Property Law - Knowing Receipt and Dishonest Assistance Flashcards
What two cases suggest UE can run concurrently with KR claim?
Dubai Aluminium v Salaam; Re Esteem Settlement
Why would a UE claim be preferable for C if allowed concurrently with KR?
No need to prove fault
What case applied unconscionability and thus affirmed BCCI v Akindele?
Charter v City Index
Belmont Finance v Williams Furniture (No.2)
All on Baden scale counts, and dishonest not necessary
What are the two core duties of KR?
Core restorative duty immediately, or liable to account if dealt with property inconsistently
Farah v Say-Dee is from what jurisdiction and court?
High Court of Australia
In what case did Lord Hoffmann clarify Twinsectra?
Barlow Clowes v Eurotrust
What are the three types of constructive trustees?
Trustees de son tort, knowing recipients and dishonest assistants
What case stated D may have to account for both new property exchanged for misdirected property and any profits generated therefrom under KR
Grimaldi v Chalemeon Mining
Who explores the two remedial duties of KR?
Mitchell and Watterson
C had concurrent claims in UE and KR
Relfo Ltd v Varsani
Twinsectra v Yardley judgment
HoL, Lord Hutton accepted objective limb from Brunei but for subjective stated D needs to realise he is not acting as honest person
McCullough v Marsden general
Subrogation
What two cases suggested SC need to approve for UE to run concurrently with KR?
BCCI v Akindele; Farah v Say-Dee
Re Montagu’s Settlement general
Duke of Manchester, life interest but T gave him all and sold
Dubai Aluminium v Salaam
UK suggested UE can run concurrently with KR in obiter
Grimaldi v Chalemeon Mining
D may have to account for both new property exchanged for misdirected property and any profits generated therefrom
Who found Barnes v Addy and Baden, Delvaux led to ‘tortuous convulsions’ for DA?
Lord Nicholls in Royal Brunei v Tan
Ultraframe v Fielding on mental element of DA
D needs to have known T was not ‘entitled to do what he is doing’ for mental element of DA
What case states that as long as D took reasonable steps to preserve property, but lost/stolen/damaged before returned, no restorative duty for KR?
Evans v European Bank Ltd
Novoship (UK) v Nikitin suggests what
Suggests DAs liability can sometimes be primary as well
No change of position defence if D still in possession of asset purchased by benefit, to the extent that she is enriched by possession
Lipkin Gorman v Karpnale
What are the last two stages of knowledge in Baden, Delvaux v Societe Generale known as?
Constructive knowledge
B only has to show assistance made breach easier for DA causation
Grupo Torras v Al-Sabah (No.5)
Niru Battery Manufacturing v Milestone Trading GENERAL
‘Short of outright dishonesty’, ‘mere negligence’
What case showed KR is liable as if he were a real T?
Arthur v AG of the Turks and Caicos Islands
What case showed move to subjective test after Royal Brunei?
Twinsectra v Yardley
Barnes v Addy on state of mind of DA
Requires dishonesty
What kind of liability is under DA?
Fault-based liability
What case gives three things for KR liability?
El-Ajou v Dollar Land Holdings
Who finds the label ‘constructive trustee’ to be an empty relief formula?
Birks
Tuthill v Equine
If T has no duty to account to C for dealings, no liability can arise as about exceeding authority, not avoiding conflicts
Why did court not allow DA to be jointly liable for Ts profits in Ultraframe?
Would be punitive
What CT has two core duties - to restore immediately, or liable to account if property dealt with inconsistency and therefore cannot be restored?
KR
Property lost/stolen/damaged
Evans v European Bank Ltd
Catching money laundering activities by holding breach not fully implemented until funds hidden from B
Heinl v Jysk Bank
Name at least two cases on breach of fiduciary duty by T for KR test
Tuthill v Equine; Re Exchange Banking Xo; Bracken Partners v Gutteridge
What did the issues with Barnes and Baden lead to?
Objective test in Royal Brunei v Tan
What case stated dishonesty is not necessary for KR?
Belmont Finance v Williams Furniture (No.2)
Abou-Rahman v Abacha judgment
CoA applied objective test, playing along with Barlow Clowes
D’s assistance can play what kind of role for DA?
Either subsidiary or primary part of breach
What was insufficient in BCCI v Akindele for knowledge?
High interest rate
When is there no difficulty in remedy of DA?
Substitutitive performance and reparation
What was the test set down in BCCI v Akindele?
