Beaver First Nation Band v. A.T.N. Farms Ltd. et al., (2001) 356 A.R. 1 (QB)

• Judge: Watson, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: August 31, 2001
• Citations: (2001), 356 A.R. 1 (QB);2001 ABQB 748

Beaver First Nation v. ATN Farms (2001), 356 A.R. 1 (QB)

MLB headnote and full text

Temp. Cite: [2004] A.R. TBEd. MR.138

Beaver First Nation Band (plaintiff/applicant) v. A.T.N. Farms Ltd., Lorne Bulldog and Harvey Bulldog (defendants/respondents)

(Action No. 0003 17825; 2001 ABQB 748)

Indexed As: Beaver First Nation Band v. A.T.N. Farms Ltd. et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Watson, J.

August 31, 2001.

Summary:

The Beaver First Nation Band sued Chief Bulldog and others. The main dispute related to Chief Bulldog's management of a corporation owned by the Band and related entities. The application was ordered to proceed as a summary trial (see [2000] A.R. Uned. 394).

The Alberta Court of Queen's Bench concluded that Bulldog breached his fiduciary duties to the corporation and the Band and that his conduct was oppressive, unfairly prejudicial to and unfairly disregarded the Band's interests (Alberta Business Corporations Act, s. 234(2)). The court granted relief, including a declaration that the Band was the full beneficial owner of the corporation and a related entity and entitled to take possession of all those entities' records, accounts, contracts and assets and to recover them from whatever location that they might be. The court also directed the winding up of the corporation by such method as the Band deemed appropriate. The court determined the amount of compensatory damages that the Band was entitled to.

Company Law - Topic 4562

Officers and agents - Liability - General - Defences - The defendant managed and was a director of a corporation owned by an Indian band - The Alberta Court of Queen's Bench concluded that the defendant breached his fiduciary duties to the band and the corporation and that his conduct was oppressive, unfairly prejudicial to and unfairly disregarded the Band's interests (Alberta Business Corporations Act, s. 234(2)) - There was no basis for a defence of bona fide action - The definition of "bona fide" in this context was not a purely subjective matter - In this corporate law context, particularly when the subject had a fiduciary relationship with the others, a bona fide state of mind of an actor had to at least involve some consciousness of, advertence to, and intent to benefit the best interests of interested persons other than the actor, and notably the company in question - It was not good faith for the actor to simply experiment with the rights or expectations or interests of others without even reflecting on those rights, expectations or interests - See paragraphs 230 and 231.

Company Law - Topic 4603

Officers and agents - Duty to company - Fiduciary duty - An Indian band sued their chief respecting his management of the band's farming business and cattle operation - The issues included the defendant's use of the business's equipment to take reserve hay for his own benefit - The defendant claimed that there was no band policy which required him to pay for the use of land or equipment respecting his own cattle operation and asserted that the operation was not profitable otherwise - The Alberta Court of Queen's Bench rejected the defence - The defendant was the band's chief and administrator and was duty bound to act with at least the sort of regard to the members of his community as was contemplated by the Alberta Business Corporations Act - The court also rejected the defendant's claim based on the fact that he was an aboriginal person - Whether or not he had a Constitutional right to take hay from reserve land, no such right could intrude so drastically upon the similar rights of other aboriginal persons of the same community - See paragraphs 160 to 162.

Company Law - Topic 4603

Officers and agents - Duty to company - Fiduciary duty - An Indian band set up A.T.N. Farms Ltd. to run and manage its farming operation and a non corporate entity (Rocky Lane) for cattle operations - The defendant was a director and the president and general manager of A.T.N. - He performed a variety of jobs including manager, bookkeeper, records keeper, teacher, welder, herbalist, seed cleaner, crop specialist, mechanic and security person - He also had full signing authority and control over Rocky Lane - The band placed a high degree of trust in the defendant - The defendant treated A.T.N., Rocky Lane and another entity as being under his absolute discretion, without any need to account - There were unaccounted for charges and charges which provided unearned benefit to the defendant - The Alberta Court of Queen's Bench concluded that a fiduciary relationship existed at common law and pursuant to s. 117 of the Alberta Business Corporations Act - The defendant breached his fiduciary duties to A.T.N and the band in his management and approach to assets and revenue streams by failing to keep adequate records and in his casual and self-directed overview of the business - His conduct was oppressive, unfairly prejudicial to and unfairly disregarded the band's interests (s. 234(2)) - See paragraphs 221 to 233.

Company Law - Topic 4606

Officers and agents - Duty to company - Duty to account - [See second Company Law - Topic 4603 ].

Company Law - Topic 4622

Officers and agents - Liability to shareholders - Fiduciary duty - [See both Company Law - Topic 4603 ].

Company Law - Topic 9785

Actions against corporations and directors -Action for oppressive conduct - Oppression, prejudice or disregard of interests - [See both Company Law - Topic 4603 ].

Indians, Inuit and Métis - Topic 503

Rights - General - Individuality v. collectivity - [See first Company Law - Topic 4603 ].

