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Judge ‘troubled’ by fraud case involving First Nations housing

|Written By Glenn Kauth

For those baffled by the continuing confusion over alleged financial problems and the housing crisis at the Attawapiskat First Nation, a new ruling from the Ontario Superior Court in relation to a neighbouring James Bay-area reserve offers a fascinating look at some of the things that can go wrong.

A contract dispute over mould remidiation on Fort Albany homes has many troubling aspects for the judge. (Photo: The Tragically Hip/flickr)

In Mould Clean v. Fort Albany last week, Superior Court Justice Robbie Gordon ruled on a contract dispute between the Fort Albany First Nation and Mould Clean Laboratories Ltd. It centred in part on whether the company did, in fact, remediate a mould problem at 12 homes on the reserve.

The case dealt with a $1.2 million claim for work on the 12 homes and an earlier judgment for $1.6 million that included 24-per-cent interest per year. The James Bay winter road connects both Fort Albany and Attawapiskat, a community whose chief is currently on a high-profile hunger strike and that has been dealing with a housing crisis of its own in recent years.

According to the ruling, Mould Clean obtained judgment against Fort Albany on Aug. 4, 2010, for the $1.6 million. The company, however, received only $405,000 but took no steps to enforce the balance until August 2012, without notifying the band in advance of its intention to do so. By that time, the former chief who had consented to the judgment, Andrew Solomon, was no longer in office.

The work itself stemmed from a mould problem at 26 houses on the reserve. A 2008 report by B.H. Martin Consultants Ltd., titled “Fort Albany First Nation 26 Unit Mould Impacted Houses January 29, 2008,” only identified 14 units for remediation and made no reference to the remaining 12 houses. According to the ruling, Mould Clean and Solomon entered into a contract later that year identifying the work in two parts: remediation on the 14 homes identified in the report at $1.4 million and further work on the 12 remaining units at a cost of $1.2 million. In the meantime, the band received a bank loan of $853,000 and funding of $568,000 from the federal government. The total roughly coincides with the cost of the work on the 14 homes. The federal Department of Indian Affairs and Northern Development never provided the funding sought for the remaining homes.

In fighting the company’s bid to enforce the judgment, the band argued Mould Clean never did the work on the 12 remaining units.

Just as there have been few solid answers on what happened to $90 million in funding provided to Attawapiskat as the band complained about its housing crisis, the court in Mould Clean found little proof either way on whether Mould Clean actually did the work on the 12 homes.

“The defendant’s evidence that the work was not done is far from persuasive and really amounts to bare allegation,” wrote Gordon in his Jan. 3 ruling.

“I would have thought that there might be tendered an affidavit from someone who had inspected the 12 units and could say there had been no mould remediation work done on them. No such affidavit was tendered. I would have thought that those persons in occupation of the 12 units might have provided an affidavit indicating the plaintiff had never worked on their homes and no mould remediation work was done. No such affidavit was provided. Instead the court was offered the evidence of current Chief Rex Knapasweet, current executive director Brian Nakogee, and executive director when the work was undertaken, Lucie Edwards.

“It turns out Chief Knapasweet was not living in the community when the work was being completed and therefore has no firsthand knowledge of what work was or was not done. Brian Nakogee admitted to having no personal knowledge of what work was or was not done. Lucie Edwards’ evidence on the issue of whether the work was done on the 12 units was: ‘I’m not sure,’ ‘I don’t know,’ and ‘I can’t remember.’”

While Gordon found the plaintiff offered no proof of the work other than its word, the onus, he wrote, was on the band to prove otherwise.

“There is basically no evidence before me to establish the work was not completed,” Gordon wrote.

As a result, Gordon found the defendant had failed to establish fraud and dismissed the band’s motion to stay enforcement of the judgment and set it aside and for leave to file a statement of defence.

While he ruled in Mould Clean’s favour, Gordon finished off his ruling with a few parting shots at the circumstances of the case: “That I have dismissed the defendant’s motion should not be taken as an indication that I am not troubled by the manner in which the plaintiff’s case has proceeded. That the judgment allows for interest at the rate of 24 per cent per year is troubling. That the plaintiff sat on the judgment for almost two years, amassing almost half a million dollars in interest is troubling. That the plaintiff would initiate its collection proceedings in the manner it did without some final demand for payment being made, I find troubling. However, none of this amounts to the proof of fraud necessary to set aside judgment.”

  • RE: Judge ‘troubled’ by fraud case involving First Nations housing

    Mary Jane
    yes all in the name of good faith the contractors were fraudulent and are in their one asked the community members to be the witnesses to testify in court regarding the unfinished business of mould in the 14 units as mentioned..i know i was one of the owners of the house(s) in question. Today i am homeless and discriminated against all this unfinished business..
  • RE: Judge ‘troubled’ by fraud case involving First Nations housing

    The band should sue the legal Counsel for not representing their interests adequately in court.

    Yes this frequently happens ALL over Canada. Mostly Engineers and Accounts and Lawyers!!

    Report that lawyer to the Legal Society. They have rules too! Put that contractor on a list of shady ppl to work with.




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