Is a trustee liable for any loss to the trust estate if the trust funds were left uninvested for an unreasonable amount of time?
British Columbia, Canada
The following excerpt is from McQuarrie v. Jacobs, 1987 CanLII 2735 (BC SC):
Turning now to the merits, the law is clear that a trustee must duly and promptly invest all capital trust money coming to his hands and all income which cannot be immediately applied for the purposes of the trust, and he is liable for any loss which may result from its being improperly invested or being left uninvested for an unreasonable length of time, and for interest during the period of its being so left. 48 Hals. (4th) 454, para. 835; Cann v. Cann (1884), 51 L.T. 770, where the headnote reads: Held, that fourteen months was too long for the trustees to leave trust money on deposit at a bank; that if after six months they could not get a mortgage they ought to have invested the money in consols; that, from the moment they left it too long on deposit, they became responsible for the consequences of their default, and were therefore liable for the sum lost to the trust estate.
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