“Such a breach is not ‘technical;’ it is an astonishing breach by elected officials and their staff.” – Justice G.D. Lemon, Ontario Superior Court, Oct. 12, 2022.

The Southampton Cultural Heritage Conservancy shares their perspective of the Ontario Superior Court's removal of Bruce County as trustee of the Krug Estate Trust, and Justice G.D. Lemon's pointed ruling:

After four years of challenging Bruce County and its secret, unlawful use of a restricted trust bequeathed by Bruce A. Krug for the County archives, the Southampton Cultural Heritage Conservancy (SCHC) is pleased that Justice G.D. Lemon of the Ontario Superior Court has removed the County as trustees in his October 12 decision, stating, “The County cannot be trusted to act appropriately with this property.”

As Justice G.D. Lemon explained, “… on any definition of a fiduciary duty, the acts of the County breach its obligations…. If the County were allowed to do as it has, no testator would ever leave trust funds to a municipality in the manner of this will; that would be to the detriment of the community at large.” The decision continues, saying, “it is a case of the County ignoring its duties and doing something entirely in breach of the terms of the will.”

In February 2019 SCHC filed an Application against the County under Section 10 of the Charities Accounting Act, saying they had breached the Krug Trust by secretly using the funds to purchase the former Anglican rectory at 254 High St, Southampton, adjacent to the County Museum. The County planned to demolish it and build a nuclear institute with Bruce Power. After a series of closed meeting investigations, investigators found the County had gone into closed meetings unlawfully on twenty-one occasions to discuss their secret plans. This was more than four times greater than the City of Hamilton, which had the second largest number of unlawfully closed meetings in Ontario with five.

Justice Lemon quoted “a County representative”, which was actually Saugeen Shores Mayor Luke Charbonneau, who was Chair of the Museum Committee when it refused to disclose documents, and denied the breach. “I don’t see any connection between how the land was purchased and this step that we are taking [to remove the rectory]….We own the land and we’re taking steps to clear it for redevelopment.” The Court reminded the County that “the land is a trust asset”, not a County asset.

Justice Lemon found in January 2022 that the County had breached the trust, and in his October 12 decision stated, “The County’s failure to abide by its duties…before and after my decision is baffling and the County cannot continue to act as trustee of the trust asset: the property in dispute.”

BMO Trust Co. is being asked to serve as interim trustee and to take “all necessary steps to sell the property to a purchaser other than the County or any individual or entity not in a non-arms length capacity from the County”. Justice Lemon ordered the County to pay the costs for the trustee services and the maintenance of the property, and that SCHC also submit their additional costs. In May, Justice Lemon told the County it must pay $140,000 in previous legal costs to SCHC.

SCHC Board member Laura Robinson disclosed that “SCHC will prepare submissions for Justice Lemon for a more permanent board of trustees for the Krug Trust that is transparent and of benefit to the public. We agree with Justice Lemon on all counts and are satisfied that the legacy of Bruce Krug will now be respected. We are also relieved that Bruce County has been prevented from demolishing the 1894 former rectory that has been recognized by the National Trust for Canada as one of Canada’s Top Ten Endangered Places.”

source: media release