Date: 20100908
Docket: T-2072-09
Citation: 2010
FC 881
Ottawa, Ontario, September 8, 2010
PRESENT: The Honourable Mr. Justice O'Keefe
IN THE MATTER of the Canada Labour Code,
R.S.C. 1985, c. 1-2 as amended, Part III
(Labour Standards)
BETWEEN:
RUSSELL
REITER
Complainant
and
MASKWACIS
HEALTH SERVICES
Respondent
REASONS FOR ORDER AND ORDER
[1]
This is a
motion by Samson First Nation, Montana First Nation, Ermineskin First Nation
and Louis Bull First Nation, operating as Maskwacis Health Services (MHS) for
an order:
1. Setting aside the ex-parte
garnishee order granted by a prothonotary issued January 22, 2010, attaching
all present and future debts owing by Peace Hills Trust Company (Peace Hills) to
MHS to satisfy a judgment recovered by Russell Reiter against MHS in the
proceedings;
2. Declaring all present and future
debts owing by Peace Hills Trust to MHS exempt from garnishment;
3. Directing any and all monies paid
into Court pursuant to the garnishee order including accrued interest be
returned to the judgment debtor, MHS; and
4. For costs to Samson First Nation,
Montana First Nation, Ermineskin First Nation and Louis Bull First Nation
operating as MHS.
[2]
Ms. Molgat
attended the motion via teleconference.
[3]
MHS provides
health services for the four bands mentioned in paragraph 1. The four Bands
make up the Hobbema and Pigeon Lake Reserves.
[4]
The
evidence shows that MHS is not an incorporated entity or society. Based on a four
Band council resolution made in 1982, the four Bands resolved to make health
services available to their members jointly through MHS.
[5]
The health
funding for the four Bands comes from Her Majesty the Queen in Right of Canada (Health Canada) pursuant to a
health funding contribution agreement executed by the four Bands and Health Canada. The terms of the funding
agreement provide for the funds to be paid directly to MHS which uses the funds
to provide health programs and services to the members of the four Bands.
[6]
MHS
maintains a number of accounts with Peace Hills and all of these accounts are
located at the Peace Hills Hobbema branch which is located on a reserve. All of
the funds paid into these accounts pursuant to the funding agreement, are
allocated for the provision of health programs and services to the members of
the four Bands.
[7]
There is
no dispute that the funds in question were located on a reserve.
Issue
[8]
Are the
funds paid monthly by Health Canada into MHS’ accounts with Peace Hills funds
which are exempt from seizure, for being situated on a reserve under section 89
of the Indian Act, R.S., c. I-6, (the Act) or being deemed to be
situated on a reserve under paragraph 90(1)(b) of the Act?
Analysis and Decision
[9]
Section 89
of the Act provides:
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89.(1) Subject to this Act, the real and
personal property of an Indian or a band situated on a 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 an Indian or a band.
(1.1)
Notwithstanding subsection (1), a leasehold interest in designated lands is
subject to charge, pledge, mortgage, attachment, levy, seizure, distress and
execution.
(2) A person
who sells to a band or a member of a band a chattel under an agreement
whereby the right of property or right of possession thereto remains wholly
or in part in the seller may exercise his rights under the agreement
notwithstanding that the chattel is situated on a reserve.
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89.(1)
Sous réserve des autres dispositions de la présente loi, les biens d’un
Indien ou d’une bande situés sur une réserve ne peuvent pas faire l’objet
d’un privilège, d’un nantissement, d’une hypothèque, d’une opposition, d’une
réquisition, d’une saisie ou d’une exécution en faveur ou à la demande d’une
personne autre qu’un Indien ou une bande.
(1.1)
Par dérogation au paragraphe (1), les droits découlant d’un bail sur une
terre désignée peuvent faire l’objet d’un privilège, d’un nantissement, d’une
hypothèque, d’une opposition, d’une réquisition, d’une saisie ou d’une
exécution.
(2)
Une personne, qui vend à une bande ou à un membre d’une bande un bien meuble
en vertu d’une entente selon laquelle le droit de propriété ou le droit de
possession demeure acquis en tout ou en partie au vendeur, peut exercer ses
droits aux termes de l’entente, même si le bien meuble est situé sur une
réserve.
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[10]
The respondent
(applicant) submits that the accounts are not subject to garnishment because of
section 89 and paragraph 90(1)(b) of the Act, since MHS is not a separate legal
entity from the four Bands it represents.
[11]
The
complainant (respondent), Russell Reiter, submitted that his employer was in
fact MHS which is controlled by a board of directors and not any of the four
Bands. He also submitted that neither MHS nor its board of directors was a band
or an Indian within the meaning of the Act. As a result, the money on deposit
for MHS is not exempt from garnishment by operation of sections 89 or 90 of the
Act.
[12]
The
complainant (respondent) also argued that since the adjudicator found that Mr.
Reiter was employed by MHS, that concludes the matter and the four Bands cannot
claim that they were his employer nor that Peace Hills owed the funds in
question to them. The complainant (respondent) also submitted that issue
estoppel applies due to the finding of the adjudicator.
