Can a trustee de son tort be held personally liable for breach of trust?

Ontario, Canada


The following excerpt is from Sheppard International Trading v. Shahab Baghai, 2013 ONSC 5025 (CanLII):

In Air Canada v. M & L Travel Limited, 1993 CanLII 33 (SCC), [1993] 3 S.C.R. 787 at p. 809-810, a case where defendants were alleged to be trustees de son tort and liable as constructive trustees for breach of trust, Iacobucci J. writing for the majority, observed that where a defendant does not assume control or possession over the property in question so that liability as a trustee de son tort could not be imposed: …strangers to the trust can also be personally liable for the breach of trust if they knowingly participate in a breach of trust… In addition to a trustee de son tort, there were traditionally therefore two ways in which a stranger to the trust could be held personally liable to the beneficiaries as a participant in the breach of trust: as one in receipt and chargeable with trust property and as one who knowingly assisted in a dishonest and fraudulent design on the part of the trustees. The former category of constructive trusteeship has been termed “knowingly receipt” or “knowingly receipt and dealing”, while the latter category has been termed “knowingly assistance.

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