



COURT OF APPEAL FOR ONTARIO

CITATION: Ontario (Training, Colleges and
    Universities) v. Two Feathers Forest Products LP, 2013 ONCA 598

DATE: 20131002

DOCKET: C56138

Feldman, Lauwers and Strathy JJ.A.

BETWEEN

Her Majesty the Queen in Right of Ontario as
    Represented by the Minister of Training, Colleges and Universities

Applicant (Respondent)

and

Two Feathers Forest Products LP, Pikangikum First
    Nation, Eagle Lake First Nation, 1670761 Ontario Inc., Wabigoon Lake Ojibway
    First Nation and
Pricewaterhousecoopers Inc.

Respondents (
Appellant
)

Richard W. Schwartz, for the appellant

Ronald E. Carr and Eric Wagner, for the respondent

Heard: June 4, 2013

On appeal from the judgment of Justice John S. Fregeau of
    the Superior Court of Justice, dated September 24, 2012, with reasons reported
    at 2012 ONSC 5077.

Feldman
    J.A.:

Introduction

[1]

The issue in this case is whether grant monies that were advanced by the
    respondent, Ontarios Minister of Training Colleges and Universities (the Ministry),
    to a First Nations limited partnership in northern Ontario, but not spent
    before the partnership sought to dissolve and appoint an interim receiver, were
    subject to a 
Quistclose
trust
[1]
for the benefit of the Ministry. The application judge held that they were
    trust monies and that the receiver should therefore pay the monies to the Ministry.
    The receiver appeals. For the reasons that follow, I agree with the receiver
    that the monies are not subject to a
Quistclose
trust and are therefore
    available to be distributed in the receivership. .

Facts

[2]

Two Feathers Forest Products was a limited partnership consisting of
    three First Nations limited partners and a general partner. It was formed in
    2007 to develop and operate two plants, a planer mill and manufacturing plant
    in Dryden, Ontario and a saw mill in Red Lake, Ontario. In 2010, Two Feathers
    applied to the Northern Training Partnership Fund, recently established by the respondent
    Ministry to support project-based skills training for northern Ontario
    residents, for a grant to provide skills training for Aboriginal and non-Aboriginal
    residents of northern Ontario in its two proposed plants.

[3]

The application was accepted and a detailed written agreement for the
    advance of the funds was executed, effective February 14, 2011 (the funding
    agreement). In September, 2011, after the Ministry had advanced a total of
    $1,895,870.00 under the funding agreement in three instalments, one in March,
    one in May and one in July, two of the limited partners applied to dissolve Two
    Feathers. The appellant was appointed interim receiver and manager in October,
    2011.

[4]

The appellant traced the funds that had been advanced by the Ministry
    and found that $1,580,000.00 was paid to the third limited partner, Wabigoon
    Lake Forest Products LP (WLFP). From those funds, $563,911.25 had been used to
    purchase a planer mill. The balance was intended to be used to lease premises
    for the mill but was still in the hands of WLFP. Ultimately those monies were returned
    to the appellant pending the disposition of this court application.

[5]

The application judge found that the Ministry had satisfied the onus to
    prove that the original grant funds were impressed with a trust, known as a
Quistclose
Trust, in the hands of Two Feathers and the funds were therefore now being held
    by the interim receiver for the benefit of the Ministry.

[6]

To make that finding, the application judge examined the provisions of
    the funding agreement in detail. The funds were to be used only for the purpose
    of carrying out the project. The project is defined in Article 1.2 of the
    funding agreement to mean the undertaking as set out in Schedule A.
[2]
In addition to a requirement that it implement on-the-job training, the project
    is defined in the funding agreement with reference to Two Feathers proposal to
    the Ministry (the proposal). The proposal describes a specialized lumber
    manufacturing and export business where skills training would take place. It sets
    out specified amounts of proposed funding in three categories. The request was
    for $160,920 and $288,080 for on-the-job and classroom training, respectively.
    The larger portion of the funding, $3,026,000, was designated for [o]ther,
    which it further describes as [c]lassroom and equipment lease.
[3]

[7]

