Enforcement of Security Interests against the Personal ... · The Enforcement of Security Interests Against the Personal Property of First ... The Enforcement of Security Interests

The Enforcement of Security Interests

Against the Personal Property of First Nations

Persons on a Reserve

BY ANITA G. WANDZURA*

La Loisur lesndicens f6drale et la loi provincialesur les sOrets mobilires crie un cadre I6gis-latif unique qui r6git les sret~s mobili~res gre-vant les biens des personnes des Premieresnations. Selon c cadre Ikgislatif, la cranciregarantie ou le cr~ancier garanti non autochtone

ui cherche i exercer ses droits de saisie deiens situ~s sur une r~serve se heurte i des

probl~mes d'ex6cution distincts. L'articleenumre et commente les difficult6s qui sur-gissent la mati~re dues au fait qu'une personneou une bande des Premieres nations peutrestreindre l'acc~s physique A la r6serve.

L'article su gre qu 'en bout de ligne I'execu-tion d6pend de la capacit6 des tribunaux d'of-frir aux creancieres ct crianciers nonautochtones un recours juridique lorsque sur-gissent des problmes de cette nature. Diversesth6ories appuient la th~se que les tribunauxpeuvent rendre une ordonnance enjoignant A [ad6bitrice ou au d6biteur ou a la bande desPremieres nations de rendre les biens.D'ailleurs les principes commerciaux de la cer-titude et de la previsibilit6 militent dans lememe sens.

Que les tribunaux puissent ou non remudieraux problmes d'ex6cution, la possibilit6 queces probl~mes surgissent augmente le risquequ'assume une creanciere garantie ou uncreancier garanti non autoctone dana sesop6rations garanties avec une d6bitrice ou undebiteur des Premieres nations. Celadcourage les op6rations de cr6dit entre per-sonnes non autochtones et autochtones. Dcplus, cela entrave Iacc~s au cr6dit des commu-naut6s des Premires nations. Or ces commu-naut6s ont plus que jamais besoin d'un acc~srapide au cr1it pour corriger la pi~tre situa-tion 6conomique actuelle clans les r~serves desPremieres nations.

The federal Indian Act and provincial personalprOperty security legislation create a uniqueegislative framework that governs securityinterests in the personal property of FirstNations persons. Under this framework, theability of a non-First Nations secured creditorto exercise his or her right to seize collateralsituated on a reserve is subject to distinctenforcement issues. Within this paper, theauthor identifies and addresses these enforce-ment issues that arise due to the ability of aFirst Nations person or band to restrict physi-cal access to the reserve.

The author suggests that the ultimate enforce-ment issue is whether the court is capable ofFroviding non-First Nations creditors with

gal recourse, should these enforcement issuesarise. In this vein, the author examines variousauthorities which support the proposition thatthe court may grant an order directing a FirstNations debtor or band to surrender the collat-eral. The author further suggests that the com-mercial principles of certainty andpredictability support this proposition.

Regardless of whether the court can remedythese enforcement issues, the possibility ofencountering these issues enhances the riskassumed by a non-First Nations secured credi-tor in engaging in secured transactions with aFirst Nations debtor. It extinguishes incentiveon the part of a non-First Nations creditor toextend credit to a First Nations debtor.Moreover, it frustrates the ability of FirstNations communities to access credit. FirstNations communities, now more than ever,require ready access to credit to alleviate thepresent economic state of First Nationsreserves.

B.Comm. Candidate 2008, Edwards School of Business, University of Saskatchewan.

LL.B. Candidate 2008, College of Law, University of Saskatchewan.

I would like to thank Professor Ronald C.C. Cuming (Faculty of Law, University of Saskatchewan) for hisguidance and assistance throughout the writing process.

2 OTTAWA LAW REVIEW REVUE DE DROIT D'OTTAWA39:1 39:1

Table of Contents

3 I. INTRODUCTION

3 II. IMPORTANCE OF ACCESS TO CREDIT TO FIRST NATIONS COMMUNITIES

4 III. ANALYTICAL FRAMEWORK

5 A. Conditional Sales Contracts

5 B. Default

6 C. Seizure: A Self-Help Remedy

6 IV. SECURITY INTERESTS IN THE PERSONAL PROPERTY OF

FIRST NATIONS PERSONS

6 A. Provincial and Federal Jurisdiction

7 B. Security Over Personal Property Under the Indian Act

7 C. Legislative Rationale of Section 89 Protection

8 D. Limits on Section 89 Protection

8 1. Personal Property of a First Nations Person or Band

9 2. Tangible Personal Prpert),'Situated on a Reserve"

9 3. Sulabstion 89(2): Conitional Sales Contract

10 4. Section 88: General Provincial Laws

11 V. ENFORCEMENT ISSUES

12 A. Issue I :Trespass Provisions

14 B. Issue 2: Bylaws and Band Council Resolutions

14 1. Bylaws

15 2. Band Council Resolutions

16 3. Concluson

16 C. Issue 3: Order for Surrender of Collateral

16 1. Supcrnvsory Power of the Court

17 2. Case law

19 3. Condut4on

19 VI. McDIARwi Limo LD. v. GD's LAKE FiRsT NA lIN

21 VII. CONCLUSION

The Enforcement of Security Interests

Against the Personal Property of First Nations

Persons on a Reserve

BY ANITA G. WANDZURA

1. INTRODUCTION

In this paper the author examines various legal issues encountered by non-First

Nations creditors in the enforcement of security interests in the personal property of

First Nations persons situated on a reserve. These legal issues arise, in part, due to

the division of powers between Parliament and the provincial legislatures under the

Constitution Act, 1867' The legislative framework created by the federal Indian Act,

and PartV of The PersonalPropertySecurityAct, 19933 of Saskatchewan raises significant

concerns amongst non-First Nations creditors. Creditors are concerned that First

Nations debtors are capable of interfering with creditors' right to enforce security

interests in collateral on a reserve through the use of trespass provisions, bylaws and

band council resolutions that restrict their physical access to the reserve.

II. IMPORTANCE OF AccEss TO CREDIT TO FIRST NATIONS

COMMUNITIES

These concerns foster a sense of uncertainty amongst creditors and a reluctance to

extend credit to First Nations debtors. An inability to access credit results in serious

economic and social consequences to First Nations communities. According to eco-

1. (U.K.), 30 & 31 Vict., c. 3, reprinted in R.S.C. 1985, App. II, No. 5.

