“I remember on some occasions challenging Mr Pok about the quotes he had received which I thought were too expensive. Although he appeared somewhat annoyed by this he responded by simply crossing out the amount on the quote and entered a new lower figure, which he said the supplier would accept.”
"To make a defendant personally liable where he has received misapplied trust property and dealt with the property for his own benefit it is currently necessary to establish that there was: (1) property held on trust or subject to some other fiduciary duty; (2) misapplication of the property by the trustees or fiduciary in breach of trust or fiduciary duty; (3) receipt of the property or its traceable proceeds by the defendant; (4) a causal link between the defendant's receipt and the breach of trust or fiduciary duty; (5) a dealing with the property by the defendant for his own benefit, and not in his character as agent for another party; (6) knowledge by the defendant that the property has been transferred in breach of trust or breach of fiduciary duty, either at the time of receipt or at any other time prior to his dealing with the property for his own benefit." (1) property held on trust or subject to some other fiduciary duty; (2) misapplication of the property by the trustees or fiduciary in breach of trust or fiduciary duty; (3) receipt of the property or its traceable proceeds by the defendant; (4) a causal link between the defendant's receipt and the breach of trust or fiduciary duty; (5) a dealing with the property by the defendant for his own benefit, and not in his character as agent for another party; (6) knowledge by the defendant that the property has been transferred in breach of trust or breach of fiduciary duty, either at the time of receipt or at any other time prior to his dealing with the property for his own benefit."
“What the decision in Belmont Finance … shows is that in a ‘knowing receipt’ case it is only necessary to show that the defendant knew that the moneys paid to him were trust moneys and of circumstances which made the payment a misapplication of them. Unlike a ‘knowing assistance’ case it is not necessary, and never has been necessary, to show that the defendant was in any sense a participator in a fraud.”
‘Both parties accept that compound, as opposed to simple, interest is payable only if the council received the money under the void interest rate swaps agreement as fiduciary ...’
“The starting point must be the discussion in Robinson v. Fernsby[2003] EWCA Civ 1820 at paragraphs [77] to [93]. A court should think long and hard before making a material alteration to a judgment which has been circulated in draft and will only exceptionally make material alterations to a judgment so provided (see paragraph [96]). It was suggested that there should be ‘exceptional circumstances’ or ‘strong reasons’”
“Barry v Butlin (1838) II Moore 480 is a decision of the Privy Council on appeal from the Prerogative Court of Canterbury. As such it is binding on courts of first instance and, I would have thought, at least highly persuasive for the Court of Appeal, see Halsbury’s Laws of England 5th Ed. Vol.11 para 103 n.1. The advice was given by Baron Parke.”
“As a general rule the decisions of the Judicial Committee of the Privy Council are not theoretically binding on English Courts, but are treated as being of great weight and are commonly followed in similar cases.”
“Where, however, the Privy Council exercises jurisdiction as an English appellate court, e.g. in ecclesiastical or prize matters, its decisions are binding on courts of first instance.” the Prerogative Court of Canterbury. As such it is binding on courts of first instance and, I would have thought, at least highly persuasive for the Court of Appeal, see Halsbury’s Laws of England 5th Ed. Vol.11 para 103 n.1. The advice was given by Baron Parke.”
“The conclusions reached by Lai Kew Chai J. in Sumitomo Bank Ltd. v. Kartika RatnaThahir [1993] 1 S.L.R. 735 and the views expressed by Sir Peter Millett were influenced by the decision of the House of Lords in Phipps v Boardman …which demonstrates the strictness with which equity regards the conduct of a fiduciary and the extent to which equity is willing to impose a constructive trust on property obtained by a fiduciary by virtue of his office. In that case a solicitor acting for trustees rescued the interests of the trust in a private company by negotiating for a takeover bid in which he himself took an interest. He acted in good faith throughout and the information which the solicitor obtained about the company in the takeover bid could never have been used by the trustees. Nevertheless the solicitor was held to be a constructive trustee by a majority in the House of Lords because the solicitor obtained the information which satisfied him that the purchase of the shares in the takeover company would be a good investment and the opportunity of acquiring the shares as a result of acting for certain purposes on behalf of the trustees; see per Lord Cohen, at p. 103. If a fiduciary acting honestly and in good faith and making a profit which his principal could not make for himself becomes a constructive trustee of that profit then it seems to their Lordships that a fiduciary acting dishonestly and criminally who accepts a bribe and thereby causes loss and damage to his principal must also be a constructive trustee and must not be allowed by any means to make any profit from his wrongdoing.”
“Two objections have been raised to this analysis. First it is said that if the fiduciary is in equity a debtor to the person injured, he cannot also be a trustee of the bribe. But there is no reason why equity should not provide two remedies, so long as they do not result in double recovery. If the property representing the bribe exceeds the original bribe in value, the fiduciary cannot retain the benefit of the increase in value which he obtained solely as a result of his breach of duty. Secondly, it is said that if the false fiduciary holds property representing the bribe in trust for the person injured, and if the false fiduciary is or becomes insolvent, the unsecured creditors of the false fiduciary will be deprived of their right to share in the proceeds of that property. But the unsecured creditors cannot be in a better position than their debtor. The authorities show that property acquired by a trustee innocently but in breach of trust and the property from time to time representing the same belong in equity to the cestui que trust and not to the trustee personally whether he is solvent or insolvent. Property acquired by a trustee as a result of a criminal breach of trust and the property from time to time representing the same must also belong in equity to his cestui que trust and not to the trustee whether he is solvent or insolvent.”