Does D’s knowledge make it unconscionable to retain the benefit
What case gives that if KR knows T will misapply property again if returned, no discharge of core restorative duty?
Blyth v Fladgate
What are the first three stages of knowledge in Baden, Delvaux v Societe Generale known as?
Actual knowledge
Relfo Ltd v Varsani general
Singapore bank money credit, debited from UK bank
How does the liability of KR differ from DA?
KR is liable IN HIS OWN RIGHT, as opposed to secondary liability for DA
What two academics argue UE MAY run concurrently with KR claim?
Birks and Lord Nicholls
What case shows that if T has no duty to account to C for dealings, no liability for KR can arise as about exceeding authority, not avoiding conflicts
Tuthill v Equine
Company directors owe duty to account to C for dealings under KR breach of fiduciary duty
Re Exchange Banking Co
What two tests did Lord Nicholls reject in Royal Brunei v Tan?
Criterion of knowledge and unconscionability
What case shows that liability for KR to account cannot be collapsed into law of wrongs/UE?
Green v Weatherill
Target Holdings v Redferns on remedy for KR
If liable for substitutive performance, clock does not stop - liable for value of property at judgment
BCCI v Akindele general
Nigerian, lends £10 million, £6.7 million profit
Why were DAs profits not liable to be accounted for in Novoship?
Not relevantly caused by wrongdoing - profit due to unexpected change in market
Why does causation in DA show break from usual philosophy of autonomy?
D can be liable for loss from primary wrong even without direct causal link
Ministry of Health v Simpson general
Strict liability of improperly distributed funds of deceased’s estate
Name at least one case on change of position defence
Lipkin Gorman v Karpnale; Niru Battery Manufacturing v Milestone Trading
DA cannot claim honesty by sheltering behind disreputable transaction
Agip (Africa) v Jackson
What are the five stages of knowledge in Baden, Delvaux v Societe Generale?
Actual, Nelsonian, naughty, reasonable man would have known and reasonable man would have been put on inquiry
Evans v European Bank Ltd judgment
if property is lost/stolen/damaged through no fault of D before it can be returned, and took reasonable steps to preserve, duty is discharged
What does CT mean for dishonest assistants?
Treating D through legal fiction as though they were T, fixing with same liability as T and derivative
Duke of Manchester, life interest but T gave him all and sold
Re Montagu’s Settlement
Strict liability of improperly distributed funds of deceased’s estate
Ministry of Health v Simpson
Name the case suggesting DA can be principally liable for own profits
Novoship (UK) v Nikitin
Lipkin Gorman v Karpnale judgment
No change of position defence if D still in possession of asset purchased by benefit, to the extent that she is enriched by possession
What CT do courts treat through legal fiction as though they were T, fixing with same liability as T and derivative
DA
What type of liability is in DA?
Civil secondary liability
When is a B likely to claim for DA or KR?
T is bankrupt and proprietary tracing claim has failed bc no property left
What case shows Bs cannot seek proprietary remedy (as opposed to personal) against D to reconvey legal title if he no longer HAS legal title?
Ultraframe v Fielding
Nigerian, lends £10 million, £6.7 million profit
BCCI v Akindele
Royal Brunei v Tan general
Tickets for airline companies sold by agents, holding money in trust for company, personal account
H&M on Barnes and Baden, Delvaux v Societe Generale
Sorry state of cases - general consensus required dishonesty but no overruling of pre-Baden cases not requiring dishonesty
What case showed a move from Baden in DA?
Royal Brunei v Tan
Daughter father trust sister
Green v Weatherill
Charter v City Index
CoA applied unconscionability and affirmed BCCI v Akindele
What judge turned to unconscionability to test knowledge of 3rd of breach for KR and in what case?
Laws LJ in BCCI v Akindele
Lipkin Gorman v Karpnale general
Asset purchased and enrichment therefrom
Twinsectra v Yardley general
Loan solicitor, purchase, no charge over home
What case gave three things to incur KR liability?
El-Ajou v Dollar Land Holdings
Morlea Professional Services v Richard Walter judgment
Bs can disavow Ts actions to accept Ds giving of property in lieu of original property, meaning D remains liable
Barnes v Addy
Not liable if D received property ministerially
El-Ajou v Dollar Land Holdings general
Three things for KR
Name at least two cases showing DA is not liable for profits T makes?
Ultraframe; Michael Wilson v Nicholls; Grimaldi v Chameleon Mining
Re Montagu’s Settlement judgment
Constructive knowledge from Baden is insufficient
What is the liability for KR to account made up of?
