As this seven-part exploration of fiduciary relationships draws to a close, one question brings the entire framework into focus: what transforms an ordinary relationship of trust into one of equity’s most exacting legal obligations? From vulnerability and the duties it creates, to accounting, enforcement, breach, and the powerful remedies that follow, this final entry brings together the legal principles governing what happens when one person is entrusted with power over another’s interests.
Introduction
This mini-series was inspired, and set out to answer, a deceptively simple and frequently asked question: what makes a relationship fiduciary and what follows once one is formed? Throughout the course of this mini-series, we examined the conceptual foundations of fiduciary obligation, the duties imposed, the mechanisms of enforcement, the authorities for breach, and the potential consequences flowing therefrom.
This final entry does not seek to introduce or examine any new aspect of fiduciary relationships; instead, we will attempt to succulently retread the common throughlines that have been forming throughout this series.
Bringing It Together: The Fiduciary Framework Behind the Series
Part I – Vulnerability as the Unifying Principle:[1]
Part I began by covering the two broad categories of fiduciary relationships. In reviewing the nature of per se fiduciaries and ad hoc fiduciaries, it became clear that the existence of a fiduciary relationship is found not according to the basis of a pre-defined checklist, but rather is determined according to principle, with the modern jurisprudence emphasizing the element/existence of vulnerability as being the determinative factor.[2]
Several Supreme Court decisions were examined in regard to the same, beginning with Wilson J.’s dissent in Frame v. Smith through to Elder Advocates, in effort to both trace the origin of the modern authorities’ emphasis on vulnerability and to appreciate the characterization of “vulnerability” as being the dependency that arises when one party is entrusted to act in another’s interests.
Part II – The Weight of Duty:[3]
Part II turned from the existence of a fiduciary relationship to the nature and scope of the obligations that arise once such a relationship is established. In examining the duties imposed upon fiduciaries, this entry considered three core duties as identified and affirmed by the Supreme Court in Valard Construction.[4] Those core duties being, the duty: to act honestly and with the skill and prudence of a reasonable person managing their own affairs, not to delegate the office itself, and not to profit personally from it.[5]
This entry further considered the exacting nature of these obligations and, in particular, the fact that a breach of fiduciary duty does not necessarily depend upon a finding of bad faith or the existence of compensable loss. Rather, the inquiry tends to be directed to whether the fiduciary has departed from the standard of conduct required by equity. In this respect, Part II demonstrated how the vulnerability that provides the foundation for the fiduciary relationship also explains the correspondingly stringent obligations imposed upon the fiduciary.
Part III – The Duty to Account:[6]
Part III examined the duty to account as being a central mechanism for which the obligations imposed upon fiduciaries are made transparent and capable of scrutiny.
This entry considered the nature of the fiduciary’s obligation to maintain and produce an account of property under their control, and the importance of that obligation in permitting those with an interest in the administration to determine how the fiduciary has exercised their authority. Particular emphasis was placed on the continuous nature of the duty to account. Rather than being a retrospective obligation that arises only once a dispute develops, the duty attaches from the moment a fiduciary assumes control over property and continues throughout
the administration.
In effect, Part III is meant to illustrate the practical connection between fiduciary duty and accountability: the obligations imposed by equity must be capable of being examined if they are to have meaningful effect.
Part IV – From Ledger to Litigation:[7]
Part IV further considered the form and procedure under a passing of accounts proceeding, by which the fiduciary’s duty to account may be pursued.
Although the statutory authority governing the accounting obligations of a particular fiduciary may differ (including the Substitute Decisions Act,[8] for attorneys and guardians of property, the Estates Act,[9] for estate trustees, and the Trustee Act,[10] for trustees) the procedure for a formal passing of accounts is substantially unified through Rule 74.16 of the Rules of Civil Procedure.[11]
This entry also examined the distinction between an informal accounting and a formal passing of accounts. While most fiduciary administrations are capable of being addressed through the provision and review of accounts without court intervention, the formal passing of accounts provides a mechanism through which judicial oversight can be brought to bear where informal disclosure or resolution is insufficient.
Accordingly, Part IV moved the discussion from the existence of an accounting
obligation to the procedural framework through which that obligation can be
tested and enforced.
Part V – Voluntary, Compelled, Contested, and Non-Contested Passings:[12]
Part V continued the examination into passing of account proceedings by considering the procedural distinctions that can arise depending upon both who initiates the proceeding and whether the accounts are opposed. In regard to the former, the discussion considered the distinction between a voluntary passing, which carries the benefit of res judicata and, ordinarily, the potential for the fiduciary to recover their costs from the estate, and a compelled passing, which may expose a fiduciary to costs where the proceeding has been necessitated by their own default.
