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Fiduciary - Ad Hoc. Paddy-Cannon v. Canada (Attorney General)
In Paddy-Cannon v. Canada (Attorney General) (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, here from findings that "Canada [was] liable to the respondents for breach of fiduciary duty (both sui generis and ad hoc) and for negligence, and granted declaratory relief to that effect".
The court considers the indigenous ad hoc fiduciary duty, specifically indigenous children:(b) Ad Hoc Fiduciary Duty
(i) Governing principles
[69] While the ad hoc fiduciary duty applies in more general circumstances, it requires an explicit Crown undertaking: Jack Woodward and Ethan Krindle, Aboriginal law in Canada (Toronto: Thomson Reuters, 2025), at § 3:58.
[70] An ad hoc fiduciary duty describes fiduciary duties in cases not covered by an existing category: Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, 499 A.R. 345, at para. 29. It requires 1) an undertaking by the alleged fiduciary (in this case Canada) to act in the best interests of the alleged beneficiaries (in this case the respondents); 2) a defined class of beneficiaries vulnerable to the fiduciary’s control; and 3) that the beneficiaries have a legal or substantial practical interest that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control: Elder Advocates, at paras. 30-36; Restoule, at para. 228.
[71] The first requirement refers to a “forsaking by the alleged fiduciary of the interests of all others in favour of those of the beneficiary, in relation to the specific legal interest at stake”: Elder Advocates, at paras. 31 and 49. An alleged fiduciary owes the “utmost loyalty” to the beneficiaries: Elder Advocates, at para. 43.
[72] When the alleged fiduciary is a government such an undertaking will be “rare” because a burden of utmost loyalty “is inherently at odds with [a government’s] duty to act in the best interests of society as a whole, and its obligation to spread limited resources among competing groups with equally valid claims to its assistance”: Elder Advocates, at para. 44, citing Sagharian (Litigation Guardian of) v. Ontario (Minister of Education), 2008 ONCA 411, 172 C.R.R. (2d) 105, at paras. 47-49. Applying this principle, the Supreme Court in Restoule, at para. 232, rejected the claim of a fiduciary duty in respect of the augmentation of annuities under the Robinson Treaties because of the need to consider the “wider public interest” and broader economic conditions.
[73] An undertaking “may be found in the relationship between the parties, in an imposition of a responsibility by statute, or under an express agreement to act as trustee of the beneficiary’s interest”: Elder Advocates, at para. 32, citing Galambos v. Perez, 2009 SCC 48, [2009] 3 S.C.R. 247, at para. 77. An undertaking flowing from a statute must be clearly supported by the language in the statute, and an undertaking arising by implication from the relationship between the parties is determined by focussing on analogous cases: Elder Advocates, at paras. 45-46; K.L.B. v. British Columbia, 2003 SCC 51, 230 D.L.R. (4th) 513, at para. 41. A “relationship of trust and reliance” alone does not meet the high threshold of an undertaking in the fiduciary sense: Restoule, at para. 231.
[74] Further, the alleged beneficiaries must be vulnerable to the exercise of discretionary power by the alleged fiduciary in relation to “an identifiable legal or vital practical interest that is at stake”: Elder Advocates, at para. 35. A general impact on the alleged beneficiary’s well-being, property, or security is not enough. Rather, the interest “must be a specific private law interest to which the person has a pre-existing distinct and complete legal entitlement”: Elder Advocates, at para. 51.
[75] Fiduciary obligations may overlap with liabilities in contract and tort in application. The “essence of a fiduciary relationship”, in contrast to contract and tort, is that the fiduciary exercises power on behalf of the beneficiary and pledges to act in their best interests: Lafrance Estate v. Canada (Attorney General) (2003), 2003 CanLII 40016 (ON CA), 64 O.R. (3d) 1 (C.A.), at para. 31, citing Norberg v. Wynrib, 1992 CanLII 65 (SCC), [1992] 2 S.C.R. 226, at p. 272, per McLachlin J. (as she then was).
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[78] Parents owe a fiduciary duty to the children in their care: M.(K.) v. M.(H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6. It also cannot be seriously disputed that guardians owe a fiduciary duty to their wards, including when children are wards of the state and even when they are in temporary foster care, as a government agency has the power to supervise and direct their placements: K.L.B., at para. 38.
