Tag: Act s. 29.03
ITB Marine Group Ltd. v. Northern Transportation Company Limited, 2017 BCSC 2007 – Deemed Trust, Including Workout Agreement, Cannot Trump Security Interest
In 2011, Northern Transportation Company Limited (NTCL), a federally regulated business, entered into a distressed pension plan workout scheme with respect to its defined benefit pension plan. Pursuant to the workout agreement, NTCL was permitted to fund the plan's deficit over a 10-year period instead of the 5-year period required under the federal Pension Benefits Standards Act (PBSA).
In 2016, NTCL assigned itself into bankruptcy. ITB Marine Group Ltd. (ITB) applied to enforce its security interest in certain marine vessels and equipment (Marine Assets), which it had sold on a conditional basis to NTCL via an equipment lease. Morneau Sheppell, as administrator of the plan, argued that the proceeds from the sale of the Marine Assets was subject to a deemed trust under s. 8 of the PBSA and should be used to pay the shortfall still owing under the workout agreement.