Indians, Inuit and Métis - Topic 6005

Aboriginal rights - Nature and scope of - [See first Company Law - Topic 4603 ].

Indians, Inuit and Métis - Topic 6222.1

Government - Band councils (incl. chief and councillors) - Fiduciary duties - [See first Company Law - Topic 4603 ].

Practice - Topic 1003

Parties - Parties unrepresented by counsel -Effect of lack of representation - As a result of a report resulting from an inspection directed under Part 18 of the Alberta Business Corporations Act, an Indian band sued the defendant respecting his management of the band's company - Lee, J., ordered the action to proceed as a summary trial - Lee, J.'s, written reasons noted the nature of the factual issues, the applicable rules and ss. 117, 224 and 234 of the Act - Section 230 authorized the use of the inspector's report at trial - The defendant received the report well before trial - Prior to trial, the defendant dismissed his lawyers - The defendant's request for an adjournment to obtain different counsel was denied and the trial proceeded - The Alberta Court of Queen's Bench stated that the defendant was entitled to as fair a trial as the balance of justice required - However, although the defendant lacked counsel, the trial process was adjudicatively fair - The defendant was intelligent, thoughtful and articulate - The trial was procedurally simple - He understood the basis of the trial - His self-representation was not incompetent - The plaintiff's counsel showed professional accommodation - See paragraphs 52 to 81.

Practice - Topic 5255.4

Trials - General - Summary trials - Availability of - An Indian band sued the defendant respecting his management of the band's corporation - The application was ordered to proceed as a summary trial - The Alberta Court of Queen's Bench affirmed that the matter was appropriate to proceed as a summary trial - The procedure thus directed was suitable for proceedings under the Alberta Business Corporations Act - Even though the band sought a declaration of breach of fiduciary duty, the court would not have to make a further declaration of criminality or of wilful and deliberate misconduct - See paragraphs 8 to 50 - If the object of the summary trial had been to effectively find criminality or the like on the defendant's part, the court would have declined to deal with it under the summary trial procedure -Such a serious allegation, with its associated stigma, would not have been suited to such a procedure - Such an allegation should be strictly and precisely alleged and strictly proven to a more contextually sensitive variant of the standard of proof of balance of probabilities - See paragraph 16.

Cases Noticed:

Smith v. Smith and Smedman, [1952] 2 S.C.R. 312; [1952] 3 D.L.R. 449, refd to. [para. 16, footnote 1].

Ringrose v. College of Physicians and Surgeons (Alta.), [1978] 2 W.W.R. 534; 8 A.R. 113; 83 D.L.R.(3d) 680 (C.A.), refd to. [para. 17, footnote 2].

Nand v. Board of Education of Edmonton Public School District No. 7 (1994), 157 A.R. 123; 77 W.A.C. 123; 23 Alta. L.R.(3d) 63 (C.A.), refd to. [para. 17, footnote 3].

Law Society of Alberta v. Estrin (1992), 4 Alta. L.R.(3d) 373 (C.A.), refd to. [para. 17, footnote 4].

K.V. v. College of Physicians and Surgeons (Alta.) (1999), 237 A.R. 49; 197 W.A.C. 49; 74 Alta. L.R.(3d) 93 (C.A.), refd to. [para. 17, footnote 5].

R. v. Oakes, [1986] 1 S.C.R. 103; 65 N.R. 87; 14 O.A.C. 335; 50 C.R.(3d) 1; 24 C.C.C.(3d) 321; 26 D.L.R.(4th) 200; 19 C.R.R. 308, affing. (1993), 40 O.R.(2d) 660; 32 C.R.(3d) 193; 2 C.C.C.(3d) 339; 145 D.L.R.(3d) 123; 3 C.R.R. 289 (C.A.), refd to. [para. 17, footnote 6].

Continental Insurance Co. v. Dalton Cartage Co. et al., [1982] 1 S.C.R. 164; 40 N.R. 135, refd to. [para. 18, footnote 7].

Recovery Production Equipment Ltd. v. McKinney Machine Co. (1998), 223 A.R. 24; 183 W.A.C. 24 (C.A.), refd to. [para. 19, footnote 8].

Ebrahimi v. Westbourne Galleries Ltd., [1973] A.C. 360; [1972] 2 W.L.R. 1289; [1972] 2 All E.R. 491 (H.L.), refd to. [para. 25, footnote 9].

Keho Holdings Ltd. and Oliver v. Noble et al. (1987), 78 A.R. 131; 52 Alta. L.R.(2d) 195 (C.A.), refd to. [para. 26, footnote 10].

827365 Alberta Ltd. et al. v. Alco Gas & Oil Production Equipment Ltd. et al. (2001), 285 A.R. 221 (Q.B.), refd to. [para. 26, footnote 11].

Elder v. Elder & Watson Ltd., [1952] S.C. 49 (Scot. Sess. Ct.), refd to. [para. 26, footnote 11].

Scottish Co-op Wholesale Society Ltd. v. Meyer, [1958] 3 All E.R. 66; [1959] A.C. 324 (H.L.), refd to. [para. 27, footnote 13].