The funding agreement restricted Two Feathers to using the funds only in
    accordance with that agreement. Two Feathers had to segregate any funds not
    immediately required into an interest-bearing account, and the amount of any
    interest earned would be deducted from any further funds advanced under the
    funding agreement. The Ministry was not obliged to advance the funds unless it
    was satisfied with the progress of the project. It could also terminate the funding
    agreement on 30 days notice and demand return of any unused funds still in the
    possession or under the control of Two Feathers. Similarly, if the Ministry
    considered that Two Feathers breached the agreement, it could demand repayment
    of any remaining funds. Likewise, on the expiry of the funding agreement, Two
    Feathers was required to return any unused funds. In respect of the repayment
    or return of funds already advanced, Article 17 provides that monies owing to
    the Ministry by Two Feathers shall be deemed to be a debt due and owing to
    the Ministry.

[8]

The application judge concluded, based on his review of the entire
    funding agreement, that the funds advanced and not yet spent by Two Feathers
    were held subject to a
Quistclose
trust for the benefit of the
    Ministry and must be returned to the Ministry by the interim receiver. He based
    his conclusion on the following findings: 1) There was no intention that Two
    Feathers would be able to freely dispose of the advanced funds; rather, the
    funds were to be used only for the specific purpose of carrying out the
    project. To that end, the Ministry had the ability and the mechanisms to ensure
    that the funds were used only for that purpose and to have the funds returned
    if they were not being so used. 2) The three certainties of a trust, certainty
    of intention, certainty of subject-matter and certainty of object, had been
    established on a balance of probabilities. The object of the trust was the on-the-job
    skills training to be provided in the project.

Analysis

A.

history of the
Quistclose
trust

[9]

The genesis of the concept of the 
Quistclose
trust was the
    House of Lords decision in
Barclays Bank Ltd. v. Quistclose Investments
    Ltd.
, [1970] A.C. 567. In that case, the trust arose in the following way:
    Rolls Razor was a client of Barclays Bank that was in financial difficulties and
    had exceeded its allowed overdraft at the bank by a significant margin. In
    order to try to recover financially, Rolls Razor found a lender who agreed to
    lend it one million pounds but on the condition that Rolls Razor obtain funds
    from another source to pay its shareholders the dividend of £209,719 8s. 6d,
    which it had already declared and which was to be paid within a short time. Quistclose
    became that source, agreeing to lend Rolls Razor the sum necessary to pay the
    dividend, on the condition that the funds would be used only for that purpose
    and that they would be held in a special account, newly opened for that
    purpose, until the dividend was paid.

[10]

One
    of the directors of Rolls Razor then made an oral agreement with its bank
    manager at Barclays, confirmed by the letter that Rolls Razor later sent to the
    bank with Quistcloses cheque. They agreed that the cheque was to be deposited
    into a special account and was to be used only to pay the declared dividend. Unfortunately,
    the company was unable to raise the further funds it needed to remain in
    business, and decided to voluntarily liquidate. Contrary to the agreement that
    the Quistclose loan would only be used to pay the shareholders dividend, the
    bank then set off the balance in the special account against part of the debit
    balance owed to it.

[11]

Quistclose
    sued the bank for return of the funds. Lord Wilberforce explained that in order
    for Quistclose to be able to claim the funds from the bank, it had to meet two
    requirements. First, it had to establish that the funds were impressed with a
    trust in its favour if the funds were not used to pay the dividend, and second,
    that the bank had such notice of the trust or of the circumstances giving rise
    to it as to make the trust binding upon them (at p. 579).

[12]

Lord
    Wilberforce had no trouble finding that the mutual intention of Rolls Razor,
    the borrower, and Quistclose, the lender, was that the funds were to be used
    only to pay the declared dividend and were not to form part of the assets of
    Rolls Razor. He concluded that a necessary consequence of their mutual
    intention was that if the dividend could not be paid, then the funds were to be
    returned to Quistclose. He stated that it had long been recognized that this
    type of arrangement created a fiduciary obligation to hold the funds in trust:

That arrangements of this character for the payment of a
    persons creditors by a third person, give rise to a relationship of a
    fiduciary character or trust, in favour, as a primary trust, of the creditors,
    and secondarily, if the primary trust fails, of the third person, has been
    recognised in a series of cases over some 150 years (at p. 580).

