What truly defines a fiduciary relationship? Is it power, discretion, or vulnerability? Beneath the surface of established categories and shifting jurisprudence lies a deeper principle: where trust and dependency converge, the law of Equity imposes its strictest obligations. This post unpacks how courts have moved from rigid classifications to a vulnerability-centered framework that now anchors both per se and ad hoc fiduciary duties.
Introduction
In Equity, and by extension in the world of Estate litigation, the law imposed by fiduciary relationships underlies much of what we do. Fiduciary relationships are often misunderstood, they are not merely defined by the presence of discretion or power, but at its core they are concerned with vulnerability that arises when one party is entrusted to act in the interests of another.
In its broadest sense, a “fiduciary” is a person who holds discretionary power over the interests or property of another and is legally required to exercise that power solely in the other person’s best interests.[1] While fiduciary duties have historically been described in categorical terms, contemporary jurisprudence has increasingly emphasized that the unifying feature across fiduciary relationships is the presence of trust and dependency marked by vulnerability.
The Law – Per Se & Ad Hoc Fiduciary Relationships
Generally speaking, there are two categories in which fiduciary obligation may arise; those being either the Per Se fiduciary relationship and/or the Ad Hoc fiduciary relationship.[2] In either case, at its core, a fiduciary relationship exists where one party is entrusted with power that can affect another party’s interests, creating an obligation of loyalty and protection.
Per Se Fiduciary Relationships
Certain categories of relationships are considered to give rise to fiduciary obligations because of their inherent purpose or their presumed factual or legal incidents.[3] Some examples of per se fiduciary relationships include trustee and beneficiary, guardian and ward, principal and agent.[4]
While the existence of a Per Se fiduciary relationship does simplify the analysis to some extent, one must bear in mind that the presumption of a Per Se fiduciary relationships is rebuttable and not all duties are fiduciary in nature. For example, in Hodgkinson, Sopinka and McLachlin JJ. noted that while the solicitor-client relationship has fiduciary aspects, many of the tasks undertaken in the course of the solicitor-client relationship do not attract a fiduciary obligation.[5] The same observation was affirmed in Galambos,[6] where the court noted that Binnie J. came to the same conclusion in 3464920 Canada Inc. v Strother.[7]
Ad Hoc Fiduciary Relationships
The development of caselaw surrounding the fiduciary relationships and the element of vulnerability has taken a winding route. Ultimately, it appears Justice Wilson’s initial dissent in Frame v Smith,[8] has prevailed as the dominant lens implemented by the Courts today.
The emphasis on vulnerability as a necessary aspect of the fiduciary relationship was popularized by Wilson J.’s dissent in Frame v Smith wherein she articulated a three-step test which characterized vulnerability an element of fiduciary relationships.[9] This view on vulnerability received split treatment by the Supreme Court. As per the majority in Lac Minerals, the element of vulnerability was minimized as La Forest J. stated that it is not a necessary ingredient in every fiduciary relationship.[10] On the other hand, in the same case, Sopinka J. (Dissenting in part) emphasized the role of vulnerability.[11] Citing from Hospital Products Ltd v United States Surgical Corp,[12] Sopinka J. endorses the view that vulnerability underlies all cases of fiduciary obligation and is inherent to the relationship.
La Forest J. would go on to slightly amend his view in the majority decision of Hodgkinson, stating that the concept of vulnerability is not the hallmark of fiduciary relationships, though it is important indicium of existence.[13]
Ultimately, the Court would put the matter to rest with Elder Advocates of Alberta Society v Alberta,[14] wherein the Court would go on to adopt the reasoning of the dissent in Frame v Smith and establish a three-part test for assessing the existence of Ad Hoc fiduciary relationships.[15]
Notably, in Elder Advocates, the Court refers to vulnerability as a hallmark of fiduciary duty and vulnerability is prominently featured within the second step of the test.[16]
Final Remarks
Ultimately, the modern law of fiduciary obligations reflects a clear doctrinal shift: while established categories continue to provide analytical starting points, they are neither exhaustive nor determinative.
The unifying principle, as set forth by the Supreme Court, is that fiduciary relationships are grounded in the entrustment of power in circumstances that give rise to vulnerability, thereby attracting obligations of loyalty and protection. Whether arising per se or ad hoc, the inquiry is inherently contextual, requiring careful attention to the nature of the parties’ relationship, the scope of the discretion conferred, and the extent to which one party is dependent on the other to safeguard their interests.
—
[1] Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 SCR 377, at para 29 (“Hodgkinson”).
[2] Galambos v Perez, 2009 SCC 48 at paras 36–37 (“Galambos”).
[3] Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 SCR 574, at p 646 (“Lac Minerals”); see also Galambos, at para 35.
[4] Guerin v. The Queen, 1984 CanLII 25 (SCC), [1984] 2 S.C.R. 335, at p. 384.
[5] Hodgkinson, at paras 110–111.
[6] Galambos, at para 37.
[7] 3464920 Canada Inc. v Strother, 2007 SCC 24, [2007] 2 S.C.R. 177 (S.C.C.), at para 34.
[8] Frame v. Smith, 1987 CarswellOnt 347 (“Frame v Smith”).
[9] Ibid., at para 45.
[10] Lac Minerals, at pp 646–647.
[11] Ibid., pp 658–660.
[12] Hospital Products Ltd. v. United States Surgical Corp. (1984), 55 A.L.R. 417.
[13] Hodgkinson, at para 37.
[14] Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261
[15] Ibid., at para 27.
