A sum, deposited in trust, is removed from the estate of the depositor and constitutes a separate estate on which the depositor cannot claim any rights.
Some people tend to believe that everything belongs to them; they could be described as "freeloaders". There are various types: the "sneaky", the sweet-talkers, the strict ones, the talkative ones, the blissful ones, and the talented ones. Any resemblance to a bankruptcy trustee is purely coincidental.
An unpaid supplier by their customer obtains a pre-judgment seizure on the goods they sold to them while reserving the right of ownership. The customer, wanting to keep the goods, deposits a certain amount with a financial institution and in return, the supplier releases the seizure pending a court decision. A few months later, the Court rules in favor of the supplier and grants them the right to execute their judgment "on the amount deposited in trust". The supplier, neglecting to execute it in the following months, learns in the meantime that the customer has declared bankruptcy.
The bankruptcy trustee claims that the amounts deposited with the financial institution are part of the bankrupt's assets and that the supplier only has themselves to blame if they neglected to execute their judgment in a timely manner.
Judge Irving J. Halperin* of the Superior Court refutes the trustee's arguments and rules in favor of the supplier. He states that the agreement reached between the parties creates a trust under the Civil Code of Quebec. The amount deposited is therefore excluded from the customer's assets and constitutes a separate asset on which the trustee cannot claim any rights.
The concept of trust has existed for a long time in common law but only recently under the Civil Code of Quebec. Thus, the freeloaders who try to claim rights over certain assets will have to familiarize themselves with this notion of "distinct affected assets" or else their financial assets and ego will be affected.
*CS 500-11-005752-973, 1997-04-18
