Merchant Law Group Contests $3000 In Lawsuit Concerning Indian Residential Schools Settlement Assignment of Proceeds

Peter Scott Vicaire

Recently, the Merchant Law Group, a law firm which was a major player in the Residential Schools Settlement Agreement, was in the Saskatchewan Court of Queen’s Bench, arguing that a $3000 unpaid assignment of debt from one of its clients (a former residential school student) should not be entered against the law firm. 

The assignment was provided to the client by Saskatchewan Government Insurance (SGI) which argued that Merchant Law Group is now liable to pay it because of its failure to honor the Assignment of Proceeds when the firm issued money to the client.  The decision is here.

Here’s a few gems from the decision:

 It is submitted on behalf of Merchant that although Merchant would have liked to pay the amount claimed by SGI nevertheless it is prohibited from doing so by virtue of the provisions of s. 67 of the Financial Administration Act, R.S.C. 1985, c.F-11.

Ironically Merchant advises the court that although it disagrees with the decision in Fontaine in principle, nevertheless, the decision is one from a court of high authority. Therefore reluctantly, but bound by the legalities of the situation, Merchant paid to its client the residual proceeds of the settlement of his Indian Residential School claim received by Merchant from the Government of Canada without deduction for the $3,000.00 assigned by the client to SGI.

In fact Merchant received two payments on account of this client in settlement of his Residential School claim against the Government of Canada. The Agreed Statement of Facts does not provide particulars of the first settlement payment nor details of exactly when it was received. In a letter dated March 30th, 2006, Merchant apparently wrote to SGI stating:
Mr. Shepherd’s file has settled. After paying all the legal fees and assignments, Mr. Shepherd received no money. No money will be forthcoming from Mr. Shepherd’s residential file.
(Agreed Statement of Facts, para. 6)

In para. 10 of its written submission Merchant states:  10. Justice supports judgment being rendered against Merchant Law Group LLP. The Indian Residential School settlement agreements and the case law do not.