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Digest of the Week – After-Fact Creation of a Trust Not Intended to Give Wronged Party More Rights Than if Contract Had Been Performed

Digest of the Week – After-Fact Creation of a Trust Not Intended to Give Wronged Party More Rights Than if Contract Had Been Performed

An after-fact creation of a trust is not intended to give the wronged party more rights than if the contract had been performed.



1698496 Ontario Ltd. v. Zoberi
2015 CarswellOnt 16178
Ontario Superior Court of Justice


Contracts --- Remedies for breach — Miscellaneous

Parties were involved in series of transactions and defendants owed plaintiffs significant amount of monies — Plaintiffs were granted partial default judgment — Finding was made that constructive trust and purchase money resulting trust existed — Plaintiffs sought declaration that defendants owed fiduciary duty to plaintiffs — Defendants did not owe fiduciary duty to plaintiffs — Parties were two independent parties that entered into commercial relationship for their mutual benefit and there was no expectation that defendant would act as fiduciary — Trusts found to exist were after-fact creation of equity designed to protect wronged party and were not intended to give party who was wronged more rights than they would have had if contract had been performed — It could not be case that defendants would prefer plaintiffs' interests as they were arms-length parties that engaged in business relationship.
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