A judge has decided Bruce County will no longer be a trustee of the Krug Estate Trust.
It’s the latest in a years-long battle between the County and some community members including the Southamtpon Cultural Heritage Conservancy over what should be done with the Krug Estate’s property at 254 High Street, the former rectory building, and the storage and display of county archives.
Bruce Arthur Krug, a late local heritage advocate, drafted his will in 2006 and included $500,000 in it to be left to Bruce County for the archives building for the storage and display of the archives of the county. Krug died in 2013.
The County used some of those funds to buy the land on High Street and had embarked on the process of tearing the rectory down. Opponents sought an injunction to prevent the demolition.
In January 2022, the Ontario Superior Court of Justice decided Bruce County was in breach of the Krug Trust, “by virtue of its use of the funds to purchase the land at High Street.”
Justice G.D. Lemon decided the building was not to be demolished unless there was further order from the court and he decided that Bruce County was to maintain the trust asset.
On October 12th, Justice Lemon decided to remove Bruce County as a trustee, saying, “On any definition of a fiduciary duty, the acts of the County breach its obligations. This is not the situation of competing uses of County general purpose funds. Instead, the issue is the proper use of specifically identified funds for specifically identified uses.”
He added, “This is not a case of negligently carrying out the County’s duties; it is a case of the County ignoring its duties and
doing something entirely in breach of the terms of the will.”
Lemon also said in his decision, “The reports all confirm that the County has removed the furnace from the building and disconnected the utilities. If I were to use this evidence, it appears that the County has not lived up to its obligations to maintain the trust asset; accordingly, the property may have been more valuable had the County lived up to its obligations.”
Justice Lemon has decided to appoint BMO Trust Co. as an interim trustee to take immediate steps to maintain and sell the property. He expressed concern that it will be winter soon and the property has no furnace and is not being properly maintained, and that for now, the costs of the trustee and steps to maintain the property will be paid by the County.
BMO Trust Co. has ten days from the decison to file its consent.
Lemon says the County submitted it does not want the property sold to a third party, because it feels the the property is valuable for future public use, but Justice Lemon says he sees no pressing need for the County to own that property.
His decision said the County filed three appraisals of the property’s value which he deemed inadmissible.
Lemon says, the value of the property needs to be determined, explaining, “The property must be sold on the open market to determine what should be returned to the trust.”
He adds, “While I cannot determine if the County’s acts are intentional or unintentional, the history here confirms that the County cannot be trusted to act appropriately with this property. I leave the sale process to the new trustee, but the sale shall not be to the County or any non-arm’s length individual or entity.”