The appellants appealed a trial judgment finding that their company held insurance premiums in trust for the respondent insurer and that the individual appellant, as the directing mind of the company, was personally liable for knowing assistance in a breach of trust for withholding those premiums.
The Court of Appeal dismissed the appeal, upholding the trial judge's findings that a statutory trust existed under s. 402(1) of the Insurance Act, which applies to both licensed and unlicensed agents, and that an express trust existed at common law.
The Court also affirmed that the individual appellant was personally liable because he directed the company to take a knowingly wrongful risk to the prejudice of the insurer.