[13]

He
    referred to five historical cases, at pp. 580-81, all of which involved monies loaned
    for the purpose of paying a specific group of the borrowers creditors in order
    to stave off bankruptcy:
Toovey v. Milne
(1819), 2 B. & A. 683;
Edwards
    v. Glyn
(1859), 2 E. and E. 29;
In re Rogers, Ex parte Holland and Hannen
(1891), 8 Morr. B.C. 243;
In re Drucker (No.1)
, [1902] 2 K.B. 237;
In
    re Hooley, Ex parte Trustee
, [1915] H.B.R. 181.

[14]

Turning
    to the notice issue, Lord Wilberforce was satisfied that the bank had notice
    that the monies were provided by a third person as a loan, and were to be used
    only to pay the dividend. This information was sufficient to constitute notice
    of the trust. Therefore, the bank could not claim the money for its own benefit:
    at p. 582.

[15]

The
Quistclose
trust concept was originally drawn by Lord Wilberforce with
    narrowly defined parameters in the
Barclays Bank
decision. In
    particular, the fiduciary relationship arose where money was lent in emergent
    circumstances to allow a debtor to pay a certain creditor or group of its
    creditors in order to keep the debtor in business. If the funds could not be
    used for that purpose, then the funds were returned to the lender. Those
    parameters were, however, significantly broadened some thirty years later, when
    the House of Lords found a
Quistclose
trust arose in
Twinsectra
    Ltd. v. Yardley and others,
[2002] 2 A.C. 164.

[16]

In
    that case, Twinsectra agreed to lend £1 million to Y for the purpose of
    purchasing property, but on three conditions: 1) that Ys solicitor undertake
    to hold the funds until they were used by Y to purchase property; 2) that Ys
    solicitor undertake that the funds would only be used for that purpose; and 3)
    that Ys solicitor would guarantee repayment of the loan. When Ys solicitor
    would not give the guarantee, Y found another solicitor who agreed to give the
    undertakings and the guarantee. However, that solicitor essentially ignored his
    undertaking and paid the money over to Ys solicitor who allowed Y to use the
    money freely and not to purchase property. The loan was not repaid and the
    solicitor who gave the guarantee went bankrupt. In the action against Ys
    solicitor, one of the issues was whether Ys solicitor could be held
    responsible as a party to a breach of trust. As a threshold matter, therefore, the
    House of Lords first had to determine whether the circumstances of the loan gave
    rise to a
Quistclose
trust.

[17]

Both
    Lord Hoffmann and Lord Millett wrote on the issue. Lord Hoffmann stated that
    the trust and its terms were found in the undertaking contained in the first
    two conditions of the loan. Y was not free to dispose of the money as he wished
    but only to purchase property. The effect of the undertaking was that the money
    remained Twinsectras until it was used to buy property. Therefore, the
    solicitor who held the money held it in trust for the lender, Twinsectra,
    subject to a power to apply it as a loan to Y in accordance with the terms of
    the undertaking. Whether the subject funds were at the free disposal of the
    recipient is one of the essential identifying elements of a
Quistclose
trust.

[18]

Lord
    Hoffmann addressed the two problems that the trial judge believed prevented him
    from finding a
Quistclose
trust in the circumstances. The first was
    that the terms of the undertaking were too vague  no particular property was
    identified. Dealing with this point, Lord Hoffmann agreed that the undertaking
    was an unusual one: Twinsectra was not seeking any security over the property
    to be purchased, so that there was nothing to prevent Y from subsequently
    mortgaging the property and using the money for whatever he wished. Lord
    Hoffmanns response was that as long as a court could say whether the money was
    used for the described purpose, then the purpose was not too vague and not void
    for uncertainty.

[19]

The
    second objection was that Twinsectra did not intend to create a trust based on
    the undertakings because its security was the solicitors guarantee. To that
    Lord Hoffmann responded that the lenders intention was irrelevant:

Whether a trust was created and what were its terms must depend
    upon the construction of the undertaking (at para. 17).