This entry then turned to the distinction between contested and non-contested passings. Where accounts are opposed, a Notice of Objection under Rule 74.18 provides the procedural
mechanism through which concerns regarding the fiduciary’s administration can
be formally raised and adjudicated. Conversely, an unopposed passing proceeds
without the same level of adversarial scrutiny.
As a result, the purpose of Part V was not only to demonstrate that the procedural character of a passing of accounts can vary significant in form, but these variations can carry significant consequences for the parties, the scope of the proceeding, and the allocation of costs.
Part VI – Establishing Breach:[13]
Part VI turned away from the procedural mechanisms for scrutinizing a fiduciary’s administration to the examine what sorts of conduct will constitute a breach of fiduciary duty. Accordingly, this entry examined the types of conduct capable of giving rise to a breach and the principles governing the assessment of whether the fiduciary has departed from the obligations imposed by their office.
Particular attention was given to the distinction between gain-based and loss-based claims for equitable relief. The difference being quite significant as the misconduct of the fiduciary, and the corresponding category of relief sought, may result in dramatically different awards for the wronged party. This is because, essentially, breach of fiduciary duty does not necessarily depend upon the claimant having suffered a corresponding financial loss. A fiduciary may be required to surrender an improper gain even where the vulnerable party cannot establish a corresponding loss, while other breaches may give rise to a claim for compensation for loss sustained.
Accordingly, Part VI represented a return to the substantive questions of fiduciary relationship, following the two preceding entries focus on identifying fiduciary misconduct/wrongdoing.
Part VII – The Consequences of Breach:[14]
Part VII concluded the substantive discussion by examining some of the discrete remedies available where a breach of fiduciary duty has been established. This entry considered the principal equitable and administrative remedies available to address fiduciary misconduct, including removal and replacement, equitable compensation, an accounting of profits and disgorgement, and the imposition of a constructive trust.
In examining these remedies, this entry considered the distinct purposes each may serve.
- Removal and replacement addresses the continuing risk posed where a fiduciary can no longer be trusted to discharge the office;
- Equitable compensation addresses loss suffered by the vulnerable party;
- An accounting of profits and/or disgorgement, strips the
fiduciary of wrongful gains, irrespective of whether a corresponding loss can
be established; and
- Claims for constructive trust may provide a proprietary remedy
where a monetary award is insufficient to achieve justice.
As discussed in Part VII, the availability and appropriateness of each remedy, however, depends upon the particular circumstances of the relationship, the nature of the breach, the interest equity is seeking to protect, and is ultimately at the discretion of the adjudicating body.
Final Remarks
Taken together, the seven parts of this mini-series demonstrate that law governing fiduciary relationships is, at its core, concerned with the exercise and control of entrusted power. Vulnerability provides the foundation for identifying when equity will impose fiduciary obligations, and these obligations, in turn, require the fiduciary to exercise their authority with loyalty, prudence, and fidelity to the interests entrusted to them.
The duty to account provides the necessary mechanism for transparency and oversight, while the passing of accounts supplies a procedural means through which that accountability may be tested and enforced. Where the fiduciary departs from the standard imposed by equity, a breach may be established irrespective of bad faith or, in appropriate circumstances, proof of corresponding financial loss.
The consequences of that breach are correspondingly flexible: equity may compensate the vulnerable party for loss, strip the fiduciary of an improper gain, remove a fiduciary who can no longer be trusted, or, where necessary, impose a proprietary remedy to vindicate the interest at stake. Ultimately, the unifying principle across each stage of the fiduciary framework is accountability: where one person is entrusted with power over the interests of another, equity requires that power to be exercised in accordance with the obligations of the office, and provides the means to scrutinize, correct, and remedy its misuse.
—
[1] Fiduciary Relationships Mini-Series Pt 1: How Vulnerability Emerged as the Unifying Principle | WEL Partners Blog
[2] Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261, at para 29.
[3] Fiduciary Relationships Mini-Series Pt 2: The Weight of Duty | WEL Partners Blog
[4] Valard Construction Ltd. v Bird Construction Co 2018 SCC 8, at para 17.
[5] Ibid.
[6] Fiduciary Relationships Mini-Series Pt 3: The Duty to Account | WEL Partners Blog.
[7] Fiduciary Relationships Mini-Series Pt 4: From Ledger to Litigation – Navigating a Passing of Accounts | WEL Partners Blog.
[8] Substitute Decisions Act, 1992, S.O. 1992, c. 30.
[9] Estates Act, R.S.O. 1990, c. E.21.
[10] Trustee Act, R.S.O. 1990, c. T.23.
[11] Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[12] Fiduciary Relationships Mini-Series Pt. 5: Voluntary, Compelled, Contested, and Non-Contested Passings | WEL Partners Blog.
[13] Fiduciary Relationships Mini-Series Pt. 6: Establishing Breach and Determining Relief | WEL Partners Blog.
