Remedies for Knowing Receipt

Charles Mitchell and Stephen Watterson, 'Remedies for Knowing Receipt', Chap 5 in Charles Mitchell (ed), Constructive and Resulting Trusts (Oxford, Hart Publishing, 2010)

36 Pages Posted: 11 Oct 2016

See all articles by Charles Mitchell

Charles Mitchell

University College London - Faculty of Laws

Stephen Watterson

University of Cambridge - Faculty of Law

Date Written: January 1, 2010

Abstract

The paper argues that liability for knowing receipt of misdirected trust funds is a wrong-based, fault-based, compensatory liability. When a recipient knowingly receives trust funds to which he is not entitled, the law responds to his wrongful conduct by subjecting him to a duty analogous to that owed by an express trustee, to hold and apply the misdirected funds solely for the benefit of the trust beneficiaries. A knowing recipient who applies the funds in any other way incurs a liability that is identical with an express trustee's liability to reconstitute a trust fund following an unauthorised payment out of the fund. For these reasons, knowing recipients are commonly said to incur a 'personal liability to account as constructive trustees'. Their fault-based, compensatory liability is distinguished from the fault-based, compensatory liability incurred by dishonest assistants in a breach of trust, and also from the strict, restitutionary liability incurred by recipients of an unjust enrichment.

Keywords: Trust law, breach of trust, constructive trust, constructive trustee, knowing receipt, dishonest assistance, unjust enrichment

Suggested Citation

Mitchell, Charles and Watterson, Stephen, Remedies for Knowing Receipt (January 1, 2010). Charles Mitchell and Stephen Watterson, 'Remedies for Knowing Receipt', Chap 5 in Charles Mitchell (ed), Constructive and Resulting Trusts (Oxford, Hart Publishing, 2010), Available at SSRN: https://ssrn.com/abstract=2848282

Charles Mitchell (Contact Author)

University College London - Faculty of Laws ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Stephen Watterson

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

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