What are the justifications for imposing personal liability on a person who has assisted in a
breach of trust or received trust property?
(1) In what circumstances will liability be imposed?
(2) Assess the criticisms of the present tests for liability and the arguments in favour of
different approaches.
Equity imposes personal liability on TPs who interfere with trusts through the doctrines of dishonest
assistance and unconscionable receipt
These doctrines were developed to protect Bs where Ts or Fs breach their obligations and
TPs either participate in or benefit from that wrongdoing
The justifications for liability are both moral and proprietary
DA is principally fault-based, focusing on TP’s dishonest participation in wrongdoing, while
UR additionally vindicates B’s continuing equitable proprietary rights in misapplied trust
property
Liability is also justified because it provides a remedy where Ts are insolvent or trust
property has been dissipated and can no longer be traced
Moreover, equity seeks to prevent TPs benefitting through interference with trusts and F
relationships
However, the present tests for liability have been heavily criticised for uncertainty and conceptual
incoherence, particularly regarding the meaning of the central organising principles of dishonesty
and unconscionability
Therefore, while the current doctrines provide important mechanisms for protecting Bs and
trust property, the law remains controversial as to both the basis and scope of personal
liability
Paragraph 1
DA comprises four elements (Baden Delvaux, revised in Royal Brunei v Tan)
(1) The existence of a trust or F relationship
(2) Breach of trust or F duty
(3) Assistance
a. Requires conduct materially facilitating the breach, as either positive acts (such as
money laundering in Twinsectra v Yardley) or passive acquiescence (such as allowing a
bank account to conceal misappropriated funds in Adelaide Partnerships v Danison)
b. However, passive acquiescence has a high threshold for assistance (Brinks v Abu-Saleh
(No 3))
(4) Dishonesty
Personal liability for DA is justified as TP has intentionally participated in another’s breach of trust
or F duty
To this extent, liability reflects equity’s condemnation of dishonest interference with F
relationships and seeks both to compensate Bs and deter TPs from facilitating wrongdoing
breach of trust or received trust property?
(1) In what circumstances will liability be imposed?
(2) Assess the criticisms of the present tests for liability and the arguments in favour of
different approaches.
Equity imposes personal liability on TPs who interfere with trusts through the doctrines of dishonest
assistance and unconscionable receipt
These doctrines were developed to protect Bs where Ts or Fs breach their obligations and
TPs either participate in or benefit from that wrongdoing
The justifications for liability are both moral and proprietary
DA is principally fault-based, focusing on TP’s dishonest participation in wrongdoing, while
UR additionally vindicates B’s continuing equitable proprietary rights in misapplied trust
property
Liability is also justified because it provides a remedy where Ts are insolvent or trust
property has been dissipated and can no longer be traced
Moreover, equity seeks to prevent TPs benefitting through interference with trusts and F
relationships
However, the present tests for liability have been heavily criticised for uncertainty and conceptual
incoherence, particularly regarding the meaning of the central organising principles of dishonesty
and unconscionability
Therefore, while the current doctrines provide important mechanisms for protecting Bs and
trust property, the law remains controversial as to both the basis and scope of personal
liability
Paragraph 1
DA comprises four elements (Baden Delvaux, revised in Royal Brunei v Tan)
(1) The existence of a trust or F relationship
(2) Breach of trust or F duty
(3) Assistance
a. Requires conduct materially facilitating the breach, as either positive acts (such as
money laundering in Twinsectra v Yardley) or passive acquiescence (such as allowing a
bank account to conceal misappropriated funds in Adelaide Partnerships v Danison)
b. However, passive acquiescence has a high threshold for assistance (Brinks v Abu-Saleh
(No 3))
(4) Dishonesty
Personal liability for DA is justified as TP has intentionally participated in another’s breach of trust
or F duty
To this extent, liability reflects equity’s condemnation of dishonest interference with F
relationships and seeks both to compensate Bs and deter TPs from facilitating wrongdoing
