is an

English trusts law English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...

case, concerning breach of trust and liability for

dishonest assistance Dishonest assistance, or knowing assistance, is a type of third party liability under English trust law. It is usually seen as one of two liabilities established in ''Barnes v Addy,'' the other one being knowing receipt. To be liable for dishonest a ...

Facts

Royal Brunei Airlines Royal Brunei Airlines Sdn Bhd (RB) ( ms, Penerbangan DiRaja Brunei, Jawi: ) is the national flag carrier airline of Brunei Darussalam, headquartered in the RB Campus in Bandar Seri Begawan. It is wholly owned by the Government of Brunei Da ...

appointed Borneo Leisure Travel Sdn Bhd to be its agent for booking passenger flights and cargo transport around

Sabah Sabah () is a States and federal territories of Malaysia, state of Malaysia located in northern Borneo, in the region of East Malaysia. Sabah borders the Malaysian state of Sarawak to the southwest and the North Kalimantan province of Indone ...

and

Sarawak Sarawak (; ) is a States and federal territories of Malaysia, state of Malaysia. The largest among the 13 states, with an area almost equal to that of Peninsular Malaysia, Sarawak is located in northwest Borneo Island, and is bordered by the M ...

. Mr Tan was Borneo Leisure Travel's managing director and main shareholder. It was receiving money for Royal Brunei, which was agreed to be held on trust in a separate account until passed over. But Borneo Leisure Travel, with Mr Tan's knowledge and assistance, paid money into its current account and used it for its own business. Borneo Leisure travel failed to pay on time, the contract was terminated, and it went insolvent. Royal Brunei claimed the money back from Mr Tan.See the headnote of the Appeal Cases report, at UKPC 4
[1995">995
UKPC 4
[19952 AC 378 The Judge held Mr Tan was liable as a constructive trustee to Royal Brunei. The Court of Appeal of Brunei Darussalam held that the company was not guilty of fraud or dishonesty, and so Mr Tan could not be either. The case was appealed to the Privy Council, where the Privy Council found in favour of the claimant, reversing the decision of the Court of Appeal.

Advice

Giving the advice of the Privy Council, Lord Nicholls held it was the dishonest assistant's state of mind which matters. Knowledge depends on a ‘gradually darkening spectrum’. Therefore, the test for being liable in assisting breach of trust must depend on dishonesty, which is objective. It is irrelevant what the primary trustee's state of mind is, if the assistant is himself dishonest. Lord Goff, Lord Ackner, Lord Steyn and

Sir John May Sir John Douglas May, PC (28 June 1923 – 15 January 1997) was a British Court of Appeal judge appointed by the British Government to investigate the miscarriages of justice related to the Maguire Seven and other miscarriages linked to IRA bomb ...

concurred.

Notes

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External links

Case at bailii.org
English trusts case law Judicial Committee of the Privy Council cases on appeal from Brunei 1995 in Brunei 1995 in case law Royal Brunei Airlines

Facts

Advice

See also

Notes

External links