Can a stranger to a trust be personally liable for breach of trust?

British Columbia, Canada


The following excerpt is from Tracy v. Wobick, 1999 CanLII 5182 (BC SC):

It is trite law that a stranger to a trust can also be personally liable for breach of trust if he or she knowingly participates in a breach of trust by either being in "knowing receipt" of trust properties, or by giving "knowing assistance" to the trustee who is in breach (See Air Canada v. M & L Travel 1993 CanLII 33 (SCC), [1993] 3 S.C.R. 787). Under this latter doctrine, strangers who knowingly assist in a dishonest and fraudulent design on the part of the trustees will be liable for the breach of trust as constructive trustees where the stranger, as agent, joins with the trustee in what he knows to be dishonest and fraudulent design to injure the trust beneficiaries.

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