Text of Section 20:
- A guardian stands in a fiduciary relation to his ward, and, save as provided by the will or other instrument, if any, by which he was appointed, or by this Act, he must not make any profit out of his office.
- The fiduciary relation of a guardian to his ward extends to and affects purchases by the guardian of the property of the ward, and by the ward of the property of the guardian, immediately or soon after the ward has ceased to be a minor, and generally all transactions between them while the influence of the guardian still lasts or is recent.
Explanation of Section 20:
This section of the Guardians and Wards Act establishes the fiduciary duties and ethical obligations of a guardian towards their ward. Here, “fiduciary relation” refers to a relationship built on trust and the guardian’s obligation to act in the best interests of the minor.
Key Points:
1. Fiduciary Duty of the Guardian:
- A guardian is required to act in the best interests of their ward. The guardian’s role is to protect the minor’s welfare, and this relationship is considered fiduciary because it involves a high degree of trust.
- Fiduciary duty means that the guardian must act honestly, transparently, and not exploit their position for personal gain.
- Unless otherwise specified in a will or legal instrument by which the guardian was appointed, or as provided in this Act, the guardian cannot profit from the position of guardianship. This is a fundamental principle of guardianship, ensuring that the guardian’s personal interests do not conflict with their responsibility to the ward.
2. Impact on Transactions Between Guardian and Ward:
- The fiduciary relationship extends to transactions between the guardian and the ward, especially those related to the purchase or sale of property.
- If a guardian purchases property from their ward, or if a ward purchases property from the guardian (particularly after the ward has reached the age of majority), these transactions are scrutinized more closely due to the continuing influence the guardian might have over the ward.
- The Court may look at these transactions with suspicion to ensure there has been no undue influence or exploitation of the ward’s trust.
- This continuing fiduciary relationship applies not only while the ward is still a minor but also for a period after the ward reaches adulthood, especially if the relationship between the guardian and the ward remains close or if the guardian’s influence over the ward is still significant.
3. Prevention of Conflicts of Interest:
- The section essentially prevents conflict of interest, ensuring that the guardian’s actions are motivated solely by the welfare of the ward and not by a desire for personal financial gain.
- Profiting from the office of guardianship is prohibited unless it is specifically allowed by a will or other legal document. For example, a guardian cannot use their position to make personal financial gains such as selling property to the ward at an unfair price or engaging in self-dealing transactions.
4. Transactions During and After Guardianship:
- The fiduciary duty extends to any transactions between the guardian and the ward during the period of guardianship and even in the period immediately following the termination of guardianship (such as when the ward reaches adulthood).
- This ensures that guardianship does not become a vehicle for financial exploitation, and the influence of the guardian is monitored even after the formal relationship has ended.
Practical Implications:
- Guardian’s Responsibility:
- A guardian is expected to act in the best interests of the minor and not for personal financial benefit. They must avoid situations where their actions may seem self-serving or exploitative.
- Monitoring Transactions:
- When a guardian purchases property from a ward or vice versa, or engages in any other significant transactions, these actions are subject to scrutiny. If the minor is no longer a minor but still under the influence of the guardian, transactions will be closely examined by the court for fairness and transparency.
- Protection of the Minor’s Interests:
- This section protects the minor’s interests, ensuring that a guardian cannot use their position to make personal gains, especially by exploiting the trust of the ward during and after the guardianship period.
- Legal Recourse:
- If a guardian violates this fiduciary duty, the ward or their representatives can seek legal recourse, and the court may void any transaction that is deemed to have been made unfairly or under improper influence.
Conclusion:
Section 20 highlights the ethical obligations of a guardian to act in the best interests of the minor and forbids them from profiting from the guardianship role. This section also ensures that the guardian cannot exploit their position by entering into questionable transactions with the minor, especially concerning property dealings, both during the period of guardianship and for a time after the ward becomes an adult. The section is meant to protect the minor’s welfare and ensure fairness in all dealings between the guardian and the ward.
