Creditors' Remedies On-Reserve ' Case Law Update

• Published date: 12 October 2022
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Indigenous Peoples
• Law Firm: Thompson Dorfman Sweatman LLP
• Author: Ms Kendall Dyck and Shoshanna Paul

Bogue v Miracle, 2022 ONCA 672

On September 29, 2022, the Ontario Court of Appeal (the "ONCA") in Bogue v Miracle, 2022 ONCA 672 [Bogue v. Miracle] affirmed the protections under section 89 of the Indian Act (the "Act") apply to the conduct of a receiver. The receiver in this case could not recoup the profits from the two on-reserve businesses to satisfy a debt owed to a non-First Nation¹ creditor but could seize property located off-reserve. In addition, the ONCA reaffirmed that section 89 of the Act ".protects all on-reserve assets, regardless of whether they are part of the 'commercial mainstream' or not, from seizure by non-Indians."²

Background

In this case, a dispute arose between Andrew Miracle (the "Appellant") and his son regarding the ownership and profits of an on-reserve business. The Appellant retained Mr. Glenn Bogue (the "Respondent") to represent him on a contingency basis and was successful, but paid the Respondent significantly less than the percentage the Respondent believed was owed.

The Respondent sought and received an order from the Ontario Superior Court of Justice appointing a receiver and manager over the Appellant's property. The order would have given the receiver the power to operate the Appellant's two on-reserve businesses and collect the profits until the debt to the Respondent had been satisfied.

The Appellant appealed, arguing that the order would contravene section 89 of the Act, among other things. Before the broader appeal could proceed, the ONCA decided that the application judge should address this threshold issue. The application judge held that the commercial mainstream exception applied to section 89, and the appointment was therefore valid. The Appellant was then able to proceed with his appeal, which is the subject of this case summary.

Section 89 and 90 of the Act

Section 89 of the Act protects the on-reserve assets (whether personal property or real property) owned by a First Nation person (i.e. someone with "Indian" status under the Act) or a First Nation (i.e. a "band" as defined in the Act) from the usual remedies available to creditors. Therefore, property located on-reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than a First Nation person or a First Nation.

The purpose of section 89 is to fulfill the Crown's obligation to "shield Indians from efforts by non-natives to dispossess them of the property they...