Explanatory Note

This Bill prevents beneficiaries of income trusts from being held liable under an indemnity for the acts or omissions of the trustee.

BILL 13 – 2006
INCOME TRUST LIABILITY ACT

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Definition

1 In this Act, "British Columbia income trust" means a trust that is

(a) existing under a trust instrument governed by the laws of British Columbia, and

(b) a reporting issuer under the Securities Act.

Limited liability

2 Despite any express or implied indemnity of a trustee of a British Columbia income trust by a beneficiary of the trust, the beneficiary is not, as a beneficiary, liable for any act, default, obligation or liability of the trustee.

Governing law

3 Without limiting the circumstances in which an income trust instrument may be governed by the laws of a particular jurisdiction, an income trust instrument is governed by the laws of the particular jurisdiction as provided in the income trust instrument.

Retroactive effect

4 (1) This Act must be applied to and must be given effect in every action or proceeding, whether commenced before, on or after the date on which this Act receives Royal Assent.

(2) This Act must not be construed as lacking effect, whether retroactive or otherwise, in relation to any matter because it makes no specific reference to that matter.

Liability in other circumstances

5 This Act does not affect any liability of a beneficiary of a trust in any other circumstance.

Commencement

6 This Act comes into force on the date of Royal Assent.

 
Explanatory Note

This Bill prevents beneficiaries of income trusts from being held liable under an indemnity for the acts or omissions of the trustee.