Second Session, 44th General Assembly
49 Elizabeth II, 2000
AN ACT TO AMEND THE TRUSTEE ACT
Received and Read the First Time
HONOURABLE ERNEST MCLEAN
Minister of Government Services and Lands
Ordered to be printed by the Honourable House of Assembly
Clause 1 of the Bill would repeal and substitute section 3 of the Trustee Act to replace the rules permitting investments only in listed types of property with a prudent investor standard.
Clause 2 of the Bill would repeal sections 4 and 5 of the Act which dealt with permitted investments.
Clause 3 of the Bill would remove references in sections 6, 7 and 8 of the Act to restrictions on a trustee's power to invest.
Clause 4 of the Bill would amend section 9 of the Act to make reference to the report of an appraiser of property in place of a surveyor.
AN ACT TO AMEND THE TRUSTEE ACT
1. S.3 R&S
2. Ss.4 & 5 Rep.
3. Ss.6, 7 & 8 R&S
4. S.9 Amdt.
Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:
1. Section 3 of the Trustee Act is repealed and the following substituted:
3. (1) Unless otherwise directed by the terms of the trust, a trustee may invest trust funds in any property and in investing trust funds shall exercise the care, diligence and skill that a reasonably prudent person would in comparable circumstances.
(2) A trustee shall consider the following factors when investing trust funds, in addition to others that are relevant to the circumstances:
(a) general economic conditions;
(b) the possible effect of inflation and deflation;
(c) the expected tax consequences of investment decisions or strategies;
(d) the role of each investment within the trust portfolio;
(e) the expected total return from income and the appreciation of capital;
(f) other resources of the beneficiaries;
(g) the need for liquidity, regular income and preservation or appreciation of capital; and
(h) the special relationship or value of an asset to the purposes of the trust or to a beneficiary.
(3) A trustee may, pending the investment of trust funds, deposit the funds for a reasonable time in a bank, trust company or other depository entitled to accept money for deposit under the Bank Act (Canada), Trust and Loans Corporations Licensing Act, or Credit Union Act.
(4) This section applies to all investments made on or after the coming into force of this section, regardless of the date the trust was created.
2. Sections 4 and 5 of the Act are repealed.
3. Sections 6, 7 and 8 of the Act are repealed and the following substituted:
Powers of trustee
6. The power conferred by section 3 shall be in addition to the powers conferred by the instrument creating the trust.
Security of property
7. Trustees lending money on the security of property on which they can lawfully lend may contract that the money shall not be called in during a period not exceeding 7 years from the time when the loan was made, provided that
(a) interest is paid within a specified time not exceeding 30 days after a half-yearly or other day on which it becomes due, and
(b) there is no breach of a covenant by the mortgagor contained in the instrument of mortgage or charge for the maintenance and protection of the property.
8. (1) Securities payable to bearer that are retained or taken as an investment by a trustee not being a trust corporation or the Registrar of the Supreme Court shall, until sold, be deposited by the trustee for safe custody and collection of income with a banker or banking company.
(2) A direction in an instrument creating a trust that investments shall be retained or made in the name of a trustee shall not be considered to be an express prohibition against retaining or investing in securities payable to bearer.
(3) A trustee shall not be responsible for loss incurred because of a deposit referred to in subsection (1), and a sum payable in respect of that deposit and collection shall be paid out of the income of the trust property.
(4) The Lieutenant-Governor in Council has power upon the application of a trustee to convert debentures issued under the authority of an Act of the province payable to bearer into debentures payable to the registered holder and to order that a register be opened by the Minister of Finance for the registration and transfer of those debentures.
4. Subsection 9(1) of the Act is repealed and the following substituted:
Report of appraiser
9. (1) A trustee lending money on the security of property on which he or she can lawfully lend shall not be chargeable with breach of trust by reason only of the proportion borne by the amount of the loan to the value of the property at the time when the loan was made provided that
(a) it appears to the court that in making the loan the trustee was acting upon the report as to the value of the property made by a person whom he or she reasonably believed to be a qualified appraiser or valuer instructed and employed independently of an owner of the property, whether that appraiser or valuer carried on business in the locality where the property is situated or elsewhere;
(b) the amount of the loan does not exceed 2/3 of the value of the property as stated in the report; and
(c) the loan was made under the advice of the appraiser or valuer expressed in the report.
©Earl G. Tucker, Queen's Printer