The B.C. Supreme Court has dismissed claims of negligence and breach of trust and fiduciary duty in a dispute over the trust fund of the Blueberry River First Nation.
The First Nation brought the lawsuit to court earlier this year, alleging $11 million had been misappropriated by two past governments between 2009 and 2013. Justice George Macintosh dismissed those allegations on Oct. 30, ruling the chief and council who oversaw the trust during those years did their best to govern, and used the monies to address a range of urgent social needs.
“It cannot be said that there has been a loss to the intended beneficiaries of the Trust, that is the Plaintiff Nation and its members, when the Nation received the funds for the various intended purposes, and allocated and spent them accordingly,” Macintosh wrote.
In his 93-page ruling, Macintosh noted Blueberry River’s ongoing issues of drug and alcohol abuse, clinical depression, family violence, and gang-related crime.
He noted “the Nation faces many pressing social issues including health, housing, violence, and education, which Chief and Council are tasked to address and alleviate.”
”These Defendants were trying to do for the Band and its members what other directors of the BTS had tried to do over the years, help the membership,” Macintosh wrote.
“When it is remembered that the Trust monies were being directed to the benefit of the Band members, the intended Trust beneficiaries, and not being diverted to the directors or some third party, it is particularly difficult to infer any dishonesty.”
On dismissing claims of negligent governance, Macintosh ruled: “The evidence shows that Chief and Council made investments and expenditures for various social initiatives such as housing, education, healthcare, etc., that Chief and Council as the governing body, had decided were necessary and appropriate,” he said.
On dismissing claims of breaching fiduciary duty, Macintosh ruled: “There is no evidence of that. All the expenditures in issue from the Trust went to the intended beneficiaries under the Trust Declaration, for the members of the Band. In the absence of self-dealing and bad faith, there is no basis for concluding that the expenditures in question in any way breached a fiduciary duty.”
The trust fund was established in June 2007 to hold and manage $76 million that Blueberry River received in 1998 from its claim against Canada for damages arising out of the surrender of reserve land in 1945, and Canada's disposition of the underlying mineral rights, according to the ruling.
The trust was structured such that the chief and council also served as its directors, and was overseen by Chief Joe Apsassin and his council between 2009 to 2013.
Macintosh noted the lawsuit was started by Chief Marvin Yahey and his new council, elected at the end of 2013, and “five months before the Band members were asked to vote on whether a civil action should be considered.” The vote was 62-62, according to the ruling.
“When the Band members voted, the claims against the present Defendants, and several others against whom the claims were eventually dropped, painted a darker case against them than is found in the present pleading,” Macintosh ruled.
In his ruling, Macintosh noted “perennial tension” between the Apsassin and Yahey families, and wrote that the notice of claim had been changed several times by the time it went to trial in February of this year.
“No satisfactory explanation was given as to why some councillors were sued and others not sued from the 2009–2013 terms,” he ruled.
“Nor was it made clear why that four-year period alone was investigated when significant funds flowed from the Trust to the Band both before December 2009 and after December 2013 on the same basis now complained.”
The Supreme Court appointed a third-party to manage the trust in 2015, and again 2016, after legal action was started, according to the ruling.
Macintosh also dismissed similar claims of negligence and breach of duty and contract made against former band manager David Laird, who served from March 2011 to December 2013.
Macintosh said Laird was “conscientious, and acted responsibly” during his tenure, and should not have been included in the lawsuit. He noted the plaintiffs had even given him a certificate acknowledging his accomplishments when Laird retired in 2013, and asked him to return in 2014 to assist the new chief and council with their transition and hire his replacement.
“He was focused on the community’s best interests. He acted in a professional and proper manner,” Macintosh wrote.
Blueberry River is about to receive approximately $350 million from the settlement of other claims with the federal government, according to the ruling.
“The Plaintiffs however appear to have chosen to write off or forgive money owing from the Nation to the Trust. In my view, that is an artificial creation of loss,” Macintosh ruled.
“If there was any loss, the party who received the funds, the Nation, can make good the loss by paying to the Trust the $11 million the Trust claims as soon as the Nation has the funds from the settlements.”
Read the full ruling below:
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