The appellant, a jewellery consultant, entered into consignment agreements with a retailer, requiring proceeds to be held in a separate trust account.
The retailer opened an account with the respondent bank, but the bank incorporated it into a consolidated off-set balance system, using the funds to offset the retailer's debts.
The Court of Appeal allowed the appeal, finding the funds were impressed with a trust and the bank had constructive knowledge of the trust because it failed to follow its own account agreement requiring two signatures before transferring funds.