Liability of Strangers

Question 1

Trustee de son tort - acts as trustee without the authority of the trustees

Answer 1

Mara v Browne - personally liable as though he were an expressly appointed trustee

Question 2

If recipient dissipates property without the requisite knowledge, his proprietary liability to return the property ceases

Answer 2

Independent Trustee Services

Question 3

Levels of knowledge

Answer 3

Baden:

1) Actual knowledge
2) wilfully shutting one’s eyes to the obvious
3) wilfully and recklessly failing to make such inquiries as an honest and reasonable man would make
4) knowledge of circumstances which would indicate the facts to an honest and reasonable man (but not a morally obtuse man)
5) knowledge of circumstances which would put an honest and reasonable man on inquiry

Question 4

Dishonest Assistance - Royal Brunei Airlines

Answer 4

• eschewed Baden categories
• knowledge is not key, but dishonesty is necessary and sufficient. Knowledge will be relevant in determining whether he acted honestly or not

Dishonesty is objective

Question 5

Subjective test for dishonesty

Answer 5

Twinsectra

Question 6

Further clarification on dishonesty - if by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by a different standard

Answer 6

Barlow Clowes

Question 7

Test for dishonesty is primarily an objective one, it is sufficient if the defendant knows of the elements of the transaction which make it dishonest according to normally accepted standards of behaviour

Answer 7

Abou-Rahmah v Abacha

Question 8

Standard of behaviour is that of the ordinary honest person

Answer 8

Starglade Properties

Question 9

It is not a defence to state that the acts would have occurred anyway, even if the defendant had not taken part

Answer 9

Balfron Trustees v Peterson

Question 10

Defendant does not need to know precisely the nature of the breach so long as he has some appreciation that he is helping someone who is up to no good

Answer 10

Ultraframe v Fielding

Question 11

Knowing receipt

Answer 11

El-Ajou v Dollar Land Holdings:

• disposal in breach of fiduciary duty
• beneficial receipt by defendant of assets which are traceable assets of the claimant
• knowledge on the part of the defendant that the assets are traceable to a breach of fiduciary duty

Question 12

Knowledge for knowing receipt

Answer 12

Types 1 to 4 Baden knowledge

BCCI v Akindele - it is unconscionable for D not to be liable? moves away from Baden categories