From: Enrichment - Restitution & Unjust Enrichment Legal Issues <ENRICHMENT@LISTS.MCGILL.CA> on behalf of Lionel Smith <lionel.smith@LAW.OX.AC.UK>

Sent: Friday 4 September 2026 11:41

To: ENRICHMENT@LISTS.MCGILL.CA

Subject: [RDG] Knowing receipt liability of the State

Neil Foster notified me of a recent and unusual decision of the NSWCA, Commonwealth of Australia v Kupang Resources Pty Ltd, in which the Commonwealth of Australia was held liable for its receipt funds paid in satisfaction of a tax bill, in knowing receipt or, as it's pithily called there, 'the first limb of Barnes v Addy (1874) LR Ch App 244'. The tax debtor was one Mr Grimaldi, a name that is familiar even to me from the law reports going back many years, so it is not surprising that the defendant knew that the money in question was held on a constructive trust. Agreeing with recent decisions of the UKSC and with all right-thinking people, the Court confirmed that a constructive trust arising under the fiduciary rule against unauthorised profits is a kind of trust that can trigger liability in knowing receipt/first limb BvA. There is some interesting discussion of merger and a little bit on tracing. The unanimous decision was written by Bell CJ, Ward P and Griffiths AJA concurring.

Congratulations to RDG member Jessica Hudson, one of the victorious counsel on the appeal!

With best wishes to all,

Lionel

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