[79] Guardianship of children engages the kind of interest that is capable of being protected by a fiduciary obligation. Elder Advocates, at para. 51 describes it as “the type of fundamental human or personal interest that is implicated when the state assumed guardianship of a child or incompetent person.” More specifically for Indigenous children, their interest in maintaining their culture, language, and identity may trigger a fiduciary duty: see also First Nations Child and Family Caring Society of Canada et al. v. Attorney General of Canada (for the Minister of Indian and Northern Affairs Canada), 2016 CHRT 2, [2016] 2 CNLR 270, at para. 109.
[80] In my view, the respondents’ relationship with Canada at the relevant time is analogous to the guardian-ward relationship in K.L.B., in that the respondents were in de facto foster care (without a formal arrangement) which remained the case until October 1, 1969, after the events in question. As of late 1965, the respondents’ parents appeared to have deserted them and in any event had no ability to care for them. They were in the care of extended family and the housekeeper of a local priest. The care arrangements were temporary. The respondents were completely reliant on potentially unwilling caretakers who lacked financial means[4] and who had no legal authority to provide consent for urgent medical treatment. Government officials at both the provincial and federal level were not only aware of these circumstances, they actively pursued more permanent care arrangements for the respondents – at least until May 1966 when the respondents’ paternal relatives finally said they would keep the children.
[81] Against this backdrop, Canada’s criticism that the trial judge failed to specifically find an undertaking of utmost loyalty has little force. When Canada developed the return plan and put it in motion, it committed itself to act in the respondents’ best interests and attempted to do so until it shelved the plan. Most tellingly, the March 3, 1966 letter made it clear that federal officials “believe[d] it would serve in the best interests of the children if [they] were returned to their home reserve.” As I will explain, the “best interests of the child” standard does not assist in deciding whether there was a breach of the fiduciary duty, but Canada’s reference to it reveals an undertaking of utmost loyalty.
[82] Further, I reject Canada’s argument that the trial judge erred by finding an undertaking of loyalty without identifying explicit statutory authority. As discussed above, the nature of a relationship can give rise to an undertaking of loyalty: Elder Advocates, at paras. 32 and 46-47. Between the state and a few children in de facto foster care, the undertaking of utmost loyalty does not engage any legislative or policy function that requires a consideration of the broader public interest: Strohmaier v. British Columbia (Attorney General), 2015 BCSC 1189, at para. 98. Rather, the relationship belongs in the category described in Elder Advocates, at para. 49, as one “where the government duty is in effect a private duty being carried out by government”.
[83] The more difficult question in this case is whether Canada’s role in the return plan was “equivalent or analogous to direct administration of [the respondents’] interest”, which must be established before a fiduciary duty can be owed by a government actor: Elder Advocates, at para. 53.
[84] First of all, I accept that the federal government did not then, and does not now, have jurisdiction to direct or supervise the placement of Indigenous children like the respondents, or to apprehend them. As counsel for Canada pointed out, that falls within provincial responsibility. However, under the double aspect doctrine the federal government can exercise authority in relation to the “protection of the ties between Indigenous families and communities, in a spirit of cultural survival” even though the general authority over child welfare remains with the provinces: Reference re An Act respecting First Nations, Inuit and Métis children, youth and families, 2024 SCC 5, 488 D.L.R. (4th) 189, at para. 98 (“Bill C-92 Reference”).
[85] The various children’s aid societies themselves no doubt directly administered and supervised the placements of the respondents, who were off-reserve Indigenous children, pursuant to the Child Welfare Act, R.S.O. 1960, c 53. Under this Act, children’s aid societies were entrusted with essentially all of the direct responsibilities regarding children who need protection, with some oversight from the Minister of Social and Family Services and the Director of Child Welfare. It has been argued, and I accept, that in circumstances like these the children’s aid societies, each separately incorporated, act as the guardians of the children.[5] I note also that, in 1965, the federal government and Ontario entered into the Canada-Ontario Welfare Services Agreement (the “1965 Welfare Agreement”). Under this agreement the federal government provides funding to Ontario which allows it to extend the delivery of its existing child welfare services to “Indians with reserve status”.
