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Fiduciary Law and the Constructive Trust: Perfecting the Fiduciary Undertaking
With the welcomed release of two unanimous decisions from the Supreme Court of Canada in Galambos v Perez and Alberta v Elder Advocates of Alberta Society, the requirements for recognizing fiduciary relationships and obligations have been narrowed and refreshed. Reducing confusion and finally uniting the Court in the area of fiduciary law, Justice Cromwell held in Galambos that all fiduciary obligations must be founded by an undertaking, either express or implied, on the part of the fiduciary to act in the interest of the other party. Where this undertaking provides the fiduciary with a "discretionary power to affect the other party's legal or [substantial] practical interests," the law provides a strict legal framework of liability in accordance with the scope of fiduciary obligations. This undivided direction from the Supreme Court was echoed by Chief Justice McLachlin in Elder Advocates, providing a powerful tool through which to recognize fiduciary relationships and understand the scope of fiduciary duty and liability from the nature of the fiduciary relationship itself. Nevertheless, the "Galambos approach" remains new and incomplete in its application in determining the scope of fiduciary duties and accountability. Published in Alberta Law Review, Volume 49, No. 3.