The applicant sought declarations that funds advanced under a provincial training funding agreement were held in trust and should be returned following the insolvency of the recipient limited partnership.
The court considered whether the funds were impressed with a Quistclose trust and whether a receiver’s charging order nonetheless had priority over those funds.
Applying authorities including Quistclose and Twinsectra, the court held that the agreement restricted the use of funds to a specific training project and required repayment of unspent funds, demonstrating the necessary intention to create a trust.
The court found the remaining funds held by the receiver were impressed with a trust in favour of the applicant but concluded they were subject to the receiver’s previously granted charging order.
The funding agreement was declared terminated.
