Tag: Application for Directions

13 Sep

Application for Directions – Trustee Act

Stuart Clark Trustees Tags: , , , , , , , , , 0 Comments

Being a trustee of a trust can be perilous, with trustees facing potential personal liability should they make the wrong decision. As a safeguard against such potential liability, when issues arise in the administration of a trust, trustees may consider commencing an Application for the opinion, advice or direction of the court in accordance with the Trustee Act. Section 60(1) of the Trustee Act provides:

“A trustee, guardian or personal representative may, without the institution of an action, apply to the Superior Court of Justice for the opinion, advice or direction of the court on any question respecting the management or administration of the trust property or the asserts of a ward or a testator or intestate.”

Should the court accept such an Application, and provide the trustees with directions regarding the issue, the trustees are insulated from liability as it relates to the beneficiaries regarding such an issue so long as they act in accordance with the directions of the court. This is made clear by section 60(2) of the Trustee Act, which provides:

As per the Trustee Act, draft an Application for Directions to safeguard a trustee from potential liability.
“As a safeguard against such potential liability, when issues arise in the administration of a trust, trustees may consider commencing an Application for the opinion, advice or direction of the court in accordance with the Trustee Act.”

“The trustee, guardian or personal representative acting upon the opinion, advice or direction given shall be deemed, so far as regards that person’s responsibility, to have discharged that person’s duty as such trustee, guardian or personal representative, in the subject-matter of the application, unless that person has been guilty of some fraud, wilful concealment or misrepresentation in obtaining such opinion, advice or direction.”

Notably, while section 60(1) of the Trustee Act allows trustees to direct a specific issue for the “opinion, advice or direction” of the court, the court has been clear that on such an Application the court will not exercise discretionary decisions on behalf of the trustees. Such a point was recently made clear by Justice Broad in Keller v. Wilson, where at paragraph 25 the court states:

“The fact that trustees are expressly permitted by the Trustee Act to apply for the opinion advice or direction of the Court does not authorize the court to exercise discretionary powers on behalf of trustees, thereby shifting responsibility from the trustees, on whom the settlor of the trust placed such responsibility, to the court. This is so even though subsection 60(2) of the Trustee Act provides a specific indemnification to trustees who act upon the opinion, advice or direction of the court.” [emphasis added]

Cases like Keller v. Wilson make it clear that on an Application for opinion, advice, or direction, the court will not exercise discretionary decisions on behalf of the trustee, with their jurisdiction to provide directions being limited to questions of a “legal” nature relating to the discharging of the trustees’ duties. To this effect, the court’s direction can be thought of the court advising whether the trustee “can” not “should” do a particular action. While the court will advise whether the trustee has the legal authority to do a particular action, they will not make such a discretionary decision on behalf of the trustee.

Thank you for reading.

Stuart Clark

19 Feb

Application for Directions – Discretionary Decisions

Stuart Clark Power of Attorney Tags: , , 0 Comments

Being an Attorney for Property is often a thankless job. You are often required to make difficult decisions on behalf of an incapable person regarding their ongoing financial wellbeing, in doing so opening yourself up to potential liability not only to the incapable person themselves, but also potentially to the beneficiaries of the incapable person’s estate. As a result of the difficult decisions which Attorneys for Property often have to make, and the risk of liability that comes with the job, it should come as no surprise that some Attorneys for Property turn to the court for guidance.

Section 39(1) of the Substitute Decisions Act (the “SDA“) provides the statutory framework under which an Attorney for Property may apply to the court for directions, providing:

“If an incapable person has a guardian of property or an attorney under a continuing power of attorney, the court may give directions on any question arising in connection with the guardianship or power of attorney.”

In Keller v. Wilson, 2015 ONSC 6962, the Ontario Superior Court of Justice was faced with an Application for directions brought by two Attorneys for Property under section 39(1) of the SDA, whereby the Attorneys asked for the assistance of the court with respect to whether they should comply with the request of the incapable person’s son that the Attorneys provide him with funds from the incapable’s property, and that the Attorneys should sell certain real property owned by the incapable to finance such a transfer.

In determining whether it could make such a decision for the Attorneys, the court looked to sections 37(1) and 37(3) of the SDA which authorize the Attorneys to make expenditures to support the incapable person’s dependants, as well as to make gifts or loans to the incapable person’s friends and relatives. The court also looked to the evidence on hand that the incapable had specifically advised her lawyers that she did not want to provide her son with an allowance, and about the difficult relationship which the incapable had previously had with her son.

The court ultimately refused to exercise the discretionary decision on behalf of the Attorneys, looking to the 1903 decision of Re Fulford, 29 O.L.R. 375, wherein the court provided the following:

“The executors cannot come to the Court and ask whether the present is a good time or a bad time to sell stock or anything else, or ask whether a price offered is sufficient or insufficient. The advice which the Court is authorized to give is not of that kind; it is advice as to legal matters or legal difficulties arising from the discharge of the duties of the executors, not advice with regard to matters concerning which the executors’ judgment and discretion must govern.” [emphasis added]

Keller v. Wilson makes it clear that discretionary decisions ultimately rest with the Attorneys alone, and the court will not exercise their discretion for them. While the court will provide direction with respect to legal issues which arise within the management of an incapable person’s property, they will not exercise discretionary decisions for the Attorney for Property. Such discretionary decisions ultimately rest with the Attorney for Property alone.

Stuart Clark

 

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