KNOWING RECEIPT ELEMENTS
This is the general name for the first limb of Barnes v Addy, where a stranger receives trust property for their own benefit.
What is Knowing receipt
On this view, knowing receipt liability turns on the defendant's own culpable state of mind, not just the fact of receipt.
What is the equitable wrongdoing analysis?
This is used to identify trust property, or its substitute, once it has passed into someone else's hands.
What is tracing?
These three remedies are available against a party who knowingly assists a breach of fiduciary duty
What are equitable compensation, account of profits, and constructive trusteeship?
This is the general equitable rule covering claims against strangers who receive trust property or assist in a breach of trust - the broader doctrine both Patrice and Graham's potential liability falls under.
What is the rule in Barnes v Addy?
Besides receiving trust property beneficially, a knowing receipt claim requires the defendant to have this about the breach.
What is knowledge of the breach?
On this view, knowing receipt is a restitutionary claim for a benefit received at the claimant's expense, regardless of the recipient's state of mind.
What is the unjust enrichment analysis?
If trust property is sold and converted into a different asset, this term describes that substitute, something tracing can follow just as easily as the original property.
What is (traceable) substitute property?
These four elements must be established to fix a third party with liability under the second limb of Barnes v Addy.
What are (1) a trust or fiduciary relationship, (2) a dishonest and fraudulent design on the part of the fiduciary, (3) assistance by the third party in that design, and (4) the third party's knowledge of the design?
Graham, who never personally received any of the money but suggested how to avoid detection, could instead be liable under this different equitable claim.
What is knowing assistance?
This is the modern Australian standard for the required knowledge in a knowing receipt claim.
What is unconscionability?
This defence, for someone who innocently and irreversibly spends money before learning of any problem, is generally available under the unjust enrichment view.
What is change of position?
This is the general legal term for a step or method used to establish a fact in litigation, (the category tracing falls into) rather than being a cause of action itself.
What is a process?
This five-category scale, running from actual knowledge down to mere constructive notice, is used to assess what a third party knew or ought to have known."
What is the Baden scale of knowledge?
For a claim to succeed against Patrice, the client would need to show she received the money and had this about Alice's breach.
What is knowledge (unconscionable knowledge)?
This case is the leading Australian authority confirming unconscionability as the test for knowing receipt.
What is Farah Constructions Pty Ltd v Say-Dee Pty Ltd?
Under the equitable wrongdoing view, this is the label for the type of liability knowing receipt is treated as, one where the defendant's own state of mind is what makes them liable.
What is fault-based liability?
If trust money has been spent with nothing left to show for it, this describes the property.
What is dissipation?
In this 2018 High Court case, Foresters was ordered to account for profits of $14,838,063 for knowingly assisting former employees to divert business connections from Lifeplan
What is Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd?
For a claim to succeed against Graham, the client would need to show Alice's own breach had this character, and that Graham knew of and helped with it.
What is a dishonest and fraudulent design (or breach)?
Even though this defendant is holding the claimant's trust property, a knowing receipt claim would still fail against them if they only ever held it in this limited capacity, such as a bank processing a transfer.
What is a ministerial capacity (as an agent or conduit, not beneficially)?
This is the general type of liability the unjust enrichment analysis treats knowing receipt as being, before any defence is even considered.
What is strict (or fault-free) liability?
This is what a claimant is left with if trust money can no longer be traced into any surviving asset, but the recipient still had the requisite knowledge of the breach.
What is a personal claim in knowing receipt for the value received, rather than a proprietary claim to specific property?
To succeed on the second limb of Barnes v Addy, a claimant must prove this character of conduct on the part of the fiduciary, together with the third party's participation with the requisite degree of dishonesty.
What is a dishonest and fraudulent design?
This is the main reason Alice's bankruptcy would make pursuing Patrice and Graham more important, not less.
What is the personal nature of their liability (independent of Alice's estate)?