[86] As it relates to the return plan, however, Canada functioned as the “exclusive intermediary” between the CAS and the maternal relatives in Saskatchewan. Neither the Hastings CAS nor the Renfrew CAS could themselves locate Marie, secure permanent homes for the respondents on reserve, or work directly with the Thunderchild First Nation to make decisions about the respondents. To the extent officials in Ontario considered the possibility of returning the respondents to their First Nation, which was not in Ontario, Canada’s jurisdiction appeared necessary. Notably, the respondents’ claim of fiduciary duty concerns not their care arrangements generally but the specific return plan, to which Canada was indispensable.
[87] The concept of “exclusive intermediary” derives from Wewaykum Indian Band v. Canada, 2002 SCC 79, [2002] 4 S.C.R. 245; and Williams Lake Indian Band v. Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4, [2018] 1 S.C.R. 83. In both cases, the federal Crown could not unilaterally create a reserve due to division of power constraints. The Supreme Court in Wewaykum held that “the nature and importance of the appellant bands’ interest in these lands prior to 1938, and the Crown’s intervention as the exclusive intermediary to deal with others (including the province) on their behalf, imposed on the Crown a fiduciary duty”: at para. 97.
[88] In Williams Lake, the majority held that it was reasonable for the Specific Claims Tribunal to find that Canada breached its fiduciary duty by failing to protect lands from pre-emption. The majority explained, at paras. 76-77, that Canada’s limited discretionary power is not legally fatal to a finding of fiduciary duty:The Tribunal openly acknowledged that Canada’s discretionary power was limited by the need for provincial cooperation and that Canada could not unilaterally create a reserve. But it was open to the Tribunal to find that a fiduciary obligation arose in the absence of complete or exclusive control, provided that the federal Crown’s position as exclusive intermediary conferred a degree of control that left a cognizable Aboriginal land interest “vulnerable” to the adverse exercise of its discretion.
... [T]he nature of the discretion or power in the hands of the alleged fiduciary that will suffice to attract a fiduciary obligation may be controversial in some cases. To the extent that the power wielded by officials acting on behalf of the federal Crown at the earliest stages of the reserve creation process in British Columbia gives rise to any such controversy, the Tribunal has resolved it in a manner that aligns with the general principles of fiduciary law. The essential requirement is that the alleged fiduciary have scope for the exercise of some discretion or power to affect the beneficiary’s interests; this is the discretion or power that is restricted by the fiduciary obligation. It is also the discretion or power whose misuse the band must still prove resulted in a compensable loss. [Citations omitted. Emphasis added.] [89] While Wewaykum and Williams Lake were about the sui generis fiduciary duty and reserve land, the same rationale applies in a situation like the present appeal. As the Supreme Court wrote in the Bill C-92 Reference, at para. 99, “[c]hild welfare in the Indigenous context is not only a field in which Parliament and the provinces can act, but also one in which concerted action by them is necessary”. To the extent that the federal government’s jurisdiction is required and indeed exercised, I see no reason why the lack of complete federal control over the ultimate outcome should bar the finding of a fiduciary duty.
[90] I reject Canada’s argument that there can be no fiduciary duty here because it had no authority to exercise sufficient control over the respondents’ interests. According to Canada, the federal officials at Indian Affairs were simply writing letters pursuant to what Canada’s counsel called “general operational powers”. The trial judge, however, characterized Canada’s role as “direct[ing]” the return plan, with or without lawful authority; Canada “put in motion plans for the children’s return to the reserve” and “was making decisions in respect of the children in consultation with the Thunderchild First Nation”. Canada has not articulated how these characterizations amount to palpable and overriding errors.
[91] The stringency of the “direct administration” requirement serves to ensure that governments can act in the interests of all citizens without being paralyzed by a fiduciary’s responsibilities: Elder Advocates, at paras. 49 and 53. It requires an examination of the nature and extent of the government’s involvement with the interest of the alleged beneficiary. While Canada refers us to cases where the governing statutory scheme rightly informed the nature and extent of the government’s involvement, that does not mean that when there is no statutory authority a trial judge is precluded from focusing on the conduct of government actors.
