Executive Summary: Key Legal and Evidentiary Issues

• The court addressed whether the Trustees could make distributions to beneficiaries under the 1985 Sawridge Trust, despite the trust’s definition of “Beneficiary” being discriminatory.

• The trust’s definition excluded individuals who became Sawridge Band members after the Indian Act amendments, raising issues of sex-based and racial discrimination.

• The court considered whether discriminatory terms in a private trust, as opposed to a public or charitable trust, are contrary to public policy and thus unenforceable.

• Arguments were made that the trust’s terms perpetuate colonial and assimilationist policies, but the court distinguished between private settlor decisions and state action.

• The court analyzed the distinction between private and public trusts, finding the 1985 Sawridge Trust to be a private trust funded by resource revenues, not taxpayer money.

• The court concluded that the Trustees are obligated to follow the trust’s terms and may proceed with distributions as defined, despite the discriminatory criteria.

Background and facts of the case

This case involved a case management application before the Honourable Justice J.S. Little in the Court of King’s Bench of Alberta. The applicant Trustees—Roland Twinn, Margaret Ward, Tracey Scarlett, Everett Justin Twin, and David Majeski—sought a direction that they may make distributions to the beneficiaries of the 1985 Sawridge Band Inter Vivos Settlement Trust (“1985 Sawridge Trust”). The Office of the Public Guardian and Trustee (OPGT) supported the application, while Catherine Twinn opposed it. The Sawridge First Nation (SFN), as Intervenor, also opposed the application, arguing that such distributions would divide the Nation.

The application was part of a seven-step process proposed by the Trustees, filed June 28, 2024. The full application sought, among other things, confirmation of the validity of the 1985 Sawridge Trust, affirmation that distributions could be made to beneficiaries (including non-members of the Sawridge First Nation who qualify under the trust), and approval of a distribution proposal. By order filed January 11, 2025, the issue of whether distributions could be made to beneficiaries as defined in the trust was to be determined before the other relief sought.

The background, as set out in a related Court of Appeal decision (2022 ABCA 368), explained that Chief Walter Twinn established the 1982 Sawridge Band Trust to consolidate assets for the benefit of Band members. In anticipation of the Canadian Charter of Rights and Freedoms and Bill C-31, which would expand Band membership, the 1985 Sawridge Trust was created to limit beneficiaries to those who qualified as members prior to the Bill C-31 amendments. In 1986, a new trust was created for all persons who qualified as members under the laws of Canada from time to time. Thus, the 1985 Trust holds assets derived up to 1985 for pre-Bill C-31 members, while the 1986 Trust holds post-1985 assets for all members as defined by federal law.

A January 22, 2018 Consent Order acknowledged that the definition of Beneficiary in the 1985 Trust was discriminatory “insofar as it prohibits persons who are members of the Sawridge Indian Band No. 19 pursuant to the amendments to the Indian Act made after April 15, 1982 from being beneficiaries of the 1985 Trust.” The parties agreed to resolve only this specific question at that time.

Application and parties’ positions

The Trustees argued that there was no authority preventing a private trust from distributing to its beneficiaries on the ground that the definition is discriminatory. They cited their statutory obligations under s. 27(1)(a) of the Trustee Act, SA 2022, c T-8.1, to act in accordance with the terms of the trust. The OPGT, representing the interests of minor children who are beneficiaries, agreed. Ms. Twinn argued that the Trustees were attempting to perpetuate discrimination and Charter violations as a permanent feature of the 1985 Sawridge Trust. The SFN argued that the trust rules delegitimize female ancestry and emphasize racial purity.

Legal analysis and discussion of trust and policy terms

Justice Little determined that the 1985 Sawridge Trust is an express, private trust, not seeded with taxpayer money but with resource revenues. The court referenced Waters’ Law of Trusts in Canada and relevant case law, including Keewatin Tribal Council Inc. v Thompson (City), but found the 1985 Sawridge Trust to be a private trust for named persons.

The court reviewed the nature of the discrimination, noting that the trust’s definition of beneficiaries was based on the Indian Act as it existed prior to Bill C-31, which had historically excluded certain individuals, particularly women who married non-Indigenous men and their children. The court accepted that this kind of legislated sex-based discrimination deprived certain Indigenous people of benefits but found that, while relevant to public rights, its application to the 1985 Sawridge Trust was less persuasive.

The court discussed public policy considerations, referencing Canada Trust Co. v Ontario Human Rights Commission and Spence v BMO Trust Company, which distinguish between public charitable trusts (subject to public policy) and private trusts (where settlors have broad discretion, even if discriminatory). The court found that the discriminatory definition in the 1985 Sawridge Trust did not require beneficiaries or trustees to act contrary to public policy.

Outcome and conclusion

The court concluded that the Trustees may make distributions to the beneficiaries of the 1985 Sawridge Trust as defined in the trust. The court recognized the concerns raised by Ms. Twinn and the SFN about the divisive and discriminatory effects of the trust’s terms but found that trust law does not address these broader issues. Chief Walter Twinn, as settlor, intentionally created two trusts and two classes of beneficiaries, and his decision does not invalidate the right and obligation of the trustees to honor the terms of the trusts. The successful party in this application was the group of Trustees. No specific amount ordered, granted, or awarded was stated in the decision.