The plaintiff sought recovery of $57,000 paid to the defendant in connection with a fraudulent investment scheme involving purported shares in a company referred to as STS.
The court found that the plaintiff delivered a cheque payable to the defendant for the sole purpose of applying the funds to purchase STS shares.
Instead, the funds were deposited into a joint account controlled by the defendant and another individual and were largely applied to other purposes before a later cheque was issued that did not secure shares for the plaintiff.
The court held that the circumstances gave rise to a constructive trust and that the defendant, by facilitating the misapplication of the funds, became liable as a trustee de son tort.
The court rejected the defendant’s limitation period defence, finding that the equitable claim for breach of constructive trust was not time-barred under the applicable transitional provisions of the Limitations Act, 2002.
