On October 28, 2022, the BC Supreme Court found that the long-time councillors of Peters First Nation were in breach of their fiduciary duty for, among other things, employing themselves as band employees and setting their own remuneration, paying themselves to attend meetings, paying themselves lump sum amounts for travel and telephone expenses, and determining their own entitlement to certain funding.
This decision is different in scope and focus from previous fiduciary duty cases in the Band governance context, which usually focuses on one or two specific transactions. In this case, the plaintiffs took issue with broad systemic failures in how the councillors remunerated or paid themselves over many years, including failures to adhere to the Band’s own bylaws in regards to conflicts of interest.
The Court not only made declarations that the defendants breached their fiduciary duties to the Band, it also ordered the disgorgement of funds that the defendants paid themselves for meetings, honouraria and expenses from funding provided by Kinder Morgan for having the Trans Mountain pipeline run through the reserve. Lastly the Court ordered punitive damages against the defendants.
This case will be of interest to other Bands beyond Peters First Nation. The case highlights the importance of creating express guidelines in regards to how councillors are remunerated or reimbursed, and strictly adhering to such guidelines.
David Wu and Caroline North of Arvay Finlay represented the plaintiffs in this action. The decision can be found here: Genaille v Peters First Nation, 2022 BCSC 1890