Darmos Family Trust – Ontario Superior Court of Justice finds that “Alberta” family trusts whose major decisions were made in Ontario, were resident there

The assets of the two Darmos family trusts were mostly shares of corporations holding the investments derived from the sale of a company of which Mr. Darmos had been the principal. Two of the three trustees of each trust were an Alberta lawyer and Alberta trust company, and the third was an Ontario-resident lawyer (Alexopoulos), who had provided longstanding legal counsel to Mr. Darmos.

Ramsay J found that that the central management and control of the two trusts was in Ontario rather than Alberta. Most of the documentation demonstrated that the role of the trustees (other than Alexopoulos) was simply to implement and document the decisions of others, all based in Ontario, i.e., Mr. Darmos (who was actively involved with and directed the management of the trust property, and the assets of the corporations), the accountants for Darmos (KPMG, whose recommendations as to distributions were implemented when these decisions did not originate with Mr. Darmos), Alexopoulos (who handled dealing with the professional advisors) and RBC Dominion Securities (to whom Mr. Darmos had delegated significant investment management functions).

Neal Armstrong. Summary of Theodoros Darmos Family Trust v. Minister of Finance, 2023 ONSC 6431 under s. 2(1).