Third-Party Liability for Breach of Fiduciary Duty in Malaysia

[2020] 1 Malayan Law Journal cxxii

20 Pages Posted: 9 Feb 2021

See all articles by Ying Khai Liew

Ying Khai Liew

University of Melbourne - Melbourne Law School

Date Written: 2020

Abstract

Commonwealth jurisdictions face a unique risk when English authorities are misunderstood or misapplied by local courts: erroneous legal rules can quickly become entrenched in the local laws, which are difficult to undo. The Malaysian jurisprudence in relation to the liability of third parties for breach of fiduciary duty provides clear examples this sort of risk. This paper examines in detail these third-party claims — tracing-related claims, recipient liability, and assistant liability — in the light of English law, and explains how they contain errors which are (or threaten to be) entrenched irreversibly within the local jurisprudence. It exhorts Malaysian courts to revert to orthodox principles, and more generally suggests that Commonwealth jurisdictions must independently engage with the substantive reasons of various legal rules, instead of adopting legal rules simply on the basis that those rules reflect what they understand to be English law.

Keywords: Malaysia; trusts; tracing; knowing receipt; dishonest assistance

JEL Classification: K1, K10, K11, K19

Suggested Citation

Liew, Ying Khai, Third-Party Liability for Breach of Fiduciary Duty in Malaysia (2020). [2020] 1 Malayan Law Journal cxxii, Available at SSRN: https://ssrn.com/abstract=3741155 or http://dx.doi.org/10.2139/ssrn.3741155

Ying Khai Liew (Contact Author)

University of Melbourne - Melbourne Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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