Breach of Fiduciary Duty

Breach of Fiduciary dutyBreach of Fiduciary Duty

In Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, [2011] 2 S.C.R. 261(S.C.C.), the Supreme Court of Canada concisely described the nature of a fiduciary relationship.

At para. 22, the Court observed that the doctrine relating to fiduciary duty arises out of trust principles. It requires the fiduciary to act with absolute loyalty toward the beneficiary in managing the beneficiary’s affairs.

In general terms, a fiduciary relationship comprises the following characteristics:


1. The fiduciary has scope for the exercise of some discretion or power;


2. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests;


3. The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power: see Elder Advocates of Alberta Societyat para. 27.


An estate trustee, such as the defendant, is in a fiduciary relationship with the beneficiaries of the estate. By the terms of the will, the testator creates a trust and places the executor as trustee with authority over that trust. The trustee has the freedom to refuse the appointment; however, when he accepts the appointment he is bound by his fiduciary obligations. Accordingly, he must forsake the interests of all others in relation to the legal interest at stake in favour of the beneficiaries of the trust: Elder Advocates of Alberta Societyat paras. 30 – 31.

Recommended Posts