Crocker and Croquip Ltd. v. Tornroos and Tornroos

Crocker and Croquip Ltd. v. Tornroos and Tornroos

The testator's will expressly forbade trustees from investing in the company shares and he must be taken to have contemplated the disposal provisions in the articles; the circumstance of Dietrich's sale was not an unforeseen emergency falling within the salvage jurisdiction, so the Court had no power to authorize the trustees to purchase; Crocker lawfully exercised his personal contractual right under the articles to buy the shares when no other shareholder elected to purchase, and thus did not breach trust or abuse his fiduciary position; appeal allowed and trial judgment restored.

Citation
[1957] SCR 151
Parties
Appellant/defendant: Stanley John Crocker; Appellant/defendant: Croquip Ltd.; Respondent/plaintiff: Libbie Cleo Tornroos; Respondent/plaintiff: Alfred Hall Tornroos
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
22 January 1957
Procedural Posture
Appeal (trust Matters) / On Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia
Outcome
Appeal allowed; judgment of trial judge restored; action dismissed
Legal Topics
Breach of Trust, Trustee Investment Powers, Salvage Rule (court Authorization), Pre Emption Rights Under Articles of Association, Conflict of Interest, Jurisdiction to Authorize Trustee Acts
Source Language
English
Trusts Company Law Fiduciary Duties Breach of Trust Trustee Investment Powers Salvage Rule (court Authorization) Pre Emption Rights Under Articles of Association Conflict of Interest +1 more

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Parties

Stanley John Crocker

Appellant/defendant

Croquip Ltd.

Appellant/defendant

Libbie Cleo Tornroos

Respondent/plaintiff

Alfred Hall Tornroos

Respondent/plaintiff

Procedural Posture

Appeal (trust Matters) / On Appeal to the Supreme Court of Canada From the Court of Appeal for British Columbia

Legal Issues

  1. 1 Whether trustee (Crocker) breached trust by purchasing shares offered from Dietrich's estate
  2. 2 Whether the Court had jurisdiction to authorize the trustees to purchase shares under the salvage rule
  3. 3 Whether Crocker had a duty to apply to the Court for leave or directions before purchasing

Ratio Decidendi

The testator's will expressly forbade trustees from investing in the company shares and he must be taken to have contemplated the disposal provisions in the articles; the circumstance of Dietrich's sale was not an unforeseen emergency falling within the salvage jurisdiction, so the Court had no power to authorize the trustees to purchase; Crocker lawfully exercised his personal contractual right under the articles to buy the shares when no other shareholder elected to purchase, and thus did not breach trust or abuse his fiduciary position; appeal allowed and trial judgment restored.

Court Disposition

Appeal allowed; judgment of trial judge restored; action dismissed

Orders

  • Appeal allowed
  • Trial judgment of Whittaker J. restored