“Applying these principles to the present case I have no hesitation in coming to the conclusion that the appellants hold the Lester & Harris shares as constructive trustees and are bound to account to the respondent”
“The decision of the Privy Council (in Attorney-General for Hong Kong v Reid) is regarded as black-letter law by Bowstead & Reynolds on Agency, para 6-082. It is also treated as representing the law by Lewin on Trusts, 17th ed (2000), para 20-34 and by Snell's Equity, 30th ed (2000), para 9-53. Goff & Jones, The Law of Restitution , 6th ed (2002), para 33-025, prefer Attorney-General for Hong Kong v Reid …but consider that Lister & Co v Stubbs … is a decision which is still technicallybinding.”
“Accordingly, if this case were not distinguishable from Lister & Co v Stubbs … , I would have applied Attorney-General for Hong Kong v Reid . There are powerful policy reasons for ensuring that a fiduciary does not retain gains acquired in violation of fiduciary duty, and I do not consider that it should make any difference whether the fiduciary is insolvent. There is no injustice to the creditors in their not sharing in an asset for which the fiduciary has not given value, and which the fiduciary should not have had.”
“This case is of importance because it disposes succinctly of the argument which appears in later cases and which was put forward by counsel in the present case that there is a distinction between a profit which a trustee takes out of a trust and a profit such as a bribe which a trustee receives from a third party. If in law a trustee, who in breach of trust invests trust moneys in his own name, holds the investment as trust property, it is difficult to see why a trustee who in breach of trust receives and invests a bribe in his own name does not hold those investments also as trust property.”
“It is submitted that in principle a claim should lie in such a case, consistently with the courts’ general desire to preserve the integrity of fiduciary relations.”
“Whatever may be the position in some criminal or other contexts ( see, for instance, R v Ghosh [1982] Q.B. 1053), in the context of the accessory liability principle acting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances. This is an objective standard. At first sight this may seem surprising. Honesty has a connotation of subjectivity, as distinct from the objectivity of negligence. Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated. Further, honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct. Carelessness is not dishonesty. Thus for the most part dishonesty is to be equated with conscious impropriety. However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances. The standard of what constitutes honest conduct is not subjective. Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual. If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour.”
“I do not think that it is fairly open to your Lordships to take this view of the law without departing from the principles laid down by the Privy Council in Royal Brunei … For the reasons given by my noble and learned friend, Lord Hutton, I consider that those principles require more than knowledge of the facts which make the conduct wrongful. They require a dishonest state of mind, that is to say, consciousness that one is transgressing ordinary standards of honest behaviour.”
“15. Their Lordships accept that there is an element of ambiguity in these remarks which may have encouraged a belief, expressed in some academic writing, that the Twinsectra case had departed from the law as previously understood and invited inquiry not merely into the defendant's mental state about the nature of the transaction in which he was participating but also into his views about generally acceptable standards of honesty. But they do not consider that this is what Lord Hutton meant. The reference to "what he knows would offend normally accepted standards of honest conduct" meant only that his knowledge of the transaction had to be such as to render his participation contrary to normally acceptable standards of honest conduct. It did not require that he should have had reflections about what those normally acceptable standards were. 16. Similarly in the speech of Lord Hoffmann, the statement (in para 20) that a dishonest state of mind meant "consciousness that one is transgressing ordinary standards of honest behaviour" was in their Lordships' view intended to require consciousness of those elements of the transaction which make participation transgress ordinary standards of honest behaviour. It did not also require him to have thought about what those standards were.”
“Hence it may now be said that the mental element for dishonest assistance is not self-conscious dishonesty of the kind described by Lord Lane CJ in Ghosh but objectivedishonesty of the kind described by Lord Nicholls in Royal Brunei and Lord Hoffman in (Twinsectra).”
“I find Arden LJ's comments persuasive, and I shall accordingly proceed on the basis that a person can be dishonest regardless of whether he appreciates that his conduct would be considered dishonest by ordinary honest people.”
“In Reid, the Privy Council reasoned that the fiduciary’s duty to account for the bribe means that the bribe ought to have been transferred to the principal as soon as it was received and, as equity considers as done that which ought to be done, it was therefore held on constructive trust for the principal. The Privy Council’s analysis in Reid necessarily involves a conclusion that the fiduciary’s duty to account is a duty to transfer the bribe to the principal in specie.”
“As the constructive trust arises out of the fiduciary’s obligation to transfer the bribe or secret commission to the principal in specie, the principal will need to follow or trace the bribe or secret commission in order to identify its current location before claiming a constructive trust over it or its substitute.”