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13/03/1997
Indian Claims Commission Report Finds Government Breached Obligations to Chippewas of Kettle and Stony Point: Recommends Claim Be Accepted for Negotiation
Toronto (March 13, 1997) - The Indian Claims Commission was in Toronto today to release its report on the 1927 Land Surrender by the Chippewas of Kettle and Stony Point. The claim involves the surrender of 81 acres of lake front property from the First Nation to the Crown, a deal which has been marked by controversy since it first took place.
The Chippewas of Kettle and Stony Point maintain that the surrender was invalid, that it had been obtained by bribery and fraud and that the Crown breached its fiduciary (protective) obligations to the First Nation throughout the surrender process. Canada, in turn, maintains that the surrender was carried out properly and met all the necessary criteria for a valid surrender. In two recent court cases, the Ontario Court (General Division) and the Ontario Court of Appeal both upheld the validity of the surrender, but both left open the question of whether Canada owed damages to the First Nation for the way in which the surrender was obtained and dealt with.
"The courts only ruled on the validity of the surrender. The other element is the government's fiduciary duty to ensure deals of this sort do not exploit the First Nation," said ICC Commissioner Roger Augustine. "When we looked closely at the chronology of events, we found that the speculators who purchased the surrendered land at $85.00 an acre pre-sold over half of the land at $300.00 an acre. The First Nation got $7,706.20 for 81 acres. The land speculators got $13,200.00 for 44 acres and still had 37 acres to sell. That's exploitation."
The Chippewas of Kettle and Stony Point First Nation is located on the Kettle Point Indian Reserve, in southwestern Ontario (60 kilometres northwest of London) on Lake Huron. The Stony Point Reserve no longer exists - in 1942 the government expropriated the entire reserve under the War Measures Act, and it became Camp Ipperwash.
At the time of the surrender, the land in question was described by the Indian Agent as nothing but "white drifting sand, being worthless, for agricultural purposes". Yet the government was aware as early as 1900 that the waterfront land had great potential as recreational property. Efforts to get the First Nation to surrender the land for development were made on a number of occasions, to no avail.
The actual surrender took place on 30 March 1927 when 27 of a possible 44 eligible Band members voted to surrender 81 acres at a price of $85 per acre. A.M. Crawford, a developer, had arranged through his local Member of Parliament, W.J. Goodison, to purchase the land from the Department of Indian Affairs at that price once the surrender was approved. Crawford attended the surrender meeting and paid Band members $5.00 to vote and told them they would get another $10.00 if the vote was in his favour. The courts have characterized these payments as a "bonus", not as "bribes" as was argued by the First Nation.
Crawford had trouble coming up with the money to close the deal. The Band filed a number of protests, as they had expected payment to follow shortly after the surrender vote. In a bizarre set of transactions characterized primarily by political intermeddling, the Department of Indian Affairs cancelled the deal on two separate occasions. Three days after the second cancelation (May 1929), Member of Parliament Ross Gray (who replaced Goodison) made an offer to purchase the property on behalf of Mr. White, a salesman and real estate agent, for $118 per acre. The Band was never informed of this higher offer. Had the deal gone through, a new surrender would have to be obtained from the Band. Instead, Gray was able to broker a deal between Crawford and White in which White withdrew his offer and the two became joint purchasers at the original price of $85 per acre.
The facts show that the Department was in receipt of White's higher offer at a point when it could have cancelled the sale, and in fact had done so at least twice. The Crown's fiduciary role dictates that, at this point, the Department's agent should have returned to the Band to explain what had occurred and to seek the Band's advice on how to proceed. Instead, Crown officials bowed to political pressure and put the interests of the Band behind third-party economic interests. This is a clear breach of the Crown's post-surrender fiduciary obligation to the Band.
The fact that the land was worth much more than the band received also relates to the government's breach of its pre-surrender fiduciary duty. Canada argued in the inquiry that the sale price of the land was reasonable, and therefore the sale "was not and could not have been foolish, improvident or exploitative." But in studying the history of the sale, it turns out that the purchasers turned around and sold just over half the land for $300 an acre.
The precise details of this "flip" are worth noting. The deeds for the flipped land were dated October 13, 1928, which means that the lots were sold ten months before Crawford and White closed the deal and obtained title. They knew before they closed the deal that they could sell it for three times more than the amount paid. The Crown had a fiduciary obligation to prevent such foolish and improvident bargains and breached its pre-surrender fiduciary duty by consenting to this exploitative transaction.
Commission Co-Chair Dan Bellegarde noted, "The report clearly shows this deal is tainted by exploitation and political interference. These events are the source of much anger, strife and grief today. We can see how these issues from the past resonate to the present day. This claim could have been settled by now if it had been accepted by Canada for negotiation. Instead, it has ended up costing the government, the First Nation and the residents currently living on the surrendered land a great deal in terms of litigation, time and resources." Bellegarde added, "On a positive note, we feel our report, if accepted, offers a basis to resolve disputes among all the parties. The First Nation will get fair compensation and recognition of this historical wrong, the non-aboriginal people now living in the area will be ensured right of residency, and the government will obtain a settlement. We hope the parties can renew discussions on those principles."
The ICC was established in 1991. Its mandate is: to inquire, at the request of a First Nation, into specific claims that have been rejected by the federal government or where the First Nation disputes the compensation criteria being considered in negotiations; and to provide mediation services on consent of the parties at any stage of the claims process.