[92] In my view, while the trial judge did not explicitly find that there was “direct administration”, her characterization of Canada’s involvement indicates that she understood the standard and was convinced that it was met.
[93] Finally, Canada should not be permitted to claim a lack of authority, after the fact, to escape liability when its officials at the time clearly thought they had authority and acted on that basis. Canada inserted itself into the respondents’ situation to such an extent that at one point, when Marie expressed her desire to have the respondents returned to her care, a representative of Canada wrote to her that “[w]hen you…have established satisfactory home conditions, we would suggest that you can then renew this request. It will then be considered in the light of the circumstances at that time”. If the federal officials did not intend to, and did not in fact, exercise discretionary control over the respondents’ situation, it is difficult to understand why they thought it appropriate to make those representations to Marie.
[94] For these reasons, the trial judge did not err in finding that Canada owed a fiduciary duty to the respondents.
(c) Did Canada breach its fiduciary duty?
(i) Governing principles
[95] The remaining question is whether Canada adequately discharged its duty to the respondents.
[96] The content of the duty owed to children under one’s care is set out in K.L.B. The majority described the parental fiduciary duty as requiring one “to act loyally, and not to put one’s own or others’ interests ahead of the child’s in a manner that abuses the child’s trust”: at para. 49. Since reasonable people will have different views about how those in the position of a parental fiduciary should advance a child’s best interests, the “unique focus” when analyzing any potential breach must be on whether the fiduciary’s decisions and conduct amount to a “breach of trust”: at paras. 46 and 48.
[97] A breach of fiduciary duty does not necessarily imply dishonesty or the pursuit of the fiduciary’s personal interests: Meng Estate v. Liem, 2019 BCCA 127, 46 E.T.R. (4th) 195, at para. 36. However, it must engage the elements of “loyalty, trust, and confidence”, which distinguishes the fiduciary duty from the ordinary duty of care underlying tortious liability: Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 S.C.R. 377, at p. 405. . Coscarella Dentistry Professional Corporation v. Harvey [confidential information]
In Coscarella Dentistry Professional Corporation v. Harvey (Ont CA, 2025) the Ontario Court of Appeal dismissed an appeal, here from the dismissal of an action between two dental enterprises "alleging the conversion and improper solicitation of Clinic patients and Clinic employees, the appropriation of confidential information, and breach of fiduciary obligation against Dr. Harvey alone relating to the misuse of confidential information."
Here the court characterizes 'fiduciary duties', on the unusual 'confidential information' facts of this case:[10] Third, we see no reversible error in the trial judge’s failure to give more complete reasons for rejecting the fiduciary breach claim. The appellants’ theory is that Dr. Harvey breached his fiduciary duty by abusing confidential information. The trial judge’s finding that the information was not confidential put an end to this claim. There was no need to say more.
[11] In any event, the trial judge explained why Dr. Harvey did not fall within a presumptive fiduciary class, and she did not need to address the ‘case-by-case” analysis, given that, on its face, this claim is thoroughly untenable. For a fiduciary duty to be found on a case-by-case basis, the fiduciary must have the “scope for the exercise of some discretion or power”, the exercise of which can “affect the beneficiary’s legal or practical interest”, in circumstances where the beneficiary is “peculiarly vulnerable to the fiduciary holding the discretion”: Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574 at p. 581. Dr. Harvey’s practical ability to access patient records does not amount to “the exercise of some discretion or power” to affect the legal or practical interests of the appellants or make them peculiarly vulnerable. If it did, the simple power of anyone to access the property of another would convert them into fiduciaries. . 1417217 Ontario Inc. v. River Trail Estates Inc.
In 1417217 Ontario Inc. v. River Trail Estates Inc. (Ont CA, 2024) the Ontario Court of Appeal allowed an appeal from a ruling involving oral real estate joint venture and several related issues.
