JUDGES: McClung, Stratton and Irving, JJ.A.

 

OTHER-REFS:

Cases Noticed:

 

Hardoon v. Belilios, [1901] A.C. 118 (P.C.), consd. [para. 17].

United States of America v. Harden, [1963] S.C.R. 366, affing 36 D.L.R.(2d) 602 (B.C.C.A.), appld. [para. 21].

India v. Taylor, [1955] A.C. 491, refd to. [para. 23].

Buchanan (Peter) Ltd. and Macharg v. McVey, [1955] A.C. 516, refd to. [para. 23].

Reid, Re (1970), 17 D.L.R.(3d) 199 (B.C.C.A.), not folld. [para. 29].

Dwelle Estate, Re (1969), 69 W.W.R.(N.S.) 212 (Alta. S.C.), appld. [para. 37].

 

Statutes Noticed:

 

Devolution of Real Property Act, R.S.A. 1980, c. D-34, s. 8(3) [para. 7].

 

Authors and Works Noticed:

 

Castel, Canadian Conflict of Laws (1st Ed.), p. 73 [para. 28].

McLeod, The Conflict of Laws (1983), pp. 209-213 [para. 28].

Schiff, Evidence in the Litigation Process, p. 126 [para. 45].

 

COUNSEL:  R.G. Bissett,  [*3]  for the appellant;

G.M. Morrison, for the respondent.

 

This case was heard at Calgary, Alberta, before McClung, Stratton and Irving, JJ.A., of the Alberta Court of Appeal.

 

On November 27, 1992, Stratton, J.A., delivered the following judgment for the Court of Appeal:

 

JUDGMENT:

 

[1] Stratton, J.A.: The issue raised by this appeal is whether, on the facts of this case, the rule against our courts enforcing a tax claim of a foreign jurisdiction applies so as to allow the transfer of Canadian realty to the devisee of that realty, rather than requiring that the property be sold and the proceeds used firstly to pay United States estate taxes.

 

[2] Sarah Dubois Cravey, a United States resident, died on May 1, 1983, with domicile in the State of Arizona. Under her will she named the Valley National Bank of Oregon (the “Bank”) as her executor and she expressly devised to Kimberly Dubois, her niece and the respondent in this appeal, her Alberta wheat farm.

 

[3] Probate issued out of the Superior Court of Arizona on June 23, 1983, and Letters of Administration, with Will and Codicils annexed, were granted to the appellant on February 27, 1984, by the Surrogate Court of this Province, “pursuant to a  [*4]  Power of Attorney granted to him” by the Bank.

 

[4] The total value of the estate is 1.9 million (U.S.), including both probate and non-probate assets. The probate assets were valued at $ 577,916 (U.S.) of which $ 430,968 (U.S.) represented the Canadian wheat farm. The non-probate assets are valued at 1.3 million (U.S.), and comprise certain joint tenancy assets and two trusts known as the Pennsylvania Trust (value 1.2 million) and the Arizona Trust (value $ 119,000).

 

[5] The U.S. Executor applied to an Arizona Court in 1987 for an order apportioning the total estate taxes. On June 5, 1987, that court  [**66]  ordered that 63.15% of the taxes be paid by the Pennsylvania Trust (which it is doing over an extended period of time) and 36.85% be paid out of the probate assets, which includes the Canadian wheat farm. The U.S. probate assets are presently insufficient to pay the apportioned share of taxes and there remains owing, as of January 24, 1991, $ 143,000 (U.S.) as estate taxes to the U.S. taxing authority. The U.S. Executor looks to the Canadian real estate for this payment.

 

[6] It should be noted that the value of the Canadian farm was established back in 1983 when probate  [*5]  issued and does not necessarily now support that value.

 

[7] On May 5, 1987, some four years after the testator’s death, the respondent applied under s. 8(3) of the Devolution of Real Property Act, c. D-34, R.S.A. 1980, for an order requiring the conveyance to her of the wheat farm. That section reads as follows:

 

“(3) At any time after the expiration of one year from the date of grant of probate or of letters of administration, if the personal representative has failed when requested by the person entitled to any real property, to convey the real property to that person, the Court if it thinks fit, on the application of that person and after notice to the personal representative, may order that the conveyance be made, and may in default make an order vesting the real property in that person as fully and completely as might have been done by a conveyance thereof from the personal representative.”

