Liability of strangers Flashcards
What are the key claims that can be made against strangers to the trust?
- accessory liability
- knowing receipt
What type of claim is accessory liability/knowing receipt?
Personal claim
What are the requirements for accessory liability?
a) Trust in existence at material time
b) Trustee committed breach of trust
c) Defendant assisted trustee to commit breach of trust and
d) Defendant’s assistance was dishonest
What must assistance be for accessory liability?
- More than minimal
- Must make commission of breach easier than it would have been
What would not allow a defendant to avoid liability for accessory liability?
If trustee/fiduciary would have committed breach even without assistance
How is dishonesty ascertained for accessory liability?
- Individual’s knowledge or belief as to the facts
- Apply standard of ordinary decent people
What are the remedies available for accessory liability?
- Defendant liable for loss occaisoned by the breach
- profits acquired
What is the requirement for a claimant to claim the profits that a defendant has made during dishonest assistance?
participation was the ‘real’ or ‘effective’ cause of the profits
What are the requirements for recipient liability?
- misapplied trust property
- beneficial receipt
- knowledge
What is not classed as beneficial receipt for recipient liability?
- ministerial capacity
- money in bank account which is in credit
What is classed as beneficial receipt for recipient liability
money in bank account which is overdrawn
When will someone be liable for recipient liability regarding their knowledge?
As soon as they acquire knowledge
What was the test for knowledge for knowing receipt set out in Akindele?
state of knowledge must be such as to make it unconscionable for him to retain the benefit of the receipt
What is the baden scale for knowledge with regards to knowing receipt?
a) Actual knowledge
b) Wilfully shutting eyes to the obvious
c) Wilfully and recklessly failing to make inquiries as an honest and reasonable man would make
d) Knowledge of circumstances which would indicate the facts to an honest and reasonable man
e) Knowledge of circumstances which would put an honest and reasonable man on inquiry
