{"id":7605,"date":"2019-02-20T21:00:38","date_gmt":"2019-02-21T02:00:38","guid":{"rendered":"http:\/\/www.irasmithinc.com\/blog\/?p=7605"},"modified":"2019-04-27T21:08:41","modified_gmt":"2019-04-28T01:08:41","slug":"trustee-act-ontario","status":"publish","type":"post","link":"https:\/\/irasmithinc.com\/blog\/trustee-act-ontario\/","title":{"rendered":"TRUSTEE ACT ONTARIO BY A TORONTO BANKRUPTCY TRUSTEE"},"content":{"rendered":"

[monkeytools msnip=”http:\/\/monkeyplayr.com\/playr.php?u=5173&p=20240″]<\/h2>\n

Trustee Act Ontario:\u00a0 Introduction<\/strong><\/span><\/h2>\n

I want to highlight a provincial statute that is also important for the administration of a deceased estate; \u00a0the <\/span>Trustee Act, R.S.O. 1990, c. T.23<\/span><\/a> (<\/span>Trustee Act Ontario<\/b>). \u00a0This blog continues my blog series to show how it would be proper to appoint a <\/span>licensed insolvency trustee<\/span><\/a> (LIT or bankruptcy trustee) (formerly known as a bankruptcy trustee) as the estate trustee (formerly called an executor or executrix) of a solvent deceased estate. <\/span><\/p>\n

As always, since we are not lawyers, and I am by no means providing in this and upcoming <\/span>Brandon\u2019s Blogs<\/span><\/a> advice on wills or estate planning matters. For that, you must consult your lawyer.<\/span><\/p>\n

My prior estate blogs<\/span><\/strong><\/h2>\n

In my blog <\/span>TRUSTEE OF DECEASED ESTATE: WHAT A TORONTO BANKRUPTCY TRUSTEE KNOWS<\/span><\/a>, I looked at some essential matters when it involves a deceased estate and why a LIT would be extremely knowledgable and competent to act as an estate trustee of a deceased estate with those basic requirements. \u00a0<\/span><\/p>\n

In the blog, <\/span>TRUSTEE OF PARENTS ESTATE: \u00a0DO I REALLY HAVE TO?<\/span><\/a>, I explained why many times parents try doing the proper thing by appointing their children as estate trustees and how many times it just turns out all wrong.<\/span><\/p>\n

In <\/span>ESTATES ACT ONTARIO: \u00a0TORONTO BANKRUPTCY TRUSTEE REVEALS HIDDEN SECRET<\/span><\/a>, I describe how the requirements and provisions of the Estates Act are already very familiar to a bankruptcy trustee. \u00a0In fact, most of the duties required by the Estates Act are already performed in the insolvency context by a LIT.<\/span><\/p>\n

My blog <\/span>ADMINISTRATION OF ESTATES ACT CANADA: \u00a0EASY FOR TORONTO BANKRUPTCY TRUSTEE TO DO<\/span><\/a>, I explained why a LIT is a right professional to lead the administration of Estates Act Canada.<\/span><\/p>\n

In this and my next blog, I will focus on two more Ontario statutes that impact the administration of a deceased estate by an estate trustee. \u00a0The three statutes are:<\/span><\/p>\n

    \n
  1. Trustee Act, R.S.O. 1990, c. T.23<\/span><\/a>; and<\/span><\/li>\n
  2. Succession Law Reform Act, R.S.O. 1990, c. S.26<\/span><\/a><\/li>\n<\/ol>\n

    As you have by now correctly guessed, in this blog, I will show how a <\/span>bankruptcy trustee<\/span><\/a> would be very familiar with the workings of this provincial legislation.<\/span><\/p>\n

    Things an estate trustee must be aware of<\/span><\/strong><\/h2>\n

    There are various sections of the Trustee Act Ontario that affects the duties and responsibilities of an estate trustee in administering a deceased estate. \u00a0All the concepts are very familiar to a LIT.<\/span><\/p>\n

    Power of court to appoint new trustees<\/i><\/strong><\/p>\n

    Section 5(1)<\/span><\/a> of this statute gives the Ontario<\/em> Superior Court of Justice the authority to make an Order for the appointment of a new trustee. \u00a0This is the same Court that we attend for Court-appointed receivership and bankruptcy matters. So, a LIT is very familiar with the workings and requirements of this Court.<\/span><\/p>\n

    Who may apply for the appointment of a new trustee, or vesting order<\/i><\/strong><\/p>\n

    Section 16(1)<\/span><\/a> of this provincial statute says that anyone who has a beneficial interest in the property of the trust can apply for the appointment of a new trustee. \u00a0This is very similar to how a Court-appointed Receiver is appointed. Although it is normally a secured creditor who makes the application, in theory, it could be any party that has an interest. \u00a0Section 101(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 states that a receivership Order may be made \u201c…where it seems to a judge of the court to be just or convenient to do so.\u201d. It is the \u201cjust and convenient\u201d clause that was relied upon by the judge when we were appointed Receiver and Manager of the assets, properties and undertakings of <\/span>The Suites at 1 King West<\/span><\/a> condo strata hotel back in August 2007.<\/span><\/p>\n

    For this reason, as a LIT, we are very familiar with this aspect of appointing a trustee.<\/span><\/p>\n

    Power and discretion of trustee for sale<\/i><\/strong><\/p>\n

    In my blog <\/span>ADMINISTRATION OF ESTATES ACT CANADA: \u00a0EASY FOR TORONTO BANKRUPTCY TRUSTEE TO DO<\/span><\/a>, I referred to sections <\/span>16<\/span><\/a> and <\/span>17<\/span><\/a> of the Estates Administration Act. \u00a0Section 17 in particular, provides the estate trustee with the power to pay off the debts of the deceased.\u00a0It also allows a trustee to distribute or divide the estate among the beneficiaries. \u00a0<\/span><\/p>\n

    Section 17<\/span><\/a> of the provincial Act provides the trustee with the authority to sell, but subject to the requirements of the Estates Administration Act.<\/span><\/p>\n

    A \u00a0LIT, either in <\/span>receivership<\/span><\/a> or bankruptcy, is extremely acquainted and experienced in the sale of real and personal property. The LIT likewise makes certain that the creditors are paid in the correct order of priority.<\/span><\/p>\n

    Sales by trustees not impeachable on certain grounds<\/i><\/strong><\/p>\n

    Section 18(1)<\/a> deals with a certain aspect of the sale of the property.\u00a0 It states that unless it is proven that there was an inadequate sales price, a sale properly made cannot be impeached by any beneficiary.\u00a0 Any beneficiary wanting to try to impeach a sale must prove that the process used resulted in a sales price at less than fair market value.<\/span><\/p>\n

    Similarly, in a Court-appointed receivership or bankruptcy, the LIT must be able to prove that both the conditions of the sales process and the sales price achieved, was right for the types of assets in the circumstances. \u00a0<\/span><\/p>\n

    The leading case is the <\/span>Ontario<\/span><\/i> Court of Appeal decision in <\/span>Royal Bank of Canada v. Soundair Corp.<\/span><\/i>, 1991 CanLII 2727 (ON CA)<\/span><\/a>. \u00a0The process a LIT must follow is known as the \u201cSoundair principles\u201d. \u00a0This is the test used when deciding whether a receiver or trustee applying for Court approval of a sales process and the authority to sell assets has acted properly. \u00a0The Court must decide whether the receiver or trustee has:<\/span>
    \n<\/span><\/p>\n