2. R.S.C. 1985, c. I-5.3. S.S. 1993 (3d Sess.), c. P-6.2 IFFS4I.This paper refers to provisions in The Persov Propert) &xurityAct, 1993

of Saskatchewan; however, the discussion concerning these provisions is not exclusive to Saskatchewan.Modern personal property security legislation is broadly uniform in all provinces and territories, with theexception of Ontario. Nonetheless, for the purposes of this paper, the differences between the OntarioPersonal PrierixScurityAct, R.S.O. 1990, c. P.10 [OntioPPS4A and its counterparts are relatively insignifl-cant.The Ontr'o PPSA contains provisions that parallel the Saskatchewan provisions cited in this paper. Theseprovisions are similar in both drafting and consequence. See Ronald C.C. Cuming, Catherine Walsh &Roderick J. Wood, Personal Property&yurit, Law (Toronto: Irwin Law, 2005) at 8-11 for a more detailed dis-cussion of the variations between the Ontario PPSA and personal property security legislation in otherjurisdictions.


nomic theory, in order to create and sustain a dynamic economy, debtors require

ready access to capital .4 Debtors utilize this credit to start and expand business enter-

prises, and to generate consumer demand and entrepreneurial spirit at a local level.5

Conversely, a lack of access to capital, or the belief of inaccessibility, "stifles business

development" and "limits the economic mindset of potential local entrepreneurs."6

Secured transactions constitute a significant source of capital. A central element

of a secured transaction is the ability to enforce the security interest in the event of

default by the debtor. The potential of encountering enforcement issues enhances the

risk assumed by a pon-First Nations secured creditor in engaging in secured transactions

with a First Nations debtor. It extinguishes any incentive on the part of a non-First

Nations creditor to extend credit to a First Nations debtor. In the event of default, a

secured creditor may be unable to mitigate his or her loss through the seizure and sale of

the collateral, and may be forced to incur additional legal expenses in order to obtain a

court order requiring the surrender of collateral situated on a reserve. Regardless of the

result, the mere possibility of either scenario occurring enhances the risk associated with

such transactions and provokes unwillingness amongst non-First Nations secured credi-

tors to extend credit to First Nations debtors.

The Supreme Court of Canada, in the recent decision of McDiannmidLumberLtd.

v. God's Lake First Nation,7 affirmed the importance of access to credit amongst First

Nations persons.8 At paragraph 40, the Court stated that "[pirovincial credit regimes

create important and enforceable rights for the debtors and creditors who are gov-

erned by them.They enable debtors to leverage assets and creditors to take measured

risks. They are the modern incarnation of the panoply of rules of credit developed at

common law." These statements reinforce the importance of resolving the enforce-

ment issues addressed by the author in this paper. Moreover, these statements suggest

that any such issues should be resolved in a manner that addresses the concerns of

non-First Nations creditors.

III. ANALYTICAL FRAMEWORK

In this paper the author focuses on a defined factual context; namely, the case of a

First Nations debtor who grants a non-First Nations secured creditor a security inter-

est in collateral situated on a reserve. "°The security agreement underlying the trans-

4. National Aboriginal Capital Corporation Association, "Building on Success" (2005) at S [unpublished, on filewith the author].

S. Ibid.

6. Ibid.

7. 2006 SCC 58,120061 2 S.C.R. 846,120071 2 WW.R. I IMcDiarniklunmherl.8. Ibid. at para. 38.9. Ibid. at para. 40.10. In this paper, the term "First Nations person" refers to a person who constitutes an "Indian" pursuant to sec-

tion 2 of the Iian Act. Subsection 2(1) of the In(n Act defines "Indian" as "a person who pursuant to thisAct is registered as an Indian or is entitled to be registered as an Indian." For the purposes of section 89 ofthe Indian Act, this definition excludes Inuit, Mtis and non-status Indians.

THE ENFORCEMENT OF SECURITY INTERESTS 5AGAINST THE PERSONAL PROPERTY OF FIRST

NATIONS PERSONS ON A RESERVE

action is a conditional sales contract, and the collateral securing the debt obligation

of the First Nations person is tangible personal property, as opposed to intangible per-

sonal property. Finally, the tangible personal property governed by the conditional

sales contract is located on a First Nations reserve for the entire time span of the con-

ditional sales contract, or a time span deemed legally relevant by the "paramount

location test.""

The First Nations debtor is in default of his or her obligations under the con-

ditional sales contract. This default triggers the right of the non-First Nations secured

creditor to exercise his or her rights and remedies in respect of the collateral. These

rights and remedies upon default are outlined in PartV of the PPS4. Furthermore, the

secured creditor has complied with all notice requirements under the PM4, provid-ing the debtor with a notice of intention to seize the collateral.The debtor has waived

his or her right to redeem or reinstate the security agreement by paying the arrears

and curing any default. Consequently, the non-First Nations secured creditor is legal-

ly entitled, subject to the provisions of the Indian Act, to exercise his or her right to

seize the collateral sold pursuant to the conditional sales contract.

A. Conditional Sales Contracts

In this paper the author focuses exclusively on security interests in which the under-

lying security agreement constitutes a conditional sales contract. A typical sales trans-

action involves the transfer of an asset from the vendor to the purchaser, for

consideration. The vendor relinquishes all rights in the asset to the purchaser, includ-

ing title and use. In contrast, under a conditional sales contract (or "installment sale"),

the purchaser makes periodic payments to the vendor, and the vendor "retains tide or

a security interest until all payments have been received.""u The ability of the pur-

chaser to obtain title to the goods is conditional upon his or her payment of the full

purchase price.Practically speaking, conditional sales contracts are often used as marketing

tools for high-value consumer goods (e.g., motor vehicles). They are a commercially

effective means of financing goods. A buyer makes installment payments to the ven-

dor during the life of the contract. While the buyer makes these installment pay-

ments, he or she retains a right to possess the goods so long as the terms of the

underlying conditional sale agreement are satisfied.

B. Default

The buyer's failure to pay the installments due under the conditional sales contract

constitutes "default" within the definition provided in the PPS4. Default is defined as

"(i) the failure to pay or otherwise perform the obligation secured when due; or (ii)

I1. Further discussion of the paramount location test is found in Part IV.D.2, below.12. Blacks Lass Dictionary, 8th ed., s.v. "installment sale" (emphasis added).


the occurrence of any event or set of circumstances on which, pursuant to the terms

of the security agreement, he security becomes enforceable."' I Upon default, PartV

of the PFS4 becomes operative, and subsection 58(2)(a) provides the secured party

with the right to seize the collateral.

