Can a trustee under a will or other trust instrument be sued for imprudent exercise of its powers under the Bankruptcy Act?
British Columbia, Canada
The following excerpt is from Qualicum Builders Supply Co. v. National Bank of Canada, 1989 CanLII 5177 (BC CA):
First, I point out that the Bankruptcy Act: 1. Does not make the approval of the court necessary for the compromise by the trustee of disputed claims. 2. May not relieve a trustee from suit for improvident or negligent exercise of its powers under the Act. I have not looked into this precise question but I have no doubt that a trustee under a will or other trust instrument can be sued for the imprudent exercise of a power conferred upon him by the instrument: see in Re Salmon, Priest v. Uppleby, [1889] 42 Ch. D. 351 at pp. 362-71.
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