A civil suit launched earlier this week by the Penticton Indian Band claims former councillors are breaching trust by not transferring their shares in the band's development corporation, potentially impacting the band's initial development of a Nissan dealership on locatee lands.

(STEVE ARSTAD / iNFOnews.ca)

PENTICTON - The Penticton Indian Band has launched a lawsuit against former councillors in a claim of breach of trust, claiming six former councillors’ failure to follow protocol for shares held in trust has made it impossible for the band to conduct its business.

The councillors named in the action, filed in Kelowna Supreme Court on Sept. 21, include: Clint Gabriel, Kevin Gabriel, Dolly Kruger, Jonathan Kruger, Travis Kruger and Joseph Pierre.

Shares in the Penticton Indian Band Development Corporation are traditionally held in trust by councillors.

The corporation, formed to foster development of the band’s economy, consists of six subsidiary companies including Westhills Aggregates, Coyote Cruises, Snpinktn Forestry GP, Pentiticton Indian Band Utilities Corporation, and PIB Holdings Ltd.

The band’s common practice is for the nine council members to hold two common shares as bare trustees. On each election, a band council resolution is passed, directing the outgoing nine council members to each transfer their two shares to the newly elected council.

The action alleges prior to the Penticton band’s election in October, 2016, councillors Timmothy Lezard, Inez Pierre, Clinton John George and the six defendants made up council.

Following the election, Inez Pierre was not returned to office, nor were four of the defendants: Clint Gabriel, Kevin Gabriel, Travis James Kruger and Dolly Kruger.

Jonathan Kruger and Joseph Pierre the other two defendants, were elected, but have since resigned.

A resolution passed by the newly elected council in June directed the nine trustees transfer their shares to Chief Chad Eneas, rather than have all nine councillors holding two shares each, as was historically done.

The resolution was intended to provide council with proper time to consult with band membership to determine whether a new shareholder arrangement could be implemented, according to the suit, in order to better protect the band members’ collective interest in the development corporation.

An appropriate “instrument of transfer” was prepared for the defendants as well as Timmothy Lezzard, Inez Pierre and Clinton John George to allow transfer of the councillor’s share to Chief Eneas.

To date, only Timmothy Lezard, Inez Pierre and Clinton John George have done so.

The band claims it is suffering loss and damages as a result of the inability of current council to properly make decisions to operate the band and its development corporation, noting there is no current director of the development corporation or other band companies.

Without a director, the band cannot appoint new signing authorities for its companies, and without signing authority, cannot operate them.

“As a result, the ability of the PIBDC and PIB companies to operate has been placed at a standstill,” the claim states.

The band also claims work to improve the intersection at Highway 97 and Skaha Hills Road has been stalled as a result of the councillors' failure to transfer their shares.

Further the band is “at risk” of breaching an agreement to lease lands for the Nissan car dealership currently under construction on locatee lands, because another band company, Westhills Aggregates, cannot complete a water connection to the property.

The band is seeking damages for breach of trust, general and special damages and costs in the judgement.

A hearing is scheduled for Sept. 25 in Kelowna Supreme Court.

Former councillor and co-defendant Dolly Kruger has been spearheading a non-confidence motion against present council and Chief Chad Eneas, voicing concerns about a  lack of leadership and communication.

The allegations have not been proven in court. A statement of defence has not yet been filed. 

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