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Ontario and Canada
Appeal Court Dicta

Trusts - Statutory Trusts

. Paul’s Transport Inc. v. Immediate Logistics Limited

In Paul’s Transport Inc. v. Immediate Logistics Limited (Ont CA, 2022) the Court of Appeal considered a statutory trust under the HTA:
[9] ... (3) Highway Traffic Act, R.S.O. 1990, c. H.8 (the “HTA”)

191.0.1 (3) A person who arranges with an operator to carry the goods of another person, for compensation and by commercial motor vehicle, shall hold any money received from the consignor or consignee of the goods in respect of the compensation owed to the operator in a trust account in trust for the operator until the money is paid to the operator.


[86] Pursuant to s. 191.0.1(3) of the HTA, Immediate was required to hold any money received from the shippers, in trust, until it paid the money to Paul’s Transport. Immediate did not do that. Instead, it placed the money into its general account and disbursed the money to persons other than Paul’s Transport. Contrary to the appellants’ submission, that conduct on the part of Immediate was fraudulent and dishonest, as those terms have been interpreted in the knowing assistance jurisprudence.
. The Guarantee Company of Canada v. Royal Bank of Canada

In The Guarantee Company of Canada v. Royal Bank of Canada (Ont CA, 2019) the court notes that a statutory trust, if it meets the basics of trust formation, is exempt from the bankrupt estate:
[13] She noted that the constitutional issue of the validity of provincial statutory trusts in bankruptcy had been resolved by the Supreme Court of Canada in British Columbia v. Henfrey Samson Belair Ltd. That case held that trusts established by provincial law that meet the general principles of the law of trusts will be excluded from the bankrupt’s estate pursuant to s. 67(1)(a) of the BIA. It is common ground that those principles are certainty of intention, object and subject matter.
And makes the following comments on statutory trusts:
Statutory Trusts

[18] As a preliminary matter, it will be helpful to define the terminology involving statutory trusts. In Henfrey, McLachlin J. referred to a “deemed statutory trust”: p. 34. A “deemed statutory trust” is a trust that legislation brings into existence by constituting certain property as trust property and a certain person as the trustee of that property. The legislation purports to deem the trust into existence independently of the subjective intentions of or actions taken by the trustee. For example, the legislation at issue in Henfrey, s. 18 of the Social Service Tax Act, R.S.B.C. 1979, c. 388, established that a merchant who collected sales tax was “deemed to hold it in trust” for the provincial Crown. Deemed statutory trusts may be in favour of either the Crown or private parties: GMAC, para. 14. The subject matter of deemed statutory trusts also varies. Some statutes establish a trust over specific sums of property owing to or received by the trustee. In contrast, other statutes purport to establish a general floating charge over the assets of the trustee for the sum of the trust moneys.

[19] Even if a statute does not deem a trust into existence, it may impose a “statutory trust obligation,” namely an obligation on a person to hold in trust certain property: GMAC, paras. 13, 17, 21-22. Statutes that create deemed statutory trusts often also impose statutory trust obligations, such as an obligation to segregate the trust property or hold it in a trust account: GMAC, at para. 17.


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