The Attawapiskat First Nation lost its attempt Friday to stop the federal government's appointment of a third-party manager for the troubled reserve in northern Ontario.

The application for an injunction was dismissed in federal court but Judge Michael Phelan also ordered Aboriginal Affairs Minister John Duncan and the third-party manager to comply with an agreement to pay for 22 new homes in Attawapiskat.

The homes, ordered in December at a cost of $2.4 million, can't be delivered until the winter road is operational. That could be next week.

Attawapiskat grabbed national attention late last year after declaring a state of emergency because families were living in tents and sheds. The federal government's appointment of an outside manager on Nov. 30 in response to the situation has been opposed by the community's leadership from the beginning and prompted the court action.

Jacques Marion, the man appointed as the third-party manager to be responsible for administering Attawapiskat's finances, was asked to leave the community by Chief Theresa Spence.

In the judge's words, there is "a significant amount of frustration, anger and distrust" among the people involved and an "almost unexplainable gap in perceptions" between the two sides. 

He ruled that Attawapiskat's request did not meet the legal test for an injunction and that the separate judicial review application to quash the appointment will still be heard on April 24.

Attawapiskat has a plan for installing and servicing 22 modular homes and De Beers Canada Inc., which has a mine on the reserve, has agreed to be the project manager. The federal government has agreed to this plan and said in court that if the invoices for the 22 homes are given to the third-party manager, the funds will be released for them.

Friday's dismissal of the injunction request is conditional upon the government's compliance with the order for it to pay for the homes, according to the plan.

Proceeding with this plan, however, would not mean that Attawapiskat is accepting the role of the third-party manager, the judge ruled.

The ruling says Attawapiskat "shall not be required to accept, acquiesce or acknowledge the legality of the appointment of the [third-party manager] in order to secure payment of the invoices."

The judge also says determining how the housing conditions in Attawapiskat could deteriorate in a country as rich and generous as Canada is an issue "for another day."