[20]

Lord
    Milletts main focus was to properly characterize the operation of the
Quistclose
trust under trust principles by conducting an analysis of the locus of the
    legal and beneficial interest in the trust property.
[4]
He concluded that the monies are always held on a resulting trust for the
    lender who never parts with the entire beneficial interest in them and that it
    is the lender who is the person who can enforce the trust. He rejected the
    theory that anyone but the lender can enforce the trust, including the persons
    who are the primary objects of the trust, such as a subgroup of the borrowers
    creditors. In the context of that analysis, he addressed the question whether a
Quistclose
trusts primary purpose must be to benefit a subset of
    identified creditors as in the
Barclays Bank
case itself. He rejected
    that premise, referring to cases where his characterization of the purpose of
    the loan was not to benefit a group of people but to purchase equipment or to
    enable a bank to meet a run and where only the lender could oversee its
    enforcement. He concluded that, as in the
Twinsectra
circumstances, a
Quistclose
trust must be able to accommodate gifts and loans for an abstract
    purpose (at para. 89).

[21]

Lord
    Millett also reviewed the three certainties required for a trust: certainty of
    intention, of subject-matter and of objects, at paras. 71, 101. On the issue of
    the significance of certainty of the objects of the trust, Lord Millett agreed
    with Lord Hoffmann, pointing out as well that if the objects were not
    sufficiently certain, the result in law is that the monies revert back to the
    lender under a resulting trust  the same result as when the purpose cannot be
    carried out.  (para. 101)

[22]

One
    could conclude that after
Twinsectra
, any time monies are advanced on
    an undertaking to use the monies only for a stated purpose, which can be an
    abstract purpose, then regardless of the subjective intention of the person
    providing the funds and of the nature of the purpose, there is a resulting trust
    for the lender. This represents a significant expansion of the
Quistclose
trust, which had been narrowly described in the
Barclays Bank
case.

[23]

As
    I have concluded that the requirements for a
Quistclose
trust have not
    been met in this case, I do not need to decide to what extent that expansion
    should be adopted in Ontario. However, when that decision does have to be made,
    the court will have to consider a number of commercial consequences, one of the
    most significant of which is the potential effect on the creditors of the
    borrower (or grantee) of the subject funds. For example, as in this case, where
    funds are advanced to a business with no registration under the
Personal
    Property Security Act
, R.S.O. 1990, c. P-10, creditors will have no
    notice, and in many cases no knowledge, that they are dealing with a debtor
    whose money is subject to a trust and not available to general creditors.
[5]


B.

Was there a
quistclose
trust in this case?

[24]

The
    House of Lords authorities are clear that on the issue of the intention to
    create a trust, it is not the subjective intention of the lender (here the
    granter) but the intention of the two parties, discerned from the terms of the
    loan (here the grant). As Lord Millett put it:

A settlor must, of course, possess the necessary intention to
    create a trust, but his subjective intentions are irrelevant. If he enters into
    arrangements which have the effect of creating a trust, it is not necessary
    that he should appreciate that they do so; it is sufficient that he intends to
    enter into them (
Twinsectra
, at para. 71).

[25]

The
    application judge came to the factual conclusion  based on all of the terms of
    the funding agreement that had the effect of a) limiting Two Feathers use of
    the funds, and b) providing that the unused funds be returned to the Ministry 
    that Two Feathers did not receive the funds for its free disposal but only for
    the purpose of carrying out the project. He then followed with the legal
    conclusion that: Viewed objectively, I am satisfied that the parties intended
    to enter into a trust arrangement.

[26]

However,
    a close examination of the terms of the funding agreement shows that the
    parties did not intend that Two Feathers would hold the funds in trust for the
    Ministry. In particular, the funding agreement specifically provides that any
    unused funds constitute a debt owing to the Ministry, not trust funds, and that
    Two Feathers had significant freedom to use the majority of the funds. As a
    result, in my view, the application judge erred in law in finding that the
    funds were held on a
Quistclose
trust.

[27]

First,
    the funding agreement specifically identifies the nature of the relationship
    between the parties respecting the funds while they are in the hands of Two
    Feathers but not yet expended  the critical time  as one not of trust, but of
    debtor/creditor. Article 17.1 provides that any monies under the funding
    agreement that the recipient, Two Feathers, owes to the Ministry shall be
    deemed to be a debt due and owing to the Ministry by the Recipient.

[28]

If
    the grant monies that Two Feathers has not yet spent constitute a debt that Two
    Feathers owes to the Ministry, they cannot be held by Two Feathers on trust for
    the Ministry. While the courts in a number of the
Quistclose
trust
    cases state that it is not necessary for the parties to use the word trust
    when creating their agreement, no court has said that when the parties have
    explicitly characterized their legal relationship in one way, the court will
    override their agreement and characterize it another way.