C. Seizure: A Self-Help Remedy

Subsection 58(2)(a) stipulates that upon default under a security agreement "the

secured party has, unless otherwise agreed, the right to take possession of the col-

lateral or otherwise enforce the security agreement by any method permitted by

law."" This provision empowers the secured creditor "to seize the collateral with-

out the assistance of the courts or any legal process."15 Self-help remedies are not

permitted in all Canadian provinces. For example, Alberta, the Northwest

Territories and Nunavut "restrict the exercise of self-help remedies by providing

that a seizure pursuant to a security agreement must be undertaken by a civil

enforcement bailiff or sheriff." 6

IV. SECURITY INTERESTS IN THE PERSONAL PROPERTY OF FIRST

NATIONS PERSONS

The ability of a non-First Nations secured creditor to exercise his or her right to seize

collateral is subject to distinct enforcement issues if the collateral is situated on a

reserve. These enforcement issues arise due to the unique legislative framework that

governs security interests in the personal property of First Nations persons.

A. Provincial and Federal Jurisdiction

The taking and enforcement of security interests in the personal property of First

Nations persons is governed by the federal Indian Act and the PPSA. This interplay

between both federal and provincial legislation is the direct result of the Canadian

Constitution Act, 1867 and subsequent judicial interpretation. The Constitution Act,

1867 grants jurisdiction over matters relating to "Indians, and Lands reserved for the

Indians" to Parliament; however, jurisdiction over "Property and Civil Rights" is

granted to the provincial legislatures.' 7 It does not articulate whether the grant of

exclusive Parliamentary jurisdiction over matters relating to "Indians, and Lands

reserved for the Indians" is intended to preclude provincial jurisdiction over proper-

13. S, supra note 3, s. 2(1)(n). See also OnotioPPSA, supra note 3, s. 1(1).14. PPSA, supra note 3, s. 58(2)(a). See also OntarioPPSA, supra note 3, s. 62(a).

15. Curning, Walsh & Wood, supra note 3 at 529.

16. MA'il.

17. Supranote 1,ss. 91(24),92(13).



ty and civil rights. 18 The Supreme Court of Canada clarified this issue in Canada (A.G.)

v. Canard,19 where the majority held that Parliament maintains jurisdiction over the

personal property of Indians.20

B. Security Over Personal Property Under the Indian Act

The federal Indian Act differentiates between security interests granted by condition-

al sales contracts and security interests granted by other types of security agree-

ments. This legal differentiation is found in section 89 of the Indian Act. Section 89

provides:

89. (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, distressor execution in favour or at the instance of any person other than an Indian or a band.

(2) A person who sells to a band or a member of a band a chattel under an agreementwhereby the right of property or right of possession thereto remains wholly or in part inthe seller may exercise his rights under the agreement notwithstanding that the chattel issituated on a reserve.

21

Subsection 89(1) precludes the attachment of a security interest and the seizure of

personal property by a non-First Nations secured creditor if the personal property is

vested in a First Nations person or band, and situated on a reserve. "Until attachment

occurs, no security interest exists and the secured party's rights against the debtor are

purely personal and contractual. Conversely, once a security interest attaches, the

secured party acquires proprietary rights in the collateral."22 It follows that if the

Indian Act precludes attachment, it also precludes the ability of a secured creditor to

enforce the security interest.

C. Legislative Rationale of Section 89 Protection

The Supreme Court of Canada articulated the legislative rationale for the protection

from seizure granted by section 89 in Mitchell v. Peguis Indian Band.2" With reference

to section 89 of the Indian Act, La Forest J. stated that:

Itihe purpose of the legislation is not to remedy the economically disadvantaged positionof Indians by ensuring that Indians may acquire, hold, and deal with property in the com-mercial mainstream on different terms than their fellow citizens. An examination of the

18. JackWoodward, NativeLaw (Toronto:Thomson Carswell, 1994) at 288.19. 119761 I 8.C.R. 170, 52 D.L.R. (3d) 548.

.20. Ibid. at 190.21. Supra note 2, s. 89.

22. Cuming, Walsh & Wood, supra note 3 at 17.

23. l199012 S.C.R. 85,71 D.L.R. (4th) 193 lMitdllcited to S.C.R.J.


decisions bearing on these sections confirms that Indians who acquire and deal in proper-

ty outside lands reserved for their use, deal with it on the same basis as all other

Canadians.

These provisions are not intended to confer privileges on Indians in respect of any prop-

erty they may acquire and possess, wherever situated. Rather, their purpose is simply to

insulate the property interests of Indians in their reserve lands from the intrusions and

interference of the larger society so as to ensure that Indians are not dispossessed of their

entitlements.24

This rationale reflects the paternalistic attitude of the Indian Act, which conflicts with

the objectives of modern personal property security legislation. Modern personal

property security legislation is founded on principles of commercial certainty and

predictability. For example, in Andrews v. Mack Financial (Canada) Ltd.,2 the

Saskatchewan Court of Appeal recognized that Part V of the PPSA constitutes a

mandatory scheme constructed to ensure a commercially reasonable result when a

security agreement is in default.26 The Court further noted that PartV is designed to

protect the interests of both the secured creditor and the debtor.27 This rationale

stands in stark contrast to that articulated by La Forest J. in Mitchell. Section 89 of the

Indian Act is not focused on a commercially reasonable result in that it provides pro-

tection solely to the First Nations debtor.

D. Limits on Section 89 Protection

The protection from seizure provided by subsection 89(1) is not absolute. For the

purposes of this paper, there are three noteworthy exceptions. An examination of

these exceptions is pertinent to a clear understanding of the circumstances in which

a First Nations debtor is denied the legal protections afforded by subsection 89(1) of

the Indian Act.

I. Personal Property of a First Nations Person or Band

Section 89 of the Indian Act stipulates that the prohibition against seizure does not apply

to claims issued by a First Nations person or band. Further, section 89 does not protect

the personal property of a First Nations corporation from seizure. A First Nations cor-

poration does not constitute an "Indian" or"band" within the meaning of section 89.28

24. Ibid. at 131,133.25. 1198812 W.WR. 747, 61 Sask. R. 311 (Sask. C.A.) [ArxhLiscitd toWWR. I.

26. MOid. at 756.27. Ibid.

28. The New Brunswick Court of Queen's Bench evidenced this assertion in R. v. Benard (1991), 118 N.B.R.(2d) 361,1199213 C.N.L.R. 33 (N.B.Q.B.) l/narri cited to N.B.R.J . At paragraph 20, the Court stated thatthe impugned First Nations corporation was not entitled to the protection from seizure granted to FirstNations persons under section 89 of the Indian Act. Therefore, regardless of the location of the personalproperty, a First Nations corporation is not entitled to legislative protection.