 

[8] The application first came before Waite, J., in Chambers and was opposed by the Administrator on the grounds that the only remaining asset of substance from which the unpaid taxes could be paid was the Canadian farm. In written reasons the learned Chambers judge said:

 

“The application  [*6]  was made, and opposed, as if the sole issue was whether Alberta law would recognize and permit the use of Canadian assets to pay American taxes. In that respect, the applicant relied on the authority of United States of America v. Harden, [1963] S.C.R. 366, while the administrator relied on the authority of Re Reid (1970), 17 D.L.R.(3d) 199.”

 

[9] In deciding that more detailed inquiry and submissions than that which had been made available to him in Chambers were required, he directed that each party file a statement of their respective claims and thereafter that a trial be held to resolve the matter. The main thrust of the respondent’s statement filed in response to that directive was to seek a transfer of the farm into her name.

 

[10] In asking that the respondent’s application be dismissed or stayed, the appellant’s statement of claim contained, inter alia, the following:

 

“6. The Defendant (appellant) pursuant to a letter dated April 30, 1984 advised the Plaintiff (respondent) that transmission of the real property into her name would be made as soon as the U.S. and Canadian tax liability had been settled, clearances obtained, and specific instruction from the Executor, the  [*7]  Valley National Bank of Arizona had been received.

 

“11. That there are insufficient assets left in the Probate Estate to pay the outstanding U.S. Tax Liability without resort to the specific bequest to the Plaintiff contained in the Last Will and Testament of Sarah Dubois Cravey.”

 

[11] The trial then proceeded before MacLean, J., by way of an Agreed Statement of Facts and viva voce evidence consisting of the testimony of Robert Rosepink, a witness  [**67]  produced by the appellant and accepted as an expert in the field of U.S. tax law as it relates to Arizona probate law.

 

[12] The Agreed Statement of Facts introduced into the proceedings a counter-application of the appellant in the following words:

 

“26. That the parties have agreed to a complete hearing of this matter, and to this end, the parties hereto agree that also an issue and properly before the Court is a Counter-Application by Briant W. Stringam on behalf of Valley National Bank of Arizona for an order directing the said real property be sold, and from the net proceeds thereof the debts of the estate be paid, including executor’s fees, all legal fees and disbursements on a solicitor/client basis, and the balance  [*8]  of U.S. estate taxes attributable to the Probate Estate, with the balance if any, to be paid to Kimberly Dubois.”

 

[13] The Bank was not separately represented in these proceedings, but counsel for the appellant advised that he was advancing the Bank’s position as well as that of his client’s.

 

[14] The learned trial judge decided as follows:

 

1. He allowed the respondent’s application and thus ordered the appellant to transfer title to the wheat farm to her.

 

2. He dismissed the counter-application of the appellant, which sought sale of the farm and payment of U.S. estate taxes from the net proceeds of that sale.

 

3. He ordered that the appellant, the bank and the respondent “each bear their own costs, in and about this action”.

 

[15] For the reasons following, I agree with the results arrived at by the learned trial judge and I would not interfere.

 

[16] In argument before us, it was common ground that three cases in particular are critical to the above stated issue.

 

[17] The preferred starting point in a perusal of these cases is, in my view, the decision of the Privy Council in Hardoon v. Belilios, [1901] A.C. 118, which was relied on by the appellant. That case raised  [*9]  the question of whether the person who is the mere registered owner of shares is entitled to be indemnified by the beneficial owner for certain financial burdens incidental to that ownership.

 

[18] The relevance of that case is clear when one looks at the evidence of Robert Rosepink, which was accepted by the trial judge “in relation to American tax laws and the manner in which they affect the administration of this estate in the State of Arizona”. A summary of his opinions (Exhibit 2 at trial) is attached as Appendix A to this judgment. In brief, these opinions set out various situations wherein either the Bank or the appellant could be held liable under U.S. law for unpaid U.S. estate taxes if the wheat farm should be transferred without payment of the taxes.

