An Alberta hog barn promoter is suing a Saskatchewan Indian band over a multi-barn deal that collapsed in a heap of acrimony and accusations.
Synergetik2000 Special Projects Inc. is seeking a $669,758.83 judgment against the Poundmaker Indian band, its chief and councillors.
In a statement of claim filed with the Court of Queen’s Bench in Battleford, Sask., Synergetik said the two parties signed a memorandum of understanding on Nov. 23, 2001, to build a series of barns on the reserve.
But the deal fell apart and Synergetik claims it was never compensated for the work it put into the project.
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No statement of defence has been filed, but band councillor Colin Favel said Poundmaker will defend itself.
“We’re looking forward to going to court because that was a joint venture agreement where certain conditions weren’t met, so then there was no deal.”
Favel is referring to a referendum that failed to get approval of the band’s rank and file.
“Without the referendum there is no deal and they know that,” Favel said.
“So I don’t know why they’re going to try to take it to court. They’ve got no way of winning.”
In the court documents it filed, Synergetik said the referendum was unnecessary because the federal Indian affairs department had classified the land in question as an agriculture site.
The hog barn promoter said it was to arrange capital financing and obtain all necessary permits, while Poundmaker would put up the land and provide security for loans and grants.
The plan was to build 10 Pure Lean barns that would take 30,000 hogs from the weanling to finished stage. It also provided for the construction of a compost unit and three greenhouses. The partners were to begin by building one barn and the compost unit.
But according to the statement of claim, due diligence work conducted by the Canadian Imperial Bank of Commerce revealed the band was “not in a positive financial situation.”
So at the request of the chief and council, Synergetik used its lobbying skills to expedite federal treaty land entitlement money owed to Poundmaker Cree Nation. The band agreed to pay the company $55,162.02 for its time and effort.
Synergetik claims it also successfully lobbied Ottawa to obtain the documents required to allow the band to develop its oil and gas reserves and it submitted an invoice amounting to $55,099.16 for that work.
As the project proceeded, Synergetik arranged financing with Farm Credit Canada for $3.5 million secured by Poundmaker Cree Nation treaty land, as well as gambling and land lease revenues.
When band members found out treaty land had been used as collateral, they organized a town hall meeting in Cut Knife, Sask., where many of them expressed disgust with the chief, council and Synergetik for using cherished treaty land to secure a hog barn deal.
In its statement of claim, Synergetik said chief and council repeatedly told it the project had the full support of band members, so the insurrection came as a surprise.
The relationship between the two business partners further unravelled when the chief and council indicated they wanted total control over the project.
On Oct. 15, 2003, the chief and council forwarded formal confirmation that the project would not proceed. Synergetik sent the band a final invoice for the work, services and out-of-pocket expenses related to the hog barn project, amounting to $559,497.65.
It has not been paid.
Favel said the band will not pursue a hog barn venture with any other company.
“The people rejected the idea here. It’s a dead issue.”
