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I wonder if anyone can help with this problem.

F, a fiduciary in respect of B (they are joint venturers, if not partners), his beneficiary concocts a scheme to seize property which is under the immediate control of F but within the scope of F's duty to B.

F has urgent need of cash. The property is not cash. So what F does is organise the sale of the property for cash to T, a third party financier, who then leases the property back to the joint venture in circumstances which are immaterial to the point of this query but which indicate that T was a knowing accessory to F's breach - F pocketed the cash. B suffered a direct loss from that and substantial 'consequential' losses.

I assume for the purposes of this question that T was, in fact, a knowing accessory for the purposes of the 'second limb' of Barnes v Addy.

In general terms, a knowing accessory will be amenable to orders that he should disgorge any profit or benefit obtained from the breach.

Apart from the profit T will make from the lease, which is on commercial terms, T received no benefit from the breach. Apparently, T entered the deal because he was asked to do so by A who was a mutual friend of T and F.

My difficulty is in finding authority for the proposition that T is liable to compensate B in equity for the whole of the losses B suffered in circumstances where T received no benefit.

A collateral question is whether T's buying and leasing back of the property was a participation in a "fraudulent design" (the 'preamble' to the two limbs of accessory liability in Barnes v Addy, or a dealing sufficient to make T a receiver chargeable with the property (the first limb).

Thanks

John Murphy
160 Hellawell Road
Sunnybank Hills Qld 4109
Australia
+61 7 3273-7193