Duties of Trustees

Trusteeship is an extremely onerous position. Trustees are subject to
the specif‌ic duties created by t he trust instr ument and by legislation.
In addition, they have a great many duties placed upon them by equity.
These duties have been car ved out through a long series of cases decided
by the courts of equity and according to equitable principles; although
it seems like a contradiction in ter ms, when we describe such duties, we
will refer to them as common law duties. The words “common law” are
used not as a reference to the King’s common law courts but in contra-
distinction to duties imposed by legislation or by instrument.
An understanding of the common law duties imposed upon trust-
ees has as its starting point the fact that a trustee is a f‌iduciary.1 The
trustee exists to administer the property on behalf of the benef‌iciary.
The trustee is to put the benef‌iciary’s interests f‌irst in t he performance
of any act and the exercise of any powers or duties. This obligation to
act solely for the benef‌it of the benef‌iciary is ter med the “duty of loyalty.
It is the duty of loyalty that underlies all the duties discussed in this
chapter: t he obligation to perform personal ly, the duty to invest the trust
assets, the obligation to act impar tially, the duty to account, and the duty
to provide information. The duty of loyalty also requires trustees to act
honestly, with candour and diligence; avoid placing themselves in situa-
tions of conf‌lict of interest; and derive no prof‌it from their position.
1 See Chapter 1 for a more deta iled discussion of the f‌iduci ary concept.

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