Can a stranger to the trust be held liable as a constructive trustee for breach of trust?
Canada (Federal), Canada
The following excerpt is from Citadel General Assurance Co. v. Lloyds Bank Canada, [1997] 3 SCR 805, 1997 CanLII 334 (SCC):
19 There are three ways in which a stranger to a trust can be held liable as a constructive trustee for breach of trust. First, a stranger to the trust can be liable as a trustee de son tort. Secondly, a stranger to the trust can be liable for breach of trust by knowingly assisting in a fraudulent and dishonest design on the part of the trustees (“knowing assistance”). Thirdly, liability may be imposed on a stranger to the trust who is in receipt and chargeable with trust property (“knowing receipt”; see Air Canada v. M & L Travel Ltd., supra, at pp. 809-11).
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