There's a problem with Fancourt J's analysis, though, namely that he hasn't thought about the situation where a third party recipient takes legal title to misdirected trust property for value and without notice or unconscionable knowledge of the breach, but then acquires unconscionable knowledge later on while he still has legal title. In such cases personal liability for KR will be incurred at the later date notwithstanding the fact that the recipient has had clear legal title in the period between receipt and acquisition of knowledge - and this is inconsistent with Fancourt J's assertion that there can be no KR liability unless the beneficiaries have always had an equitable interest in the relevant property. See e.g. [46]: 'liability in knowing receipt should not arise where the recipient is, as a consequence of the transfer or otherwise, entitled to the assets. If the primary duty of the knowing recipient is to restore the trust property, with a secondary obligation to account for any profits received and losses suffered by the trust, it is not obvious how such duties can exist if the recipient is entitled to retain the assets for himself.' C








________________________________________
From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA> on behalf of S.E. Worthington <sew1003@CAM.AC.UK>
Sent: 15 January 2021 16:04
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: Re: [RDG] Knowing Receipt

Hear, hear!
Sarah

From: Andrew Tettenborn <a.m.tettenborn@swansea.ac.uk>
Sent: 15 January 2021 15:55
To: Robert Stevens <robert.stevens@law.ox.ac.uk>; ENRICHMENT@LISTS.MCGILL.CA
Cc: obligations@uwo.ca
Subject: Re: Knowing Receipt


Correct. A
On 15/01/2021 15:46, Robert Stevens wrote:
Good (ie I agree with it) decision on knowing receipt with some conflicts thrown in, from Fancourt J.

https://www.bailii.org/ew/cases/EWHC/Ch/2021/60.html<https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.bailii.org%2Few%2Fcases%2FEWHC%2FCh%2F2021%2F60.html&data=04%7C01%7C%7C14473e9bac2745fdba5908d8b970f5fd%7C1faf88fea9984c5b93c9210a11d9a5c2%7C0%7C0%7C637463242105327344%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000&sdata=9ks1hCUHYRmUjZb7fjIP2aPBUYw%2Fgf5JzRUUtd%2Bn%2BAA%3D&reserved=0>

[110]

"The knowing recipient's liability depends on his knowledge that the property he receives is trust property and is to be dealt with in that way. His receipt is not wrongful in the sense that he has acted dishonestly or culpably (unless he has also dishonestly assisted in the breach of trust), but his liability to deal with the property as if he were a trustee arises at the moment of receipt because of his knowledge that the property is trust property. If the transferee then deals with the property otherwise than as a trustee should (whether by failing to restore it to the trust or by dealing with it as his own) he is at fault and will be liable for the consequences. In those circumstances, a personal claim against the transferee can properly be said to be fault-based, but the reason for liability is that the transferee has knowingly dealt with (or retained) property that belongs to the trust inconsistently with his duty. If the property is not trust property, there cannot be liability of that kind."

R
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