Restore property in specie, show disposal was authorised OR falsification and substitutive performance
Evans v European Bank Ltd general
Property lost/stolen/damaged
Who dissented in Twinsectra v Yardley, saying subjective test for metal element only appropriate in criminal?
Lord Millett
What did Royal Brunei v Tan say of Baden?
Over-theorised and too obscure to be used for DA
Spam competition email, Nigerin bank fraud, London bank manager
Abou-Rahman v Abacha
When does the core restorative duty of a KR not require them to restore misapplied property to Ts?
When there is a bare trust - only need to restore directly to Bs who are absolutely entitled
What kind of defence was not allowed in Royal Brunei?
Robin Hood defence
What two limbs were given in Royal Brunei for test of dishonest state of DAs mind?
(1) objective limb - acting as honest person, and (2) subjective limb - take into account Ds attributes (e.g. intelligence)
Change of position defence excludes those acting just ‘short of outright dishonesty’, but includes ‘mere negligence’
Niru Battery Manufacturing v Milestone Trading
Name at least two cases on core restorative duty of KR
Evans v European Bank Ltd; Morlea Professional Services v Richard Walter; Blyth v Fladgate
Re Esteem Settlement
Royal Court of Jersey allow UE to run concurrently with KR
In what case did Peter Gibson J give five stages of knowledge for DA?
Baden, Delvaux v Societe Generale
What is the remedy for DA?
Reflect T liability OR primary liability to disgorge profits
BCCI v Akindele on UE
Nourse LJ - SC need to approve concurrent liability of UE and KR
What judge in BCCI v Akindele found Baden unhelpful?
Laws LJ
El-Ajou v Dollar Land Holdings judgment
Breach of fiduciary duty, legal title received by 3rd and knowledge by 3rd of breach
What are the four elements to a claim for DA?
Breach of fiduciary duty by T, assisted by D, who acts with a dishonest state of mind and with a causal link between assistance and B’s loss
What kind of liability is under KR?
Fault-based liability?
Criterion Properties v Stratford UK judgment
Directors acting for improper purpose when causing A to transfer to B gives A personal claim against B under UE
Green v Weatherill judgment
Sister order to pay money without allegation of BoD as CT - shows duty cannot be collapsed into law of wrongs/UE
Bracken Partners v Gutteridge
KRs owe stewardship duty , so liability can arise for D receiving improper funds from a KR
Baden, Delvaux v Societe Generale general
Five stages of knowledge
Singapore bank money credit, debited from UK bank
Relfo Ltd v Varsani
BCCI v Akindele judgment
Laws LJ turns from Baden as unhelpful, finding ‘conscience’ in authorities - turns to unconscionability with test ‘Does D’s knowledge make it unconscionable to retain the benefit?’
Conaglen and Goymour
Nothing to stop B suing in KR if they so wish, unless property is registered and for valuable consideration under s.29 LRA 2002
What does CT mean for trustees de son sort?
Personally liable to account - remedy same as when T does not act in accordance with trust
Faraj v Say-Dee
UE does not run concurrently with KR
What are three ways to criticise the test in BCCI v Akindele?
Lacks clarity, unpredictable and unconscionability expressly rejected by Lord Nicholls in Royal Brunei
Morlea Professional Services v Richard Walter general
Sham loans company, in lieu of original property
Ultraframe v Fielding on profits remedy for DA
DA NOT jointly liable for Ts profits as would be punitive
Sham loans company, in lieu of original property
Morlea Professional Services v Richard Walter
Who explains Blyth v Fladgate as being about liability for KR discharged, but then liability for DA?
H&M
Relfo Ltd v Varsani judgment
To identify traceable substitute of property of D, C needs to satisfy tracing rules
What case showed that there is no knowing receipt of property if D did not receive it for her own benefit (e.g. received ministerially)?
Barnes v Addy
Green v Weatherill general
Daughter father trust sister
How do L&O commend BCCI v Akindele?
Courts do not have much trouble applying the test
What judge sat in both Barlow Clowes v Eurotrust and Twinsectra?
Lord Hoffmann
Ultraframe v Fielding causation
LJ Lewison saw cover-up as counting as assistance
Blyth v Fladgate
D knows T will misapply property again if returned - no discharge
What judge in Baden, Delvaux v Societe Generale gave five stages of knowledge?
Peter Gibson J
What judge in what case gave five stages of knowledge?