 

[19] In Hardoon v. Belilios, Lord Lindley enunciated the rule relied on by the appellant, as follows:

 

“The next step is to consider on what principle an absolute beneficial owner of trust property can throw upon his trustee the burdens incidental to its ownership. The plainest principles of justice require that the cestui que trust who gets all the benefit of the property should bear its burden unless he can show some  [*10]  good  [**68]  reason why his trustee should bear them himself .” (emphasis added)

 

[20] Then, at p. 127, in referring to a cestui que trust, he said:

 

“The obligation of such a person to indemnify his trustee against calls upon them appears to their Lordships indisputable in a court of equity unless, of course, there is some contract or other circumstance which excludes such obligation .” (emphasis added)

 

[21] The next of the three key cases and the most important for our purposes, is United States of America v. Harden, [1963] S.C.R. 366, affing 36 D.L.R.(2d) 602 (B.C.C.A.). In this case the U.S. government sued in British Columbia upon a judgment obtained in California and based on unpaid taxes. U.S.A. contended that the long-established rule against a sovereign power not enforcing the revenue laws of another state had no application for two reasons:

 

1. The action was based on a judgment — not on a tax claim and

 

2. The judgment sued on was the result of an agreed amount which was less than the actual tax claim and therefore the B.C. action was based on contract and not the tax claim.

 

[22] Both arguments were rejected by the Court of Appeal of B.C. and by the  [*11]  Supreme Court of Canada. The Supreme Court expressly supported the reasons given by the B.C. Court of Appeal.

 

[23] Writing for the Supreme Court, Cartwright, J. (as he then was), endorsed unconditionally that which he referred to as the “ancient rule” , namely:

 

“… the proposition that in no circumstances will the courts directly or indirectly enforce the revenue laws of another country.” (emphasis added)

 

(See also Government of India v. Taylor, [1955] A.C. 491, and Peter Buchanan Ltd. & Macharg v. McVey, [1955] A.C. 516.)

 

[24] After pointing to the explanations generally accepted by the authorities for the establishment of the rule (see p. 370) Cartwright, J., said:

 

“In my opinion, a foreign State cannot escape the application of this rule, which is one of public policy, by taking a judgment in its own courts and bringing suit here on that judgment. The claim asserted remains a claim for taxes. It has not, in our courts, merged in the judgment; enforcement of the judgment would be enforcement of the tax claim.

 

“Similarly, in my opinion, the argument that the claim asserted is simply for the performance of an agreement, made for good consideration, to pay a stated  [*12]  sum of money must also fail. We are concerned not with form but with substance, and if it can properly be said that the respondent made an agreement, it was simply an agreement to pay taxes which by the laws of the foreign State she was obligated to pay.” (p. 371)

 

[25] Thus the Supreme Court stressed two points, namely that an indirect attempt at enforcement is as offensive as a direct attempt and that one must look at the substance of the claim to determine its nature for the purposes of application of the rule.

 

[26] The appellant argued that in the light of the facts in Harden the reference by Cartwright, J., to “indirect enforcement” should be limited to a similar factual situation,  [**69]  that is an action based on a tax judgment. I find no support for that limitation in the decision of the Supreme Court.

 

[27] The appellant also suggested that a further important distinction be made between the Harden decision and our cases in that in Harden the foreign government was the entity seeking enforcement of the claim. This argument is also not supported by the Supreme Court decision. The point is addressed squarely by Sheppard, J.A. In writing for the B.C. Court of Appeal he  [*13]  said:

 

“Also, the Courts will not entertain an action brought by an individual which will indirectly have the effect of enforcing the revenue laws of a foreign country.” (1963), 36 D.L.R.(2d) 602, at 604 (emphasis added)

 

[28] I have not overlooked the fact that the decision of the Supreme Court in Harden has been criticized as an older rule that is not responsive to modern circumstances. (See Castel, Canadian Conflict of Laws, 1st edition, p. 73 and The Conflict of Laws, McLeod (1983), pp. 209-213.) Nevertheless the rule remains the law of Canada and I am bound by it.

 

[29] I now turn to the last of the three key decisions — Re Reid (1970), 17 D.L.R.(3d) 199 (B.C.C.A.). In that case an English company, subject to the laws of England, became the trustee of an estate wherein the bulk of the assets were situate in B.C. There were insufficient assets in England to pay the estate tax levied under English law. The appropriate English statute also expressly made the trustee responsible for payment of the tax. The trustee paid the tax and then sought reimbursement from the estate on the strength of the rule in Hardoon v. Belilios (supra) and s. 97 of the B.C. Trustee Act (comparable  [*14]  to s. 25 of the Trustee Act, c. T-10, R.S.A. 1980; see Appendix B). The success of that application would have directly affected the entitlement of the remainderman under the will and therefore he opposed it on the grounds that the rule in Harden constituted a sufficiently “good reason” to oust the operation of s. 97 and the rule in Hardoon v. Belilios (supra).

