Per Côté J.: In general, there is no proactive duty on the part of a trustee to take steps to inform potential claimants of a bond’s existence, although a trustee does have an equitable obligation to accurately answer all requests from potential claimants for information pertaining to the existence and particulars of any labour and materials payment bond. ![]() Bird therefore committed a breach of trust. Something more than nothing was required. It could have posted a notice of the bond in its trailer. Bird had an on-site trailer in which notices were normally posted and where Valard was required to attend daily meetings. Its obligation extended only to taking reasonable steps to notify potential beneficiaries of the trust. Conversely, Bird could not have known of all potential beneficiaries when the bond was procured. An honest, reasonably skillful and prudent trustee would have known that labour and material payment bonds were uncommon on private oilsands construction projects. What a trustee must do to discharge it is highly sensitive to the context in which the particular trust relationship arises. The specific demands of that standard are informed by the facts and circumstances of which the trustee ought reasonably to have known at the material time. The standard to be met by a trustee in respect of the duty to disclose the trust’s existence is that of honesty, and reasonable skill and prudence. The expiry of the notice period before Valard learned of the bond effectively prevented it from enforcing the trust. Valard was unreasonably disadvantaged by Bird’s failure to inform it of the trust’s existence. Whether a particular disadvantage is unreasonable must be considered in light of the nature and terms of the trust and the social or business environment in which it operates, and in light of the beneficiary’s entitlement thereunder. In general, wherever it could be said to be to the unreasonable disadvantage of the beneficiary not to be informed of the trust’s existence, the trustee’s fiduciary duty includes an obligation to disclose the existence of the trust. In some cases, the beneficiary’s right to enforce the trust can be meaningfully exercised only if he or she is first informed of the trust’s existence. The beneficiary of a trust has a right to hold the trustee to account for its administration of the trust property and to enforce the terms of the trust. In the circumstances of this appeal, where the evidence was that labour and material payment bonds were uncommon in the pertinent sector and where the trustee’s failure to disclose the existence of the trust prevented the beneficiary from making a claim within the prescribed notice period, that duty was breached. and Abella, Moldaver, Brown and Rowe JJ.: Wherever a beneficiary would be unreasonably disadvantaged not to be informed of a trust’s existence, the trustee’s fiduciary duty includes an obligation to disclose the existence of the trust. dissenting): The appeal should be allowed and the matter of quantum of damages should be remitted to the trial judge for adjudication. A majority of the Court of Appeal dismissed Valard’s appeal. The trial judge dismissed Valard’s action. Bird replied affirmatively and Valard filed a claim. ![]() After the 120-day notice period had expired, it asked Bird whether a bond had been obtained. Valard was never notified of the bond’s existence. Langford became insolvent and some of Valard’s invoices went unpaid. Langford contracted with Valard to provide work on the project. The bond allows for a provider of work who has not received payment from Langford to sue a company acting as a surety for that unpaid sum, subject to a condition that it give notice of its claim within 120 days of its last provision of work. Bird subcontracted with Langford and required Langford to obtain a labour and material payment bond naming Bird as trustee. Trusts - Fiduciary duty - Bonds - Whether trustee of trust contained in labour and material payment bond owes duty to disclose existence of bond to potential beneficiari es of trust - If duty is owed, whether conduct of trustee discharged it.īird was a general contractor for a construction project in the oilsands. On appeal from the court of appeal for alberta and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ. ![]() Bird Construction Co., 2018 SCC 8, 1 S.C.R. and Abella, Moldaver, Karakatsanis, Côté, Brown and Rowe JJ.īrown J. Bird Construction Co., 2018 SCC 8, 1 S.C.R.
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