Fales v. Canada Permanent Trust Co.

Fales v. Canada Permanent Trust Co.

Canada Permanent breached its fiduciary duty by failing to take timely and adequate steps to sell the speculative Inspiration Limited shares it held for the trust, causing measurable loss to the estate; damages are the actual loss to the trust fixed at $250,408; Mrs. Wohlleben, though a co-trustee who failed to join in timely sale, is relieved from personal liability under Trustee Act s.98 because she acted honestly and reasonably; Canada Permanent is not entitled to relief under s.98 and its claim for contribution is dismissed; the exchange itself was authorized by the will and was not a breach by Canada Permanent.

Citation
[1977] 2 SCR 302
Parties
Plaintiffs/appellants (residuary Beneficiaries): Kirsten A. Fales; Bernard W. Wohlleben; Steven K. Wohlleben (infant) by Kenneth D. Wohlleben; Kenneth D. Wohlleben; Defendant/respondent (co Trustee): Canada Permanent Trust Company (Trustee of the Estate of Kai Wohlleben); Third Party/appellant (co Trustee): Mildred Alice Wohlleben
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
5 October 1976
Procedural Posture
Appeal (trusts and Trustees) / Supreme Court of Canada on Appeal From the Court of Appeal for British Columbia (trial Below and Appellate Judgment Considered)
Outcome
Appeal allowed in part: award of damages increased to $250,408; third party appeal allowed; third party cross-appeal dismissed; third party claim for contribution dismissed; Canada Permanent not relieved under s.98.
Legal Topics
Standard of Care for Trustees, Breach of Trust for Failure to Sell Assets, Contribution and Indemnity Between Co Trustees, Statutory Relief for Trustees (trustee Act S.98), Measure of Damages for Loss to Trust
Source Language
English
Trusts Trustees Remedies Equity Damages Standard of Care for Trustees Breach of Trust for Failure to Sell Assets Contribution and Indemnity Between Co Trustees +2 more

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Parties

Kirsten A. Fales; Bernard W. Wohlleben; Steven K. Wohlleben (infant) by Kenneth D. Wohlleben; Kenneth D. Wohlleben

Plaintiffs/appellants (residuary Beneficiaries)

Canada Permanent Trust Company (Trustee of the Estate of Kai Wohlleben)

Defendant/respondent (co Trustee)

Mildred Alice Wohlleben

Third Party/appellant (co Trustee)

Procedural Posture

Appeal (trusts and Trustees) / Supreme Court of Canada on Appeal From the Court of Appeal for British Columbia (trial Below and Appellate Judgment Considered)

Legal Issues

  1. 1 Whether the share exchange was authorized by the will
  2. 2 Whether Canada Permanent breached its duty in entering the exchange
  3. 3 Whether Canada Permanent breached its duty by failing to sell Inspiration Limited shares in a timely fashion

Ratio Decidendi

Canada Permanent breached its fiduciary duty by failing to take timely and adequate steps to sell the speculative Inspiration Limited shares it held for the trust, causing measurable loss to the estate; damages are the actual loss to the trust fixed at $250,408; Mrs. Wohlleben, though a co-trustee who failed to join in timely sale, is relieved from personal liability under Trustee Act s.98 because she acted honestly and reasonably; Canada Permanent is not entitled to relief under s.98 and its claim for contribution is dismissed; the exchange itself was authorized by the will and was not a breach by Canada Permanent.

Court Disposition

Appeal allowed in part: award of damages increased to $250,408; third party appeal allowed; third party cross-appeal dismissed; third party claim for contribution dismissed; Canada Permanent not relieved under s.98.

Orders

  • Allow appeal and set aside Court of Appeal award; fix damages at $250,408 and award costs to appellants
  • Dismiss third party claim by Canada Permanent against Mildred Alice Wohlleben with costs in this Court and in the Court of Appeal for British Columbia