Baden, Delvaux v Societe Generale
What do H&M argue about concurrent liability of UE and KR?
Fault for compensatory liability (KR) shouldn’t affect restitutionary liability under UE
Why did Lord Nicholls reject criterion of knowledge in Royal Brunei?
Tortuous convulsions and less meaningful
Name at least three cases on causation and DA
Grupo Torras v Al-Sabah (No.5); Casio Computer v Sayo; Ultraframe v Fielding; Heinl v Jysk Bank
Barlow Clowes v Eurotrust general
Ponzy scheme
Baden, Delvaux v Societe Generale judgment
Five stages of knowledge, for DA but applied to KR
What are trustees de son tort?
A person who deals with trust property AS THOUGH they were a T
What is the type of liability in UE?
Strict - no need for fault
When can KR remain liable when giving property in lieu of original property to discharge core restorative duty
If Bs disavow Ts actions to accept Ds giving of property in lieu of original property, meaning D remains liable
Relfo Ltd v Varsani on UE
C had concurrent claims in UE and KR
What judge in what case accepted objective limb from Brunei but altered subjective standard?
Lord Hutton in Twinsectra v Yardley
How do courts catch money laundering activities under causation of DA?
Hold breach not fully implemented until funds hidden from B
McCullough v Marsden used to show what
If B can get property rights against innocent 3rd through subrogation to remedy UE, they should have direct UE claim too
Who argues CT conveys distinct nature of liability for knowing recipients?
Mitchell and Watterson
In what jurisdiction is UE denied independent source of rights and obligations?
Australia - Farah v Say-Dee
What does the test from Twinsectra look like
Ghosh test from criminal
D needs to have known T was not ‘entitled to do what he is doing’ for mental element of DA
Ultraframe v Fielding
Who explains why a constructive trustee is not just an empty relief formula?
Mitchell and Watterson
To identify traceable substitute of property of D, C needs to satisfy tracing rules for legal title received by 3rd in KR
Relfo Ltd v Varsani
what defence was allowed in Twinsectra v Yadley?
Robin Hood defence
Grupo Torras v Al-Sabah (No.5)
B only has to show assistance made breach easier for DA causation
What court decided Royal Brunei v Tan?
Privy Council
What two Australian cases show DA is only severally liable for profits?
Michael Wilson v Nicholls; Grimaldi v Chameleon Mining
What case is used to show that if B can get property rights against innocent 3rd through subrogation to remedy UE, they should have direct UE claim too?
McCullough v Marsden
What was the issue with Barnes v Addy?
Unreserved judgment ignoring previous authority
What three elements are there to a UE claim?
D is enriched, at C’s expense, unjustly
What case gave that if KR is liable for substitutive performance, clock does not stop - liable for value of property at judgment
Target Holdings v Redferns
What case confirmed Barlow Clowes v Eurotrust?
Abou-Rahman v Abacha
How do H&M explain Blyth v Fladgate?
About liability for KR being discharged, but then liability for DA
What is it argued MAY run concurrently with a KR claim?
UE
Under what kind of trust can a KR restore property directly to Bs who are absolutely entitled instead of Ts?
Bare trust
What system and case do H&M prefer for UE to run concurrently with KR, if ever applied in UK
Re Esteem Settlement
Royal Brunei v Tan judgment
Lord Nicholls said Barnes wrong - T need not be dishonesty, so dishonesty of 3rd sufficient, and honesty is OBJECTIVE based on circumstances
How do H&M explain Farah v Say-Dee?
UE is denied independent source of rights and obligations in Australia
What judge in El-Ajou v Dollar Land Holdings gave three things for KR liability?
Hoffmann LJ
What judge clarified Twinsectra in Barlow Clowes v Eurotrust?
Lord Hoffmann
Why do H&M consider it misleading to see DA as ‘liable to account as CT’?
Used in knowing receipt context already and calls to mind constructive TRUST
What defence could D rely on if UE is allowed concurrently with KR?
Change of position defence, if in GOOD FAITH
Who argue fault for compensatory liability (KR) shouldn’t affect restitutionary liability under UE?
H&M
In what case was the argument of Mitchell and Elliott endorsed that DA is secondarily liable AFTER t?
Ultraframe v Fielding
Subrogation
McCullough v Marsden
Niru Battery Manufacturing v Milestone Trading judgment
Change of position defence excludes those acting just ‘short of outright dishonesty’, but includes ‘mere negligence’
Abou-Rahman v Abacha general
Spam competition email, Nigerian bank fraud, London bank manager
What does CT mean for knowing recipients?