2. Tangible Personal Proerty 'Situated On a Reserve"

Another exception to the protection afforded by section 89 is derived from the pro-

vision's explicit stipulation that it applies solely to the "personal property of an Indian

or a band situated on a reserve."" In a 2005 report prepared for the Law Commission

of Canada, Professor Ronald C.C. Cuming asserts that the words "situated on a

reserve" are interpreted in light of their ordinary meaning, 0 and the Supreme Court

of Canada affirmed this interpretation in McDannkLumiber.31 Thus, for legal purpos-

es, the location of tangible personal property is usually, but not always, its actual

location.2

In Leghton v. British Columbia,33 the British Columbia Court of Appeal articu-

lated the paramount location test, and this test was approved by the Supreme Court

of Canada in itchel.34 The paramount location test is operative in two situations: (1)

tangible personal property that moves off the reserve; and (2) tangible personal prop-

erty that is brought onto the reserve. Due to the mobility of personal property, it is

necessary to determine whether the property is still subject to the protection grant-

ed by section 89 of the ndian Act. Pursuant to the paramount location test, as long as

a discernible nexus remains between the impugned personal property and the occu-

pancy of the reserve, the property is deemed to be situated on a reserve.3"

3. Subsection 89(2): Condtional Sales Contract

Subsection 89(2) of the Indian Act expressly states that"[a] person who sells to a band

or a member of a band a chattel under an agreement whereby the right of property

or right of possession thereto remains wholly or in part in the seller may exercise his

rights under the agreement notwithstanding that the chattel is situated on a

reserve."36 In other words, personal property purchased by a First Nations person

under a conditional sales contract is available for seizure by a non-First Nations ven-

dor regardless of whether the property is situated on or off the reserve.

One author has observed that "[sub]section 89(2) is now a peculiar provision,

given the trend in North America secured transaction law to ignore such distinctions

between different security devices and to treat them all as creating security interests

governed by a common system of rules."37 Under personal property security legisla-

29. Supra note 2, s. 89 (emphasis added).

30. Ronald C.C. Cuming, "Security Interests and Money Judgments Enforcement Against Property of FirstNations Persons: Background, Issues and Suggested Approaches" (2005) Law Commission of Canada at 7.

31. Supra note 7 at paras. 15-21.

32. See e.g. Made v. Ontatio(MinLsterofRetenue.) (1993), 4W.D.C.P. (2d) 341 (Ont. Gen. Div.).

33. 119891 4WWR. 654, 57 D.L.R. (4th) 657 (B.C.C.A.) [L,*ton cited toWW.R.j.34. Supra note 23 at 132, 133.

35. Supra note 33 at 658-59.36. Supra note 2, s. 89(2).

37. James I. Reynolds, "Taking and Enforcing Security Under the Indian Act and Self-Government Legislation"(2002) 18 B.F.L.R. 37 at 54.


tion, almost all Canadian jurisdictions characterize a conditional sales contract as a

security agreement.38 Subsection 89(2) of the Indian Act"perpetuates a distinction" no

longer consistent with modern concepts of personal property law; however, this dis-

tinction remains relevant for the purposes of secured creditors.39 Subsection 89(2)

creates a sphere of commercial lending in which a First Nations debtor is able to grant

a non-First Nations creditor a valid and enforceable security interest in personal

property situated on a reserve.

4. Section 88: General Provincial Laws

Section 88 of the In&an Act provides that:

Islubject to the terms of any treaty and any other Act of Parliament, all laws of generalapplication from time to time in force in any province are applicable to and in respect ofIndians in the province, except to the extent that those laws are inconsistent with this Actor the First Nations Fiscal and Statsical Management Act, or with any order, rule, regulationor law of a band made under those Acts, and except to the extent that those provincial

laws make provision for any matter for which provision is made by or under those Acts.40

Consequently, the P/M, as general provincial law, governs the taking and enforce-

ment of a security interest in personal property situated on a reserve, if a security

interest is granted pursuant to a conditional sales contract.

Subsections 88(2) and'89(1) were applied by the Ontario District Court in

Chrysler Credt Corp. Ltd. v. Penagin.41 In Chrysler, a car dealer sold a truck to a First

Nations person under a conditional sales contract. The dealer assigned this contract

to the Plaintiff finance company in the ordinary course of business. Upon default, the

Plaintiff sought the Court's permission to repossess the collateral from a reserve.The

ultimate issue before the Court was whether "the /ndin Act, [R.S.C. 1970, c. 1-61prevent[s] the assignee of a conditional sales contract from exercising an otherwise

undoubted right to repossess the chattel."42 In the course of its analysis, the Court

made several important observations regarding the effect of section 88 and subsec-

tion 89(2) of the Indan Act.

In Cuysler, the Court concluded that subsection 89(2) makes it clear that sub-

section 89(1) "was never intended to apply to a conditional sales agreement."3 The

Court also stated that:

[iln no way does this subclause [subsection 89(2)1 restrict the general application of sec-tion 88 and the obvious intent of Parliament is to make Indian citizens subject to the

38. See e.g. IMt, supra note 3, s. 3; OntanoPPSA, supra note 3, s. 2.

39. Supra note 30 at 10.40. Supra note 2, s. 88.41. 119821 I C.N.L.R. 19 (Ont. Dist. Ct.) l]irykr.42. lbhk. at 20.43. lbk. at 21.



same sanctions as other citizens and in particular that if you make a conditional salesagreement to pay and do not pay, the person having title may repossess the goods. TheGovernment of Canada has not entrenched Isici on the right of the province to legislategenerally on property and civil rights in this instance. And the Indian citizens must obeythe general law like any other citizen.44

Earlier the Court noted that the law of conditional sales is a law of general applica-

tion within the province's mandate under the division of powers in the ConstitutionAct, 1867 .41

Chrysler highlights the combined legal effect of section 88 and subsection

89(2). Subsection 89(2) of the /n&an Act creates an exception to the prohibition of

attachment and enforcement contained in subsection 89(1). By virtue of section 88,

the law within this legal exception is dictated by general provincial laws, including the

Personal Property S'eurity Act.

