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TRUSTS - The trustee - Action against

Wednesday, March 17, 2021 @ 6:33 AM  

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Appeal by Carroll from an order dismissing her application against TD Bank for orders that would result in the disclosure, discovery and redress of financial irregularities and misconduct, if any, by TD relating to its role as Trustee of designated mutual funds. The appellant was a former employee of TD responsible for the compliance of a group of TD Bank’s subsidiaries with legal and regulatory obligations and internal policies relating to the management of mutual funds. She allegedly exposed regulatory non-compliance and breaches of mutual fund trusts by TD Bank’s subsidiaries. She claimed that TD succeeded in suppressing the full extent of its wrongdoing and its enrichment, including by wrongfully dismissing her from her employment in 2014. After her dismissal, the appellant commenced a wrongful dismissal action. In 2019, she commenced the application against TD. The motion judge found the appellant lacked standing to bring the application.

HELD: Appeal dismissed. The motion judge did not err in finding the appellant lacked standing to bring her application. Standing was required to sue for breaches of trust. There was no support for the appellant’s claim that the inherent jurisdiction of courts to supervise or administer trusts made standing a subordinate or largely irrelevant consideration where allegations of fraudulent or improper misconduct were made against a trustee. The enforcement of trusts was not achieved by empowering courts to act as commissions of inquiry into their proper performance, but by empowering courts to assist those with an interest in trusts in enforcing and compelling the performance of those trusts. The inherent jurisdiction to supervise and administer trusts existed to assist the parties to the trust relationship or those who were interested in the trusts. As such, the inherent jurisdiction of courts to supervise and administer trusts was not inconsistent with the imposition of standing requirements. The motion judge considered the correct standing tests in determining whether the appellant had standing. She determined that the statutory standing provisions that governed standing to pass accounts did not apply, and she considered whether the appellant had a personal legal interest in the litigation that could support private interest standing. She also considered and correctly rejected the appellant’s contention that her status as a knowledgeable whistleblower gave her standing to bring the application or that more generous standing rules applied in breach of trust cases. Public interest standing principles could not inform whether the appellant had private interest standing. The appellant pleaded no facts that could disclose a personal legal interest in the trusts that were allegedly breached. She was not a unitholder in the trust and had no financial interest in the outcome of the litigation she commenced, and, despite her role as a whistleblower, she lacked a direct personal interest in the litigation.

Carroll v. Toronto-Dominion Bank (c.o.b. TD Bank Group), [2021] O.J. No. 267, Ontario Court of Appeal, M.H. Tulloch, B. Miller and D. Paciocco JJ.A., January 21, 2021. Digest No. TLD-March152021005