[16] Ibid., at para 29,
Menu
Written by: Grant Swedak
Posted on: April 8, 2026
Categories: Commentary
What truly defines a fiduciary relationship? Is it power, discretion, or vulnerability? Beneath the surface of established categories and shifting jurisprudence lies a deeper principle: where trust and dependency converge, the law of Equity imposes its strictest obligations. This post unpacks how courts have moved from rigid classifications to a vulnerability-centered framework that now anchors both per se and ad hoc fiduciary duties.
Introduction
In Equity, and by extension in the world of Estate litigation, the law imposed by fiduciary relationships underlies much of what we do. Fiduciary relationships are often misunderstood, they are not merely defined by the presence of discretion or power, but at its core they are concerned with vulnerability that arises when one party is entrusted to act in the interests of another.
In its broadest sense, a “fiduciary” is a person who holds discretionary power over the interests or property of another and is legally required to exercise that power solely in the other person’s best interests.[1] While fiduciary duties have historically been described in categorical terms, contemporary jurisprudence has increasingly emphasized that the unifying feature across fiduciary relationships is the presence of trust and dependency marked by vulnerability.
The Law – Per Se & Ad Hoc Fiduciary Relationships
Generally speaking, there are two categories in which fiduciary obligation may arise; those being either the Per Se fiduciary relationship and/or the Ad Hoc fiduciary relationship.[2] In either case, at its core, a fiduciary relationship exists where one party is entrusted with power that can affect another party’s interests, creating an obligation of loyalty and protection.
Per Se Fiduciary Relationships
Certain categories of relationships are considered to give rise to fiduciary obligations because of their inherent purpose or their presumed factual or legal incidents.[3] Some examples of per se fiduciary relationships include trustee and beneficiary, guardian and ward, principal and agent.[4]
While the existence of a Per Se fiduciary relationship does simplify the analysis to some extent, one must bear in mind that the presumption of a Per Se fiduciary relationships is rebuttable and not all duties are fiduciary in nature. For example, in Hodgkinson, Sopinka and McLachlin JJ. noted that while the solicitor-client relationship has fiduciary aspects, many of the tasks undertaken in the course of the solicitor-client relationship do not attract a fiduciary obligation.[5] The same observation was affirmed in Galambos,[6] where the court noted that Binnie J. came to the same conclusion in 3464920 Canada Inc. v Strother.[7]
Ad Hoc Fiduciary Relationships
The development of caselaw surrounding the fiduciary relationships and the element of vulnerability has taken a winding route. Ultimately, it appears Justice Wilson’s initial dissent in Frame v Smith,[8] has prevailed as the dominant lens implemented by the Courts today.
The emphasis on vulnerability as a necessary aspect of the fiduciary relationship was popularized by Wilson J.’s dissent in Frame v Smith wherein she articulated a three-step test which characterized vulnerability an element of fiduciary relationships.[9] This view on vulnerability received split treatment by the Supreme Court. As per the majority in Lac Minerals, the element of vulnerability was minimized as La Forest J. stated that it is not a necessary ingredient in every fiduciary relationship.[10] On the other hand, in the same case, Sopinka J. (Dissenting in part) emphasized the role of vulnerability.[11] Citing from Hospital Products Ltd v United States Surgical Corp,[12] Sopinka J. endorses the view that vulnerability underlies all cases of fiduciary obligation and is inherent to the relationship.
La Forest J. would go on to slightly amend his view in the majority decision of Hodgkinson, stating that the concept of vulnerability is not the hallmark of fiduciary relationships, though it is important indicium of existence.[13]
Ultimately, the Court would put the matter to rest with Elder Advocates of Alberta Society v Alberta,[14] wherein the Court would go on to adopt the reasoning of the dissent in Frame v Smith and establish a three-part test for assessing the existence of Ad Hoc fiduciary relationships.[15]
Notably, in Elder Advocates, the Court refers to vulnerability as a hallmark of fiduciary duty and vulnerability is prominently featured within the second step of the test.[16]
Final Remarks
Ultimately, the modern law of fiduciary obligations reflects a clear doctrinal shift: while established categories continue to provide analytical starting points, they are neither exhaustive nor determinative.
The unifying principle, as set forth by the Supreme Court, is that fiduciary relationships are grounded in the entrustment of power in circumstances that give rise to vulnerability, thereby attracting obligations of loyalty and protection. Whether arising per se or ad hoc, the inquiry is inherently contextual, requiring careful attention to the nature of the parties’ relationship, the scope of the discretion conferred, and the extent to which one party is dependent on the other to safeguard their interests.
—
[1] Hodgkinson v. Simms, 1994 CanLII 70 (SCC), [1994] 3 SCR 377, at para 29 (“Hodgkinson”).
[2] Galambos v Perez, 2009 SCC 48 at paras 36–37 (“Galambos”).
[3] Lac Minerals Ltd. v. International Corona Resources Ltd., 1989 CanLII 34 (SCC), [1989] 2 SCR 574, at p 646 (“Lac Minerals”); see also Galambos, at para 35.
[4] Guerin v. The Queen, 1984 CanLII 25 (SCC), [1984] 2 S.C.R. 335, at p. 384.
[5] Hodgkinson, at paras 110–111.
[6] Galambos, at para 37.
[7] 3464920 Canada Inc. v Strother, 2007 SCC 24, [2007] 2 S.C.R. 177 (S.C.C.), at para 34.
[8] Frame v. Smith, 1987 CarswellOnt 347 (“Frame v Smith”).
[9] Ibid., at para 45.
[10] Lac Minerals, at pp 646–647.
[11] Ibid., pp 658–660.
[12] Hospital Products Ltd. v. United States Surgical Corp. (1984), 55 A.L.R. 417.
[13] Hodgkinson, at para 37.
[14] Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261
[15] Ibid., at para 27.
[16] Ibid., at para 29,
Author
View all posts