[13]
The
garnishment of the account is governed by Rule 449 of the Federal Courts
Rules, SOR/2004-283, s. 2, which states:
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449.(1) Subject to rules 452 and 456, on
the ex parte motion of a judgment creditor, the Court may order
(a) that
(i) a debt
owing or accruing from a person in Canada to a judgment debtor, or
(ii) a debt
owing or accruing from a person outside Canada to a judgment debtor, where the debt
is one for which the person might be sued in Canada
by the judgment debtor,
be attached to
answer the judgment debt; and
(b) that the
person attend, at a specified time and place, to show cause why the person
should not pay to the judgment creditor the debt or any lesser amount
sufficient to satisfy the judgment.
(2) An order
to show cause made under subsection (1) shall be served, at least seven days
before the time appointed for showing cause,
(a) on the
garnishee personally; and
(b) unless the
Court directs otherwise, on the judgment debtor.
(3) Subject to
rule 452, an order under subsection (1) binds the debts attached as of the
time of service of the order.
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449.(1)
Sous réserve des règles 452 et 456, la Cour peut, sur requête ex parte du
créancier judiciaire, ordonner :
a) que toutes
les créances suivantes du débiteur judiciaire dont un tiers lui est redevable
soient saisies-arrêtées pour le paiement de la dette constatée par le
jugement :
(i) les
créances échues ou à échoir dont est redevable un tiers se trouvant au Canada,
(ii) les
créances échues ou à échoir dont est redevable un tiers ne se trouvant pas au
Canada et à l’égard desquelles le débiteur judiciaire pourrait intenter une
poursuite au Canada;
b)
que le tiers se présente, aux date, heure et lieu précisés, pour faire valoir
les raisons pour lesquelles il ne devrait pas payer au créancier judiciaire
la dette dont il est redevable au débiteur judiciaire ou la partie de
celle-ci requise pour l’exécution du jugement.
(2)
L’ordonnance rendue en vertu du paragraphe (1) est signifiée, au moins sept
jours avant la date fixée pour la comparution du tiers saisi :
a) au tiers
saisi, par signification à personne;
b)
au débiteur judiciaire, sauf directives contraires de la Cour.
(3)
Sous réserve de la règle 452, l’ordonnance rendue en vertu du paragraphe (1)
grève les créances saisies-arrêtées à compter du moment de sa signification.
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[14]
If the
funds are determined to be funds owing to the Bands, thus being the personal
property of the Bands, they are exempt from seizure as a result of the
operation of subsection 89(1) of the Act. If the funds are found to be the property
of MHS, then the garnishment order could stand.
[15]
I have
reviewed the evidence and considered the arguments presented to me and I have
come to the conclusion that the funds in the account belong to the Bands and
cannot be garnished.
[16]
MHS has
been put in place by the four Bands to administer the funds paid by Health Canada under the funding agreement
to provide health services and programs to the four Bands. The four Bands signed
the funding agreement and MHS is referred to as “First Nation” on the title
page of the funding agreement.
[17]
There is
no evidence before me that MHS is a corporation or a partnership. From the
evidence, it may be an unincorporated association.
[18]
There is
no evidence before me that anyone but the four Bands are entitled to use the
funds for purposes other than the provision of health services to the members
of the four Bands.
[19]
The
evidence supports the position that the funds were provided to the four Bands
who utilized MHS to receive the funds and plan and deliver the health services
on their behalf.
[20]
The
present case differs from Choken v. Lake St. Martin Indian Band, 2004
FCA 248 where funds were placed with a third party manager by the Department.
As well in Kostyshyn (Johnson) v. West Region Tribal Council Inc.,
[1994] 1 C.N,L.R. 94, the holder of the funds was found to be a corporation and
not an Indian or a band within the meaning of the Act.
[21]
Based on
this evidence, I must conclude that the funds in the account at Peace Hills are
ultimately the funds of the four Bands.
[22]
Consequently,
the funds are exempt from seizure as a result of the operation of subsection
89(1) of the Act. As they are the personal property of the four Bands, the
garnishment order issued by the prothonotary must be set aside.
[23]
Because of
my finding, the respondent’s (applicant’s) motion must be allowed in part and
the garnishment order is set aside with costs to the respondent (applicant) of
this motion.
ORDER
[24]
IT IS
ORDERED that:
1. The ex-parte garnishee order
granted by a prothonotary issued January 22, 2010, attaching to all present and
future debts owing by Peace Hills Trust Company to MHS to satisfy a judgment
recovered by Russell Reiter against MHS in the proceedings is set aside.
2. It is declared that all present and
future debts owing by Peace Hills Trust Company to MHS are exempt from
garnishment.
3. It is directed that any and all
monies paid into Court pursuant to the garnishee order including accrued
interest be returned to the judgment debtor, MHS.
4. Costs be awarded to Samson First
Nation, Montana First Nation, Ermineskin First Nation and Louis Bull First
Nation operating as MHS.
“John
A. O’Keefe”
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