[29]

To
    be clear, there was an argument made in
Barclays Bank
that because the
    transaction between Quistclose and Rolls Razor was one of loan creating the
    legal obligation of debt, that excluded the implication of a trust, enforceable
    in equity. The House of Lords rejected that argument. The loan only arose once
    the funds were used for the designated purpose  until that time, the funds
    were held by the borrower on trust for the lender, and did not become the
    property of the borrower:

There is surely no difficulty in recognising the co-existence
    in one transaction of legal and equitable rights and remedies: when the money
    is advanced, the lender acquires an equitable right to see that it is applied
    for the primary designated purpose: when the purpose has been carried out
    (i.e., the debt paid) the lender has his remedy against the borrower in debt (
Barclays
    Bank
, at p. 581).

[30]

In
    this case, the transaction is one of grant, not loan. However, before the funds
    are actually expended for the purposes of the grant, or if they are left over
    and not needed for the agreed purposes, the parties agreed that they
    constituted, not a trust, but a debt owed by Two Feathers to the Ministry. To
    be a debt, the property in the funds belongs to the debtor, i.e., to Two Feathers,
    unlike a trust where only the legal title is held by the trustee, with the
    beneficial title in the trust beneficiary.

[31]

The
    application judge stated that

[t]he fact that the word trust does not appear in the
    agreement, and that Article 17 of the agreement stipulates that monies owing to
    [the Ministry] by Two Feathers shall be deemed to be a debt due and owing to
    [the Ministry] is not, in my opinion, determinative of the intention of the
    parties as to whether the funds were to be at the free disposal of Two Feathers
    once advanced by [the Ministry].

[32]

I
    agree with the application judge that agreeing that monies owed back to the Ministry
    are deemed to be a debt does not determine whether they are at the free
    disposal of Two Feathers. However, the effect of this characterization of the granted
    funds that have to be returned to the Ministry if they are not spent or needed
    for the project, is that until Two Feathers pays those funds back, it holds
    them as a debt due to the Ministry, not in trust for the Ministry. To override
    the express agreement of the parties, that any funds owed back to the Ministry
    under the agreement constitute a debt and for the court instead to imply a
    trust, would be contrary to the cardinal rule of interpreting written
    commercial contracts that the parties have intended what they said:
Ventas,
    Inc. v. Sunrise Senior Living Real Estate Investment Trust
, 2007 ONCA 205,
    at para. 24;
Venture Capital USA Inc. v. Yorkton Securities Inc.
(2005),
    75 O.R. (3d) 325 (C.A.), leave to appeal to S.C.C. refused, [2005] S.C.C.A. No.
    334, at para. 26.

[33]

The
    second error is the application judges conclusion that the funds were not at
    the free disposal of Two Feathers, and it arises from an examination of
    Schedule B to the funding agreement. Schedule B is the budget that governs
    the actual spending requirement for the grant funds. It covers the three fiscal
    years of the term of the agreement, 2010-2011, 2011-2012 and 2012-2013. As
    discussed above, of the sum of $3,535,000, the total maximum amount to be
    granted, only $449,000, was to be spent on on-the-job and in-class training
    costs, while the vast majority of the funds, $3,026,000, are designated only as
    other in Schedule B. In the proposal, the other funds were described as being
    for [c]lassroom and equipment lease.

[34]

Since
    specific funds are designated in Schedule B for the actual costs of training,
    which was the purpose of the grant from the Ministry, the vast majority of the
    other funds appear to be  available over the term of the funding agreement to
    set up the business more generally, including lease and equipment costs for the
    whole business.

[35]

As
    a result, although the funding agreement requires that Two Feathers spend the
    grant money on the project, in fact, the budget in Schedule B gives Two
    Feathers significant discretion to spend the largest part of those monies. Contrary
    to the conclusion reached by the application judge, those monies were
    essentially at the free disposal of Two Feathers.

