Anna Chen, Associate, Gowling WLG (Canada) LLP

Often, estate trustees or trustees apply to the court for its opinion, advice or direction in respect to issues in the administration of the estates or trusts.  The questions put to the court may range from the interpretation of a clause in a testamentary instrument or questions as to whether the estate trustee or trustee has the authority to carry out certain steps in the administration.

What is often not known is that there are some circumstances that are not appropriate to ask the court for its opinion, advice or direction.  One such circumstance is an application by an estate trustee or trustee seeking advice, opinion or directions from the court on whether or how to exercise their discretion.  For example, questions of whether the estate trustee or trustee should make certain investments or undertake certain post-mortem tax planning are not appropriate questions to be put to the court on an advice, opinion or direction application.  Specifically, the courts have applied the following principles in dismissing such applications by estate trustees or trustees:

• the Court will not assume the role of the trustee and is not authorized to give directions to trustees on whether or how to exercise their discretion.[1]
• the Court has no power, save in the case of male fides or a refusal to discharge the duty undertaken, to put a control on the exercise of discretion of a trustee;[2]
• section 60(1) of the Trustee Act (which permits an application to court on any question respecting the management or administration of the trust property) does not authorize the Court to exercise discretionary powers on behalf of trustees, thereby shifting responsibility from the trustees to the court;[3] and
• it is not appropriate for an estate trustee or trustee to attempt to insulate themselves from liability for exercising their discretion by bringing an application for directions.[4]

Rather than bringing an application for advice, opinion or direction, the proper course is, the courts have held, for the estate trustee or trustee to exercise their discretion, and if they act honestly and with due care exercise the discretion vested in them, then they will be protected from liability.[5]

[1] Re Fulford ,1913 CanLII 515 (ONSC) at p 850.

[2] Re Wright, [1976] O.J. No. 2367 (Ont. H.C.).

[3] Keller v Wilson, 2015 ONSC 6962.at para. 25, 28 and 29

[4] Re Fulford, supra; Keller, supra.

[5] Re Fulford, supra; Keller, supra.