Rob Stevens was specifically concerned with the person who did give value in exchange in good faith and without notice of a legal right.  Surely in such a case they take free of the rights of the trust beneficiaries, even if they acquire notice later whilst still holding the right?

Bill

 

From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA> On Behalf Of Bob Klotz
Sent: 15 January 2021 19:03
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: Re: [RDG] Knowing Receipt

 

Robert -- For an example of "someone who acquires trust property without giving value, who subsequently acquires knowledge of the trust" being held liable, see this Canadian case, Wilson, Re, 2019 ONSC 1278 (Ont. SCJ, Chiappetta J., Feb 25 2019), attached, perhaps not exactly what you are alluding to, but close.  A complicated set of facts, not the greatest judicial reasoning but the right result.  It helps to have four orphaned children as clients, sitting as an echelon in the front row of the courtroom, with their forlorn eyes fastened on the judge.  At some point I will write up this decision and send it in.  The case is also available on CanLII.org.

 

Regards,

 

   Bob K.

 

   ... Robert A. (Bob) Klotz

       Klotz Associates, Barristers & Solicitors

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Temporary address and contact information during the Covid shutdown:

 

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-----Original Message-----
From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA> On Behalf Of Robert Stevens
Sent: Friday, January 15, 2021 12:47 PM
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: Re: [RDG] Knowing Receipt

 

Am not sure I follow. Do you mean

 

"where a third party recipient takes legal title to misdirected trust property, [*except* where they have given] value and without notice or unconscionable knowledge of the breach, but then acquires [knowledge] later while he still has legal title"

 

is potentially liable?

 

I wouldn't have thought a bona fide purchaser without notice, who only subsequently acquires knowledge of the trust should be liable. Is there authority saying that they are liable?

 

The recipient party who is not "equity's darling" hasn't acquired a "clear" legal title that is not potentially subject subsequently to being imposed with a trust.

 

I can see that, say, someone who acquires trust property without giving value, who subsequently acquires knowledge of the trust, is potentially liable. The knowledge doesn't have to be contemporaneous with the receipt. But I'll forgive Fancourt J for not mentioning that.

 

R

 

-----Original Message-----

From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA> On Behalf Of Mitchell, Charles

Sent: 15 January 2021 16:51

To: ENRICHMENT@LISTS.MCGILL.CA

Subject: Re: [RDG] Knowing Receipt

 

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

--

br>

--

 

 

 

 

 

 

Andrew Tettenborn

Professor of Commercial Law, Swansea University

 

Institute for International Shipping and Trade Law School of Law, University of Swansea Richard Price Building Singleton Park SWANSEA SA2 8PP Phone 01792-602724 / (int) +44-1792-602724 Cellphone 07472-708527 / (int) +44-7472-708527 Fax 01792-295855 / (int) +44-1792-295855 Andrew Tettenborn Athro yn y Gyfraith Fasnachol, Prifysgol Abertawe

 

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