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121816
Third Party Liability
Description
Degree E&T Mind Map on Third Party Liability, created by Vicky Babs on 04/06/2013.
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Mind Map by
Vicky Babs
, updated more than 1 year ago
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Created by
Vicky Babs
about 11 years ago
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Resource summary
Third Party Liability
Selbourne LJ Barnes v Addey
knowing receipt
Westdeutsche Landesbank - D's can be liable for knowing reciept
Beneficiaries can get their money back from anyone but equity's darling
Re Montague's ST - McGarry liability for knowing receipt comes with Baden 1-3
El Ajou - for D to be a constructive trustee, there must be:
disposal of trust property in breach of trust/fiduciary duties
Polly Peck - transferring money to Cyprus was disposal
Lipkin Gorman - spending money at playboy was disposal
beneficial reciept of trust assets
Belmont Finance - Rule covers company directors
Ajip - banks/agents not liable as they do not benefit - Millet J
D knew the money was traceable to trust funds
Eagle Trust - no need for dishonesty/participation
Carl Zeiss - knowing of a claim that there was a trust is not knowledge
BCCI v Adekunle - test is now unconscionability
critiques
Burke - we should have a strict liability test with a defence of change of positions
Applied in Lipkin Gorman
dishonest assistance
Baden Delveaux
4 tests for liability
existence of a trust
dishonest/fraudulent design of the trustee
assistance in the fraud from a third party
stranger must have known of the fraudulent design
5 categories of knowledge - per Gibson J
1) actual knowledge
2) Nelsonian knowledge - deliberately closed their minds to actual knowledge
3) willfully and recklessly failed to enquire
4) knowledge of the circumstances that they did have would suggest the truth
Selangor, Karak Rubber - guilty because they should have known
5) knowledge of the circumstances which would lead a reasonable man to enquire
Agip - D's were put on notice so had knowledge
Lipkin Gorman - 1-3 only should be applied for dishonest assistance per Alliot J
Brunei - Nicholls LJ says OBJECTIVE test for knowledge (with consideration of what D knew)
Twinsetctra - Lords say Ghosh type combo test for knowledge
Barlow Clowes - Hoffman claims that Twinsectra says the same as Brunei and that critics misunderstood. test os objective
critiques
Andrews - dishonest assistance is unnecessary and over-complicated. All case law could be solved through tort and crim
Yeo - Agrees with Andrews. Hoffman's 'clarification of Twinsectra is, with respect, unconvincing'
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