3P liability Flashcards
Trustee de son tort
Mara v Browne - liable as a contrastive trustee
UE concurrent liability for KR? (pro)
Twinsectra, Relfa (obiter)
Lord Nicholls and Lord Birks (obiter)
Canada say the essence of KR is D is unjustly enriched
UE concurrent liability for KR? (cons)
Akindele, Farah v Say Dee, Charter v City Index = NO
Nourse LJ - it is for the SC tor recognise it because all case law is inconsistent with the idea of UE since Barnes v Addy
Three pieces of evidence for concurrent liability for KR in UE
1) UE for people receiving property under will be accident (Ministry of Health v Simpson)
2) UE for directors misappropriating property irrespective of fault (Criterion Properties v Stratford UK prop)
3) Suborgation to reverse UE
El-Ajou v Dollar Land Holdings
how to show KR:
1) C must show disposal of his assets in breach of fiduciary duty or trust
2) D beneficially received assets traceable as representing C’s property
3) With a state of mind rendering recipes unconscionable
Reflo v Varsini
Money credited to D’s bank account in singapore = traceable proceeds of money debited from C’s bank in England
Baden, Delvaux
Peter Gibson lists 5-fold classifications of knowledge:
1) Actual knowledge
2) Nelsonion knowledge (wilfully shutting ones eyes)
3) Naughty knowledge (recklessly failing to inquire like an honest man)
4) Reasonable man known
5) Reasonable man inquiry
Belmont Finance, Houhton v Fayers
1-5 can make 3P liable (Baden scale KR)
Royal Brunei v Tan
PC held Baden = obscure and over theorised so knowledge cannot be assessed this way for breach
BCCI (overseas) v Akindele
CA said same thing as Royal Brunei about Baden
Nourse LJ - dishonest will suffice but is not required
RULE: D is liable if state of knowledge makes it unconscionable to retain receipt
(slight modification of El-Ajou)
- uncertain test
- would also mean definitely not claim in UE without departing from cases requiring proof of fault for KR
Ultraframe (DA profits)
DA is not liable for T’s profits (not full secondary liability then)
Novoship (UK) v Nikitin
DA must disgorge profits from own wrongdoing (nb. in this case, DA didn’t have to because profits was not relatively caused by wrongdoing)
How to show DA?
1) a BREACH of trust/fiduciary duty
2) Assisted by D
3) with a dishonest state of mind
Royal Brunei (assisted by DA)
DA can be the primary instigator
D caused company he was majority shareholder and director of to misdirect funds held on trust for C
Fyffe’s Group v Templeman
DA could have bribed fiduciary
Dishonesty? (history)
at first - D liable if she was honest but negligent
then - Baden, Delvaux - D liable even if not dishonest (as long as one of the 5 types of knowledge)
then - Aquip (Africa) v Jackson - D must be DISHONEST to incur liability
Royal Brunei v Tan
OBJECTIVE TEST
- Honesty is not an optional scale
- D must have acted dishonestly
- only some of D’s attributes considered (e.g. intelligence, experience)
Twinsectra v Yardley
PC said what seems like a subjective test
- Hutton: dishonesty requires knowledge by D that he was doing something regarded dishonest by a reasonable and honest man
(D has to realise he is not acting as an honest person would)
Barlow Clowes v Eurotrust
interpreted Twinsectra to mean OBJECTIVE (???)
Hoffman said neither he nor hutton said D doesn’t have to consider normally acceptable standards
Said Twinsectra doesn’t add anything
TEST IS OBJECTIVE
Abou-Rahman v Abacha
followed Eurotrust
- dishonesty = objective (following Nicholls in Royal Brunei, and Hoffman in Eurotrust)
Knowledge in DA
NOT a defining ingredient
- but DA must at least know T is not entitled to do what he does (Ultraframe)
- DA doesn’t need to know details, just broad terms (liability doesn’t extend to unforeseen actions)
- Doesn’t matter if DA didn’t know it was a breach but knew it was a wrongful transaction - DA cannot hide behind transactions that are themselves disreputable (Aquip (Africa) v Jackson)
Causal Link between DA and B’s loss (general)
Ultraframe - covering up
Royal Brunei - instigate
DA - causation NOT but for
Group Torras v Al Sabab (Affirmed in Casio Computer v Sayo)
Brown v Bennett
DA - causation (if NO difference at all then no causation)
