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Section 35: Saving Provision for Gotcha! Litigation

By Hull Hull LLP

pThe a href="http://www.search.e-laws.gov.on.ca/en/isysquery/10875a83-778c-40d2-af20-72bbf10f9bb8/4/frame/?search=browseStatutesamp;context="Trustee Act/anbsp;can be a responding solicitor's best friend.nbsp; Consider section 35, which excuses trustees for technical breaches of trust where the elements are met:/p pquot;35. (1)nbsp; If in any proceeding affecting a trustee or trust property it appears to the court that a trustee, or that any person who may be held to be fiduciarily responsible as a trustee, is or may be personally liable for any breach of trust whenever the transaction alleged or found to be a breach of trust occurred, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust, and for omitting to obtain the directions of the court in the matter in which the trustee committed the breach, the court may relieve the trustee either wholly or partly from personal liability for the same.quot;/p pThis helpful section can eliminate Gotcha! claims and provides a ready response to frivolous accusations that often arise in the course of litigation.nbsp; By eliminating nuisance claims for minor breaches, section 35nbsp;gives solicitorsnbsp;acting for trusteesnbsp;anbsp;very quick answer to the minornbsp;types ofnbsp;claimsnbsp;that add little substance to already complexnbsp;litigation.nbsp; nbsp;/p pHowever, thisnbsp;provisionnbsp;does not apply to liability for a loss to the trust arising from the investment of trust property (Trustee Act, s.35(2))./p pHave a great week, and remember,nbsp;it's really Wednesday./p pChris Graham/p pnbsp;/pimg src="http://feeds.feedburner.com/~r/TorontoEstateLawBlog/~4/492237009" height="1" width="1"/

Full post as published by Toronto Estate Law Blog on December 22, 2008 (boomark / email).