Gas station's 29-year lease on reserve land invalid, judge rules

A British Columbia-based gas station chain has been operating one of its fuel stops on reserve land with an invalid lease for nearly 30 years, a B.C. Supreme Court decision has revealed.

Super Save Gas had been seeking to keep open the station it operated on Penticton Indian Band reserve land via an injunction.

But in a ruling last week, Justice Gareth Morley said the court did not have the authority to order the injunction because the company's lease was not enforceable, as it had not sought the approval of the federal Indigenous Relations Ministry.

The case underlines the fundamental rules that govern reserves in Canada, with a lawyer for the landowners saying it is an important reminder of how companies need to do their due diligence when they conduct work on reserve land.

'Handshake agreement'

The case concerns land held by Penticton Indian Band member Adam Eneas, who operated a gas station just off Highway 97 at 101 Green Mountain Rd.

In 1995, Eneas and Super Save entered into a "handshake agreement" to transfer the operations of the gas station, which was later written up into a document that Super Save considered a "lease" for the property, according to the judgment.

The agreement was renewed every few years under various conditions — until January this year, when Eneas and his wife Sandi Detjen wrote to Super Save and asked them to vacate the property in just over a month, according to court documents.

In response, Super Save wrote that it "does not intend to leave the property unless directed by a court of competent jurisdiction" and subsequently sought an injunction to stop its eviction. The landowners replied that Super Save was trespassing on reserve land and in contravention of the Indian Act.

'Buckshee lease'

As Morley wrote in his judgment, section 58 (3) of the Indian Act entails that only the federal Indigenous relations minister can issue leases to land held by a member of an Indian reserve.

"Such a lease must be for the benefit of that member," Morley wrote, adding that "the band must be consulted, and issuing the lease must be consistent with the minister's fiduciary duty to the band as a whole."

Despite the Indian Act's reputation as a "vehicle for colonialism ... heavily inflected with racist and paternalistic assumptions," the stipulation that only the federal minister has the authority to lease out reserve land has remained for decades, the judge wrote.

In that light, Morley says the agreement signed by Eneas and Super Save constituted what is colloquially called a "buckshee lease" — which are legally invalid and not enforceable by any court.

The two parties have differing versions of their negotiations when they signed the 1995 agreement.

Eneas told the court that he never told Super Save they would be obtaining legally enforceable rights, or that he would apply for a lease with the federal minister.

Super Save, however, told the court that Eneas represented himself as the sole landowner of the property, and said they did not need to consult with the Penticton Indian Band before entering into the lease.

While Morley did not rule on whether either parties' arguments were true, he noted the "lease agreement" did not state that Eneas's property was on reserve land, and was based on precedent Super Save had used generally for non-reserve land.

Lawyers for Super Save attempted to cite previous cases which involved buckshee leases — but Morley said none of those cases sought possession of reserve land in the absence of a valid lease, and dismissed their injunction application.

Morley ordered the company to vacate the property after being given a reasonable opportunity to remove their possessions.

Malcolm Funt, a lawyer for Super Save, said the company was very disappointed the 29-year-long relationship ended with "very little notice" to the operator and employees of the gas station. 

He said the company does not intend to appeal the judgment.

"Unfortunately, the issue of non-registration of the lease was unknown to Super Save," Funt said in a statement. "It has at all times intended to act fairly and has done so in accordance with the authorization of the landlord."

Jordanna Cytrynbaum, a lawyer for Eneas and his wife, said the couple now plan to resume operating the gas station themselves.

"It's important for people to understand, before they do business on reserve lands, to ... understand the legal framework," she told CBC News. "This is an important reminder."

Super Save Gas says it operates more than 40 gas stations throughout B.C.