Completed Inquiries – Reports Released
01/03/1997
Chippewas of Kettle and Stony Point [1927 Surrender] - March 1997
March 1997 This inquiry dealt with the surrender and sale of 81 acres from the Kettle Point Indian Reserve in southwestern Ontario. The Chippewas of Kettle and Stony Point claimed that the surrender was invalid, and that the Crown was negligent and in breach of its fiduciary obligations towards the First Nation throughout the surrender process. The surrender meeting, held in March 1927, was attended by A.M. Crawford who wished to purchase the land at a price of $85 per acre. He paid members of the First Nation a "bonus" of $5 to vote and told them they would get another $10 later. After the surrender was obtained, Crawford had difficulty raising the funds to purchase the land. The First Nation filed a number of protests, as it had expected payment to follow shortly after the surrender vote. The Department of Indian Affairs appeared to cancel the deal on two separate occasions. After the second cancellation, an offer to purchase the property was made on behalf of John A. White, a salesman, for $118 per acre. The First Nation was never informed of this higher offer. Instead, a deal was brokered between Crawford and White in which White withdrew his offer and the two became joint purchasers at the original price of $85 per acre. They then sold just over half the land for $300 per acre. In its final report, released in March 1997, the Indian Claims Commission (ICC) felt obliged to take into account that the 1927 surrender was also the subject of a court case. Since the Ontario Court (General Division) and the Ontario Court of Appeal both upheld the validity of the surrender, the Commission concluded that the surrender was valid and unconditional. However, the Commission noted that the courts did not rule on the issue of breach of fiduciary duty. The Commission found that the Crown had both pre-surrender and post-surrender fiduciary duties towards the First Nation and that it breached those duties. Crawford's "flip" of the land for $300 per acre after purchasing it for $85 per acre demonstrates that the surrender was an exploitative transaction. The Crown had an obligation to inquire into the market potential of the land and to satisfy itself that it made good sense for the First Nation to sell the land to Crawford for $85 per acre. It failed to do so, and by consenting to an exploitative transaction it breached its pre-surrender fiduciary duty. The Crown also breached its post-surrender duty to the First Nation by failing to disclose White's higher offer and by failing to seek the First Nation's direction on how to proceed. Finally, the Crown breached its fiduciary duty by ignoring an implied term of the surrender that the transaction close in a timely manner and by allowing the transaction to close two years after the surrender. Response: No response from government. In 1998, the Supreme Court of Canada rendered its decision in the First Nation's appeal of the Ontario Court of Appeal's finding that the surrender was valid. The Supreme Court of Canada upheld the reasons of the lower court to find the surrender valid. Click Here for the Report
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