Personally liable to account - remedy same as when T does not act in accordance with trust
Name at least three cases which are used to show there should be concurrent liability of KR and UE?
Ministry of Health v Simpson; Criterion Properties v Stratford UK; Relfo Ltd v Varsani; McCullough v Marsden
What judge in BCCI v Akindele stated that SC need approve concurrent liability of UE and KR?
Nourse LJ
D knows T will misapply property again if returned - no discharge
Blyth v Fladgate
Heinl v Jysk Bank
Catching money laundering activities by holding breach not fully implemented until funds hidden from B
Arthur v AG of the Turks and Caicos Islands
showed KR is liable as if he were a real T
Ministry of Health v Simpson judgment
strict liability applies to recipient of improperly distributed funds of deceased’s estate, so why not trust assets?
Name at least three cases on knowledge by 3rd of breach giving liability for KR
Baden, Delvaux v Societe Generale; Re Montagu’s Settlement; Belmont Finance v Williams Furniture (No.2); BCCI v Akindele; Charter v City Index
When do difficulties arise with remedy for DA?
Profits
What case shows KRs owe stewardship duty , so liability can arise for D receiving improper funds from a KR?
Bracken Partners v Gutteridge
Casio Computer v Sayo
If DA made no difference, not liable
Director improper purpose, personal claim
Criterion Properties v Stratford UK
What case stated that all knowledge on Baden scale is sufficient for KR?
Belmont Finance v Williams Furniture (No.2)
What case in UK suggested UE can run concurrently with KR in obiter?
Dubai Aluminium v Salaam
What is the distinct nature of liability for knowing recipients, highlighted by Mitchell and Watterson?
Distinctive equitable custodial duty very similar to T duty to account
Ultraframe v Fielding
Bs usually seek proprietary remedy for D to reconvey legal title if he still has it, but not possible if D doesn’t
What case showed a move back to more objective test after Twinsectra?
Barlow Clowes v Eurotrust
what case showed courts ordering KR to pay money without allegation of BoD as CT
Green v Weatherill
Agip (Africa) v Jackson
D cannot claim honesty by sheltering behind disreputable transaction
What kind of state of mind of D in DA was required prior to Royal Brunei?
Dishonest (Barnes v Addy)
What does change of position defence require?
Extraordinary expenditure in reliance of receipt of benefit, on a ‘but for’ basis, and good faith
Criterion Properties v Stratford UK general
Director improper purpose, personal claim
3rd receiving legal title is not liable if received property ministerially
Barnes v Addy
What judge caw cover-up as counting as assistance and in what case?
Ultraframe v Fielding, LJ Lewison
What CTs do courts hold Personally liable to account - remedy same as when T does not act in accordance with trust?
KR and trustees de son sort
Who highlighted that there is nothing to stop B suing in KR if they so wish, unless property is registered and for valuable consideration under s.29 LRA 2002?
Conaglen and Goymour
In what two ways can D dishonestly assist?
Either in misapplication of property OR breach of duty
Novoship (UK) v Nikitin general
Charters to company, £150 million profit to company
Hoffmann LJ gave three things for KR liability in what case?
El-Ajou v Dollar Land Holdings
Pauline Ridge on DA remedies
Messy that DAs liability is sometimes primary and sometimes secondary
What would stop B from suing in KR?
property is registered and for valuable consideration under s.29 LRA 2002
If DA made no difference, not liable
Casio Computer v Sayo
Royal Court of Jersey allow UE to run concurrently with KR
Re Esteem Settlement
Name at least two cases on legal title received by 3rd for KR
Ultraframe v Fielding; Grimaldi v Chameleon Mining; Relfo Ltd v Varsani; Barnes v Addy
Tickets for airline companies sold by agents, holding money in trust for company, personal account
Royal Brunei v Tan
How can measure of liability for KR be very different to claim under UE/law of wrongs?
Clock stops for UE but not for KR
Barlow Clowes v Eurotrust judgment
Lord Hoffmann clarified Twinsectra test as being the same as Royal Brunei - not subjective but oBJECTIVE
Re Exchange Banking Co
Company directors owe duty to account to C for dealings
what three reasons are given in Green v Weatherill for why liability of KR to account cannot be collapsed into law of wrongs/UE?
Liability about RESTORATION, not RESTITUTION (like UE), D not entitled to claim contributory negligence and measure of liability may be very different