 

[30] Robertson, J.A., writing for the court in Reid, refused to apply the Harden rule. He distinguished the Harden case from the one he was considering on two grounds:

 

1. He pointed out that in the cases before Harden to which he referred, wherein the rule against enforcement of foreign revenue laws was applied, “success would have enriched the treasury of the interested state” but in the case before him “whether or not the respondent trustee is indemnified cannot affect to the slightest degree the amount of estate duty collected in England.” (p. 205)

 

[31] With the greatest respect, I do not consider that to be a proper basis for distinguishing Harden. It implies that the act of a trustee in first paying the foreign levy and then seeking reimbursement would serve to emasculate the Harden rule. I do not agree. In any event,  [*15]  in the present case, it is clear that success would have the immediate effect of enriching the U.S. treasury.

 

2. Again in reference to the cases mentioned by him and which accepted the rule against enforcement, Robertson, J.A., said:

 

“Further, in each of those cases the foreign State was … the plaintiff, the claimant or the instigator of the proceedings. Here (in Re Reid) the United Kingdom has nothing whatever to do with the respondent’s claim to be indemnified.”

 

[**70]  [32] This statement implies that only where the foreign state is involved as an active party to the proceedings will the Harden rule apply; with the greatest respect, I disagree. To accept that conclusion, in my view, ignores the indirect aspect of the Harden rule. Moreover, as pointed out earlier, Sheppard, J.A., in the Court of Appeal of B.C. in Harden (approved by the S.C.C.), stressed that the identity of the plaintiff in the action is not vital if the action “indirectly (has) the effect of enforcing revenue laws of a foreign country” (supra).

 

[33] In the result, and again with the greatest respect, I have concluded that I cannot follow the Reid decision. Nevertheless the careful reasoning in that  [*16]  decision together with the considerable criticism of the decision in Harden leads me to comment that the Supreme Court may wish to re-examine the problem in the light of more modern international notions of comity. Nevertheless, until it is changed by the Supreme Court, statute, treaty or convention, the rule as reaffirmed in Harden is valid and binding.

 

[34] The major difficulty is to determine under what circumstances must the Harden rule be applied. The authorities seem agreed on the key question that must be asked for that determination, namely, what is the nature or substance of the proceedings placed in issue? In the present case the nature or substance of the proceeding is the indirect enforcement of the tax laws of the United States and as such the rule enunciated in Harden should be applied.

 

[35] It must also be noted that the U.S. taxing authority has recourse for unpaid taxes against the respondent, who is a U.S. resident, and thus it need not pursue either the appellant or the Bank.

 

[36] Cartwright, J., in Harden, pointed to two explanations for the rule against enforcement of foreign tax judgments and I quote:

 

“Various reasons have been suggested for this ancient  [*17]  rule. In his speech in Government of India, Ministry of Finance (Revenue Division) v. Taylor, supra, Lord Keith of Avonholm having approved of the judgment of Kingsmill Moore, J., in the High Court of Eire in Peter Buchanan Ltd. & Macharg v. McVey, reported as a note in [1955] A.C. 516, and particularly of the proposition ‘that in no circumstances will the courts directly or indirectly enforce the revenue laws of another country’, goes on at pp. 511 and 512 to suggest two explanations, as follows:

 

‘One explanation of the rule thus illustrated may be thought to be that enforcement of a claim for taxes is but an extension of the sovereign power which imposed the taxes, and that an assertion of sovereign authority by one State within the territory of another, as distinct from a patrimonial claim by a foreign sovereign, is (treaty or convention apart) contrary to all concepts of independent sovereignties. Another explanation has been given by an eminent American judge, Judge Learned Hand, in the case of Moore v. Mitchell, in a passage, quoted also by Kingsmill Moore, J., in the case of Peter Buchanan Ltd. as follows: “While the origin of the exception in the case of penal liabilities  [*18]  does not appear in the books, a sound basis for it exists, in my judgment, which includes liabilities for taxes as well. Even in the case of ordinary municipal liabilities, a court will not recognize those arising in a foreign State, if they run counter to the ‘settled public policy’ of its own. Thus a scrutiny of the liability is necessarily always in reserve, and the possibility that it will be found not to accord with the policy of the domestic State. This is not a troublesome or delicate  [**71]  inquiry when the question arises between private persons, but it takes on quite another face when it concerns the relations between the foreign State and its own citizens or even those who may be temporarily within its borders. To pass upon the provisions for the public order of another State is, or at any rate should be, beyond the powers of the court; it involves the relations between the States themselves, with which courts are incompetent to deal, and which are intrusted to other authorities. It may commit the domestic State to a position which would seriously embarrass its neighbour. Revenue laws fall within the same reasoning; they affect a State in matters as vital to its existence  [*19]  as its criminal laws. No court ought to undertake an inquiry which it cannot prosecute without determining whether those laws are consonant with its own notions of what is proper.”’””

