Choken et al. v. Lake St. Martin Indian Band, 2004 FCA 248

• Judge: Décary, Létourneau and Pelletier, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: June 01, 2004
• Jurisdiction: Canada (Federal)
• Citations: 2004 FCA 248;(2004), 324 N.R. 384 (FCA)

Choken v. Lake St. Martin Indian Band (2004), 324 N.R. 384 (FCA)

MLB headnote and full text

Temp. Cite: [2004] N.R. TBEd. JL.002

Department of Indian Affairs and Northern Development (appellant/intervener) v. Shirley Choken, Myles Sinclair, Wilfred Marsden and Jerry Marsden (respondents/applicants) and Lake St. Martin Indian Band (respondent) and Peace Hills Trust Company and Canadian Imperial Bank of Commerce, and Andrew Alkier (garnishees)

(A-524-03; A-540-03; 2004 FCA 248)

Indexed As: Choken et al. v. Lake St. Martin Indian Band

Federal Court of Appeal

Décary, Létourneau and Pelletier, JJ.A.

June 28, 2004.

Summary:

The applicants were awarded compensation for being wrongfully dismissed by an Indian Band in 1998. The unpaid compensation was made a judgment of the court. The appli­cants applied for an attachment order, attach­ing, inter alia, funds from the Department of Indian Affairs and Northern Development deposited in a bank account in the name of a Third Party Manager who had been appointed for the Band.

A Prothonotary of the Federal Court granted the requested relief. Rule 449(1) of the Federal Rules of Court, 1998, required a garnishee to show cause why the funds should not be paid out to the judgment creditor.

The Federal Court, in a decision reported at 241 F.T.R. 269, affirmed that the funds were subject to attachment. The court awarded the applicants costs despite an alleged agreement between counsel during the hearing that there would be no costs. The Department appealed. There was also a cross-appeal on the costs order.

The Federal Court of Appeal allowed the appeal, holding that the funds held by the Manager was not attachable by the applicants and not subject to garnishment. The court allowed the cross-appeal.

Creditors and Debtors - Topic 4266

Garnishment by creditor - Debt due or accruing due - What constitutes - The De­partment of Indian Affairs and Northern Development appointed a Third Party Man­ager for an Indian Band - Under a Comprehensive Funding Arrangement, the Department provided funding for the deliv­ery of programs and services - The funds were deposited in a bank account in the Manager's name - The trial judge held that the funds were "debts owing and accruing" to the Band and were subject to attachment by judgment creditors under Federal Court Rule 449(1) - The Federal Court of Appeal allowed the Department's appeal - Under the Third Party Management Agreement, the funds advanced to the Manager re­­mained public funds - Therefore, they were immune from garnishment - Further, it could not be said that the funds were debts owing to the Band under rule 449 - The Band had no unconditional right to the funds - The fact that the funds were in­tended to be spent on members of the band did not make them a debt - Finally, the idea that a creditor could garnish the Man­ager's account was incompatible with one of the Manager's main functions, i.e., to prepare a debt reduction plan - See para­graphs 1 to 31.

Creditors and Debtors - Topic 4343

Garnishment by creditor - Property liable to garnishment - Debt owed to judgment debtor - [See Creditors and Debtors - Topic 4266 ].

Creditors and Debtors - Topic 4416

Garnishment by creditor - Exemptions - Crown funds - [See Creditors and Debtors - Topic 4266 ].

Cases Noticed:

Royal Bank of Canada et al. v. Central Capital Corp. (1996), 88 O.A.C. 161; 27 O.R.(3d) 494 (C.A.), refd to. [para. 20].

Ross v. HVLD Systems (1997) Ltd. (1999), 172 Sask.R. 261; 185 W.A.C. 261; 170 D.L.R.(4th) 600 (C.A.), refd to. [para. 20].

Bank of Montreal v. Krisp (I.M.) Foods Ltd. et al. (1996), 148 Sask.R. 135; 134 W.A.C. 135; 140 D.L.R.(4th) 33 (C.A.), refd to. [para. 20].

Siegner v. Pettipas (2000), 191 Nfld. & P.E.I.R. 170; 577 A.P.R. 170 (P.E.I.T.D.), refd to. [para. 20].

Mitchell and Milton Management Ltd. v. Peguis Indian Band et al., [1990] 2 S.C.R. 85; 110 N.R. 241; 67 Man.R.(2d) 81, refd to. [para. 23].

Air Canada v. M & L Travel Ltd., Martin and Vaillant, [1993] 3 S.C.R. 787; 159 N.R. 1; 67 O.A.C. 1, refd to. [para. 27].

Authors and Works Noticed:

Hogg, Peter W., and Monahan, Patrick J., Liability of the Crown (3rd Ed. 2000), p. 56 [para. 23].

Sgayias, David et al., The 1995 Annotated Crown Liability and Proceedings Act (1994), p. 119 [para. 23].

Counsel:

Darrin Davis and Marlaine Anderson-Lindsay, for the appellant, Department of Indian Affairs and Northern Develop­ment;

Harvey I. Pollock, Q.C., and Wayne P. Forbes, for the respondents, Shirley Choken, Myles Sinclair, Wilfred Mars­den and Jerry Marsden;

No one appearing for the respondent, Lake St. Martin Indian Band;

No one appearing for the garnishee, Peace Hills Trust Co.;

David Jackson, for the garnishee, CIBC;

Harley I. Schachter, for the garnishee, Alkier.

Solicitors of Record:

Morris Rosenberg, Deputy Attorney Gen­er­al of Canada, Ottawa, Ontario, for the appellant, Department of Indian Affairs and Northern Development;

Pollock & Company, Winnipeg, Manitoba, for the respondents, Shirley Choken, Myles Sinclair, Wilfred Marsden and Jerry Marsden;

Taylor McCaffrey, Winnipeg, Manitoba, for the garnishee, CIBC;

Duboff Edwards Haight & Schachter, Winnipeg, Manitoba, for the garnishee, Alkier.

This appeal and cross-appeal were heard at Winnipeg, Manitoba, on June 1, 2004, by Dé­cary, Létourneau and Pelletier, JJ.A., of the Federal Court of Appeal. Décary, J.A., delivered the following decision for the court on June 28, 2004.