A farm.

Bogue v Miracle, 2022 ONCA 672

Case Reporter

Written by Ty Schmidt

Can a court, in light of section 89 of the Indian Act,[1] place an on-reserve business into receivership? No, confirmed the Ontario Court of Appeal in the recent decision of Bogue v Miracle.[2] Under s. 89, all assets on reserve lands are protected from seizure by non-Indigenous persons, regardless of whether they are part of a commercial enterprise or not.[3]

The decision by the lower court in this matter had appointed Mr. Bogue (a non-Indigenous person) to be a receiver over all of the assets of Mr. Miracle (an Indigenous person). On appeal, Mr. Miracle asserted that the order contravenes s. 89 of the Indian Act, which prohibits the enforcement by any non-Indigenous persons against the assets of an Indigenous person situated on a reserve.[4] Subsequently, in an order under appeal, the application judge held that receivership constituted an exception to s. 89, since selling these on-reserve businesses was “in the commercial mainstream and amounted to normal business transactions”.[5] This decision was also appealed, leading to the case at hand.

This first issue to be determined was whether the actions of the receiver are covered by s. 89. The Court determined that the appointment of a receiver to take control over on-reserve businesses in order to recoup proceeds for a creditor “is closely akin to an order for the seizure or restraint of the debtor’s property”.[6] Thus, this conduct “is captured by the prohibition against “seizure, distress or execution” in s. 89.”[7]

Second, the Court had to determine if there exists a “commercial mainstream” exception to s. 89, as had been alleged by the court below. This discussion involved an analysis of a number of cases, particularly the Supreme Court of Canada’s decisions in Mitchell v Peguis Indian Band[8]and McDiarmid Lumber Ltd v God’s Lake First Nation.[9] In doing so, the Court concluded that only s. 90(1) has a “commercial mainstream” exception, and that nothing in the language of s. 89 offers any support for such an exception.[10]

Significantly, the Court here acknowledged that its interpretation of the statute potentially “fetters the economic independence of Indigenous peoples on reserves.”[11] Academic commentary has expressed concern that “the restricted ability of creditors to compel payment of legal obligations makes them hesitant to advance credit to Indigenous peoples.”[12] The Court concludes that it has merely been tasked with determining the correct interpretation of s. 89 as it is currently written, and that whether s. 89 should exclude such assets is a policy question best left to Parliament to address through the legislative process.[13]

[1] Indian Act, RSC, 1985, c I-5, s 89; Section 89 states as follows:

(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] 2022 ONCA 672.

[3] Ibid at paras 37 and 43.

[4] Ibid at para 12.

[5] Ibid at paras 15 and 17.

[6] Ibid at para 30.

[7] Ibid at para 32.

[8] [1990] 2 SCR 85.

[9] 2006 SCC 58.

[10] Supra note 2 at paras 40 and 42.

[11] Ibid at para 44.

[12] Ibid at para 44.

[13] Ibid at para 45.

The views and opinions expressed in the blogs and case reporter are the views of their authors, and do not represent the views of the Desautels Centre for Private Enterprise and the Law, the Faculty of Law, or the University of Manitoba. Academic Members of the University of Manitoba are entitled to academic freedom in the context of a respectful working and learning environment.