QUESTION:
‘Liability for ‘knowing (or unconscionable) receipt’ of trust property and
liability for ‘dishonest assistance’ are ways in which a stranger may be liable
to the beneficiaries of a trust consequent on a breach of trust. That, however,
is as far as the similarities go.’
Discuss, explaining the basis for a person’s liability in these two situations
A good answer to this question would
explain that these liabilities were imposed on non-trustees (strangers) because of
their involvement in the administration of the trust. A good answer would make it
clear that, often, third party claims were used after an attempt had been made to
sue the trustee personally or recover the trust property. The conditions for the
existence of each liability can be identified and then how the conditions differ or are
similar – e.g. as to the degree of ‘knowledge’ required and any available defences.
This discussion can be used to explore the underlying basis for the liabilities – are
they ‘fault’ based; are they rooted in ‘unconscionability’; do they form part of the law
of restitution? Considering the views of authors such as Swaddling and Penner, and
judges such as Lord Millet and Lord Nicholls, would gather more marks.
their involvement in the administration of the trust. A good answer would make it
clear that, often, third party claims were used after an attempt had been made to
sue the trustee personally or recover the trust property. The conditions for the
existence of each liability can be identified and then how the conditions differ or are
similar – e.g. as to the degree of ‘knowledge’ required and any available defences.
This discussion can be used to explore the underlying basis for the liabilities – are
they ‘fault’ based; are they rooted in ‘unconscionability’; do they form part of the law
of restitution? Considering the views of authors such as Swaddling and Penner, and
judges such as Lord Millet and Lord Nicholls, would gather more marks.
Law cases, reports and other references the examiners would expect you to use
Royal Brunei Airlines Sdn Bhd v Tan; Twinsectra v Yardley; Group Seven Ltd v
Notable Services LLP; Byers v Saad Investments Co Ltd; BCCI (Overseas) v Chief
Akindele; Ivey v Genting Casinos; NatWest Markets plc v Bilta; Williams v Central
Bank of Nigeria.
Notable Services LLP; Byers v Saad Investments Co Ltd; BCCI (Overseas) v Chief
Akindele; Ivey v Genting Casinos; NatWest Markets plc v Bilta; Williams v Central
Bank of Nigeria.