STRANGERS

Accessory Liability

This question requires the discussion of Accessory liability and according to

Peter Gibson in order to be classified as an accessory four requirements need
to be fulfilled. The concept of accessory liability is explained in the case of
Baden who outlines a set of requirements that should be met. The first
requirement for holding a stranger accountable under accessory liability for a
breach of trust is the presence of a pre-existing trust. Nonetheless, it is
dispensable for the accessory to possess knowledge regarding the trust's
existence. The rationale behind this is that the stranger must be accountable
for violating the trust through accessory liability (Brown Clowes v Euro Trust).
The trust in question could potentially take the form of an express trust, as
was seen in the legal matter of Twinsectra Ltd. versus Yardley, or alternatively,
it could manifest as a resulting trust, as was demonstrated in the case of
Competitive Insurance Co. versus Davies Investments. Furthermore, it could
potentially be classified as a constructive trust, as exemplified in the legal
precedent of Competitive Insurance Co. versus Davies Investments.
According to the legal precedent set forth in Brown v Bennett, it is necessary
for an accessory to have committed a breach of trust that caused harm to the
property in order for them to be held accountable for the damages. In the event
that such a breach did not occur, the accessory cannot be deemed responsible
for any resulting harm. The ruling in the legal matter of Wetherspoon plc v
Vanden Berg and Co ltd established that accessory liability can be established
without the presence of a trust property. Nonetheless, liability shall not be
imposed for a breach in cases where there exists a mere fiduciary duty. As per
his statement, the sole correlation that can be established between accessory
liability and a trust is the commonality of providing aid to an individual who is
functioning as a fiduciary. The perspective of Mikihayluk was adjudged to be
accurate in the legal matter of Novoship Ltd. versus Mikihayluk.
The third criterion necessitates the involvement of assistance in the breach of
trust. The aforementioned statement posits that an individual who is not
known to the parties involved in a contractual agreement can solely be deemed
responsible for a violation of the agreement if they have played a role in the
occurrence of the violation or if they have influenced the occurrence of the
violation, as established in the legal case of Eaves v Hickson. As per the ruling
in Royal Brunei versus Tan, the term "assistance" encompasses scenarios
wherein the trustee misuses the trust with the aid of a third party. The third
criterion was not satisfied in the legal matter of Brinks Ltd. versus Abu Saleh.
This was due to the assertion made by Romer Justice, which stipulated that
the individual in question must have been an accomplice to the breach and
must have undertaken specific actions that unequivocally demonstrate their
assistance to the perpetrator, in order for them to be held accountable.
Otherwise, they would not be held responsible for the breach. Contrary to the
statement made, the situation was different.
The ultimate and indispensable requirement is the lack of honesty exhibited by
the candidate. Historically, a lesser degree of negligence was deemed adequate
to fulfil the prerequisites for establishing accessory liability. Equitable liability
is a type of liability that is based on fault. The case of Agip Ltd. versus Jackson
established that a higher level of dishonesty must be present in order to
establish accessory liability. This precedent was subsequently applied in the
Lipkin Gorman and Polley Peek International v Nadir case. In the case of Royal
Brunei Airlines versus Tan, it was determined by a separate court that the
liability should be determined based on the assistant's dishonesty.
The court ruling in the case of Twinsectra versus Yardley stipulated that a
combination test should be employed to ascertain liability, instead of solely
relying on the criterion of dishonesty, owing to the ongoing discourse
surrounding the degree of liability. The majority of individuals arrived at a
decision, prompting Lord Millet to express a dissenting opinion advocating for
the implementation of an objective test. On the other hand, Lord Hutton's
judgement, which reflected the majority decision, posited that an individual's
dishonesty should be evaluated based on the standards of a reasonable person.
Lord Hoffman did not agree with the House of Lords ruling to which said to
incorporate a subjective standard in the case of Barlow Clowes International
versus Yardley. The speaker asserted that the defendant's level of knowledge
ought to align with the principles of ethical behaviour in order for their
involvement to be deemed appropriate. As a consequence of this occurrence,
the ruling of the House of Lords was reversed.
The court of appeal in the matter of Abou Ramah versus Abacha held that the
standard of proof for dishonesty should be based on the objective test.
Nonetheless, the court expressed that a marginal degree of the subjective
assessment ought to persist. This implies that Lord Hoffman's ruling did not
deviate entirely from the precedent established in the Yardley case. The
appellant's legal representative argued that the test lacked support from any
authoritative source, a contention that was upheld by the court, leading to the
reversal of the trial judge's decision. According to Morritt LJ, the remarks
expressed by the trial judges were misleading and therefore, a standard of
integrity should be implemented. As per his statement, the perceived
consensus regarding the elevated level of ethical conduct among individuals
holds no significance.
The court of appeal in the matter of Starglade Properties Ltd. versus Roland
Nash applied a uniform standard of integrity, determined through an objective
assessment by the court. The standard pertains to the notion of fraudulent
facilitation, as it was implemented within a commercial context. The court
opined that the assessment of an individual's behaviour in accordance with
their subjective understanding does not hinge on the presence of dishonesty.
Rather, the pertinent standard to be employed is that of honest behaviour.
According to Morritt LJ, intentionally transferring assets from a company that
owes debts in order to avoid paying creditors is not in line with the customary
principles of fair business practices and cannot be used to defeat the legitimate
claim of the creditor. This assertion was purportedly made with the intention of
invalidating the rightful demand of the lender. Levesen LJ expressed agreement
with Morritt's evaluation, however, he proceeded to suggest that the issue of
deceitfulness ought to be re-examined by the judicial system at a later time.
The primary ruling on the subject of dishonesty was delivered by Anthony
Morritt, who conducted a comprehensive examination of all preceding
judgements that carried weight on the matter. The methodology employed
involved a sequential analysis of the occurrences. The individual in question
formulated their own set of four fundamental concepts through a process of
consulting various sources of information. According to the speaker, it is the
court's duty to autonomously establish a solitary, unbiased criterion of
integrity, which is subsequently employed to evaluate an individual with the
requisite expertise. The author's second theoretical proposition posits that the
standard for evaluating conduct ought to be based on the prevailing level of
ethical conduct within a given society. The speaker proceeded to assert that the
existence of a particular ideology advocating for an exceedingly elevated
standard of ethical conduct is inconsequential. The speaker concluded that the
courts shall possess the authority to determine the suitable legal criterion to be
employed, contingent upon the unique circumstances of each case.
The individual who has received fraudulent aid as a result of a violation of
fiduciary responsibility towards another party is accountable for any resulting
harm. The court was granted access to this remedy in the matter of Royal
Brunei Airlines versus Tan. In the event that a defendant is convicted of
receiving fraudulent aid, the court possesses the power to mandate that the
defendant relinquish any gains obtained as a consequence of the offence. The
exercise of such power was evidenced in the legal dispute between Novoship
Ltd. and Mikihayulk. It is conceivable that any bribes received by a fiduciary
while acting in bad faith could be incorporated into their profits. If third parties
are discovered to have provided fraudulent assistance and violated their
fiduciary obligation, they will solely be responsible to the recipient for gains
that arose from their deceitful behaviour. The principles of causation under
common law will be followed in such circumstances.

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