V. ENFORCEMENT ISSUES

The Court in Orysler confirmed that the general laws of the province apply to a secu-

rity interest governed by subsection 89(2).46 Consequently, Part V of the PSA is

operative upon default of the debtor. Part V plays a significant role in defining the

rights and remedies of the debtor and creditor, and the courts can order compliance

with Part V under section 63 of the PYS4. 7 It is uncertain whether the secured cred-

itor can use section 63 to remedy enforcement issues that arise in the context of col-

lateral situated on a First Nations reserve.These distinct enforcement issues arise due

to the ability of a First Nations person or band, pursuant to provisions in the ndian

Act, to restrict physical access to the reserve.

Case law regarding the interface between the PPS4 and the ndian Actis scarce;

therefore, the author's analysis of enforcement issues is largely speculative. In her

speculation, the author relies on limited case authority and the commercial principles

of certainty and predictability entrenched in the PMSA. The enforcement issues are

addressed in the following order:(1) Issue 1: Whether the trespass provisions in sections 30 and 31 of the Indan

Act provide a First Nations debtor with a means of interfering with the right

of a non-First Nations creditor to seize collateral situated on a reserve;

(2) Issue 2:Whether the bylaw and band council resolution provisions in sections

60 and 81 of the ndian Act provide a First Nations debtor with a means of

interfering with the right of a non-First Nations creditor to seize collateral sit-

uated on a reserve, and;

44. Ibid. at 21-22.

45. Ibid. at 19.46. bid. at 21-22.

47. ffS, supra note 3, s. 63. See also Ontio PSA, swra note 3, s. 67; Ankciss, stpra note 25 at 752-53.


(3) Issue 3: Whether a secured non-First Nations creditor can ultimately obtain

a court order pursuant to section 63 of the PPSA to compel the surrender of

collateral situated on a reserve.

A. Issue I : Trespass Provisions

Section 30 of the Indian Act provides that "a person who trespasses on a reserve is

guilty of an offence."4 tThis section is supplemented by section 31, which states that

where a band alleges trespass on a reserve, relief may be sought. 49 The Indian Act

provides no express definition of trespass; therefore, the Saskatchewan Court of

Queen's Bench adopted the common law definition of trespass in R. v. Pinay. 0 The

Court noted that "[tlhe definition of common law trespass varies as stated by dif-

ferent authorities, but it clearly involves the entering upon another's land without

lawful justification.""'

It is uncertain whether the courts will allow a First Nations debtor to rely on

section 30 of the ndian Act to prohibit seizure. The First Nations debtor would rely

on section 30 to allege that the non-First Nations creditor constitutes a trespasser if

he or she attempts to seize the collateral situated on the reserve. Arguably, if the non-

First Nations creditor is legally entitled to seize the collateral pursuant to the PS4,

this creditor maintains "lawful justification" to enter the reserve, and he or she would

not be a trespasser under the Indian Act.

The case of Pinay provides limited guidance on this issue. In Pinay, the Court

decided whether Frank Miles, a deputy sheriff, trespassed on a First Nations reserve

when he attempted to serve Mr. Pinay with a statement of claim. Frank Miles did not

obtain permission from the band or anyone at the band office to enter the reserve.

The Court held that, "Miles was a trespasser on the Reserve only if, in similar cir-

cumstances, he would have been a trespasser on any private property."5 2

The holding in Pinay strips the First Nations reserve of any special legal status

otherwise afforded by the Indian Act. It directly equates a reserve with private prop-

erty. Applying the analysis in Pinay, a conditional vendor is a trespasser on a reserve

only if, in similar circumstances, he or she would be a trespasser on private proper-

ty. This assertion raises the following question: what are the rights of a conditional

vendor to enter the private property of the purchaser to seize?

The PPSA provides no direct guidance on this issue; however, subsection

58(2)(a) of the FPS4 and related case law impose limits on the secured party's right

to repossess the collateral upon default. 3 As previously noted, the secured party is

48. Supra note 2, s. 30.49. Ibid. at s. 31.

50. (1990), 84 Sask. R. 287,1199014 C.N.L.R. 71 (Q.B.) lPinaycited to Sask. R. I.

51. Ibid. at para. 5 (quoting Ford C.J.C. in R. v. Gi&rh, 11959129WWR. 471 at 473).52. Ibid. at para. 6.

53. FI , supra note 3, s. 58(2)(a). See also Ontari PSA, supra note 3, s. 62(a).



entitled to take possession of the collateral "by any method permitted by law." 4The

Ontario Court of Appeal held in R. v. Doucettes that, in exercising this right to repos-

sess, the secured party is not permitted to commit trespass or engage in conduct that

results in a breach of the peace.5 6

In Dbuoiie, three bailiffs were accused of assaulting the purchaser of a televi-

sion. The bailiffs sought to repossess the television under the terms of a conditional

sales contract. The purchaser protested the presence of the bailiffs on his property,

objected to the removal of the television set, and clearly stated that any attempt to

repossess the television set before the arrival of the police would be met with force.57

Nonetheless, the bailiffs persisted in their efforts to repossess the television set and a

struggle ensued. The Ontario Court of Appeal allowed the appeal and assault convic-

tions were entered.The Court noted that reasonable limits must be imposed upon a secured cred-

itor's right of self-help in order to preserve peace.5" Further, the Court stated that:

lilt follows logically that if a person enters premises lawfully in the first instance for the

purpose of resuming possession of his moveable property and subsequently abuses hisauthority, he becomes in law a trespasser.... Once it was made clear to them, as indeedit was, that they would not be suffered to remove the television set without resistance,

they grossly exceeded and abused their rights when they persisted in carrying out theirproject of abducting the television receiver, using force for the purpose if necessary. Theythus became trespassers even if their original entry was lawful, a point which, on the evi-dence, is itself not free from doubt.

59

If the approach in Doucette is applied in the context of collateral situated on a reserve,

regardless of whether a non-First Nations creditor enters the reserve with a lawful

purpose, he or she will be a trespasser if the First Nations debtor or band: (1) protests

the presence of the creditor on the reserve premises; (2) objects to the removal of

the collateral; and/or (3) demonstrates that any attempt at seizure will be met with

force.The fact that the bailiffs were legally entitled to repossess the television, due to

the debtor's default under the conditional sales contract, was of little consequence in

the Court's reasoning in Doucete. If the conditional debtor demonstrates that the

repossession will be met with resistance, the conditional vendor is under an obliga-

tion to forgo the repossession and rely on court proceedings.

54. II,id.

55. 119601 O.R. 407, (su)hnom. R. v. Doucett., Dongun andMdVutt) 25 D.L.R. (2d) 380 (C.A.) [Dotwmncited toO.R. I.