[14] Fiduciary Relationships Mini-Series Pt. 7: The Remedies for Breach of Fiduciary Duty | WEL Partners Blog.
Written by: Grant Swedak
Posted on: September 14, 2026
Categories: Commentary, Fiduciary Relationships Series
As this seven-part exploration of fiduciary relationships draws to a close, one question brings the entire framework into focus: what transforms an ordinary relationship of trust into one of equity’s most exacting legal obligations? From vulnerability and the duties it creates, to accounting, enforcement, breach, and the powerful remedies that follow, this final entry brings together the legal principles governing what happens when one person is entrusted with power over another’s interests.
Introduction
This mini-series was inspired, and set out to answer, a deceptively simple and frequently asked question: what makes a relationship fiduciary and what follows once one is formed? Throughout the course of this mini-series, we examined the conceptual foundations of fiduciary obligation, the duties imposed, the mechanisms of enforcement, the authorities for breach, and the potential consequences flowing therefrom.
This final entry does not seek to introduce or examine any new aspect of fiduciary relationships; instead, we will attempt to succulently retread the common throughlines that have been forming throughout this series.
Bringing It Together: The Fiduciary Framework Behind the Series
Part I – Vulnerability as the Unifying Principle:[1]
Part I began by covering the two broad categories of fiduciary relationships. In reviewing the nature of per se fiduciaries and ad hoc fiduciaries, it became clear that the existence of a fiduciary relationship is found not according to the basis of a pre-defined checklist, but rather is determined according to principle, with the modern jurisprudence emphasizing the element/existence of vulnerability as being the determinative factor.[2]
Several Supreme Court decisions were examined in regard to the same, beginning with Wilson J.’s dissent in Frame v. Smith through to Elder Advocates, in effort to both trace the origin of the modern authorities’ emphasis on vulnerability and to appreciate the characterization of “vulnerability” as being the dependency that arises when one party is entrusted to act in another’s interests.
Part II – The Weight of Duty:[3]
Part II turned from the existence of a fiduciary relationship to the nature and scope of the obligations that arise once such a relationship is established. In examining the duties imposed upon fiduciaries, this entry considered three core duties as identified and affirmed by the Supreme Court in Valard Construction.[4] Those core duties being, the duty: to act honestly and with the skill and prudence of a reasonable person managing their own affairs, not to delegate the office itself, and not to profit personally from it.[5]
This entry further considered the exacting nature of these obligations and, in particular, the fact that a breach of fiduciary duty does not necessarily depend upon a finding of bad faith or the existence of compensable loss. Rather, the inquiry tends to be directed to whether the fiduciary has departed from the standard of conduct required by equity. In this respect, Part II demonstrated how the vulnerability that provides the foundation for the fiduciary relationship also explains the correspondingly stringent obligations imposed upon the fiduciary.
Part III – The Duty to Account:[6]
Part III examined the duty to account as being a central mechanism for which the obligations imposed upon fiduciaries are made transparent and capable of scrutiny.
This entry considered the nature of the fiduciary’s obligation to maintain and produce an account of property under their control, and the importance of that obligation in permitting those with an interest in the administration to determine how the fiduciary has exercised their authority. Particular emphasis was placed on the continuous nature of the duty to account. Rather than being a retrospective obligation that arises only once a dispute develops, the duty attaches from the moment a fiduciary assumes control over property and continues throughout
the administration.
In effect, Part III is meant to illustrate the practical connection between fiduciary duty and accountability: the obligations imposed by equity must be capable of being examined if they are to have meaningful effect.
Part IV – From Ledger to Litigation:[7]
Part IV further considered the form and procedure under a passing of accounts proceeding, by which the fiduciary’s duty to account may be pursued.
Although the statutory authority governing the accounting obligations of a particular fiduciary may differ (including the Substitute Decisions Act,[8] for attorneys and guardians of property, the Estates Act,[9] for estate trustees, and the Trustee Act,[10] for trustees) the procedure for a formal passing of accounts is substantially unified through Rule 74.16 of the Rules of Civil Procedure.[11]
This entry also examined the distinction between an informal accounting and a formal passing of accounts. While most fiduciary administrations are capable of being addressed through the provision and review of accounts without court intervention, the formal passing of accounts provides a mechanism through which judicial oversight can be brought to bear where informal disclosure or resolution is insufficient.
Accordingly, Part IV moved the discussion from the existence of an accounting
obligation to the procedural framework through which that obligation can be
tested and enforced.
Part V – Voluntary, Compelled, Contested, and Non-Contested Passings:[12]
Part V continued the examination into passing of account proceedings by considering the procedural distinctions that can arise depending upon both who initiates the proceeding and whether the accounts are opposed. In regard to the former, the discussion considered the distinction between a voluntary passing, which carries the benefit of res judicata and, ordinarily, the potential for the fiduciary to recover their costs from the estate, and a compelled passing, which may expose a fiduciary to costs where the proceeding has been necessitated by their own default.
