Intermeddlers - Dishonest Assistance

Question 1

what is the main case for dishonest assistance and why?

Answer 1

Royal brunei airlines v Tan 1995

Question 2

what happened in the Tan case?

Answer 2

• BLT run by mr tan, travel agency in pre internet days
  
  • They sold royal airlines tickets under arrangement - BLT was constitutive trustee of customers ticket money - way the trust worked is ticket money was held of trust on behalf of royal B as beneficiaries until accounted for
  • BLT would then deduct the allowed commission - then the difference given back to royal airlines - key point here is BLT isn’t allowed to put the money into its normal business account
  • No doubt logic was if BLT go out of business, with the trust there asset shielding so money goes to them rather than BLT creditors
  • BLT go insolvent an they had been using ticket sales money in the general business account
  • Claim against royal brunei should be easy but they haven’t got any money - but what about Mr Tan, he was the orchestrator
  • Normal rule of this is when the trustee is being dishonest - but the company BLT wasn’t being dishonest, it was TAN THAT WAS THE DISHONEST ONE
    Was cleared up in this case that it was the accessories dishonestly that mattered

Question 3

what would be the problem with applying Barnes v Addy in the Tan case?

Answer 3

• Problem with using Barnes was that it wasn’t the trustee being dishonest it was tan
  
  • Tan fixed upon this dicta in his defence, saying he couldn’t be liable as it relies on the liability of the trustee and BLT wasn’t liable as they weren’t dishonest
  • Privy council rejected - what mattered wasn’t trustees dishonesty but the accessory/ assistants dishonesty (shows you have to read the dicta in context) common law develops in response to the circumstances of the cases
  • If we interpreted as tan wanted it to be, It would apply anyone like tan to get away with it so long as the successfully dupe the trustee so the trustee is innocent

Question 4

what were the two options rejected by the court in the Tan case?

Answer 4

1. No liability for accessories
   
   • Th primary wrong is the breach of trust by the trustee - but court rejected as its not right to not have liability to accessories, allows people like tan to get away with it
     2. Strict liability (no need for fault)
   • If anyone procured or assisted in the breach of trust or fid duty, this would be enough even if there was only a slight inclination of what was happening - so solicitors and advisors would most likely all be liable
     Even if they were innocent, could still be liable, people would be fearful for liability and business enterprises would breakdown

Question 5

what was the option accepted by the court in the Tan case?

Answer 5

3. Fault-based liability
   
   • Settled on this
   • Provided the assistant is liable for the dishonest assistance
     The only difficulty will be drawing the line of dishonestly and degrees of knowledge (sort of goes back to Baden)

Question 6

what were the two limbs for finding dishonesty from Tan?

Answer 6

 Was the conduct dishonest by the standards of
ordinary decent people? [Tan: required]
 [Objective] - doesn’t require awareness of the dishonesty

 Did the defendant realise that her conduct was
dishonest? [Tan: Not required]
 [Subjective]

Question 7

what was the criminal case for dishonestly they drew on in Tan?

Answer 7

R v Ghosh 1982

Question 8

In which case did the courts re-review what dishonestly required because it was more borderline than Tan?

Answer 8

Twinsectra v yardley 2002

Question 9

what were the facts of the Twinsectra case?

Answer 9

• Dodgy solicitor Mr Leech, but instigator was yardley who was the trustee
  
  • Yardley borrowed money from Twin to buy and develop property
  • Twin extracted a promise that money and undertaking would only be used for the stated purpose
  • In this transaction another solicitor called simms made that undertaking
  • Leech was the person that negotiated deal with twin and was on yardleys side of the deal
  • Twin pays money to simms and simms pays it too leech - what should leech have done? He should have ensured the undertaking was compliant - but he paid money directly to yardley
  • Yardley used money for other purposes, so breach of trust - arrangement created a special trust
  • Leech had assisted but not instigated the breach of trust, so was he liable for dishonest assistance?
  • Trial judges has facts - leech honestly believed the undertaking didn’t apply to him, he believed he could follow clients instructions - he wanted to get the job through and didn’t want to sour relationship with yardley - didnt make inquires in fear of finding out something he didn’t want to know - but looking at what he believes, HOL held it didn’t amount to subjective dishonesty, he was just misguided (although it would have been objective dishonesty)
    If they fallowed tan and only applied objective test, he would be liable, but if they followed ghosh and applied objective ad subjective test, he wouldn’t be liable

Question 10

what were the 3 options lead judge Hutton considered for dishonestly in Twinsectra?

