Executive Summary: Key Legal and Evidentiary Issues

• The case addressed whether a successor mineral owner qualifies as a "beneficiary" with standing to seek partial termination of a trust under Alberta's Trustee Act.
   
• Justice Jones examined whether clause 22 of the Gross Royalty Trust Agreements created a reversionary interest in favour of the mineral owner.
   
• Consideration was given to whether Unitholders held a fixed indefeasible interest that had vested absolutely, which would preclude court-approved variation under section 67(6) of the Trustee Act.
   
• Arguments grounded in resulting trust principles were also evaluated with respect to accumulated funds owed to unlocatable unitholders.
   
• Submissions from the Attorney General of Alberta, the Public Trustee of Alberta, and a unitholder, Karen MacPherson, informed the court's broader analysis of the trust's legal character.
   
• A subsequent costs decision determined whether a contractual indemnity clause entitled the trustee to recover its legal expenses in full.
   

Facts of the case

953342 Alberta Ltd. is the successor to Leonidis J. Auten ("LJA"), who in 1953 entered into five Gross Royalty Trusts (the "Auten GRTs") in respect of mines and minerals he owned in Alberta. Melvin Auten is a shareholder, director and officer of the Applicant. Under the Auten GRTs, LJA had leased petroleum and natural gas rights to McColl-Frontenac Oil Company Limited (four leases) and Imperial Oil (one lease) in exchange for a 12½% gross royalty. That royalty was assigned to a trustee "forever" and divided into Gross Royalty Units, represented by Royalty Trust Certificates issued to Unitholders. Supplemental Agreements (also called Patch Agreements) were later entered into with Central Guaranty Trust Company as Trustee — four dated April 5, 1991, and one dated November 6, 1991 — reaffirming that the royalty rights had been settled on the Trustee forever. Computershare Trust Company of Canada is the current Trustee and Respondent.

The Applicant sought an order declaring the Auten GRTs partially terminated as against certain "Lost Contact Unitholders" whose share of trust revenue had accumulated with the Trustee because they could not be located. The unitholders originally named were Doyal James McVicker, Elizabeth J. Auten (c/o Eunice I. Collins), Ann Bueckert, and Helen W. McVicker and Laura Ajtwros McVicker; a successor to Doyal James McVicker was later located, leaving three Lost Contact Unitholders. The Applicant asked the court to supply consent on their behalf, to direct that accumulated non-deliverable funds be paid to it, and to direct that future royalty payments attributable to those unitholders be redirected to it rather than held by the Trustee. The Attorney General of Alberta, the Public Trustee of Alberta, and a unitholder, Karen MacPherson, also made submissions. The Public Trustee took no formal position on the partial termination itself but declined to act as trustee for the Lost Contact Unitholders, while MacPherson and the Attorney General each advanced positions contrary to the Applicant's characterization of clause 22. Justice Jones heard the application on February 17, 2026, and dismissed it in a decision dated April 1, 2026. A separate decision on costs followed on July 15, 2026.

Policy and legislative provisions at issue

Central to the merits decision was clause 22 of the GRT Agreements, which permits termination of the agreement "at any time on three months' written notice to the Trustee by the Owner herein with the consent in writing of all of the holders of Royalty Trust Certificates outstanding hereunder," and permits partial termination on the same notice and consent basis, "provided that such partial termination does not prejudicially affect the holders of any other Gross Royalty Units." The Applicant relied on this clause to argue it held a reversionary or contingent beneficial interest in the trust property.

The court also applied section 67 of the Trustee Act, SA 2022, c T-8.1. Section 67(2) permits a trustee or beneficiary to apply for court approval of a variation. Section 67(3) requires written consent from all persons beneficially interested, subject to exceptions in section 67(4), including for a person who cannot be located after reasonable inquiry. Section 67(6) prohibits the court from approving a variation that would reduce or remove a fixed indefeasible interest vested absolutely in a beneficiary. The Applicant additionally invoked section 28(3) (concerning a trustee's obligations to a "qualified beneficiary"), the definition of "qualified beneficiary" in section 1(l), and the definition of "objects" in section 1(i), none of which the court found assisted its position. In the costs decision, the operative provision was section 7.1 of the Supplemental Agreement, under which the Mineral Owner agreed to indemnify the Trustee, on a full indemnity basis, for costs arising from claims asserted through the Mineral Owner contrary to the Royalty Trust Agreement and the Supplemental Agreement.

Reasoning and analysis

Justice Jones framed the case around two threshold questions: whether the Applicant had status to bring the application, and whether the Unitholders' interests were vested indefeasibly. On the first question, the court held that section 67(2) requires an applicant to be a trustee or beneficiary, and since the Applicant was not a trustee, it needed to establish beneficiary status through clause 22. The court rejected the Applicant's position, finding that clause 22 gives the Mineral Owner only a power to give notice of termination alongside unitholder consent — it does not confer any reversionary interest in the Royalty or Gross Royalty Units. The court noted that the GRT Agreements and Supplemental Agreements repeatedly describe the assignment of the Royalty to the Trustee as being "forever," which the court found incompatible with an implied reversion to the Mineral Owner. The court also rejected, for completeness, an argument that a resulting trust arose in the Applicant's favour, citing the Supreme Court of Canada's description of resulting trusts in Kerr v Baranow, 2011 SCC 10, and finding that LJA had received full consideration for the Royalty and never intended to reacquire an interest in it.

On the second threshold question, the court considered whether the Unitholders held a "fixed indefeasible interest" that had "vested absolutely" within the meaning of section 67(6). Drawing on Boger Estate v Canada (TD), [1992] 1 FC 152, and the Alberta Court of Appeal's decision in Scurry-Rainbow Oil Ltd v Galloway Estate, 1994 ABCA 313, the court asked whether the Unitholders were ascertainable, whether they were able to take possession, and whether any condition subsequent could defeat their interest. The court found the Unitholders ascertainable through the Trustee's registry, found they had been in possession of freely tradable certificates, and found no condition subsequent capable of causing a reversion to the Mineral Owner. It concluded that the Unitholders' interests were fixed, vested absolutely, and not contingent, such that section 67(6) barred the court from approving the requested variation in any event.

In the subsequent costs decision, the court accepted the Respondent's argument that the criteria in section 7.1 of the Supplemental Agreement were satisfied, since the Applicant was the Mineral Owner and had brought an action asserting an interest contrary to the GRT Agreements and Supplemental Agreements. The court rejected the Applicant's submission that the application had been brought partly for the benefit of the Respondent and similarly situated mineral owners, finding this insufficient to avoid a costs order. Relying on Alberta Treasury Branches v 1401057 Alberta Ltd (cob Katch 22), 2013 ABQB 748, and related authorities, the court reaffirmed that a contractual costs provision does not oust the court's discretion, and that indemnity costs must still be reasonable and subject to review by an Assessment Officer.

Ruling and overall outcome

The application was dismissed. The court held that 953342 Alberta Ltd. lacked status to apply for a variation of the Auten GRTs under section 67(2) of the Trustee Act because it was not a beneficiary, and that section 67(6) independently deprived the court of jurisdiction to approve the variation because the Unitholders' interests were fixed and vested absolutely. In the costs decision, the successful party — Computershare Trust Company of Canada, as Respondent and Trustee — was awarded full indemnity costs payable by the Applicant, as assessed by a Review Officer; the decision does not state a specific dollar figure, so no exact quantum can be determined from the judgment. The court further noted that if the Review Officer disallows any portion of the claimed full indemnity, the Respondent may seek the shortfall from trust property on a formal passing of accounts.