[36]

Finally,
    the circumstances of the grant transaction in this case do not have many of the
    characteristics that caused a trust to be found in either of the two seminal
    cases. It was not a situation where the limited partnership needed immediate
    funding to stave off bankruptcy; the funds were not needed to make a specific
    payment, whether to a group of creditors or to make a specific purchase;
    instead, they were obtained as a basic source of business funding for a
    long-term project.

[37]

Nor
    were the funds advanced based on a short or quickly drawn contractual
    arrangement; instead, they were the subject of a detailed government-approved
    funding agreement, fully executed by both parties that prescribed all aspects
    of the funding relationship between them. It is difficult to see the basis for
    implying a trust where a sophisticated party, such as a provincial ministry,
    provides funding by means of a commercial agreement in which its contractual
    rights and remedies are carefully and extensively defined.

[38]

This
    court has not yet applied the
Quistclose
trust concept.
[6]
However, the British Columbia Court of Appeal in
Cliffs Over Maple Bay
    Investments Ltd. (Re)
, 2011 BCCA 180, 17 B.C.L.R. (5th) 60, recently
    reversed a decision of a motion judge that had implied a
Quistclose
trust
    in circumstances where funds were loaned to be used for a general, long-term
    purpose, as in this case. There, funds were advanced by a debtor-in-possession
    lender in the context of a
Companies Creditors Arrangement Act
,
    R.S.C. 1985, c. C-36, order [t]o facilitate further construction of [a] golf
    course and development of [a series of] home lots and source an irrigation
    solution for the golf course: at para. 56. In rejecting the implication of a
Quistclose
trust for a number of reasons, the British Columbia Court of Appeal stated:

In short, although it is obvious that Cliffs agreed as a matter
    of contract that the funds would be used for the general purpose stated, I
    disagree that this restriction gives rise to any inference of an intention on
    the part of both parties to create the specialized vehicle that is a
Quistclose
trust(at para. 69).

[39]

To
    summarize my analysis, the Ministry entered into a detailed funding agreement
    with Two Feathers setting out the terms under which the Ministry granted
    funding for Two Feathers to provide on-the-job skills training to residents of
    northern Ontario. Although the funds provided were intended to be used only for
    the purpose described in the funding agreement, there is no basis to infer a
    mutual intention that the funds were to be held on trust for the Ministry. To
    the contrary, under the budget attached to the funding agreement, the
    recipient, Two Feathers, had significant  discretion to spend the majority of
    the funds as long as it was for the general purpose stated, as in the
Cliffs
    Over Maple Bay
case. And most importantly, Article 17 of the funding agreement
    defines the relationship between the parties with respect to any funds that
    have to be returned to the Ministry under the agreement as a debt, not a trust.

Conclusion

[40]

In
    my view, the application judge erred in law in concluding that in these
    circumstances, the court could imply a
Quistclose
trust. I would
    therefore allow the appeal, set aside the order of the application judge and dismiss
    the application with costs, fixed at $15,000.00, inclusive of disbursements and
    HST.

Released: KF October 2, 2013

K. Feldman J.A.

I agree. P. Lauwers
    J.A.

I agree. G.R.
    Strathy J.A.





[1]

Barclays Bank
    Ltd. v. Quistclose Investments Ltd.
, [1970] A.C. 567.



[2]
Schedule A is comprised of the following Project Description:

Background. The purpose of
    the Project is to provide support to project-based skills training to help
    Aboriginal and non-Aboriginal Northern Ontarians participate in and benefit
    from emerging economic development opportunities. The Province of Ontario
    announced this new initiative under the project of Jobs and Growth in Northern
    Ontario.

Objective. The objective of
    this initiative is to help Aboriginal and non-Aboriginal Northern Ontarians

·

[A]ttain workplace skills and sustain employment in the resource
    related sectors of mining, energy and greener economy, forestry, environment,
    bio-economy, tourism and agriculture by providing employers in Northern Ontario
    with skilled workers for current and future needs.

·

Develop innovative collaborations and models of delivery that are
    tailored to specific circumstances and needs of the community.

·

[E]nhance and add value to resources, programs and services already
    available in the community.

The Recipient shall carry
    out the Project in accordance with the Proposal.

The Ministry shall provide
    up to 75% of the overall eligible costs of approved projects. Project partners
    will provide3 a minimum of 25% of the overall funding of approved projects. The
    Ministry funding shall not exceed $15,000 per participant for each year of the
    Project.