Answer 10

1. Purely subjective – the ‘Robin Hood’ test
   
   • Without what ordinary person would think, def applies only his own standards to if its right or wrong, decides if he’s doing right, law will respnd saying no liability
   • What robin hood was said to have judged himself by, as far as he was concerned he was doing right - lots of consequences of this
   2. Purely objective (per Tan) – no need for realisation
      - Look at community standards and if ordinary people would think it dishonest, no need for def to know it was dishonest
   3. Partly subjective – Combined Test (per Ghosh)
      - Both limbs, objective and subjective dishonesty

Question 11

which option was decided on in Twinsectra?

Answer 11

opted for combined test of objective and subjective (Ghosh)

- Option 1 rejected, and so was option 2 - lead judge was a crim judge (lord Hutton) and may have applied their rules very strictly to civil law

Powerful dissent by lord millet

Question 12

what did Lord Millet say in his important dissent to the dishonestly chosen in Twinsectra?

Answer 12

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 13

what was the main issue with Twinsectra?

Answer 13

Allows def to say they didn’t realise ordinary people would consider that they’re doing dishonest and get them off with it

which is what happened in clowes

Question 14

which case showed the fundamental flaw of Twinsectra?

Answer 14

Barlow clowes v Eurotrust 2005

Question 15

what were the facts of the Barlow Clowes case?

Answer 15

• Principle wrong committed by Clowes - his civil wrong was breach of fid duty, and crime was Operate fraudulent offshore investment scheme with 140 million pounds
  
  • Had lavish life style with yachts all funded by dishonest abstraction of clients funds
  • Sentenced to 10 years
  • He had his millions with a lot of others helpers. With the wrongdoing
  • One assisters (henwood?) was to help assist Clowes in transfer of clients funds
  • Henwood moving lots of money around for what looked like no commercial purpose - he applied it according to clowes instrctions, thereby facilitating the fraud
  • Judge found henwood may live by different standards and see nothing wrong in what he’s doing, produced a warped moral approach to treat clients insturctions as all important
  • Henwood may think it to be honest attitude but he was dishonest by standard of ordinary person - so found he was objectively dishonest but not subjectively dishonest - so here they will tried to plead that they didn’t know
    But this was fraud on a huge scale, and authorities wanted to get all those liable

Question 16

what did lead judge decide to do in Barlow Clowes?

Answer 16

Lord Hoffman (who agreed with Hutton in twinsectra) its always been requirement of objective dishonesty in tan, twin and now clowes - seen as crude way to save face as test was very different in twinsectra, so they have actually just rode back to the test of tan, which is objective dishonesty

Question 17

which case finally cleared up the issue of dishonesty?

Answer 17

Ivey v genting casinos 2017

Question 18

what happened in Ivey case?

Answer 18

• Wasn’t actually a fid accessory case, he was a gambler at casino
  
  • Said didn’t realise card counting was dishonest - casino refuses to pay out so sues casino and loses all way to supreme court
    SC got act together and made matters clear - when it comes to assessments of dishonesty in civil law, only require first limb which is objective dishonesty

Question 19

the most recent case where objective dishonest assistance was applied?

Answer 19

Stanford International Bank Ltd v HSBC Bank Plc

[2021]

Question 20

Which case complicated the objective dishonesty test?

Answer 20

Weavering Capital (UK) Ltd v Dabhia & Platt (2013)

Question 21

what did the Weavering Capital 2013 case establish?

Answer 21

• went back to hoffman in tan - said they look at intelligence, characteristics, standard, education of the defendant - don’t look at awareness but their personal characteristics
  
  • was platt behaviour dishonest by ordinary people standard?
• concluded platt was over promoted and just did what he was told

Question 22

how was Weaving capital different to Clowes?

Answer 22

 Mr Platt was doing his ‘incompetent best’

- Wasn’t objectively dishonest - conduct of 3rd party to be assessed on his knowledge at the time, relates to things like intelligence, couldn’t have been expected to understand the risks
- Different to Clowes because Henwood was intelligent enough he should've have known what he was doing, but platt was so dumb he couldn’t have been expected to understand the risks - so ordinary person would hold Henwood to a high standard then platt

Assistance

Question 23

which case is used to say factual assistance is also necessary and what happened?

Answer 23

Brinks Ltd v Abu-Saleh (No 3) [1996]

- Fallout from brinks robbery
- Here you cant steal and launder without people helping you
- Person they tried to get as principle breacher was Mr Elcombe and Mrs elcombe
	○ They were driving a car with 3 million in it across Europe
	○ The wife accompanies husband on the journey
	○ She thought husband was just committing tax evasion, didn’t know of the armed robbery
	○ Did she breach the fid duty? Court thought no as there has to be more than minimal assistance - moral support on a long drive isn't enough Not looking for great deal of assistance but there needs to be some factual assistance for it to be dishonest