 

The explanation by Judge Learned Hand is particularly supportive of my conclusion in this case. The disposition of the bulk of the estate of the testator, the treatment of the trusts in the light of the instructions in the will, the reason for taxes to remain outstanding notwithstanding a substantial U.S. estate, and the apportionment of estate taxes between probate and non-probate assets all leave questions as to whether the estate tax claimed would be, in the words of Judge Hand, “in accord with the policy” of this country.

 

[37] In Re Dwelle Estate (1969), 69 W.W.R.(N.S.) 212 (Alta. S.C.), a similar problem to the case at bar was considered and the Harden rule was applied. In that case the testatrix died resident and domiciled in California and by her will appointed an Alberta lawyer to be the executor of her Canadian estate. The state of California made a claim against the Canadian estate for inheritance tax and the Alberta executor applied to the court for directions. Applying Harden, Riley, J.,  [*20]  made an order prohibiting the Alberta executor from “making any payment of estate funds which would in effect be payment of a tax to a foreign government”.

 

[38] It was also argued that the failure of the appellant administrators to pay the estate tax constituted a breach of a duty imposed under his will or as undertaken by him in his “Affidavit on Application for Administration With Will Annexed”. Paragraph 8 of that affidavit reads as follows:

 

“8. That I will faithfully administer the property of the deceased, by paying (4) her just debts, all taxes and duties payable in respect of the estate, and the legacies contained in (4) her will (11) and Codicils, so far as the same will thereunto extend and the law bind me , and distribute the residue (if any) of the estate according to law, and that I will exhibit under oath a true inventory of all the property of the deceased, and render a full account of my administration whenever required by law to do so.” (emphasis added)

 

[39] To accept that argument one must interpret the words “taxes and duties” in paragraph 5 so as to include foreign taxes and duties. In my view “and the law bind me” modifies the words “just debts, all  [*21]  taxes and duties payable”. On this construction, the administrator is only to pay those debts, taxes and duties which the law mandates and that “law” refers to the law of the forum, namely, Alberta law.

 

[40] Thus the appellant must be able to point to some Alberta law which mandates that the administrator pay the U.S. taxes. In other words, the U.S. revenue authorities would have to prove their claim in Alberta. This analysis thus comes full circle because under  [**72]  the law presently applicable in Alberta, an Alberta Court must refuse to entertain or enforce such a claim.

 

[41] With respect to a duty imposed under the deceased’s will, it must be noted that approximately four years after execution of his will, the testatrix executed a codicil dealing only with the payment of “all inheritances, death & estate taxes”. These directions are as follows:

 

“(A) I direct that all inheritance, death and estate taxes becoming due by reason of my death with respect to that portion of my estate situate in Pennsylvania be paid by my Executor out of the property I may leave in Pennsylvania whether said property passes under this Will or pursuant to the Trust of May 1, 1979.

 

“(B) I direct  [*22]  that all inheritance, death and estate taxes becoming due with respect to my taxable estate by reason of my death be paid by my Executor out of my residuary estate other than as noted in Paragraph (A) above, as an expense and cost of administration of my estate. My Executor shall have no duty or obligation to obtain reimbursement from any recipient of property not passing under this Will for any portion of such tax paid. However, if my residuary estate is insufficient or inappropriate for the payment of such taxes, my Executor may avail itself of any provisions of the trust receiving my residuary estate which would allow assets of the trust to be used for such purposes.”

