The BC Court of Appeal has ordered the present and past chief and three councillors from the 2009 Lower Kootenay Band council to repay $5,000 each for bonuses they awarded themselves in 2009.
The $25,000 total was part of a $125,000 compensation received from the Regional District of Central Kootenay to provide access through LKB land from Highway 21 to the landfill site.
Information provided to the court said that former chief Chris Luke Sr. and councillors Mary Basil, Sandra Luke, Carol Louie and Jason Louie (now band chief) voted in an in-camera meeting to give themselves $5,000 bonuses to compensate for work done on the band’s behalf. At the time, councillors received a stipend of $360 a month.
The payments went unnoticed by other band members for two years, despite being included in audited annual financial statements. LKB member Wayne Louie then filed a suit. In the original case the court found in favour of the defendants. That decision was overturned by the BC Court of Appeal June 3.
In the court ruling it said, “The removal of $25,000 from band funds and the payment of $5,000 to each of the defendants was a clear and significant personal benefit to them, and them only.
“As a one-time payment, it did not benefit future members of council or of the band. Rather, it was a detriment to the band. The conclusion seems to me to inescapable that this was a breach of fiduciary duty, even in the context of a relatively informal and custom-based governance structure.”
Robert Louie Jr., a one-time attorney who did the legal work on Wayne Louie’s behalf, has also called for Jason Louie to step down as chief, “as a result of breaching his fiduciary duty and oath of office.”
Wayne Louie expressed concern that Jason Louie used LKB money to defend himself in the court case, while he had to pay expenses out of his own pocket.
“The chief flew to Vancouver to attend court and ate out on the band’s dime,” he said, “while I had to take a 15-hour bus ride and packed a sandwich. There’s something wrong with that picture.”
Before both courts, the defendants argued that they had made no attempt to hide the payments and that they understood that the now-deceased band administrator would prepare the necessary documents and post them to make LKB residents aware of the payments. Such documents were not produced, with Wayne Louie arguing they never existed and the defendants saying they were likely lost in a flood that ruined many band documents.
Justice Mary V. Newbury wrote in her decision, with the concurrence of Justice S. David Frankel and Justice Harvey M. Groberman, “I would allow the appeal, grant Mr. Louie a declaration that the five personal defendants acted in breach of their fiduciary duties to the band in purporting to remunerate themselves to the extent of $5,000, and order that each is liable to disgorge the amount to the band. If the plaintiff wishes to pursue his claim for punitive damages, he may return to the court below.”
Read the court's full judgement at scribd.com.