Accessories: Intermeddlers in Trust and Fiduciary Relations

Question 1

how do Barnes v Addy define knowning receipts and dishonest assistance

Answer 1

• “become chargeable with some part of the trust property” – known receipts
• and “assist with knowledge in a dishonest” dishonest assistance

Question 2

what is the Baden-Delvaux test?

Answer 2

• test to determine where the accessory falls and then determine which of these categories is enough for knowing assistance

Question 3

what are the 3 requirements for Actual knowledge

Answer 3

i. Actual knowledge - actually know what’s happening
ii. Wilfully shutting one’s eyes to the obvious
iii. Wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make – deliberately not making any further enquiries

Question 4

what is ‘Constructive knowledge and what are the 2 requirements for ‘Constructive knowledge

Answer 4

• ‘Constructive knowledge’ – things one should know even if one does not
• Knowledge of circumstances which would indicate the facts to an honest and reasonable man - lessor degree of knowledge that doesn’t require any enquiries to be made but enough was known to indicate the facts
• Knowledge of circumstances which would put an honest and reasonable man on inquiry

Question 4

what is the leading case for Dishonest Assistance and what was decided

Answer 4

• Royal Brunei Airlines Sdn Bhd v Tan
• Fault-based liability – provided the assistance is at sufficient fault then they would be dishonest assistance – was the assistance honest or dishonest given what they knew and what they did?

Question 5

what are the objective and subjective elements in tan

Answer 5

• Objective: Was the conduct dishonest by the standards of ordinary decent people? [Tan: required]
• subjective: Did the defendant realise that her conduct was dishonest? [Tan: Not required]

Question 6

how is objective dishonesty defined in tan?

Answer 6

• Objective dishonesty = Want of probity – was it commercially unacceptable behaviour?

Question 7

what was the stance for Baden-Delvaux after tan

Answer 7

• Baden-Delvaux ‘best forgotten’

Question 8

what did R v Ghosh from the Criminal Law attempt to do?

Answer 8

• attempt to define dishonesty

Question 9

what are the 3 kinds of Dishonesty

Answer 9

1. Purely subjective – the ‘Robin Hood’ test – the assistance thought he was doing right
2. Purely objective (per Tan) – no need for realisation
3. Partly subjective – Combined Test (per Ghosh)

Question 10

what was the type of dishonesty used in Twinsectra v Yardley?

Answer 10

• partially subjective

Question 11

what was Lord Millett’s reasoning for the decision in Twinsectra v Yardley

Answer 11

1. Dishonesty connotes ‘moral turpitude’ or conduct that is ‘morally reprehensible’
2. Consciousness of wrongdoing is an aspect of criminal mens rea – ‘knowledge’ is more apt for civil liability
3. Subjective dishonesty is a jury question
4. Consequently, knowledge is more appropriate that dishonesty as the test

Question 12

why did Twinsectra v Yardley not last

Answer 12

• because it allows defendants to say they simply didn’t realise that ordinary honest people wouldn’t consider what they were doing to be dishonest.

Question 13

what case went back to Tans objective dishonesty after Twinsectra

Answer 13

• Barlow Clowes v Eurotrust Intl (Rowing Back)

Question 14

what did the supreme court say in Ivey v Genting Casinos

Answer 14

• only require objective dishonesty

Question 15

what was decided aboiut Subjective Elements in Weavering Capital (UK) Ltd v Dabhia & Platt

Answer 15

• personal characteristic are looked at (e. intelligence)

- Mr Platt was doing his ‘incompetent best’

Question 16

how is assistance for dishonest assistance defined and case?

Answer 16

• The must be factual assistance as well as dishonesty

- Brinks Ltd v Abu-Saleh

Question 17

what are the 3 elements of knowing receipts + case?

Answer 17

1. Disposal of assets in breach of trust or fiduciary duty
2. Beneficial receipt of property – recipient takes the benefit for themselves
3. Knowledge – how much is it that this person needs to know?
   - El Ajou v Dollar Land Holdings Plc (No 1)

Question 18

what was the test in BCCI (Overseas) Ltd v Akindele for knowing receipts

Answer 18

• The recipient’s state of knowledge must be such as to make it unconscionable for him to retain the benefit of the receipt.
• dishonesty is not required

Question 19

what was said in Starglade Properties Ltd v Nash about the test in BCCi

Answer 19

• a flexible test, which requires the court to consider what is right, taking into account the nature and extent of the defendant’s knowledge and all the circumstances relating to the receipt (e.g intelligence, education)
• Actual knowledge, which would put a reasonable man on enquiry, coupled with a failure to enquire, may suffice.

Question 20

why did some people want to get rid of knowing receipts? and what did they want to replace it with?

Answer 20

• Its too difficult and uncertain

- wanted introduce unjust enrichment where liability doesn’t rely on fault

Question 21

what is the Restitution for Unjust Enrichment?

Answer 21

1. that the defendant has been enriched, - benefited
2. this enrichment was gained at the claimant’s expense, and
3. the defendant’s enrichment at the claimant’s expense was unjust (list of special reasons)
   - The defendant is not liable if she can show she changed her position bona fide in reliance of the receipt.

Question 22

case for unjust enrichment

Answer 22

• Lipkin Gorman v Karpnale

Question 23

what is a Principled Distinction Two Types of Constructive Trustee? and what cases

Answer 23

1. Act in accordance with trust initially – more like actual trust – an expressive trust
2. Act contrary to trust from outset – dishonest assistance and knowing receipts
   - Paragon Finance plc v D B Thakerar & Co
   - Williams v Central Bank of Nigeria

Question 24

what are the differences with True and de facto trusteeship (Class 1)

Answer 24

• constructive trustees so the same remedies apply
• No limitation period for retained property
• Fiduciary duties

Question 25

what are the differences with Equitable fraud trusteeship (Class 2)

Answer 25

• More like committing fraud
• Limitation period – six years
• No fiduciary duties
• Remedies are different

Question 26

what is the justification for the differences between class 1 and 2

Answer 26

• Fiduciary duties are voluntarily assumed

- Fiduciary duties are ongoing duties

Question 27

what is a Trustee de son Tort or De Facto Trustee and case?

Answer 27

• type of constructive trustee
• takes it upon him or herself to do acts characteristic of the office of trustee – behave like a proper trustee – assume the position even though they haven’t been properly appointed
• Mara v Brown

Question 28

what is the Money Remedies for Dishonest Assistance and name a case?

Answer 28

• Joint and several liability to compensate for the loss
• Ultraframe (UK) Ltd v Fielding [2005] EWHC 1638 (Ch) [1600]
• Larger because the mental state for dishonest assistance is much higher, as much stricter. Knowing receipts is much lower because they need to know less

Question 29

what is the Money Remedies for Knowing Receipt and name a case?

Answer 29

• Seems to be limited to the property received

- Kasikornbank Public Co Ltd v Akai Holdings Ltd

Question 30

what is the Money Remedies for Knowing Receipt and Dishonest Assistance and name a case?

Answer 30

• Account of secondary profits – addition profits made ‘effectively caused’ by the underlying wrong
• Novoship (UK) Ltd v Mikhaylyuk

Question 31

what is the Money Remedies for Unjust enrichment?

Answer 31

• Restitution – returning what transferred (minus anything dissipated in bona fide change of position)