The Saskatchewan Court of Queen’s Bench interpreted a clause in a trust agreement for a trust settled by a Saskatchewan First Nation. The Court held that, when interpreting the amendment provisions of the trust agreement, the “majority of the majority” approach should be applied.

In 2009, the Nekaneet First Nation settled a trust through a written trust agreement. Royal Trust was appointed as the trustee of the Trust. Pursuant to the terms of the trust agreement, the beneficiary of the Trust would be the First Nation.

Article 12.2 of the trust agreement provided for amendments. Particular types of amendments may occur by written agreement between Royal Trust and the First Nation following a referendum of eligible members of the First Nation. Article 12.2(c) referred to approval by “a majority of 50% plus one of all Electors voting in favour of such amending agreement in a referendum duly called for such purpose”. Article 12.2(d), which concerned amendments permitting the use of trust property and other purposes, stated that an amendment required the approval by a majority of 75%.

The term “Elector” was defined as a “Member” of the First Nation who was 18 years or older. The term “Member” was defined as a member of the First Nation within the meaning of the Indian Act or any membership code. The Court also noted that the Nekaneet First Nation had adopted a Constitution in 2008 that had a similar amending formula.

Royal Trust applied to the Saskatchewan Court of Queen’s Bench pursuant to the provincial Trustee Act for the construction and interpretation of article 12.2

As a preliminary matter, the Court held that the Saskatchewan Court of Queen’s Bench had jurisdiction to interpret the trust agreement. This issue did not fall within s. 18 of the Federal Court Act, but involved a trust agreement made in Saskatchewan. The Court had inherent jurisdiction over the management and administration of trusts.

In regards to the interpretation issue, Krogan J. considered various possible interpretations. She rejected an interpretation whereby only a majority of the eligible voters who attend a meeting would satisfy the amending requirement. She commented:

As a practical matter, accepting that a majority of Electors who vote is what is required to amend the Trust Agreement, one might see a situation where the Trust Agreement could be amended if five Electors cast votes in a referendum and of those five, the stipulated majority vote in favour of proposed amendments to the Trust Agreement. Where such a low threshold is contemplated, that approach ought to be clearly captured in the wording of a written instrument such as was contained in s. 39 of the Indian Act, 1985.

Krogan J. preferred the “majority of the majority approach” used in other Aboriginal cases, including the Supreme Court of Canada’s interpretation of the voting requirements under s. 49 of the Indian Act, 1906 in Enoch Band of Stony Plain Indian Reserve No. 135 v. Canada, [1982] 1 S.C.R. 508. The first step is to identify a quorum. The next determination is, of that quorum, how many positive votes are required to approve a particular matter. Krogan J. noted that this interpretation of the trust agreement would also be consistent with the amendment provisions of the Constitution adopted by the Nekaneet First Nation in 2008. By way of illustration, the Court set out the following:

Thus, in paragraph 12.2(c), if there were 100 Electors, a quorum of 50% plus one of the Electors would be 51 Electors. A majority of 51 would be, rounded up, 27 Electors. A positive vote of 27 or more would be required to amend the Trust Agreement for the reasons enumerated in that paragraph.

In paragraph 12.2(d), if there were 100 Electors, the quorum of 75% of those Electors would be 75 Electors. The majority of those would be 38 Electors. A positive vote of 38 or more would be required to amend the Trust Agreement for the reasons contained in that paragraph.

The Court therefore held that paragraphs 12.2(c) and (d) of the trust instrument should be interpreted in keeping with the “majority of the majority” approach.

http://www.canlii.org/en/sk/skqb/doc/2014/2014skqb309/2014skqb309.html

Author

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Expertise

Aboriginal Law