Trust Account Case Law

Paul S

Paul S

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Jan 29, 2008
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CASE LAW
o Load broker required to keep funds in trust (transportation act) – been replaced with 191.0.1 (person who arranges for compensation by motor carrier in trust account and trust for the operator)
o HIGHWAY TRAFFIC ACT – OBLIGATION MONEY HELD IN TRUST (MONEY CANNNOT BE USED FOR OTHER PURPOSE)
 
Actaua Section from Ontario Highway Traffic Act

Contracts of carriage
191.0.1 (1) Every contract of carriage for a person to carry the goods of another person by commercial motor vehicle for compensation shall contain the information required by the regulations and shall be deemed to include the terms and conditions set out in the regulations. 2002, c. 18, Sched. P, s. 34.
Deemed terms where no contract of carriage
(2) Where a person is hired for compensation to carry the goods of another person by commercial motor vehicle in circumstances where no contract of carriage has been entered into, then a contract of carriage shall be deemed to have been entered into, and the terms and conditions of the deemed contract of carriage shall be as set out in, and shall apply to such persons as are set out in, the regulations. 2002, c. 18, Sched. P, s. 34.
Money for contract of carriage held in trust
(3) A person who arranges with an operator to carry the goods of another person, for compensation and by commercial motor vehicle, shall hold any money received from the consignor or consignee of the goods in respect of the compensation owed to the operator in a trust account in trust for the operator until the money is paid to the operator. 2002, c. 18, Sched. P, s. 34.
Other rights unaffected
(4) Nothing in subsection (3) derogates from the contractual or other legal rights of the consignor, the consignee, the operator or the person who arranged for the carriage of the goods with respect to the money that is held in trust under that subsection. 2002, c. 18, Sched. P, s. 34.
 
1) Every contract of carriage for a person to carry the goods of another person by commercial motor vehicle for compensation shall contain the information required by the regulations and shall be deemed to include the terms and conditions set out in the regulations. 2002, c. 18, Sched. P, s. 34.
Deemed terms where no contract of carriage
(2) Where a person is hired for compensation to carry the goods of another person by commercial motor vehicle in circumstances where no contract of carriage has been entered into, then a contract of carriage shall be deemed to have been entered into, and the terms and conditions of the deemed contract of carriage shall be as set out in, and shall apply to such persons as are set out in, the regulations. 2002, c. 18, Sched. P, s. 34.
Click to expand...


This is one thing I haven't been able to find. Where are the "terms and conditions set out in the regulations"? Can anyone link this or am I missing something in the lawyerspeak-to-english translation and these paragraphs ARE the terms and conditions (which doesn't help)
 
The Conditions of Carriage is exactly what I've been looking for, thank you.

Some things are difficult to find if you do not know specifically what you're looking for or what its called, and some phrasing in laws and other documents don't make it very easy to figure out.
 
So after all the legal mumbo-jumbo has been addressed, the question I have is:
What happens if the broker you have been dealing with goes bankrupt or steals the cash and runs, what recourse do you have?

Take him to court??? But he hasn't got a pot to piss in and by the time you're done chasing the money, where are you now?

God I'm so friggin pessimistic some days...lol:D
 
Personal responsibility

I'm not sure you need to be so pessimistic.
One of our fellow contributors alluded in another stream a few weeks ago, to the fact ; that in the case of miss appropriation of funds, which is what abusing a trust account is. The governement has the right to lift the corporate vail thus holding the directors of the corporation personally liable!!
Thus, engaing a lawyer to retreive funds in the case one or several of the directors still have personal assets can turn out to be fruitful!
 
"The governement has the right to lift the corporate vail thus holding the directors of the corporation personally liable!!
Thus, engaing a lawyer to retreive funds in the case one or several of the directors still have personal assets can turn out to be fruitful!"

So the letter we just recieved from The Trustee's for Longbow stating that they never ran a proper Trust Account and even after filing for protection did not run a proper Trust Account mean that we could go after the director's personally?
 
Director's liability

To add to this thread, if you litigate successfully against a director for monies that should have been held in trust, and all their assets are in the spouses name, then you can move to have a division of family assets under the Ontario Family Law Reform Act, in order to satisfy a judgment. It's a bit complicated and expensive, however you can recover some costs, especially if the actions of the defendant are deemed to be high handed or otherwise reprehensible (costs on a solicitor/client basis).
 
What happens if a customer uses a broker who brokers to another broker and the carrier from the second broker is not paid?
 
Remember, the trust account is supposed to protect carriers in the event the broker goes bankrupt. If that is not the case here, there are other remedies available to you if the matter is strictly one of non-payment. I believe that is where the Bill of Lading, if it has been properly completed, will be of great assistance to you. Search under Bill of Lading or Conditions of Carriage on this site for more info. Good luck untangling this mess!
 
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