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Trust Claims

The Guarantee Company of North America v. Royal Bank of Canada 2019 Ont C.A.

The Construction Act establishes a deemed statutory trust. The Bankruptcy and Insolvency Act sets out a distribution scheme for an insolvent person. Beneficiaries of the deemed trust have always attempted to take priority over the creditors of the bankrupt by claiming that trust money does not form part of the estate. The courts have held that a deemed trust has priority if it meets three certainties under the common law: certainties of object, subject matter, and intention. The trial judge had held that the statutory trust did not meet the certainty of object and the Court of Appeal overruled. Commingling of funds did not destroy that object because the receiver had kept good accounting records and knew exactly what the trust amounts were.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.