Here the court sets out the test for ad hoc fiduciary duties:[52] For an ad hoc fiduciary relationship to arise, the alleged fiduciary must undertake to act in the best interests of the alleged beneficiary; the duty must be owed to a defined person or class of persons who are vulnerable to the fiduciary in the sense the fiduciary has a discretionary power in respect of them; and, the fiduciary’s power may affect the legal or practical interest of the alleged beneficiary: Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, [2011] 2 S.C.R. 261, at paras. 30, 33, 34. . Boal v. International Capital Management Inc.
In Boal v. International Capital Management Inc. (Ont CA, 2023) the Court of Appeal considered (and allowed) a second appeal from a class action order striking a claim for not properly alleging "a cause of action for breach of fiduciary duty between certain investment advisors and a group of their clients". In these quotes the court considers the nature of an ad hoc fiduciary relationship, here that of a financial advisor:The Relevant Legal Principles
[34] The law governing ad hoc fiduciary relationships in Canada was profoundly changed in 1987 by Wilson J.’s dissenting reasons in Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99. At that time, the law recognized categories of fiduciary relationships including: directors and corporations, solicitors and clients, trustees and beneficiaries, principals and agents, and partners. While the jurisprudence acknowledged that the categories of fiduciary relationships were not closed, there were no general principles governing when, outside of the established categories, the courts would impose a fiduciary obligation on a particular relationship (an “ad hoc fiduciary relationship”).
[35] At p. 136 of Frame, Wilson J. remedied that deficiency. She said that relationships in which fiduciary obligations have been imposed possess three general characteristics:1. the fiduciary has scope for the exercise of some discretion or power;
2. the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests; and,
3. the beneficiary is peculiarly vulnerable to, or at the mercy of, the fiduciary holding the discretion or power. [36] Since Frame was decided, the Supreme Court has repeatedly used this analysis as the foundation for identifying ad hoc fiduciary relationships. Hodgkinson is one such case. It is particularly helpful because, in Hodgkinson, the Supreme Court addressed whether an ad hoc fiduciary relationship existed between a professional financial advisor and his client.
[37] In Hodgkinson, a stockbroker with little experience in tax planning, hired an accountant to advise him regarding his tax planning needs, particularly with respect to real estate investments. The stockbroker relied on the accountant’s advice and invested in four multi-unit residential building projects. He lost heavily when the value of the properties fell during a decline in the real estate market. It was later revealed that the accountant had a financial relationship with the developers of the projects during the relevant period which he failed to disclose to his client.
[38] The trial judge allowed the client’s action for breach of fiduciary duty and breach of contract and awarded him damages. The British Columbia Court of Appeal upheld the trial judge on the breach of contract issue but reversed on the issue of fiduciary duties.
[39] On further appeal to the Supreme Court of Canada, the majority allowed the appeal. Justice La Forest, writing for the majority, held that in view of the professional relationship between the parties, which was based on trust, confidence, and independence, and the client’s reliance on the accountant’s advice, there was an ad hoc fiduciary relationship between the parties. The accountant breached his fiduciary obligations by failing to disclose the financial benefit he obtained as a result of his client having invested in the projects that he had recommended.
[40] Justice La Forest expanded considerably on Wilson J.’s three-step analysis in Frame. His comprehensive judgment was considered by this court in Hunt v. TD Securities Inc. (2003), 2003 CanLII 3649 (ON CA), 66 O.R. (3d) 481 (C.A.), leave to appeal refused, [2003] S.C.C.A. No. 473. At para. 40 of Hunt, this court summarized the five interrelated factors that La Forest J. identified for consideration when determining whether a financial advisor stands in a fiduciary relationship to their client:1. Vulnerability – the degree of the client’s vulnerability, due to such things as age, or lack of language skills, investment knowledge, education, or experience in the stock market;
2. Trust – the degree of trust and confidence the client reposes in their advisor and the extent to which the advisor accepts that trust;
3. Reliance – whether there is a long history of relying on the advisor’s judgment and advice, and whether the advisor holds him or herself out as having special skills and knowledge upon which the client can rely;
4. Discretion – the extent to which the advisor has power or discretion over the client’s account; and,
5. Professional Rules or Codes of Conduct – which help to establish the advisor’s duties and the standards to which the advisor will be held. [41] In Hodgkinson, La Forest J. stated that the question to ask is whether, given all the surrounding circumstances, one party could reasonably have expected that the other would act in the former’s best interests with respect to the subject matter in issue: at p. 409. He noted that the essence of professional advisory relationships is trust, confidence, and independence, and that clients in such relationships have a right to expect their professional advisors will act in their best interests, to the exclusion of all other interests, unless the contrary is disclosed: at pp. 415, 417. In the advisory context, the advisor’s ability to cause harm and the client’s susceptibility to be harmed arise from the simple but unassailable fact that the advice given by the independent advisor is not likely to be viewed with suspicion but, rather, is likely to be followed: at p. 431.
