The Plaintiff’s action is allowed. Companies and investors that had invested in a mobile home park are trespassing on a First Nation’s land. They did not comply with the rules set out in the Indian Act, specifically regarding non-band members seeking to engage in business activities on Indigenous lands.
This trial was the culmination of numerous legal and other battles spanning over 30 years involving a 40-acre parcel of land [“Lands”] and a mobile home park known as “Creek Run Park” located on a portion of the Lands. The Lands are part of the Okanagan Indian Band [“OKIB”]. Various construction companies and other investors involved with the development of Creek Run Park have changed names, but the relevant parties will be referred to together as the “Companies”.
Over the past 26 years, the Companies have never obtained a registered head lease from the Minister of Indigenous Services on behalf of the federal Crown [“Crown”] authorizing the Creek Run Park to operate on the Lands. The Indian Act requires such a head lease for Creek Run Park to be constructed and operated. The Companies proceeded with development, construction and significant expansion of Creek Run Park on the expectation that a head lease would eventually be granted to them by the Crown. It never was.
The Plaintiffs are supported by the OKIB, and also hold the right to possession of the Lands under certificates of possession issued by the Crown under s 20(1) of the Indian Act. The Plaintiffs state the Companies have no legal right or other authority to be on the Lands and are therefore trespassing and seek various forms of damages.
While acknowledging that they have no legal right of possession of the Lands and Creek Run Park, the Companies assert that they relied on repeated assurances and agreements that a head lease would be formally agreed to and registered. Alternatively, they counterclaim against the plaintiffs seeking damages and other forms of relief on the basis of the equitable principles of promissory estoppel, unjust enrichment and quantum meruit.
The background and history of this dispute is complex and lengthy. Much of it is not in dispute and include hundreds of documents admitted into evidence by agreement that helpfully explain the chronology of events. The key issue from which all other claims and counterclaims flow is whether or not the Companies are trespassing on the Lands. The combination of the relevant legislation, well-established common law and agreed facts leads to the inescapable conclusion that the Companies are trespassing on the Lands.
Section 91(24) of the Constitution Act, 1982, places reserve lands under federal jurisdiction to be held by the Crown for the use and benefit of Indian bands. The use and management of these lands is governed by the Indian Act. There are clear provisions and a long line of authorities that establish that only the Crown may grant interests in reserve lands. Any non-band member occupying reserve land without being granted an interest by the Crown is in trespass (Indian Act, ss 20–29, 37–41, 58(3); The Queen v Devereux,  SCR 567).
Neither the band nor any band members may enter into legally binding lease agreements and to the extent that they purport to do so, the agreements are void. Such informal arrangements (commonly referred to as “buckshee leases”), are illegal and unenforceable. Before granting a lease of lands held under a certificate of possession, the Crown is required to consult with the band, and consider and give weight to concerns and views of the band. This is done to protect the collective interest of the band in reserve lands that continues despite possession being allocated to individual members (Tsartlip Indian Band v Canada (Minister of Indian Affairs and Northern Development),  3 CNLR 386). What occurred in this case is precisely why it is important that the process set out in the Indian Act needs to be followed. Failure to do so can lead to the kinds of disputes the parties in this case have been engaged in for 26 years.
The Plaintiffs have proven that the Companies have always been trespassers on the Lands and are entitled to the orders they seek including a tracing order. Considering the whole of the evidence, damages ought to be awarded in favor of the in the sum of $250,000. While on first blush, the evidence suggests that the Plaintiffs have been enriched by the existence of Creek Run Park and its infrastructure, a closer look clouds the point. Instead of properly maintaining the operation to acceptable standards, the Companies essentially ran the operation into the ground and syphoned off as much money as they could pending the predictable outcome of this case. Even if the Plaintiffs have received a benefit, there was no corresponding deprivation to the Companies because they had to build the infrastructure in order to move forward with the development of Creek Run Park, the cost of which they have likely recovered over the years many times over.
This case is a prime example of what can happen when parties hopeful of developing reserve lands, short-circuit or attempt to bypass the process and protections of the Indian Act. Creek Run Park should never have begun, or any continuation of its construction, without securing a properly registered head lease. The Plaintiffs’ action is allowed and the Companies’ counterclaim is dismissed in its entirety.