 

[42] In her will the deceased dealt with the residue of her estate as follows:

 

“Seventh: All the rest and residue of my estate (including lapsed devises or legacies, but not including property over which I may then have a power of appointment), I devise and bequeath to The Valley National Bank Of Arizona, Trustee under that certain trust agreement executed by me as Trustor and said Bank as Trustee, on the 2nd day of November, 1972, to be added to principal and allocated as provided under said trust agreement.”  [*23]   

 

[43] The clear intent of these directions is that all those taxes mentioned by her should be paid out of either the trust property or the residue of her estate. There is no suggestion that the property specifically devised to the respondent should be burdened by estate taxes.

 

[44] Some months after this appeal was heard and before judgment issued, the respondent applied for leave to introduce new evidence. We allowed time for both parties to make written submissions. The submissions of the appellant asked that he also be allowed to introduce fresh evidence. The nature of the evidence sought to be introduced was identified by affidavits.

 

[45] In Kastner v. Kastner (unreported Dec. 9/87, Appeal No. 19761), this court confirmed its acceptance of the following test applicable to introduction of fresh evidence in civil cases:

 

“According to the standard approved by the Supreme Court of Canada for civil cases, absent very unusual circumstances, Canadian appellate courts will grant the applicant’s request to present new evidence only if two conditions are satisfied: first, the applicant could not have obtained the evidence by reasonable diligence before the trial and, second, the evidence  [*24]  is of such nature that, if introduced before the appellate court and at a new trial, it would be practically conclusive to cause reversal of the original result.” (Schiff, Evidence in the Litigation Process, p. 126)

 

[46] The evidence here sought to be introduced fails the second branch of that test and accordingly both applications are denied.

 

[**73]  Conclusion

 

[47] For the reasons set out I have concluded that the rule against our courts directly or indirectly enforcing the revenue laws of another country applies here. Moreover, on the facts of this case, I consider that rule to be a “circumstance” or “good reason” to exclude the normal concept of indemnification of a trustee within the rationale of Hardoon v. Belilios (supra).

 

[48] I would not interfere with the trial judge’s decision as to costs of the trial.

 

[49] Accordingly, I would dismiss the appeal.

 

[50] I would however direct that costs of the appeal be payable out of the estate.

 

Appeal dismissed.

 

Appendix A

 

“If the Canadian Courts order transfer of the Real Property to the beneficiary, Kimberly Dubois, without provision for the IRS debt and,

 

1. B.W. Stringam, the Administrator is agent and does not  [*25]  stand independent from the U.S. Executor, Valley National Bank of Arizona then Valley National Bank is deemed to have possession or control of the wheat farm and:

 

a) B.W. Stringam has no liability to IRS under agency rules;

 

b) Valley National Bank has full liability to the IRS to the value of the Canadian Real Property or the IRS debt, whichever is less;

 

c) Valley National Bank has liability for indemnity and contribution which could be claimed by Pennsylvania Trust if the IRS successfully collects from Pennsylvania Trust under transferee liability, and further, for breach of Judge Sult’s Order.

 

2. If B.W. Stringam, the Administrator is not an agent of Valley National Bank and stands independent from the U.S. Executor, Valley National Bank of Arizona then Valley National Bank is deemed not to have possession or control of the wheat farm and:

 

a) B.W. Stringam is liable to the IRS but can only be pursued by the IRS in the United States;

 

b) Valley National Bank is only liable for $ 15,805.50 plus interest being the value of the personal property of the deceased’s Estate which never came into Valley National Bank’s possession or control but will be deemed by the IRS to be paid  [*26]  out while the Estate is insolvent (Exhibit 18, page 3);

 

c) Valley National Bank has liability for indemnity and contribution which could be claimed by Pennsylvania Trust if the IRS successfully collects from it under transferee liability and further for breach of Judge Sult’s Order.”

 

Appendix B

 

“Trustee Act, c. T-10, R.S.A. 1980

 

‘25 A trustee is chargeable only for money and securities actually received by him, notwithstanding his signing any receipt for the sake of conformity and is answerable and accountable only for his own acts, receipts, neglects or defaults  [**74]  and not for

 

(a) those of any other trustee,

 

(b) any banker, broker or other person with whom any trust money or securities may be deposited,

 

(c) the insufficiency or deficiency of any securities, or

 

(d) any other loss, unless it happens through his own wilful default,

 

and may reimburse himself or pay or discharge out of the trust property all expenses incurred in or about the execution of his trust or powers.’”