Can a general partner of a limited partnership breach trust if the partnership assets are used for a non-partnership purpose?
British Columbia, Canada
The following excerpt is from Falcon Pacific Financial Corp. v. Kerkhoff Investment Syndication Corp., 1996 CanLII 1461 (BC SC):
Counsel for Partnership No. 1 relied on the decision in King v. On-Stream Natural Gas Management Inc.[7] for the propositions that a general partner of a limited partnership holds the partnership assets in trust for the limited partners and that it is a breach of trust if the assets are used for a non-partnership purpose. I fully accept these propositions but it does not follow that the use of a partnership asset for a purpose which is not consistent with representations or projections made by the general partner to the limited partners is necessarily a non-partnership purpose.
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