Justice James Russell ruled that Terrance Nelson ceased being chief of the Roseau River Anishinabe First Nation on Sept. 20, 2011 — the day the community's Custom Council removed him over his refusal to co-operate with an audit into the band's financial affairs.
The Custom Council is the band's governing authority and is made up of one representative from each family in the community.
Nelson was a candidate last year for the top job at the Assembly of First Nations.
Russell ruled that Nelson, along with several other band councillors who were also removed, attempted to dissolve the Custom Council.
When that didn't work, Russell said they "attempted to concoct and/or rely upon a fake Custom Council resolution" to reinstate themselves.
The dispute caused financial havoc for the community, with financial institutions freezing the band's accounts and band employees unsure who to take orders from.
Russell ruled that Kenneth Henry Jr., who was elected in a byelection to replace Russell, is the legitimate chief.
"The evidence before the Court establishes reprehensible, scandalous and outrageous conduct on the part of the Nelson Respondents," Russell wrote in the ruling, which was released Thursday.
Nelson withdrew as a candidate during the multiple rounds of voting for the chief of the Assembly of First Nations last July after receiving few votes. He threw his support behind Pam Palmeter, who eventually lost to Shawn Atleo.
Earlier this year, he took part in an Idle No More blockade of a Canadian National rail line in Manitoba.
The Custom Council levelled allegations of financial mismanagement against Nelson starting in 2007, Russell wrote. As a result of the allegations, Indian and Northern Affairs Canada appointed a third-party manager to administer the band's funds.
A forensic audit was ordered in 2007, and Russell wrote that Nelson refused to provide the auditor with records, co-operate with the process, or attend Custom Council meetings. This eventually resulted in a decision by Custom Council to remove him from his position as chief, Russell said.
Henry was elected in a byelection in October 2011 to replace Nelson. In protest, councillors Michael Littlejohn, Evelyn Patrick and Keith Henry refused to attend to their duties as councillors, so the Custom Council ousted them, too.
Despite their removal, Russell wrote that Nelson, as well as the three ousted councillors, continued to hold themselves out as chief and council.
"On 31 October 2011, documents were authored that made it appear as though the family units of (the community) had met and appointed new family representatives to the Custom Council to replace the actual Custom Council," Russell wrote.
"On 1 November 2011, 16 individuals signed a document which they called a 'Custom Council Resolution' purporting to rescind the decisions of the real Custom Council and reappointing the Nelson Respondents as Chief and Band Councillors."
However, Russell wrote that a representative of the Custom Council told the court that she wasn't aware of the resolution and wasn't notified about it. Affidavits were also submitted to the court claiming that many of the people who signed the resolution were direct family members of Nelson and the other former councillors. The affidavits also claimed that people who purported to be the representatives of certain families were not the actual representatives, Russell's ruling said.
Russell said the confusion made it difficult for the community to function until the Federal Court issued an injunction on Feb. 2, 2012 ordering Nelson and the former councillors to cease holding themselves out as chief and councillors.
Russell has ordered Nelson and his fellow former councillors to pay court costs.
The federal auditor's report into the band's finances found no criminal activity but it questioned some of the financial spending, including $500,000 of undocumented loans, $2,500 Christmas bonus for chief and council and $2.1 million to develop land for a gaming centre and gas bar.
In March 2011, Nelson said a conspiracy involving federal government officials was behind the auditor's report, and that it was meant to undermine his chances of re-election as chief in elections later that month.
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