Ferguson and Imax Systems Corp., Re (1983), 43 O.R.(2d) 128; 150 D.L.R.(3d) 718 (C.A.), leave to appeal refused (1983), 52 N.R. 317; 2 O.A.C. 158 (S.C.C.), refd to. [para. 28, footnote 14].

Wind Ridge Farms Ltd. et al. v. Quadra Group Investments Ltd. et al. (1999), 180 Sask.R. 231; 205 W.A.C. 231 (C.A.), refd to. [para. 28, footnote 15].

First Edmonton Place Ltd. v. 315888 Alberta Ltd. (1988), 60 Alta. L.R.(2d) 122; 40 B.L.R. 28; 10 A.C.W.S.(3d) 268 (Q.B.), varied [1990] 2 W.W.R. 670; 71 Alta. L.R.(2d) 61 (C.A.), refd to. [para. 30, footnote 16].

ADI Ltd. v. 052987 N.B. Inc. et al. (2000), 232 N.B.R.(2d) 47; 598 A.P.R. 47; 2000 NBCA 55, refd to. [para. 31, footnote 17].

Downtown Eatery (1993) Ltd. v. Ontario et al. (2001), 147 O.A.C. 275 (C.A.), refd to. [para. 31, footnote 18].

Westfair Foods Ltd. v. Watt et al., [1990] 4 W.W.R. 685; 106 A.R. 40; 48 B.L.R. 43; 73 Alta. L.R.(2d) 326; 20 A.C.W.S.(3d) 642 (Q.B.), affd. [1991] 4 W.W.R. 695; 115 A.R. 34; 79 D.L.R.(4th) 48, leave to appeal refused [1991] 3 S.C.R. viii; 137 N.R. 78; 127 A.R. 394; 20 W.A.C. 394 (S.C.C.), refd to. [para. 31, footnote 19].

Stech v. Davies, [1987] 5 W.W.R. 563; 80 A.R. 298; 53 Alta. L.R.(2d) 273 (Q.B.), refd to. [para. 32, footnote 20].

Calmont Leasing Ltd. v. Kredl et al. (1993), 142 A.R. 81 (Q.B.), affd. (1995), 165 A.R. 343; 89 W.A.C. 343 (C.A.), refd to. [para. 33, footnote 21].

R. v. White (R.G.) and Côté (Y.), [1998] 2 S.C.R. 72; 227 N.R. 326; 112 O.A.C. 1; 16 C.R.(5th) 199; 125 C.C.C.(3d) 385, affing. (1996), 91 O.A.C. 321; 108 C.C.C.(3d) 1; 29 O.R.(3d) 577; 49 C.R.(4th) 97 (C.A.), refd to. [para. 38, footnote 22].

Broda v. Broda (2001), 286 A.R. 120; 253 W.A.C. 120; 2001 ABCA 151, refd to. [para. 62, footnote 23].

R. v. McGibbon (1989), 31 O.A.C. 10; 45 C.C.C.(3d) 334 (C.A.), refd to. [para. 77, footnote 24].

R. v. G.D.B., [2000] 1 S.C.R. 520; 253 N.R. 201; 261 A.R. 1; 225 W.A.C. 1; 143 C.C.C.(3d) 289; 32 C.R.(5th) 207; [2000] 8 W.W.R. 193; 81 Alta. L.R.(3d) 1; 2000 SCC 22, affing. (1999), 232 A.R. 307; 195 W.A.C. 307; 42 W.C.B.(2d) 1; 133 C.C.C.(3d) 309 (C.A.), refd to. [para. 77, footnote 25].

International Corona Resources Ltd. v. LAC Minerals Ltd., [1989] 2 S.C.R. 574; 101 N.R. 239; 36 O.A.C. 57; 61 D.L.R.(4th) 14; 69 O.R.(3d) 287; 35 E.T.R. 1, refd to. [para. 222, footnote 26].

Frame v. Smith and Smith, [1987] 2 S.C.R. 99; 78 N.R. 40; 23 O.A.C. 84; 42 D.L.R.(4th) 81, refd to. [para. 224, footnote 27].

Anderson, Smyth & Kelly Customs Brokers Ltd. v. World Wild Customs Brokers Ltd. et al. (1996), 184 A.R. 81; 122 W.A.C. 81 (C.A.), refd to. [para. 225, footnote 28].

400280 Alberta Ltd. v. Franko's Heating & Air Conditioning (1992) Ltd. (1995), 166 A.R. 241; 26 Alta. L.R.(3d) 421 (Q.B.), refd to. [para. 229, footnote 29].

Lee et al. v. To et al. (1998), 168 Sask.R. 66; 173 W.A.C. 66 (C.A.), refd to. [para. 229, footnote 30].

Counsel:

Robert M. Curtis, Q.C., and Karen M. Trace (McCuaig Desrochers), for the plaintiff/applicant;

Harvey Bulldog, appeared on his own behalf.

Watson, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, heard this action on June 21 and 22, 2001, and delivered the following judgment on August 31, 2001.