A man established a trust for his widow during her life and after her death. Their son, his accountant and widow were co-trustees. The widow suffered from Parkinson’s disease. The accountant refused to consent to a termination of the trust to permit the widow to transfer shares to her son during her lifetime.
The court ordered termination of the trust. The court noted that the accountant failed to appreciate the distinction between the estate and the trust by alleging debts owed by the estate (a loan never called upon, a recent invoice for the accountant’s time which the court doubted would be fully recoverable given it did not reflect this distinction in its billing and legal fees) prevented him from consenting to termination of the trust. The court found such debts irrelevant to the trust because property bequethed on trust ceases to be part of the estate. The accountant knowingly brought about a situation where there were no assets of the estate from which he could be indemnified and all the debts relied upon only materialised since the commencement of proceedings. In any case, the accountant has no right of indemnity out of the trust in respect of debts of the estate. Further the court found the “concern” of the accountant (as to whether the widow was sui juris when her mental faculties were unimpaired) unfounded.