On-the-Job Component. The
    Recipient shall ensure that the Project has an on-the-job component, including
    as part of a pre-apprenticeship type program must comply with all applicable
    legislation and regulations. The on-the-job component of a pre-apprenticeship
    type, must be trade-appropriate and based on the current Apprenticeship
    Training Standard or Schedule of Training.

The Recipient shall ensure
    participants and employers comply with all applicable legislation and
    regulations as well as the current Apprenticeship Training Standard or Schedule
    of Training.

The Recipient shall ensure
    where projects delivering the Level 1 Apprenticeship In-School Curriculum
    Standard are an approved Apprenticeship Training Delivery Agent for the trade
    including delivery format and for that location. Participants who successfully
    complete all of the requirements of Level 1 will be given credit for this level
    of training.

Apprenticeship Training
    Delivery Agents are required to issue participants who successfully complete
    Level 1 will be provided the same documentation given to registered apprentices
    (e.g. transcript). Project participants must meet the same requirements as
    registered apprentices to pass level 1.

In compulsory or restricted
    trades, Level 1 must be taught by a journeyperson with a current Certification
    of Qualification in that trade.

Performance Targets. The
    Recipient shall meet [a series of] performance targets



[3]
The details of the proposal are in Schedule F of the funding agreement.



[4]
Lord Millett embarked on his analysis to resolve the question of which party
    could enforce performance of a
Quistclose
trust: at paras. 77-100. This
    issue is significant because non-charitable purpose trusts may be invalid at
    common law if there is no party with standing to enforce performance of the
    trustees obligations  since an abstract purpose cannot come to court. The
    Alberta Court of Queens Bench invalidated a similar trust on this basis in
Ernst
    & Young Inc. v. Central Guaranty Trust Co.
, 2004 ABQB 389, 29 Alta.
    L.R. (4th) 269, though the decision was reversed on appeal on other grounds:
    2006 ABCA 337, leave to appeal to S.C.C. refused, [2007] S.C.C.A. No. 9.



[5]
See also concerns raised in: Michael G. Bridge et al., 
Formalism,
    Functionalism, and Understanding the Law of Secured Transactions (1999) 44
    McGill L.J. 567, at pp. 610-614 (Security and Trust).



[6]
A number of Ontario trial level decisions have implied
Quistclose
trusts. These may be divided into four categories. First, two decisions
    accepted the
Quistclose
trust principle, but refused to apply it in
    the circumstances:
Del Grande v. McLeery
(1998), E.T.R. (2d) 30 (Ont. Gen.
    Div.), affd (2000), 31 E.T.R. (2d) 50 (Ont. C.A.);
Niedner Ltd. v. Lloyds
    Bank of Canada
(1990), 74 O.R. (2d) 574 (H.C.). Second, two decisions are
    consistent with the long line of authority cited in
Barclays Bank
in
    which a trust was implied with respect to a payment for a specific debt:
Ling
    v. Chinavision Canada Corp.
(1992), 10 O.R. (3d) 79 (Gen. Div.);
Continental
    Bank of Canada v. Boekamp Manufacturing Inc.
, [1990] O.J. No. 143 (H.C.).
    Third, a series of decisions implied a
Quistclose
trust, but with some
    ambiguity as to how much the case turned on the
Quistclose
trust
    analysis:
Cummings Estate v. Peopledge HR Services Inc.
, 2013 ONSC
    2781;
Teperman v. Teperman
, [2000] O.J. No. 4133 (S.C.);
Triax
    Resource Ltd. Partnership v. Research Capital Corp.
(1999), 96 O.T.C. 290
    (S.C.);
Smith v. Gold Key Construction Ltd.
, [1993] O.J. No. 147 (Gen.
    Div.);
Abulyha v. Montemurro
, [1984] O.J. No. 962 (H.C.). Finally, two
    decisions prior to
Twinsectra
extended the
Quistclose
trust
    concept beyond a payment to discharge a specified debt
: Ontario (Securities
    Commission) v. Consortium Construction Inc.
(1993), 1 C.C.L.S. 117 (Ont.
    Gen. Div.);
Gignac, Sutts v. National Bank of Canada
(1987), 5 C.B.R.
    (4th) 44 (Ont. H.C.).


