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Causation in trust law: Where are we now?

Trusts and Estates

Causation in trust law: Where are we now?

Where a trustee has misapplied trust property, their obligation to restore the trust asset (or its value) to the trust fund was traditionally viewed as a strict obligation, where principles of causation played little or no part. Rules of foreseeability and remoteness, developed largely in the context of common law tort and contract claims, were of limited importance. As McLachin J said in Canson Enterprises Ltd v Boughton & Co (1991) 85 DLR (4th), it would be wrong to apply causal rules developed in tort by analogy as this “overlooks the unique foundation and goals of equity”.

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