Scoretz v Kensam Enterprises Inc 2017 BCSC 1356 was an action for breach of trust brought by the beneficiary of a bare trust and discusses the liability and duties of a trustee of a bare trust.
The Court found that the trustee was liable in damages for failing to hand over the shares when directed to do by the beneficiary who suffered damages as a result.
40 In Waters Law of Trust in Canada, 3rd ed. (Toronto: Thomson Carswell), 2005, the learned author makes this statement regarding the nature of a bare trust and the duties of a bare trustee:
The usually accepted meaning of the term “bare,” “naked” or “simple” trust is a trust where the trustee or trustees hold property without any duty to perform except to convey it to the beneficiary or beneficiaries upon demand. It is true, of course, that so long as a trustee holds property on trust he had the duty to account for the property, keeping it secure and unharmed. The trustee cannot divest himself of this duty, and, if that is his sole duty, he must transfer that property to the beneficiary on demand. . . .
(at pp. 33 and 34)
41 In Bronson v. Hewitt, 2010 BCSC 169, Goepel J. (as he then was), made this statement regarding the nature of a bare trust:
In Trident Holdings Ltd. v. Danand Investments Ltd. (1988), 64 O.R. (2d) 65 at 75, the Ontario Court of Appeal described a bare trust and the role of its trustee as follows, quoting from Maurice C. Cullity, “Liability of Beneficiaries-A Rejoinder” (1985-86), 7 E. & T.Q. 35 at 36.:
The distinguishing characteristic of the bare trust is that the trustee has no independent powers, discretions or responsibilities. His only responsibility is to carry out the instructions of his principals the beneficiaries. If he does not have to accept instructions, if he has any significant independent powers or responsibilities, he is not a bare trustee.
(at para. 636)
42 In Bronson, supra, Goepel J. held that a trustee breached the terms of the trust which had required the trustee to return the trust property on demand when the trustee required the beneficiaries to sign a release and indemnification before releasing proceeds of a share transaction. I find that what was prohibited in Bronson, supra, is prohibited here.
43 As a bare trustee, Kensam was obligated to deliver the trust property upon demand and, as the principal of Kensam, Mr. Sai was required to take whatever steps that were required so that Kensam would make such a delivery to Mr. Scoretz. The failure to deliver the LIM Shares to Mr. Scoretz when they were demanded constitutes a breach of trust. The failure to deliver the Napier Shares to Mr. Scoretz when they were demanded also constitutes a breach of trust.
44 I am also satisfied that Kensam and Mr. Sai have acted other than in accordance with the obligation to act in the interests of Mr. Scoretz to the exclusion of the separate interests of Kensam and Mr. Sai.
45 One of the fundamental duties owed by a bare trustee to a beneficiary was set out by Gow, J. in MacDonald v. Thompson (1988), 26 C.C.E.L. 269 (B.C.S.C.) in the following statement:
A trustee in his dealings with one who has an interest in the fund which the trustee administers is under a duty to that someone of exceptional honesty. The standard is known “fiduciary” and was recently described by our Court of Appeal in Litwin Construction (1973) Ltd. v. Peter Pan et al.,  B.C.J. No. 1145 (No. CA006245/6/7 June 28, 1988) at p. 23 as follows:
It arises where the obligation that is undertaken or imposed is the obligation of loyalty or selflessness arising from the fiduciary having entered a relationship where the other party is entitled to expect that the fiduciary will act in the other party’s interests, or in the interests of both parties (where those interests coincide), to the exclusion of the fiduciary’s own separate interests (where those interests are opposed), and where the fiduciary has the power to affect the other party’s interests in a legal or practical sense, giving rise to a position of vulnerability in the other party.
In order to perform properly that fiduciary duty a trustee when considering and dealing with the interest of that someone must rid himself of bias (prejudice) and be scrupulous to act with fairness and impartiality c.f. Boe v. Alexander, (supra), at pp. 113-114
(at paras. 73 and 74)
46 The standard of care and diligence required of a trustee was also set out in Fales v. Canada Permanent Trust Co.,  2 S.C.R. 302 where Dickson J., on behalf of Court stated:
Traditionally, the standard of care and diligence required of a trustee in administering a trust is that of a man of ordinary prudence in managing his own affairs (Learoyd v. Whitely, at p. 733; Underhill’s Law of Trusts and Trustees, 12th ed., art. 49: Restatement of the Law on Trusts, 2nd ed., para. 174) and traditionally the standard has applied equally to professional and non-professional trustees. The standard has been of general application objective though, at times, rigorous.
(at p. 315)
47 A beneficiary is entitled to expect that a trustee will act in his or her best interests to the exclusion of the interests of a trustee: Litwin Construction, supra at p. 95.