56. f*Ls. at 412.57. Ik, at 409-10.

58. Ibk. at 413.59. bk. at 414.


The repossession in Doucette did not take place in the context of a reserve, as

the licensed bailiffs entered the private property of a conditional debtor.

Nonetheless, the Court's holding in Pinay extends the approach in Doucette to the

reserve scenario. A conditional vendor is a trespasser on a reserve if, in similar cir-

cumstances, he is a trespasser on private property.6The conditional vendor trespass-

es on private property, according to Doucete, if the vendor has reason to believe that

the repossession will not occur peacefully.61

The trespass provisions in sections 30 and 31 of the Indian Act, as well as the

cases of Pinay and Doacete, likely provide a First Nations debtor or band with a means

of interfering with the right of a non-First Nations creditor to seize collateral situat-

ed on a reserve. Sections 30 and 31 enable a First Nations debtor to restrict a secured

party's physical access to the reserve.The judgment in Doucette supports the assertion

that if the secured creditor is unable to repossess the property by peaceable means

(i.e. without trespass), he or she must resort to court proceedings to recover the col-

lateral situated on the reserve.

B. Issue 2: Bylaws and Band Council Resolutions

The ability of a First Nations band to formulate bylaws and band council resolutions

provides a First Nations debtor or band with additional means of interfering with the

right of a non-First Nations creditor to seize collateral situated on a reserve. Both

bylaws and band council resolutions can be relied on to restrict physical access to the

reserve, and hence, access to the collateral situated there.

1. Byla ws

Shin Imai writes that, "[ulnder the Indian Act, the basic governmental unit is the

Band."62 An elected chief and council govern each band and maintain jurisdiction over

the reserve. Sections 60 and 81 of the Indian Act empower the chief and council to

enact bylaws, 6 and arguably, the band can rely on sections 60 and 81 to enact bylaws

that restrict the entry of non-First Nations creditors and thereby hamper the ability

of creditors to seize collateral situated on the reserve. 64

There is little case law involving the use of sections 60 and 81 of the Indian Act

as a means of preventing seizure; however, the case of AgricreditAcceptance Canada Ltd.

v. Muskowekan Bandu provides indirect guidance on this topic. In Agria-edit, the

Muskowekan Band raised the issue of whether the agents or representatives of the

60. Supra note 50 at para. 6.61. Supra note SS at 413-14.

62. Shin Imai, AboriginaLawHandfook, 2nd ed. (Scarborough: Carswell, 1999) at 132.63. Supra note 2, ss. 60, 81.

64. Supra note 30 at I I.

65. 2001 SKQB 428, 120021 2WW.R. 107, 212 Sask. R. 102 IAgrkiuditl.



secured creditor, Agricredit Acceptance Canada Ltd., could enter upon the reserve to

repossess collateral. The Muskowekan Band entertained no lawful entitlement to retain

possession of the collateral, but, prior to court proceedings, the Band refused Agricredit

permission to enter upon the reserve to repossess the collateral. The Band dearly indi-

cated that they would regard any such attempt by the secured creditor as trespass. 66

The Court in Agricredit did not conclusively determine whether a person in

the position of Agricredit is entitled to enter upon reserve land if he or she is not

invited or has not obtained permission to do so. However, the Court stated that it "is

prepared, for the purposes of resolving these matters, to respect the wishes of the

Band with respect to whom it invites or permits to enter upon its reserve lands in the

context of these circumstances. 67 This statement demonstrates deference by the

Court to the Band's ability to control access to its premises. The Court would likely

extend equal or greater deference to a band that enacted a bylaw which expressly

prohibited the entrance of all secured parties to seize collateral situated on the

reserve. A bylaw is a more formalistic expression of a band's opposition to the

entrance of a secured party to the reserve for the purpose of seizure. 61

2. Band Council Resolutions

Similar considerations concern band council resolutions. 69 A band council acts formal-

ly by passing resolutions, referred to as band council resolutions. Specifically, a band

council resolution can be passed when the chief and council achieve quorum at a coun-

cil meeting. These decisions can bind the band and effect the rights of band members.70

Band council resolutions constitute another means by which a band can

restrict or grant access to a secured creditor to a reserve. Professor Catherine

Walsh notes that "in Canada, the de facto practice of lending institutions is to seek

advance written permission in the form of a Band Council Resolution to enter the

reserve to seize assets not caught by the section 89 exemption."'" Walsh further

notes that it is legally questionable whether a band council resolution is necessary. 12

To date, the courts have not addressed the legal enforceability of a band council res-

olution of this nature.

In the same connection, Professor Cuming notes that while a band may grant

permission to a secured creditor to enter the reserve, an individual member of the

66. Ibid. at para. 7.67. Ibid. at para. 38.68. In Agicrit, the Muskowekan Band expressed its intention to regard any attempts by the secure(d creditor to

enter the reserve as trespass. The Band did not enact a bylaw or band council resolution to this effect.69. See Imai, supra note 62 at 134. The term "hand council resolution" also refers to a form distributed by the

Federal Department of Indian Affairs to bands. This form is used to document band council resolutions.

70. Ibi.71. Catherine Walsh, "Section 89 of the Indian Act: Personal Property Financing and Creditors' Rights" at

Chapter 5, page 14.72. Ibid. at 134.


band cannot grant such permission. 71 Consequently, a clause in a conditional contract

granting this permission cannot override a band resolution to the contrary. A band

council resolution likely constitutes a more effective means of ensuring access to the

reserve for seizure because it represents and formalizes a band's consent, as opposed

to the consent of a sole reserve resident.

3. Conclusion

Both bylaws and band council resolutions may provide a First Nations band with a

means of interfering with the right of a non-First Nations creditor to seize collateral

situated on a reserve. This assertion is premised on two observations: (1) bylaws and

band council resolutions are mechanisms through which a band may formally express

its wish that a secured creditor refrain from entering upon reserve lands for the pur-

pose of seizure; and (2) as seen in Agricredt, the courts will likely defer to these for-

mal expressions of a band's wishes. In Agicredit, the Court respected the wishes of

the Muskowekan Band regarding whom it permits to enter upon its reserve in the

context of seizure. The courts will likely exercise similar deference in relation to

bylaws and band council resolutions.

C. Issue 3: Order for Surrender of Collateral

If a secured non-First Nations creditor is unable to obtain physical access to the

reserve, the issue arises as to whether this creditor can obtain a court order under sec-

tion 63 of the PPS4 to compel surrender of collateral situated on a reserve. There is no

case law directly addressing whether the courts are willing to grant such an order.