This entry then turned to the distinction between contested and non-contested passings. Where accounts are opposed, a Notice of Objection under Rule 74.18 provides the procedural
mechanism through which concerns regarding the fiduciary’s administration can
be formally raised and adjudicated. Conversely, an unopposed passing proceeds
without the same level of adversarial scrutiny.
As a result, the purpose of Part V was not only to demonstrate that the procedural character of a passing of accounts can vary significant in form, but these variations can carry significant consequences for the parties, the scope of the proceeding, and the allocation of costs.
Part VI – Establishing Breach:[13]
Part VI turned away from the procedural mechanisms for scrutinizing a fiduciary’s administration to the examine what sorts of conduct will constitute a breach of fiduciary duty. Accordingly, this entry examined the types of conduct capable of giving rise to a breach and the principles governing the assessment of whether the fiduciary has departed from the obligations imposed by their office.
Particular attention was given to the distinction between gain-based and loss-based claims for equitable relief. The difference being quite significant as the misconduct of the fiduciary, and the corresponding category of relief sought, may result in dramatically different awards for the wronged party. This is because, essentially, breach of fiduciary duty does not necessarily depend upon the claimant having suffered a corresponding financial loss. A fiduciary may be required to surrender an improper gain even where the vulnerable party cannot establish a corresponding loss, while other breaches may give rise to a claim for compensation for loss sustained.
Accordingly, Part VI represented a return to the substantive questions of fiduciary relationship, following the two preceding entries focus on identifying fiduciary misconduct/wrongdoing.
Part VII – The Consequences of Breach:[14]
Part VII concluded the substantive discussion by examining some of the discrete remedies available where a breach of fiduciary duty has been established. This entry considered the principal equitable and administrative remedies available to address fiduciary misconduct, including removal and replacement, equitable compensation, an accounting of profits and disgorgement, and the imposition of a constructive trust.
In examining these remedies, this entry considered the distinct purposes each may serve.
fiduciary of wrongful gains, irrespective of whether a corresponding loss can
be established; and
where a monetary award is insufficient to achieve justice.
As discussed in Part VII, the availability and appropriateness of each remedy, however, depends upon the particular circumstances of the relationship, the nature of the breach, the interest equity is seeking to protect, and is ultimately at the discretion of the adjudicating body.
Final Remarks
Taken together, the seven parts of this mini-series demonstrate that law governing fiduciary relationships is, at its core, concerned with the exercise and control of entrusted power. Vulnerability provides the foundation for identifying when equity will impose fiduciary obligations, and these obligations, in turn, require the fiduciary to exercise their authority with loyalty, prudence, and fidelity to the interests entrusted to them.
The duty to account provides the necessary mechanism for transparency and oversight, while the passing of accounts supplies a procedural means through which that accountability may be tested and enforced. Where the fiduciary departs from the standard imposed by equity, a breach may be established irrespective of bad faith or, in appropriate circumstances, proof of corresponding financial loss.
The consequences of that breach are correspondingly flexible: equity may compensate the vulnerable party for loss, strip the fiduciary of an improper gain, remove a fiduciary who can no longer be trusted, or, where necessary, impose a proprietary remedy to vindicate the interest at stake. Ultimately, the unifying principle across each stage of the fiduciary framework is accountability: where one person is entrusted with power over the interests of another, equity requires that power to be exercised in accordance with the obligations of the office, and provides the means to scrutinize, correct, and remedy its misuse.
—
[1] Fiduciary Relationships Mini-Series Pt 1: How Vulnerability Emerged as the Unifying Principle | WEL Partners Blog
[2] Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261, at para 29.
[3] Fiduciary Relationships Mini-Series Pt 2: The Weight of Duty | WEL Partners Blog
[4] Valard Construction Ltd. v Bird Construction Co 2018 SCC 8, at para 17.
[5] Ibid.
[6] Fiduciary Relationships Mini-Series Pt 3: The Duty to Account | WEL Partners Blog.
[7] Fiduciary Relationships Mini-Series Pt 4: From Ledger to Litigation – Navigating a Passing of Accounts | WEL Partners Blog.
[8] Substitute Decisions Act, 1992, S.O. 1992, c. 30.
[9] Estates Act, R.S.O. 1990, c. E.21.
[10] Trustee Act, R.S.O. 1990, c. T.23.
[11] Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[12] Fiduciary Relationships Mini-Series Pt. 5: Voluntary, Compelled, Contested, and Non-Contested Passings | WEL Partners Blog.
[13] Fiduciary Relationships Mini-Series Pt. 6: Establishing Breach and Determining Relief | WEL Partners Blog.
[14] Fiduciary Relationships Mini-Series Pt. 7: The Remedies for Breach of Fiduciary Duty | WEL Partners Blog.
Author