Creditor Access to the Assets of a Purpose Trust

This report discusses the ruling of the Ontario Court of Appeal in Re Christian Brothers of Ireland in Canada. The ruling asserted that assets held by a charity on a charitable trust for a special purpose were available to satisfy the claims of creditors, even where those claims arose out of circumstances wholly unrelated to the purpose of the trust. This decision was widely considered to change what had previously been the law. The report considers the implications of the decision for the operation of charitable trusts and charitable fundraising. The report recommends remedial legislation to prevent undesirable results potentially flowing from the ruling. The report was implemented in effect by the Charitable Purposes Preservation Act, which came into force in 2007.

Keywords: trusts and trustees, Trustee Act, purpose, trust, charities, charitable organizations, volunteers, tort, liability, creditor access, debt, wills, estates & life planning, immunity from liability, Christian Brothers case, Trustee Act Modernization Committee