In the recent decision from the Ontario Court of Appeal (“ONCA”), Corvello v. Colucci, 2022 ONCA 159, the ONCA confirmed that a trust can exist even where there is no written trust agreement.
At issue in the case was the ownership of a land use permit which allowed the holder(s) of the permit to build on and use the land for recreational purposes.
In the court of first instance, the appellant took the position that the permit belonged to him alone. However, the trial judge determined that the appellant actually held the permit “in trust for himself and the respondents as beneficial owners”.
On appeal, the appellant argued that the trial judge erred in law and in fact by determining that an undocumented trust agreement existed.
The ONCA advised that it is trite law that a valid trust requires “three certainties: certainty of intention to create a trust, certainty of subject matter, and certainty of objects” and opined that the trial judge must consider the evidence as a whole in order to determine whether a valid trust exists (it is open to the trial judge to “accept some, all, or none of the witness’s evidence”).
Further, the ONCA cautioned that the absence of a “formal trust agreement” is not determinative. Rather, in order to ascertain certainty of intention in the absence of a written trust agreement, the trial judge needs to look at “the surrounding circumstances and the evidence as to what the parties intended, as to what was actually agreed, and as to how the parties conducted themselves”, as well as assess the credibility/reliability of evidence.
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