The Claim Discloses a Cause of Action for Breach of a Class Wide Fiduciary Duty
[42] As Hodgkinson makes clear, the existence of industry standards is an important factor in determining whether there is an ad hoc fiduciary relationship between a professional investment advisor and their client. ...
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[52] Accordingly, in my view, it is not “plain and obvious” that the claim for breach of a class-wide fiduciary duty has no reasonable prospect of success.
DISPOSITION
[53] For these reasons, I would allow the appeal and declare that the claim discloses a cause of action for breach of a class-wide fiduciary duty. I would remit the action to the Superior Court of Justice for a fresh determination, by a different judge, of the common issues and preferable procedure certification criteria, and whether the pleaded claims of knowing assistance and knowing receipt are certifiable. . Boal v. International Capital Management Inc.
In Boal v. International Capital Management Inc. (Div Ct, 2022) the Divisional Court considered where an ad hoc fiduciary relationship stands between investors and their advisors:[64] In determining whether financial or investment advisors stand in a fiduciary relationship with their clients, the Court of Appeal summarized the five interrelated factors established by LaForest J. in Hodgkinson as follows in Hunt v. TD Securities Inc. (2003), 2003 CanLII 3649 (ON CA), 66 O.R. (3d) 481, 229 D.L.R. (4th) 609 (C.A.) at para. 40:1. Vulnerability -- the degree of vulnerability of the client that exists due to such things as age or lack of language skills, investment knowledge, education or experience in the stock market.
2. Trust -- the degree of trust and confidence that a client reposes in the advisor and the extent to which the advisor accepts that trust.
3. Reliance -- whether there is a long history of relying on the advisor's judgment and advice and whether the advisor holds him or herself out as having special skills and knowledge upon which the client can rely.
4. Discretion -- the extent to which the advisor has power or discretion over the client's account.
5. Professional Rules or Codes of Conduct -- help to establish the duties of the advisor and the standards to which the advisor will be held. ....
[69] Simply casting away an analysis of discretionary authority in the case of financial advisors casts the net too wide. As stated in Galambos at para. 70:Underpinning all of this is the focus of fiduciary law on relationships. As Dickson J. (as he then was) put it in Guerin v. The Queen, 1984 CanLII 25 (SCC), [1984] 2 S.C.R. 335, at p. 384: “It is the nature of the relationship . . . that gives rise to the fiduciary duty. . . .” The underlying purpose of fiduciary law may be seen as protecting and reinforcing “the integrity of social institutions and enterprises”, recognizing that “not all relationships are characterized by a dynamic of mutual autonomy, and that the marketplace cannot always set the rules”: Hodgkinson, at p. 422 (per La Forest J.). The particular relationships on which fiduciary law focusses are those in which one party is given a discretionary power to affect the legal or vital practical interests of the other: see, e.g., Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99, per Wilson J., at pp. 136-37; Norberg, per McLachlin J., at p. 272; Weinrib, at p. 4, quoted with approval in Guerin, at p. 384. [70] The goal of the imposition of fiduciary duties is to protect a relationship the law recognizes as one of high trust and confidence, based on the implicit dependency and vulnerability to another. With the recognition of the relationship comes the imposition of proscriptive duties, notably the no-profit rule and the no-conflict rules, as well as the prescriptive duties of good faith and confidence. But duties of good faith, care, confidentiality, and disclosure apply to a variety of non-fiduciaries as well. As the motion judge set out, the fiduciary standard is exceptional. Other legal concepts which may apply – protection in contract, tort, and unjust enrichment – are available to regulate the conduct alleged here, albeit not on a class, but an individual basis. While the MFDA rules and the FP Code are a part of the analysis, they are not the whole of the analysis. . Density Group Limited v. HK Hotels LLC
In Density Group Limited v. HK Hotels LLC (Ont CA, 2014) the Court of Appeal commented as follows on ad hoc fiduciary duties:[171] In her analysis of the fiduciary duty claim against Mr. Kallan, the motion judge referred to a number of leading Supreme Court of Canada decisions on fiduciary duties: Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 S.C.R. 377, which cites the Court’s earlier decision in Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99, and Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), 2011 SCC 24, 2 S.C.R. 261.
