Recently, in Humphreys-Saude v Pavao, the Ontario Superior Court of Justice had to determine whether a person who had not been named the estate trustee of an estate could nonetheless be held liable for the actions of the estate trustee.

In this case, the Applicant (daughter of the Deceased and sole beneficiary of the estate) sought relief against the Respondent sister of the Deceased when it became apparent that there were no assets in the estate of the estate trustee (the estate trustee, the mother of the Deceased, having died after the commencement of the Application).

In Humphreys, the court found that the Respondent was liable for breach of trust due to the doctrine of knowing assistance.

There are four elements of knowing assistance:

1. a fiduciary duty;
2. fraudulent and dishonest breach of duty by the fiduciary;
3. actual knowledge by the stranger to the fiduciary relationship of both the fiduciary relationship ad the fiduciary’s fraudulent and dishonest conduct; and
4. participation by or assistance of the stranger in the fiduciary’s fraudulent and dishonest conduct.

The Court easily found that there was a trust relationship and that the Respondent was aware of that relationship. There was also no doubt that there was a breach of trust by the estate trustee since she had used the deceased’s debit card after he had died to make purchases outside of her duty to the estate administration. Therefore, the only element in dispute was whether the Respondent knew of the breach of trust and whether she assisted in it.

The Respondent had conceded that she knew the estate trustee was using the debit card to make cash withdrawals. Furthermore, she was driving the estate trustee around to make the cash withdrawals and purchases, which the court found to be assisting in the breach of trust. The court concluded that the Respondent and the estate of the estate trustee were jointly and severally liable for the payments and cash withdrawals that were made by the estate trustee.

The Court also found that the Respondent had not shown herself to have acted honestly and reasonably to be excused from liability.

This case indicates the importance of being aware of actions of people you may be helping. Even though an individual may not be holding the title of a fiduciary, such as an estate trustee, the liability can fall onto them if they know and assist the estate trustee in any wrongdoing.

Thank you for reading.