Manitoba grand chief accused of scrapping $20M land deal over alleged personal mortgage default

Southern Chiefs' Organization Grand Chief Jerry Daniels threatened to kill a $20-million land deal over demands that he make payments on a personal mortgage, a numbered company alleges in court documents.

The allegation is made by lawyers for 7475323 Manitoba Ltd. in court documents associated with a legal battle between the private company and the Southern Chiefs' Economic Development Corporation.

"On numerous occasions, Daniels advised that he could influence the progress of the transaction agreed on if the defendant … did not desist in its' demands [to make mortgage payments]," one of the court filings says.

"Ultimately, Daniels … advised that this property transaction would not proceed further, which action [the company] asserts was motivated by the personal transaction matters."

Daniels heads the Southern Chiefs' Organization, which represents 33 Anishinaabe and Dakota First Nations in southern Manitoba with more than 87,000 citizens, its website says. The SCO owns the former Hudson's Bay Co. building in downtown Winnipeg, which is the focus of a $200-million redevelopment project, and is working with True North Real Estate Development on a residential tower proposed as part of the $650-million redevelopment of Portage Place, across from the old Bay building.

The legal dispute that contains the allegations against Daniels was launched when the Southern Chiefs' Economic Development Corporation filed a lawsuit against the numbered company in November 2023, seeking a $100,000 deposit it made to the company in May 2019 for the possible acquisition of five parcels of land on Dugald Road in Winnipeg.

The Southern Chiefs' corporation said in its statement of claim that the terms of its contract with the company included that, while the two parties would try to negotiate a $20-million deal for the land, neither of them "had any binding obligation" to make a deal. The contract also said "in the event that the parties did not close the purchase and sale agreement, any deposits would be returned," the statement of claim said.

But in a statement of defence and counterclaim filed in May, the numbered company asked that the Southern Chiefs' Organization Economic Development Corporation be made to forfeit its $100,000 deposit and pay damages, including upwards of $765,000 in expenses incurred by the company as it worked to advance the land deal, alleging the Southern Chiefs' group "negligently misrepresented" its commitment to the deal.

In that document, the company alleges that shortly after a letter of intent for the deal was executed around December 2018, Daniels approached the company to ask for a mortgage for a condo in Winnipeg — which the company said it provided through an associated corporation.

The company alleges Daniels then "went into default under the payment terms several times," resulting in the company "putting Daniels on notice of the default, demanding payment, and advising of its intent to pursue its remedies," the statement of defence and counterclaim says.

In a reply and defence to the counterclaim filed in August 2024, the Southern Chiefs' group denied the company's allegations, calling them "meritless, scandalous, vexatious [and] irrelevant."

It also said Daniels was the one who was approached about taking out the mortgage — not the other way around — and that he did not default on it.

No guarantee

The Southern Chiefs' group also denies the company's allegations of misrepresentation, saying the company "knew or ought to have known" the deal wasn't guaranteed to close, noting it had not secured the financing it needed to buy the land.

The Southern Chiefs' Economic Development Corporation, established in 2018, was recently disbanded by the Manitoba Companies Office after it appears to have failed to file its annual returns for several years, provincial records show.

Daniels was first elected as grand chief of the Southern Chiefs' Organization in 2017. He was acclaimed for a second term in 2020 and re-elected this past June.

He recently returned to his position after going on leave following an altercation in Ottawa last month that left him hospitalized. Ottawa police later said the investigation into the incident was closed with no charges laid.

Daniels later issued an apology via Facebook, saying he was seeking help for alcohol use after what he described as "a wake-up call."

While Daniels was initially scheduled to return to his position Jan. 6, his leave was extended after eight First Nations that belong to the Southern Chiefs' Organization said they would withdraw from the organization unless a summit of its chiefs was held before a decision was made on its leader's return to office.

In a Facebook post last week, the organization said it was "excited and deeply grateful" to welcome Daniels back to his role after his leave.