I. Supervisory Power of the Court

Subsection 63(2) of the PPSA stipulates that:

63(2) On application by a debtor, a creditor or a debtor, a secured party, a sheriff or a personwith an interest in the collateral, the court may make one or more of the following orders:

(a) an order, including a binding declaration of a right and an order for injunctive relief,that is necessary to ensure compliance with this Part or section 17, 36, 37 or 38;

(b) an order giving directions to any person regarding the exercise of rights or the dis-charge of obligations pursuant to this Part or section 17, 36, 37 or 38;(c) an order relieving a person from compliance with the requirements of this Part orsection 17, 36, 37 or 38;

(d) an order staying enforcement of rights provided in this Part or section 17, 36, 37or 38; or(e) any order that is necessary to ensure protection of the interest of any person in thecollateral.

74

73. Cuming, "Security Interests," supra note 30 at 11.74. If4, supra note 3, s. 63(2). See also Ontario PPSA, supra note 3, s. 67(1).



The Saskatchewan Court of Appeal considered this provision in Amrkus.7s It held that:

" "[T]he court is given broad powers under s. 63, including the right to make

declarations of rights, grant injunctive relief or make any order required to

ensure compliance with Pt. Vands. 17of the Act;"76

" "Section 63 provides a mechanism for ensuring that a commercially just result

will be obtained;"77

" "The pervading purpose [of section 63] is for the protection of rights and inter-

ests between the secured party and the debtor, 78 and;

" "[Section] 63 was not designed to permit a trial judge to rewrite or change the

substance of the contractual rights between the parties."The substance of the

contract cannot be altered. 79

These holdings support the contention that the supervisory power in section 63 per-

mits the court to grant an order directing the First Nations debtor or band to deliv-

er the collateral held situated on the reserve to the secured creditor. This order would

ensure a commercially just result, as the secured creditor is thereby permitted to

seize and sell the collateral upon default."

Further, the grant of an order directing a First Nations debtor or band to sur-

render the collateral accords with the need to protect the rights and interests of both

the secured party and the debtor. Part V of the PPSA statutorily enshrines the right of

a secured party to seize the collateral upon the debtor's default.8' And, in the absence

of extenuating circumstances, the courts should ensure compliance with Part V and

the rights it prescribes. This approach promotes certainty and predictability, and

these commercial principles constitute the foundation of modern personal property

security legislation.

2. Case Jaw

Cumulatively, the cases of Andrews, Agrrecit, Doucette, and Bernard 2 can be viewed as

indirectly supporting the conclusion that the courts may grant an order directing the

First Nations debtor or band to deliver to the secured creditor the collateral situated

on the reserve. In Doucette, the Court stated that a secured creditor's right to self-help

seizure is conditional on his or her ability to obtain possession peaceably.8 3 Moreover,

the Court stated that if the conditional vendor is unable to seize the collateral in a

75. Supra note 25.

76. fikL. at 752 (emphasis in original).77. bkb. at 756.

78. IM.79. fih,. at 757 (emphasis in original).

80. Ibkl at para. 31.81. 1S4, stqa note 14.82. Bernard, supra note 28.

83. Supra note 55 at 412.

OTTAWA LAW REVIEW

39:1

REVUE DE DROIT D'OTTAWA

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peaceable and easy manner, he or she must resort to the courts. 4 These statements

imply that the courts are able to offer some form of recourse if the debtor resists

seizure of the collateral. It follows that this recourse is a court order, compelling the

surrender of the collateral to the secured party.

In Bernard, the Court discusses subsection 89(2) of the ni/an Act and the abil-

ity of a secured party to obtain possession of the collateral upon default. At paragraph

20, the Court states:

Iuinder s. 89(2) of the IndUan Act a person who sells to an Indian purchaser under a con-

ditional sales agreement, retains his right to the property under the terms of the condi-

tional sale contract. An assignee of the seller also retains his right to the property. If their

(sic) is default in a term of the contract and the conditional seller is entitled to posses-

sion, he may request an interim order for possession under rule 44 of the Rules of

Court. If such an application is made and an order is granted for recovery of personal

property, a sheriff acting under the authority of such an order is entitled to enter upon

an Indian Reserve and execute the order. Provincial laws of general application apply on

an Indian Reserve except to the extent that they are inconsistent with the Indian Act.

There is nothing in the Indian Act that I am aware of that prohibits the executing of an order of the

court for reovery of possession of personal property as a result of a def5ult otpayment under the

terms ola conditionalsale contract. The provisions of s. 89(2) of the Indian Act provide that

property sold to an Indian, where the right of property or possession remains in the sell-

er, may be repossessed by the seller and he may exercise his rights notwithstanding that

the chattel is situated on the reserve. Surely a person who obtains a Court Order to

exercise his right to repossession of personal property under the terms of a conditional

sale contract, would not as a result preclude his right to repossession as permitted by s.

89(2) of the Indian Act.8 5

These statements are obiter dcta because, on the facts of the case, section 89 did not

apply.16 Nonetheless, they support the proposition that subsection 89(2) of the ndian

Actdoes not prohibit the execution of a court order requiring the surrender of per-

sonal property situated on a reserve. While the references in Bernard concern the

Rules of Court, arguably, such an order can similarly be granted pursuant to section

63 of the PPS4.

The case of Agricre&talso supports the proposition that a secured creditor may

obtain a court order requiring the First Nations debtor or creditor to surrender col-

lateral situated on a reserve. In Agriae'dt, a non-First Nations debtor abandoned the

84. bk. at 413.85. Bernard, sEpia note 28 at para. 20 (emphasis added).

86. Ibid. at para. 2 1. In Btynaad, a sheriff repossessed a vehicle located on a First Nations reserve. This vehicle waspurchased by a corporation under a conditional sales contract. The accused, a First Nations person, attemptedto prevent seizure of the vehicle on the premise that section 89 of the Indian Act exempted the vehicle fromseizure as it was owned by a First Nations person and situated on a reserve. The Court held that section 89did not apply, as the conditional buyer was a corporation, and a First Nations corporation is not entitled tothe protection from seizure granted to First Nations persons under section 89 of the Indian Act.



collateral on the Muskowekan Band reserve.To protect the collateral, the Band stored

the collateral on the reserve.The Band refused to release the collateral to the secured

party, Agricredit Acceptance Canada Ltd. Agricredit applied to the Court for an

order directing the Band to deliver the collateral to the secured party 7 and, ulti-

mately, the Court granted the order."8

It is important to note that in Agrkredit the Court held that the Band had no

lawful entitlement to retain possession of the collateral, and the Band was not enti-

tled to any protection under section 89 of the Indian Act. As such, this case is not

directly on point. However, arguably, if the collateral fell under the exception in

subsection 89(2), such an order is possible because the collateral is legislatively

excluded from the operation of subsection 89(1) and thus is subject to the provisions

of the PM .

3. Condusion

Collectively, the authorities of Doucette, Bernardand Agriaedtsupport the proposition

that, in the defined factual context of this paper, a non-First Nations creditor may

obtain a court order requiring a First Nations creditor or band to surrender collater-

al situated on a reserve. Furthermore, much of the discussion in Andcewssupports the

proposition that, in the defined factual context of this paper, the supervisory power

of the court permits it to grant an order requiring surrender of the collateral.

Arguably, the exercise of subsection 63(2) of the PISA would ensure a commercially

just result, as it would ensure compliance with Part V of the PFM and prevent undue

prejudice to a secured party's right to possession under default.

VI. MCDIARMID LUMBER LTD. v. Gcv's LAKE FIRST NATION

In the recent decision of McDiarmid Ltnber,8 9 the Supreme Court of Canada com-

mented on the interplay between the federal /ndian Act provisions and provincial

money judgment enforcement law. The First Nations band in McDiaNmid Lumber

sought to prevent the garnishment of funds deposited in the band's off-reserve bank

account.The band claimed that the funds were exempt from seizure under section 89

and subsection 90(1)(b) of the ndian Act. Subsection 90(1 )(b) deems funds received

from the federal government under a treaty or agreement exempt from seizure.9The

funds at issue were provided to the band by the federal government under a "com-

prehensive funding arrangement." Ultimately, the Court held that the word "agree-

87. Supra note 65 at para. S.

88. Ibid. at para. 39.

89. Supra note 7.

90. Supra note 2, s. 90(l)(b).


ment" in 90(1 )(b) did not extend to the comprehensive funding arrangement, and the

funds were eligible for seizure by the judgment creditor.

This case did not examine personal property security legislation; however, the

Court's comments and analysis lend considerable support to the proposition that a

First Nations debtor cannot rely on Indian Act provisions as a means of interfering

with the right of a non-First Nations creditor to seize collateral situated on a reserve.

The Court adopted and strongly advocated a narrow interpretation of the Indiah Act

should its provisions interfere with the scope of provincial credit regimes.9 At para-

graphs 38 and 39, McLachlin C.J. stated:

Itihe provincial credit regimes shape an important part of economic life in Canada. They

are designed, almost by necessity, to apply universally. The provisions at issue in the case

at bar serve to interfere with that scope. They act to carve out certain forms of Indian

property from under the applicable credit regime, but leave others in. In short, they

establish specific exceptions to the general rule that the provincial credit regime will

apply to Indian property.

The wording of the provisions makes clear that Parliament (lid not seek to exempt Indianproperty in a broad sense. Instead, specific criteria were set out to describe the featuresof property that Parliament wanted to exclude from the credit regimes established by theprovinces. Given the importance of access to the credit economy, and given Parliament'schoice to create only limited exceptions to its application, it is not for the courts toadopt a reading of the statute that distorts that choice. Courts should be hesitant to findexceptions where they are not explicit, particularly when their effect is to materiallyaffect the rights of citizens under statute or common law.92

In this excerpt, the Court broadly references provincial credit regimes. It thereby

extends both its approach and analysis to the credit regime created by personal prop-

erty security legislation. Akin to McDiarnid, the enforcement issues identified by the

author in this paper challenge the scope of Indian Act provisions that may interfere

with the personal property security credit regime and the rights thereunder.

Arguably, the Court's analysis in McDiarnid supports a narrow construction of the

trespass, bylaw and band council resolution provisions under the Indian Act such that

they cannot be used to interfere with the rights of non-First Nations creditors under

the PPSA.

It may prove noteworthy that in McDiarmid the Court addressed the scope of

exceptons, while in the instant case, the enforcement issues arise due to the scope of

general trespass, bylaw, and band council resolution provisions. Nonetheless, the

Court's strict construction is premised on the importance of access to credit amongst

First Nations persons, 93 and this policy rationale remains significant in the context of

91. McDiarmidLun'sxr, supra note 7 at para. 38.92. Ibid. at paras. 38- 39.



trespass, bylaw and band council resolution provisions. In the alternative, this policy

rationale likely supports the ability of the courts to grant an order requiring the sur-

render of collateral situated on a reserve.

VII. CONCLUSION

In this paper the author identifies and addresses various legal issues encountered by

non-First Nations creditors in the enforcement of security interests over the person-

al property of First Nations persons situated on a reserve. These legal issues arise

because a First Nations person or band can interfere with a secured creditor's right

to enforce security interests in collateral on a reserve through the use of trespass pro-

visions, bylaws and band council resolutions that restrict a creditor's physical access

to a reserve.

The ultimate enforcement issue is whether the court, pursuant to the PPS4, is

capable of providing non-First Nations creditors with legal recourse, should these

enforcement issues arise. The cases of Andrews, Bernard, Doucette and Agriaedt, sup-

port the proposition that the court can remedy any prejudice experienced by the

secured party by ordering the First Nations debtor or band to surrender the collat-

eral situated on the reserve.

This proposition is further supported by the Supreme Court of Canada in

McDiarmid Lumber. The Court's comments in this case are extremely significant

because the Court explicitly supports the commercial principles that constitute the

foundation of modern personal property security legislation. Chief Justice McLachlin

states that "[p]articularly in the case of a credit regime, courts have a responsibility to

ensure a degree of certainty and predictability in the law and to approach the task of

statutory interpretation with restraint."94 The principles of certainty and predictabil-

ity clearly support the ability of a non-First Nations creditor to enforce his or her

rights and remedies upon default, as prescribed in Part V of the PFS4.

Moreover, in McDimwid Lumber, the Court signaled concern from the bench

regarding the economic state of First Nations reserves. The Court recognized that the

current legislative framework frustrates the ability of First Nations persons to access

capital. By strictly construing Indian Act provisions, the Court is attempting to miti-

gate the inadequacies of the current legislative framework, and to support the effi-

cient functioning of provincial credit regimes. Further, indirectly, the Court is

supporting business development amongst First Nations persons, and enhancing the

mindset of First Nations entrepreneurs.

93. ibM. at para. 42.94. Ibk. at para. 41.

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