice of Application seeking judicial review of the decision of the Respondents, Fred Anderson and Lucille Brotchie, while purporting to act as the Interim Band Council to call an election for a new Chief and Councillors. The Applicant, Chief Sundberg, issued letters dated March 5, 2001 to Councillors, Lucille Brotchie and Fred Anderson, removing them respectively from the Band Council.
[13] On April 11, 2001, Chief Sundberg issued 28 letters of eviction for lack of payment of rent or mortgage payments. According to the Respondents, these eviction notices served as retribution for participating in the election process. There are other allegations made by the Respondents with respect to inappropriate behaviour by Chief Sundberg.
Analysis
[14] In my view the Respondents have not established that any irreparable harm would be caused by Chief Sundberg and the Applicant Councillors continuing to perform their duties. There have been allegations of mismanagement without any details of the mismanagement, as well as allegations of inappropriate personal conduct by the Chief. However, there is no evidence of any dissipation of the assets of the Band or misappropriation of the Band's funds. Chief Sundberg's Council has reduced the deficit position of the Band by several hundred thousand dollars. Cheques and balances are in place. The Development Company is managed by a Board of Directors. Chief Sundberg is an ex-officio member and has no voting rights. The Development Company is having audited financial statements prepared this year.
[15] Furthermore, on April 11, 2001 the Department of Indian Affairs and Northern Development ("DIAND") confirmed that its records showed the Applicants were the current Chief and Council and that the election process held on March 12, 2001, which was not called by the incumbent Chief and Council, did not result in the incumbent Chief and Council being removed from office. Accordingly, DIAND would only deal with the Applicants as the Council of record. If I remove the Chief and Council there will be no Band Council to deal with DIAND and this would likely cause disruption of funding from DIAND, as the Applicants are the Band Council of record. There is no irreparable harm to the Respondents.
[16] The balance of convenience favours the Applicants. It is in the interests of the Band that the special by-election to fill vacancies proceed on Friday, June 1, 2001, as there are only 4 Councillors at present and decisions of Band Council require the agreement of 4 Councillors. Every Council meeting requires the attendance of all Councillors and all decisions have to be unanimous. When vacancies arise, whether by resignation or removal, and there are more than 3 months remaining in the term, special by-elections are held to fill those vacancies for the remainder of the term. The balance of convenience favours that the status quo be maintained until such time as a new election is called in November, or the application for judicial review has taken place as to the legitimacy of the election held on March 12, 2001.
[17] This case seems to me to fall within the comments from a passage from the Canadian Encyclopaedic Digest (C.E.D.) which was approved by McNair J. in McIvor v Sandy Bay Indian Band, [1989] 1 C.N.L.R. 95 at 97 (F.C.T.D.) where he quoted from 18 C.E.D. (West. 3rd), pp. 78 - 29, paragraph 35 which reads as follows:
An interlocutory injunction, especially in disputed facts, is a dramatic remedy and the jurisdiction to grant it should be cautiously exercised. Where doubt exists as to the plaintiff's rights, the court should take into consideration the balance of convenience to the parties and the nature of the injury which the defendant will suffer if the injunction is granted and he ultimately wins his case, as well as that which the plaintiff might suffer if the injunction is refused and he should be successful in the end. The plaintiff must show that such balance of convenience or inconvenience is in his favour. Where the inconvenience seems to be equally divided as between the parties, the injunction will not be granted.
McNair J. then stated at 99 that:
Whatever the terminology, it is my opinion that the plaintiff has totally failed to meet the onus of showing that the inconvenience and harm he would be likely to suffer from a refusal to grant the interlocutory injunction is greater than the inconvenience and harm that would be suffered by the defendants from the granting of it.
[18] There is also no authority for the interim declaration sought by the Respondents. As Thurlow, A.C.J. stated in Richard V. Sankey v. Minister of Transport and Stanley E. Haskins, [1979] 1 F.C. 134 (T.D.) at 2:
I know of no authority or rule under which an interim declaration, which in substance would accomplish the whole purpose of the action without a trial on the merits, may be made. If a case for a declaration were shown to exist or to be fairly arguable, the Court might perhaps intervene by injunction, in an appropriate case, to hold matters in status quo until the right could be tried but that is by no means the same thing as granting an interim declaration of right. The likelihood of ultimate entitlement to the declaratory relief would help to persuade the Court to issue an injunction but the Court would do so without determining the right to the declaration either temporarily or at all.
I agree that the status quo should be maintained in this case and this is an additional reason for my refusal to grant the injunction.
[19] This is not a case like Joe v. John [1991] 3 C.N.L.R. 63 where the Court made an Order with respect to a party's access to Band funds based on what was in the best interests of the Band. The legal fees in the present matter are one fifth of the amount involved in the case of Joe v. John, supra. Furthermore, DIAND recognises the Applicants as the Chief and Council of record.
[20] Since many of the same issues in this case will be issues in the application for judicial review, I have attempted to avoid commenting on the areas of specific allegations and defences to the extent possible.
[21] In my view, the application for judicial review as filed by the Applicants on March 15, 2001 should proceed on an expedited basis and this application shall continue as a specially managed proceeding. The motions for interlocutory injunctions are dismissed and the motion for a declaratory Order is also dismissed. Costs to the Applicants (Respondents in this motion).
(Sgd.) "William P. McKeown"
Judge
Vancouver, British Columbia
30 May 2001