When is a Stranger a Constructive Trustee - A Critique of Recent Decisions

  • Susan Barkehall Thomas


This article explores the conceptual development of third party liability for participation in a breach of fiduciary duty. The author provides a critical analysis of the foundations of third party liability in Canada and chronicles the evolution of context-specific liability tests. In particular, the tests for the liability of banks and directors are developed in their specific contexts. The author then provides a reasoned critique of the Supreme Court of Canada's recent trend towards context-independent tests. The author concludes by arguing that the current approach is inadequate and results in an incoherent framework for the law of third party liability in Canada.