[172] In particular, she highlighted the principle from Hodgkinson v. Simms that to establish a fiduciary duty outside the established fiduciary categories “what is required is evidence of a mutual understanding that one party has relinquished its own self-interest and agreed to act solely on behalf of the other party”: pp. 409-10.
[173] She also referred to the requirements set out in Elder Advocates for establishing a fiduciary relationship outside a recognized category. First, there must be evidence that the alleged fiduciary undertook to act in the best interests of the beneficiary. Second, it must be shown that the alleged fiduciary has a discretionary power over a defined person or class of persons. Third, there must be evidence that the alleged fiduciary’s power may affect the legal or substantial practical interests of the beneficiary: Elder Advocates, paras. 30 to 34. . Stirrett v. Cheema
In Stirrett v. Cheema (Ont CA, 2020) the Court of Appeal cited the criteria for finding an ad hoc fiduciary duty:[53] In Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, [2011] 2 S.C.R. 261, at para. 36, McLachlin C.J., writing for the court, stated what a claimant must establish before a court will impose a fiduciary duty outside of the traditionally recognized categories of per se fiduciary relationships:In summary, for an ad hoc fiduciary duty to arise, the claimant must show, in addition to the vulnerability arising from the relationship described by Wilson J. in Frame: (1) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries; (2) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and (3) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control. [54] Here, the trial judge recognized that the issue was whether the factual matrix before him raised a fiduciary duty. While he did not cite Elder Advocates for the factors giving rise to a fiduciary duty, he relied on Frame and Hodgkinson, two other leading cases from the Supreme Court on fiduciary duty. . The Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership
In The Catalyst Capital Group Inc. v. Dundee Kilmer Developments Limited Partnership (Ont CA, 2020) the Court of Appeal set the test for finding an ad hoc fiduciary relationship:[65] To establish the existence of an ad hoc fiduciary relationship a claimant must demonstrate three elements:(i) an undertaking, express or implied, by the alleged fiduciary to act in the best interests of a beneficiary. The claimant must be able to point to a forsaking by the alleged fiduciary of the interests of all others in favour of those of the beneficiary in relation to the specific legal interest at stake;
(ii) the identification of a defined person or class of persons who are vulnerable to the alleged fiduciary in the sense that the alleged fiduciary has a discretionary power over them; and
(iii) the alleged fiduciary’s power may affect the legal or substantial practical interests of the beneficiary. Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, [2011] 2 S.C.R. 261, at paras. 30-34; Professional Institute of the Public Service of Canada v. Canada (Attorney General), 2012 SCC 71, [2012] 3 S.C.R. 660, at paras. 124, 128 and 138.
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[71] The existence of an ad hoc fiduciary relationship is determined on a case-by-case basis, including in cases of commercial transactions: PIPSC, at para. 113; Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 S.C.R. 574, at pp. 667-668. ... . Garneau v. Industrial Alliance Insurance and Financial Services Inc.
In Garneau v. Industrial Alliance Insurance and Financial Services Inc. (Ont CA, 2015) the court succinctly set out the test for finding a fiduciary relationship outside a categorical fiduciary relationship (ie. one where a fiduciary relationship is established by the type of the relationship, eg. solicitor-client):[16] The test for establishing an ad hoc fiduciary duty has been modified since Frame v. Smith, 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99. This duty will only be found where the alleged fiduciary has provided an express or implied undertaking to act in the best interests of the other party: Galambos v. Perez, 2009 SCC 48 (CanLII), [2009] 3 S.C.R. 247, at para. 66; Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 S.C.R. 261, at para. 30.
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