All About Estates

Don’t Trust a Stranger

This blog was written by Christopher Cook, student-at-law

The law recognizes three ways in which a stranger to the trust (i.e., someone who is not an appointed trustee) may be liable for breach of trust. First, one may be liable as a “trustee de son tort.” This is the case when one takes on the responsibilities of a trustee, though unappointed, and commits a breach of trust while so acting. Second, one may be liable for “knowing assistance,” which occurs when one knowingly assists an appointed trustee with a course of action amounting to a breach of trust. Third, one may be liable for “knowing receipt.” This is when one knowingly receives trust property in breach of the trustee’s fiduciary obligations. In a recent case, Humphreys-Saude v. Pavao, 2022 ONSC 4982, the Court had an opportunity to discuss in detail the second of these grounds for liability.

In Humphreys-Saude, the testator named his 81-year-old mother, Mrs. Saude, as estate trustee. Though she accepted the appointment, Mrs. Saude failed to notify the testator’s daughter—the sole beneficiary—of her inheritance. She also failed to inform the bank of the testator’s passing. In the months following the testator’s death, Mrs. Saude used the deceased’s debit card to make various unauthorized ATM withdrawals and purchases. For example, in addition to paying herself $10,000 in cash, Mrs. Saude used estate funds to pay off an outstanding Rogers internet bill owed by the testator’s sister.

Because Mrs. Saude was unable to drive, the testator’s sister frequently chauffeured Mrs. Saude to the bank and to various retail outlets, including Rogers, where many (but not all) of the unauthorized transactions took place. The testator’s sister conceded that she was aware that Mrs. Saude was, during their various trips, using the testator’s debit card to make unauthorized ATM withdrawals and purchases.

Not surprisingly, the Court had no trouble finding that the estate of Mrs. Saude (who had died by the time of the hearing) was liable to the testator’s daughter for breach of trust. More interesting was the Court’s finding that the testator’s sister was also partially liable as a constructive trustee for knowing assistance.

As explained by the Court, knowing assistance consists of four elements. First, a fiduciary duty must exist. Second, the fiduciary must engage in a fraudulent and dishonest breach of duty. Third, the stranger to the fiduciary relationship must possess actual knowledge of (or be reckless or willfully blind as to) both the fiduciary relationship and the fiduciary’s fraudulent and dishonest conduct. Fourth, the stranger must participate in or assist in the fiduciary’s fraudulent and dishonest breach of duty.

Because Mrs. Saude was acting as an estate trustee, a fiduciary duty clearly existed. Moreover, because she had intentionally used estate funds for reasons wholly unrelated to the proper administration of the testator’s estate, Mrs. Saude had engaged in a fraudulent and dishonest breach of duty. The Court also found that the testator’s sister (a stranger to the trust) had actual knowledge of Mrs. Saude’s fraudulent and dishonest conduct. By her own admission, she knew that Mrs. Saude was acting as the trustee of the testator’s estate, and that Mrs. Saude was wrongfully using the testator’s debit card to make unauthorized cash withdrawals and purchases.

Finally, the Court found that the testator’s sister had assisted Mrs. Saude in carrying out her fraudulent and dishonest activities. In spite of her knowledge that Mrs. Saude was misappropriating estate funds, the testator’s sister continued to drive Mrs. Saude to the bank and to various outlet stores, thereby enabling and perpetuating her fraudulent and dishonest conduct.

Humphreys-Saude ought to serve as a cautionary tale to those who lend their assistance to estate trustees. If an estate trustee engages in conduct that you know or suspect is contrary to their fiduciary obligations, do not—under any circumstances—continue to act. Otherwise, you may end up sharing in their inevitable liability.

About Rebecca Studin
Rebecca Studin was called to the Bar in 2009. Before joining de VRIES LITIGATION LLP, Rebecca practised estates and commercial litigation at a full-service international law firm in Toronto. Rebecca’s estates experience includes will interpretation applications, will rectification applications, solicitor’s negligence actions, and other estates and trusts matters. Rebecca obtained her law degree from Osgoode Hall Law School after earning her honours bachelor of arts degree from Glendon College, York University. Following her call to the Bar, Rebecca was selected as a Fox Scholar and spent a year training as a barrister at the Middle Temple, Inns of Court, in London, UK. More of Rebecca's blogs can be found at


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