Report on Creditor Access to the Assets of a Purpose Trust

BCLI Report No. 24

12 Pages Posted: 22 Jun 2009

Date Written: March 1, 2003

Abstract

This report is the sixth of a series of reports that form part of a larger project on the British Columbia Trustee Act and related laws that is aimed at introducing reforms that will allow the law to meet the present-day requirements of trusteeship. Many provisions of on the Trustee Act are out of keeping with present-day conditions and practices and some provisions are so seriously outdated as to be significant obstacles to efficient trust administration. This project is being carried forward on behalf of the BCLI by a our Trustee Act Modernization Committee whose members were appointed by the board of the BCLI to reflect the wills and trusts Bar, the professional fiduciary sector, and academic specialists in trust law.

During the course of the Committee’s work a decision with significant implications emerged that has generated a large measure of concern among Canadian charities. In Re Christian Brothers of Ireland in Canada the Ontario Court of Appeal ruled that assets held as a special purpose charitable trust by a charity were available to satisfy the claims of creditors even where those claims arose out of circumstances wholly unrelated to the special purpose trust.

In the Committee’s view this decision constitutes a serious distortion of the law of trusts. Since the circumstances of the case are such that no further appeal is likely, the Committee is concerned that this holding may be more widely adopted unless steps are taken. The Committee has, therefore, recommended that remedial legislation, in the form of a restatement, be enacted (with an appropriate saving for the rights of the parties in the Christian Brothers case itself).

Keywords: trusts, trustees, Trustee Act, purpose, trust, charities, charitable organizations, volunteers, tort, liability, creditor access, debt, wills, estates, life planning, immunity from liability, Christian Brothers case, Trustee Act Modernization Committee

Suggested Citation

Law Institute, British Columbia, Report on Creditor Access to the Assets of a Purpose Trust (March 1, 2003). BCLI Report No. 24, Available at SSRN: https://ssrn.com/abstract=1422644

British Columbia Law Institute (Contact Author)

British Columbia Law Institute (BCLI) ( email )

1822 East Mall
Vancouver, British Columbia V6T 1Y1
Canada

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