What is the test for establishing a trust relationship?

Counsel for the landlord referred to the case of Air Canada v. M & L Travel Ltd., 1993 CanLII 33 (SCC), [1993] 3 S.C.R. 787, for the proposition that in order for an arrangement to constitute a trust, it must have three characteristics: certainty of intent; certainty of subject matter; and certainty of object (a beneficiary). Certainty of intent means that the intention to create a trust relationship must be expressed in plain and certain language. In this case, the landlord did inform the tenant that he was increasing the rent to cover the licence fee, but he did not tell her that he intended to contest the legality of the licence fee or that he would apply the increased amount to cover operating costs and profit if he ultimately did not have to pay the license fee. There was nothing said in the notice to increase rent, claims counsel, which indicated an intention to create a trust relationship or to hold a portion of the rent in trust for the tenant. Therefore, she concludes, the hearing officer erred in law in making a finding that there was a trust relationship.