Third Parties Flashcards
What is the two-limb test from Ghosh and Twinsectra for dishonesty?
D’s conduct must be dishonest by standards of a reasonable person (objective).
D must realize that their conduct was dishonest by those standards (subjective).
What change did Ivey v Genting bring to the dishonesty test?
Replaced the two-limb test with a purely objective one:
Determine D’s actual belief (subjective fact-finding).
Judge their conduct by the standards of ordinary decent people (objective).
Note: No requirement for D to appreciate dishonesty.
What did Barlow Clowes v Eurotrust clarify about dishonesty?
Lord Hoffmann emphasized that the focus should be on objective dishonesty, even if D doesn’t appreciate their own dishonesty.
What did Royal Brunei Airlines v Tan say about trustees and DA?
D can be liable even if the trustee is innocent. Dishonesty is judged independently.
What threshold of assistance is required for dishonest assistance according to Brinks v Abu-Saleh?
Assistance must be more than of “minimal importance” to the breach.
What did Group Seven v Notable Services clarify about assistance and dishonesty?
Assistance: Must make the trustee’s breach easier; must be more than minimal.
Dishonesty: Ivey test applies.
Suspicion + deliberate avoidance of the truth can amount to dishonesty.
What did Novoship v Nikitin decide about personal claims against dishonest assistants?
Courts can award disgorgement of profits where:
Wrongdoing was a but-for cause of the profit
Causation was direct
Court deems it proportionate and appropriate
Is a dishonest assistant jointly and severally liable for the trustee’s profits? (Hotel Portfolio II v Ruhan)
Generally yes. BUT, If wrongs are inextricably linked, liability may be apportioned based on the first wrong.
What are the core elements of knowing receipt liability? (Byers v Saudi National Bank & BCCI v Akindele)
D received property subject to a trust
D had sufficient knowledge of the breach
It would be unconscionable for D to retain or deal with the property
What factors indicate “unconscionability” in knowing receipt? (BCCI v Akindele)
Did D know of a breach?
Was D suspicious of a breach?
Would a reasonable person in D’s position have made inquiries?
What did Williams v Central Bank of Nigeria decide on limitation periods for dishonest assistance?
Claims against third parties (not trustees) are subject to limitation, unless fraud or conversion applies.
Under the Limitation Act 1980:
No time limit for fraud/trust property (s.21(1))
Otherwise, 6 years applies (s.21(3))
What critique does J Lee raise in ‘Constructive and Limiting Liability in Equity’ (2015)?
Criticizes reliance on “but-for” causation and loss-only models in equity.
Argues equity should hold trustees to higher standards than common law negligence, focusing on fiduciary integrity—not just compensation.
What does R Chambers argue in ‘The End of Knowing Receipt’ (2016)?
Knowing receipt is a doctrinally incoherent hybrid. He argues it should be abolished in favor of clearer doctrines.
What does W Swadling say about the nature of knowing receipt?
Knowing recipients are not trustees, so shouldn’t be held to the same fiduciary standards or liabilities as trustees—they never consented to hold on trust.
