Lawyer for Kahnawake weighs in on Sylvestre

The Mohawk Council of Kanesatake (MCK) did not go it alone at the Supreme Court of Canada, which heard Council’s appeal last month against Sylvestre et al. The MCK had a sole intervenor, the Mohawk Council of Kahnawake, whose lawyer Éric Doucet addressed the court in support of Kanesatake’s position.

One reason for Kahnawake’s intervention, according to Doucet, was a concern that the case could have consequences that could harm other First Nations communities.

“I think the importance comes down to how non-Native creditors can seize or attempt to interrupt prescription,” said Doucet, referring to the legal term for renewing a debt collection window, in this case 10 years, by attempting to collect. “I think that’s what it comes down to.”

The case pertains to a debt stemming from services rendered from 2001-2003 by a group including Louis-Victor Sylvestre, a lawyer, against an Oka mining project. But the fight coincided with financial difficulties for Kanesatake, which was put into third-party management from 2003 until 2006.

In 2004, the MCK was ordered to pay $700,000 plus interest to Sylvestre’s group, but the third-party manager’s settlement offer of 24 percent of that amount was refused by the creditors, who continued to attempt to collect the full amount.

However, a key extension of the 10-year collection window depends on whether efforts to seize band property in 2016 would be considered valid. Section 89 of the Indian Act protects property on First Nations reserves against seizure by non-Indigenous creditors.

This was the basis of refusal by the Caisse populaire Kahnawake, the Canada Revenue Agency, and Revenu Quebec to accept Sylvestre’s group’s attempts to seize Kanesatake property.

“Can they attempt to interrupt prescription by attempting to seize something that is unseizable? We made the argument that on the basis of reconciliation, that this is not in alignment with Canada’s principles of reconciliation,” said Doucet.

Yet in 2022, the Superior Court of Quebec ruled in favour of Sylvestre et al., deeming the attempt to collect valid. This ruling was supported by the Court of Appeal in December 2023 when it sided with Sylvestre et al. The Supreme Court opting to hear the MCK’s appeal has given the Kanesatake Council one last chance to make its case to the highest court in Canada.

It would be harmful to allow prescription to be interrupted when attempts are made to seize unseizable property, Doucet said. This is because creditors could use this mechanism to jack up debts until they become astronomical by allowing interest to accumulate indefinitely. “Where it becomes particularly problematic for a First Nation is it’s not like they’re a corporation or an individual where they can just declare bankruptcy and say we’re going to wipe the slate clean and restart our finances from zero,” he said.

In the Sylvestre case, interest on the debt so far has brought it up to nearly $2 million, according to MCK chief Serge Otsi Simon in an interview last month.

Because of the language of the Indian Act protection, which refers to reserves, Kanesatake’s status has also been at issue in the case, both in terms of Kanesatake’s insulation from creditors and the applicability of the ruling to other First Nations.

“Anybody who knows anything about Kanesatake knows they’re not actually a reserve,” said Doucet. “They’re happy and proud of not being a reserve. The Court of Appeal specifically extended the application of its decision to all reserves even though the facts of the case were very specific that Kanesatake has these designated lands under a special, private act. That’s another major concern that we had.”

Doucet argued that Canada is obligated to take an expansive view of protections of First Nations, rather than hewing to narrow definitions to the detriment of Indigenous communities.

“You shouldn’t be necessarily applying the very technical interpretation of those statutes. You have to be liberally interpreting it in favour of First Nations, so that it’s in keeping with the fact that everybody kind of understands that property on reserve under Section 89 isn’t seizable,” said Doucet, noting Supreme Court precedent and Canada’s commitments under the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

“You shouldn’t be able to do an end run around that fiduciary obligation.”

A decision on the appeal is expected to take months.

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Marcus Bankuti, Local Journalism Initiative Reporter