All About Estates

It is Not My Deed: How a Party Can Void a Trust Agreement

One way for a party to set aside a trust agreement is by arguing that the settlor of a trust made a mistake about the trust. The concept, often found in contract law, is known as non est factum (note that a trust deed can be seen as a contract).

The doctrine applies where there was both a mistake made in the execution of a contract, and the party was actually in error about the nature of the document that was signed.[1] Courts apply a two-step test: first, the individual signing a contract must have been mistaken as to the nature and content of the document. After that has been established, the court must determine whether the individual was careless in signing the document.[2] The onus is on the party raising the defence.

Modern cases have limited the doctrine to some extent. Courts have refused to apply the doctrine where a person is mentally capable and understands English, and is not pressured or under duress. If the person executing the deed of trust is not illiterate, no fraudulent misrepresentation is made, and there is ample time to read the deed and have knowledge of its purpose and effect, the defence is not available, whether or not the party read the deed or not.[3] Also, the mistake must be to the essential nature of the transaction, rather than as to its terms. In other words, there must be a fundamental difference between the document the signer thought he or she was signing and the document he or she actually signed, whether in terms of character, contents or otherwise.[4]

In general, the lack of independent legal advice does not invalidate an agreement in absence of proof of non est factum[5], and each case is decided on its own facts. A lack of independent advice is not, in and of itself, a defence against the signing of a contract or trust deed.[6] Where a contract is fully read and explained, the doctrine may not be applicable.

An example of a case where the court refused to apply the principle of non est factum was in Mongillo v. Mongillo. In that case, the father-in-law of a divorcing wife convinced his daughter-in-law to agree to move to a smaller, less expensive home than the marital home. In return, he promised she would receive $100,000 from the proceeds of the matrimonial home. The wife signed a trust agreement and power of attorney in his favour. The father-in-law then transferred title to the smaller home into his name alone. The court refused to apply non est factum. Although the court accepted that the wife was mistaken as to the nature and content of the document, the court found that she was careless in not reading the trust agreement and power of attorney. The wife, who was born in Canada, had a Grade 12 high school education and was fully conversant in English, and she was not under undue pressure when she signed. The court, however, accepted the wife’s arguments with respect to fraudulent misrepresentation and lack of independent legal advice and declared the power of attorney and trust agreement void.

[1] Halsbury’s Laws of Canada, VIII.7(5)

[2] Mongillo v Mongillo, 1999 CarswellOnt 3042, 103 O.T.C. 252 (Ont. S.C.J.)

[3] CED Deeds and Documents, IV.5

[4] CED Contracts, V.2

[5] Royal Bank v. 966566 Ontario Inc., 2000 CarswellOnt 508

[6] Royal Bank

About Michael Rosen
Michael Rosen is a lawyer at de VRIES LITIGATION LLP. He practises in the area of estates, trusts and capacity litigation. He is a graduate of York University and the University of Western Ontario’s Faculty of Law. Email: