With apologies to Jacobellis v Ohio (1964) 378 US 184 at 197 for purloining my title, I am to address:
- proprietary remedies for breach of fiduciary duty, specifically constructive trusts and resulting trusts; and
- third party liability for breaches of trust or fiduciary duty, specifically dishonest assistance and knowing receipt.
The former could occupy a seminar series all on its own. I focus instead on the viability of each resulting and constructive trusts in a commercial context. By way of ‘theme’, I query if equitable principles should, contrary to an objective of commercial certainty, allow proprietary relief prejudicing third parties or upsetting insolvency priorities.
I thank, in absentia, my clerk, Louis Norton, without whose diligence and industry in preparing these comments I should have remarkably little to say. And then, with respect, I have remarkably little to say that is not already explored in Peter Blanchard’s Civil Remedies in New Zealand, or Andrew Butler’s Equity and Trusts in New Zealand. I offer no particular original insight.
Proprietary remedies for breach of fiduciary duty
Just to remind ourselves, some context.
A constructive trust attaches to specific property not subject to either express or a resulting trusts; instead, held in circumstances it would be inequitable to allow the holder to assert full beneficial ownership to the property.
Constructive trusts generally are said to arise by operation of law. They appear in two forms: the institutional constructive trust and the remedial constructive trust. The former is a trust arising upon the happening of an event that brings it into being and is simply recognised by us in a declaratory way. The latter is brought into existence by our order and would not otherwise have existed. The label “constructive trust” also is sometimes used in the context of third-party liability, which is apt to cause conceptual confusion. I try to avoid that usage in the second part of my comments, on third-party liability.
So, to turn to resulting trusts.
Proprietary remedies grant to, or recognise in, a plaintiff an interest in an identifiable asset. The law’s commitment to protecting property rights enables a plaintiff to recover the asset or to be awarded a remedy for the defendant’s interference with it. These remedies lie almost exclusively in the realm of equity. But proprietary relief has attendant problems in that the rights of principals may be elevated over those of other creditors, sometimes unjustifiably.
The law relating to resulting trusts has had to contend with those problems. The leading decision is Westdeutsche Landesbank, concerning a plaintiff bank attempting to convert a claim for money had and received into one of resulting trust. There, the House of Lords held the use of resulting trusts should be circumscribed to prevent the prejudicial effects the award of a proprietary remedy might have on innocent third parties:
The law of resulting trusts would confer on the plaintiff a right to recover property from, or at the expense of, those who have not been unjustly enriched at his expense at all, e.g. the lender whose debt is secured by a floating charge and all other third parties who have purchased an equitable interest only, albeit in all innocence and for value.
Lord Browne-Wilkinson referred to past judicial warnings “against the wholesale importation into commercial law of equitable principles inconsistent with the certainty and speed which are essential for the orderly conduct of business affairs”. The bank’s arguments in favour of converting the action into one of resulting trust, if correct, would introduce “[a] new area of unmanageable risk … into commercial dealings.” His Lordship continued:
If the due application of equitable principles forced a conclusion leading to these results, your Lordships would be presented with a formidable task in reconciling legal principle with commercial common sense. But in my judgment no such conflict occurs. The resulting trust for which the bank contends is inconsistent not only with the law as it stands but with any principled development of it.
His Lordship’s reservations expressly were couched in terms of the commercial uncertainty he apprehended would arise should the bank be allowed to avail itself of proprietary relief in the form of a resulting trust:
I do not think it right to make an unprincipled alteration to the law of property (i.e. the law of trusts) so as to produce in the law of unjust enrichment the injustices to third parties which I have mentioned and the consequent commercial uncertainty which any extension of proprietary interests in personal property is bound to produce.
The authors of Lewin on Trusts characterise the decision as a rejection of ‘any attempt to use a liberalised theory of resulting trusts to provide a proprietary remedy for unjust enrichment”.
—remedial constructive trusts
The law relating to remedial constructive trusts further illustrates the dilemma. Equitable property rights commonly are vindicated through the device of constructive trust. Through that device, equity recognises or declares the plaintiff the beneficial owner of the asset and the defendant as holding the asset on trust, as though it were held on an express trust.
In the specific case of the “remedial constructive trust”, the court imposes a trust over assets as a remedy for the plaintiff’s otherwise personal claim against the defendant. Such trusts are imposed in circumstances where there are “assets in the defendant’s hands in respect of which the Court considers it appropriate to impress a trust in favour of the plaintiffs”.
The authorities are “clear” the remedial constructive trust is constrained by considerations of third parties and statutory insolvency regimes. Proprietary remedies necessarily trench on the rights of third parties, particularly the defendant’s other secured creditors. Imposition of a remedial constructive trust amounts to the court “expropriating [the other creditors’] rights away from them in favour of the plaintiff”.
Put differently, if an insolvent company or bankrupt is deemed to hold property on trust for someone else, that property cannot form part of the assets available to the company or individual’s creditors — the claimant has “a claim to the money rather, rather than sharing pro rata with other creditors or falling further behind the queue”.
Since a remedial constructive trust often will disentitle third parties, the state of the conscience of those third parties will be a principal factor. For a remedial constructive trust properly to be imposed, there need be some element affecting the conscience of the secured creditor(s) “to the extent that they should be deprived … of their contractual rights to exercise their security”. Care must be taken to assess if there is a sufficient element so affecting creditors’ conscience their proprietary interest should yield to the plaintiff’s.
The fact of a defendant’s insolvency necessarily constrains the extent to which a court may grant the plaintiff proprietary relief. An insolvent defendant’s assets will be disposed of according to the applicable statutory regime. Imposition of a remedial constructive trust effectively allows the plaintiff to stand outside the statutory regime and assert property rights in assets held by the defendant.
Where a remedial constructive trust is imposed before insolvency, the insolvency regime will respect the property rights vested in the plaintiff in the same way as other pre-insolvency rights. But where a defendant already is insolvent at the time of trial, the question arises as to the extent to which the statutory order of distribution constrains the court’s ability to impose a remedy upsetting that order.
The policy goals underwriting the particular statutory regime will tend to inform the assessment whether the Court, in a given case, may award proprietary relief. For example, in Polly Peck, the Court of Appeal of England and Wales held the legislative structure and effect of the relevant administration regime (which imposed a moratorium on all claims against the company or assets in its possession) was to prevent courts from varying any of the rights to insolvent companies’ assets by way of remedial constructive trust. The administration regime involved in that case was “exceptional” in the sense Parliament had clearly intended it to foreclose all claims against failing companies. By extension, it clearly intended to preclude imposition of any remedial constructive trust in respect of such companies.
Our own insolvency regimes do not generally or per se prevent a court from imposing a remedial constructive trust, but we “must be very careful not to vary settled rules on too loose a basis”. In exercising our remedial discretion, the integrity of the overall insolvency regime needs be taken into account. “[C]ourts pay close attention to the relevance of the insolvency regime and the propriety of recognising proprietary rights in new contexts”. Nonetheless, it is doubtful if there is any principled basis for imposing a remedial constructive trust post-insolvency. That is because, in legislating for a particular order of distribution, “Parliament has effectively suspended the common law rights of creditors … [and] at a policy level, the regime depends on its mandatory nature to effect an efficient distribution”. As imposing a remedial constructive trust disrupts that prescribed distribution, it is difficult to see how the court’s jurisdiction to do so is sustainable.
To return to Westdeutsche Landesbank, it is notable — in rejecting wholesale the application of the resulting trust to award the plaintiff bank proprietary relief — Lord Browne-Wilkinson tentatively countenanced the use of the remedial constructive trust. He observed:
Since [the remedial constructive trust] can be tailored to the circumstances of the particular case, innocent third parties would not be prejudiced and restitutionary defences, such as change of position, are capable of being given effect.
But there also is room for discomfort over remedial constructive trusts’ application in such circumstances. Remedial constructive trusts create proprietary interests that may affect third parties’ rights, on the simple predicate “the defendant’s behaviour was grave enough to give rise to that remedy”. It is problematic to try to get around that issue by treating the proprietary interest arising from a remedial constructive trust as “defeasible … if it conflicts with a third party’s interest”. That would seem to contradict the nature of a proprietary interest inherently as one standing against the rest of the world.
Clarity of expression also would help. In Paragon Finance, Millett LJ in the Court of Appeal of England and Wales said:
[Remedial constructive trusts arise] when the defendant is implicated in a fraud. Equity has always given relief against fraud by making any person sufficiently implicated in the fraud accountable in equity. In such a case he is traditionally though I think unfortunately described as a constructive trustee and said to be ‘liable to account as a constructive trustee’. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. He never assumes the position of a trustee, and if he receives the trust property at all it is adversely to the plaintiff by an unlawful transaction which is impugned by the plaintiff. In such a case the expressions ‘constructive trust’ and ‘constructive trustee’ are misleading, for there is no trust and usually no possibility of a proprietary remedy; they are ‘nothing more than a formula for equitable relief’.
Thus it is said the remedial constructive trust may be viewed less as a “trust” than a “tool for the invocation of a range of remedies where there has been a breach of another equitable obligation”.
The better view is the term “remedial constructive trust” is used in distinct, and possibly confusing, senses. Those situations in which equity simply compels a defendant to pay compensation for wrongdoing (that is, the kind of situation contemplated in Paragon Finance) are often referred to in the literature as giving rise to “constructive trusts of the second kind”. The authors of Lewin on Trusts observe:
… description of constructive trusts of the second kind as being remedial constructive trusts, though accurate and sometimes used in the recent past, tends to create confusion between constructive trusts … recognised in English law, and what we call purely remedial constructive trusts which are not (presently) recognised in English law.
So, the trust Lord Browne-Wilkinson contemplated in Westdeutsche Landesbank was “purely” a remedial constructive trust, while the trust contemplated in Paragon Finance was a “constructive trust of the second kind”.
It is the purely remedial constructive trust that is of concern here. Trusts of that nature have been imposed in New Zealand. Commonwealth Reserves I, LC v Chodar concerned a remedial constructive trust being imposed over assets transferred to (knowing) third parties, with the intention of defeating the personal claims of victims of the transferor’s fraud. The remedial constructive trust was thought a superior remedy to that available under the applicable legislation. The Court said the remedy was available as a discretionary response to unjust enrichment and unconscionability. Inadequacy of alternative relief was an important consideration.
I turn to my second topic, third-party liability for breach of trust or fiduciary duty.
Third party liability for breach of trust/fiduciary duty
A stranger to a trust may sometimes be liable to beneficiaries for loss suffered by the trust. A third party who assists in the breach of fiduciary obligations may be liable for rendering dishonest assistance. Further, a third party may be liable for receiving property the subject matter of fiduciary obligations: this is knowing receipt.
Third-party liability has a personal, rather than proprietary, character. The stranger may be liable not only for any trust property in his or her hands, but for any loss to trust property whether or not still under the stranger’s possession or control.
These heads of liability can be traced to the dictum of Lord Selborne LC in Barnes v Addy:
Now in this case we have to deal with certain persons who are trustees, and with certain other persons who are not trustees. That is a distinction to be borne in mind throughout the case. Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may, no doubt, be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps, of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.
For liability to attach to a third party under these heads, there need to have been a breach of trust or of some other fiduciary obligation. In Equiticorp, Smellie J explained:
In the case of claims to enforce a constructive trust on the basis of knowing receipt there are three broad requirements. First, the plaintiffs must show a disposal of their money in breach of fiduciary duty or on some other unauthorised basis. Secondly, the beneficial receipt by the Crown of that money. Thirdly, knowledge by the Crown that the payment over to it was in consequence of a breach of a fiduciary duty or other unauthorised act. In respect of the dishonest assistance claims (as the knowing assistance claims are more properly described) the requirements are first (as in the recipient causes of action) that the plaintiffs have lost their money as a result of breaches of fiduciary duty or unauthorised acts. Secondly, that the Crown participated, by helping or assisting, in those breaches. Thirdly, dishonesty (objectively assessed) on the part of the Crown.
The more vexed question is the requisite state of mind for liability to attach to a stranger under either head. In Baden, Gibson J formulated a five-pronged scale of types of relevant knowledge in knowing receipt and dishonest assistance cases, being:
- actual knowledge;
- wilfully shutting one’s eyes to the obvious;
- wilfully and recklessly failing to make such enquiries as an honest and reasonable person would make;
- knowledge of circumstances which would indicate the facts to an honest and reasonable person; and
- knowledge of circumstances which would put an honest and reasonable person on inquiry.
This scale of knowledge since has fallen out of favour in the United Kingdom, but remnants remain in New Zealand. The jurisdiction may be moving back to wholesale embrace of the five categories of knowledge, at least in respect of knowing receipt.
Care must be taken to separate analytically dishonest assistance and knowing receipt. Liability in the former is fault-based; in the latter, liability has a restitutionary character. That distinction is justified in that a receiver is simply a recipient (either passive or active) of trust property and should be able to restore it to the beneficiaries. Someone who has dishonestly assisted by breach of fiduciary obligations, meanwhile, will not have had the benefit of the trust property and liability should therefore attach only where that person’s conscience has been tainted. This conceptual distinction, in turn, influences the remedial response to each head of liability.
I appreciate this seminar explicitly is focussed on the present state of the law. But it is an open question if dishonest assistance and knowing receipt should continue to be founded in the equitable jurisdiction. Dishonest assistance, given its similarity to liability in contract for procuring breach, may profitably be “assimilated into a general principle of participatory liability” as part of a unified law of obligations. Knowing receipt, meanwhile, conceptually could be analysed as an aspect of the law of restitution — an instance of the principle of unjust enrichment: “to correct normatively defective transfers of value, usually by restoring the parties to their pre-transfer positions”. Developments in third-party liability in equity usefully are viewed within the wider context of the debate as to the appropriate role of equity in the commercial context. With few exceptions, the developments in this branch of equity have arisen in a commercial context. In contrast, our development of the law relating to constructive trusts generally took place in resolution of property disputes between de facto couples.
I turn to discuss specific points going to each of the two heads of third-party liability.
Dishonest assistance (or “accessory liability”) may be regarded as a “settled” branch of law in New Zealand, notwithstanding some theoretical questions remain unresolved, as I have said.
The ingredients of a claim in dishonest assistance are:
- a breach of trust or fiduciary obligation;
- assistance by the defendant in that breach;
- the defendant was dishonest in rendering assistance; and
- loss is suffered by the plaintiff in consequence of the dishonest assistance.
The leading authority on dishonest assistance in the United Kingdom is Royal Brunei Airlines. There, Lord Nicholls held different considerations apply to knowing receipt as compared to dishonest assistance; the former being grounded in restitution and the latter being fault-based. Dishonesty was the “touchstone” of liability for accessory liability. By “dishonesty” is meant the objective standard of “simply not acting as an honest person would in the circumstances”. In Twinsectra, the House of Lords later appeared to suggest the requisite statement of mind for qualifying dishonesty was one in which the defendant also was subjectively aware of the standards by which s/he was acting dishonestly. That conceptual confusion was put to rest by the Privy Council in Barlow Clowes. There, the Court said for liability to attach the defendant need only have:
… knowledge of the transaction … such as to render his participation contrary to normally acceptable standards of honest conduct. [The test does] not require that he should have had reflections about what those normally acceptable standards were.
Our Supreme Court has made similar remarks on dishonest assistance. In Westpac New Zealand v MAP & Associates Ltd, the Court accepted the Barlow Clowes position, but added a dishonest state of mind could also consist in “a sufficiently strong suspicion of a breach of trust, coupled with a deliberate decision not to make inquiry lest the inquiry result in actual knowledge … That state of mind … is usually referred to as wilful blindness”. The Court of Appeal applied this test in Hansard v Hansard.
More recently, in Sandman v McKay, the Supreme Court confirmed we have followed the approach of the Privy Council in Royal Brunei and Barlow Clowes. The Court confirmed the test for dishonesty is objective: if a defendant’s mental state would be described as dishonest by ordinary standards, it is irrelevant s/he did not consider their conduct to be dishonest or did not appreciate it would be regard as dishonest by ordinary standards. Wilful blindness, equating in equity with actual knowledge, also suffices.
A useful summary of the position is to be found in Abou-Rahmah v Abacha:
A dishonest state of mind on the part of the person assisting is required in the sense that that person’s knowledge of the relevant transaction had to be such as to render his participation contrary to normally acceptable standards of honest conduct.
Such a state of mind may involve knowledge that the transaction is one in which he cannot honestly participate, (e.g. a misappropriation of other people’s money), or it may involve suspicions combined with a conscious decision not to make enquiries which might result in knowledge.
It is not necessary for the [claimant] to show that the person assisting knew of the existence of a trust or fiduciary relationship … and/or that the transfer of the [claimant’s money] … involved a breach of that trust or fiduciary relationship.
Following Royal Brunei, factors to which an honest person would have regard in acting include:
- the nature and importance of the proposed transaction;
- the nature and importance of the defendant’s role;
- the ordinary course of business;
- the degree of doubt;
- the practicality of the fiduciary or third party proceeding otherwise; and
- the seriousness of the adverse consequences to the beneficiaries.
The standard otherwise is elusive of precise definition but is said to be “one of those concepts that, although impossible to define precisely in advance, is easily identified when you see it”. At bottom, the stranger to the trust “must not be guilty of commercially unacceptable conduct in the particular context involved”.
What of liability in negligence (broadly, categories (d) and (e) of the Baden scale — see  above)? In Royal Brunei, Lord Nicholls stated as a “general proposition … beneficiaries cannot reasonably expect that all the world dealing with their trustees should owe them a duty to take care lest the trustees are behaving dishonestly”. Here, meanwhile, Smellie J said:
There is no longer room for argument. Dishonesty, assessed objectively, ‘is a necessary ingredient for accessory liability’. In practical terms, although [Royal Brunei] strongly discourages further reference to the Baden scale, it means that only if the plaintiffs establish Baden categories [(a), (b), or (c)] will their dishonest accessory causes of action succeed.
We consistently have applied the Royal Brunei approach to dishonest assistance, effectively excluding the negligence categories of the Baden scale. That has led to “increased difficulty for plaintiffs in establishing liability”. The remedial response to dishonest assistance is equitable compensation for loss flowing from the trustees’ breach of trust. Foreseeability is not a requirement.
Our position on knowing receipt is less certain than that on dishonest assistance. The receipt cases have been the subject of considerable judicial and academic discussion, centred around the application of the Baden knowledge scale.
The weight of authority in the United Kingdom is actual knowledge within one of categories (a), (b) or (c) of the Baden knowledge scale is required for liability for attach in knowing receipt cases. Mere carelessness (negligence) alone (that is, Baden categories (d) and (e)), is not enough. Canadian Supreme Court authority is to similar effect.
We are more equivocal. We previously unanimously concluded each of the five Baden knowledge categories is sufficient to found liability. In Westpac Banking Corp v Savin, the Court of Appeal countenanced the full range of knowledge categories in founding liability for knowing receipt. Cases following Westpac indicated possibly a strict liability approach may be taken to the analysis.
Edmund Thomas J, however, later rejected such an approach in favour of a discretionary inquiry, by which the Court would balance the equities of the recipient and of the innocent beneficiary before imposing liability. Subsequent treatment of Thomas J’s treatment of knowing receipt has been mixed. Wylie J, in Equiticorp Industries Group Ltd v Hawkins, preferred an analysis that inspected the conscience of the recipient. Other cases, meanwhile, have shown more acceptance of Thomas J’s restitutionary analysis.
The debate between “conscience” (or equitable wrongdoing) and “restitutionary” (or unjust enrichment) approaches to knowing receipt can also be seen in the United Kingdom, in the contrasting decisions of the House of Lords (in Westdeutsche Landesbank) and the Privy Council (in Royal Brunei). While the position remains open here, we may be heading back to the position expressed by the Court of Appeal in Westpac Banking Corp v Savin, where knowing receipt may arise in a number of ways, including by simple carelessness. Royal Brunei made explicit the restitutionary basis of knowing receipt, the logical corollary of which is acceptance of all five of the Baden knowledge categories (and, further, probably requiring a strict liability approach). But the High Court of Australia, in obiter comment in Farah Constructions, has rejected the view recipient liability is restitutionary or thus strict.
Smellie J’s Equiticorp decision best captures our present position, being unjust enrichment is the foundation for recipient liability and its remedy consequently has a restitutionary character. In so holding, however, the Judge declined to take a conclusive position on whether Baden knowledge categories (d) and (e) could ground liability in knowing receipt. He did so expressly in view of Lord Browne-Wilkinson’s speech in Westdeutsche Landesbank, which may be characterised as an attempt to limit general equitable principles in commercial dealings. That speech relevantly included the following passage:
My Lords, wise judges have often warned against the wholesale importation into commercial law of equitable principles inconsistent with certainty and speed which are essential requirements for the orderly conduct of business affairs.
The countervailing view is our knowing receipt cases:
… are presently more coherent with an equitable wrongdoing analysis, although dicta from eminent equity Law Lords hint strongly that the liability is likely to be reinterpreted as part of the law of unjust enrichment as soon as an opportunity presents itself.
Should recipient liability definitively be cast as a form of unjust enrichment, the receiver’s knowledge likely would become irrelevant. Whichever view is to be preferred, the short point is lingering uncertainty about our position on knowing receipt and if the full scale of Baden knowledge categories applies.
There similarly is some uncertainty as to the appropriate remedial response to knowing receipt in New Zealand. If the remedy is restitutionary, not compensatory, mitigation of loss is not a relevant consideration.
The place of equity in commerce generally
The proper extent and role of equitable and fiduciary doctrines in commercial settings is a long-standing and fertile area of debate. Equitable principles may be seen as existing in tension with commercial desiderata, including certainty of expectations, contractual integrity and orthodox insolvency priorities. That tension led Lord Millett to observe, extrajudicially:
It is of the first importance not to impose fiduciary obligations on parties to a purely commercial relationship who deal with each other at arms’ length and can be expected to look after their own interests.
Consequently, in England and Wales, there may be thought a general principle courts should be “very slow to introduce uncertainty into commercial transactions by over-ready use of equitable concepts such as fiduciary obligations and equitable estoppel”.
We judges are “alive to the need to apply equitable principles and rules with care when the setting is commercial”:
Expectations around the extent of fiduciary obligations owed, the duty of care expected, the reasonableness of accountability for breach of trust and the awarding of equitable relief where third party interests stand to be compromised must all be considered if equity is to remain true to its informing principles of justice, unconscionability tempering the rigour of the law.
But that does not mean equity should entirely be relegated to the margins of commercial dealings:
The proper role of equity in commercial transactions is a topical question. Increasingly plaintiffs have recourse to equity for an effective remedy when the person in default, typically a company, is insolvent. Plaintiffs seek to obtain to relief from others who were involved in the transaction, such as directors of the company or its bankers.
… one should not extrapolate too much from the cases. Well-advised commercial people will be well aware (or ought to be) of the potential impact which equitable rights and interests can have on their commercial activities and the structuring of their transactions. In that regard it is important to emphasise that often commercial parties will have made a deliberate decision to choose the trust form over other available transaction structures; and part of the reasoning behind that choice is likely to be the application of well-known trusts law principles …
From those perspectives, there is significant artificiality in purporting to distinguish between obligations of trust in commercial contexts and non-commercial settings. The mere fact a trust has a commercial context does not mean it “should be treated, necessarily, as a separate subset of trusts where obligations are somehow not real trust obligations.” In a conflict of claimed proprietary rights, arguments for certainty often exist on both sides.
6 July 2021
 G Fuller Laws of New Zealand Trusts: Constructive Trusts at .
 Jessica Palmer “Constructive Trusts” in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 335 at [13.1.1]–[13.1.2], citing Fortex Group Ltd (in rec & liq) v Macintosh  3 NZLR 171 (CA) at 172–173.
 Tim Clarke “Knowing Receipt and Accessory Liability” in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 575 at [18.1.1].
 Charles Rickett and Jessica Palmer “Proprietary Remedies” in Peter Blanchard (ed) Civil Remedies in New Zealand (2nd ed, Thomson Reuters, Wellington, 2011) 423 at [10.1].
 Westdeutsche Landesbank Girozentrale v Islington London Borough Council  AC 669 (HL) at 716 per Lord Browne-Wilkinson.
 At 704–705.
 At 705.
 At 709.
 Lynton Tucker, Nicholas Le Poidevin and James Brightwell (eds) Lewin on Trusts (20th ed, Sweet & Maxwell, London, 2018) vol 1 at [8-025].
 Foskett v McKeown  1 AC 102 (HL) at 108–109.
 Fortex Group Ltd (in rec & liq) v MacIntosh  3 NZLR 171 (CA) at 173.
 Palmer and Rickett, above n 5, at [10.2.5].
 Jamie Glister and James Lee (eds) Hanbury and Martin: Modern Equity (21st ed, Sweet & Maxwell, London, 2018) at [3-004].
 Fortex Group Ltd (in rec & liq) v MacIntosh, above n 12, at 178–179.
 For natural persons, the Insolvency Act 2006. For companies, the Companies Act 1993.
 Palmer and Rickett, above n 5, at [10.2.5].
 At [10.2.5].
 Re Polly Peck International Plc (in administration) (No 2); Marangos Hotel Co Ltd v Stone  3 All ER 812.
 Palmer and Rickett, above n 5, at [10.2.5].
 Fortex Group Ltd (in rec & liq) v MacIntosh, above n 12, at 178 per Tipping J.
 Glister and Lee, above n 14, at [3-004].
 Palmer and Rickett, above n 5, at [10.2.5].
 Westdeutsche Landesbank Girozentrale v Islington London Borough Council, above n 6, 716.
 Butler, above n 3, at [39.10.3].
 At [39.10.3].
 Paragon Finance plc v D B Thakerar & Co  1 All ER 400 (CA) at 409 per Millett LJ.
 Butler, above n 3, at [39.10.3].
 See, for example, Tucker, Le Poidevin and Brightwell, above n 10, at [8-012]–[8-014].
 At [8-014].
 Commonwealth Reserves I, LC v Chodar  2 NZLR 374 (HC) at –. See further Powell v Thompson  1 NZLR 579 at 616; and Equiticorp Industries Group Ltd v Hawkins  3 NZLR 700. But insolvency contexts are ones in which remedial constructive trusts must be approached cautiously: Fortex Group Ltd (in rec & liq) v MacIntosh, above n 15.
 Clarke, above n 4, at [18.1.1].
 At [18.1.1].
 At [18.1.2].
 At [18.2.1], citing Barnes v Addy (1874) LR 9 Ch App 244 at 251–252.
 At [18.2.1].
 At [18.2.1], n 20, citing Equiticorp Industries Group Ltd (in stat man) v The Crown (No 47)  2 NZLR 481 (HC) at 540.
 At [18.2.2(1)], citing Baden v Société Générale pour Favoriser le Developpement du Commerce et de l’Industrie en France  1 WLR 509 (HC) at 575.
 At [18.2.2(2)]. See also the authorities cited at n 41.
 At [18.2.3].
 At [18.7].
 Investment Trust Companies v Revenue and Customs Commissioners  UKSC 29,  AC 275 at .
 Clarke, above n 4, at [18.1.3].
 At [18.1.3], n 12. See also the authorities cited there.
 At [18.5.1], citing the application in New Zealand of the Privy Council’s decision in Royal Brunei Airlines Sdn Bhd v Tan  2 AC 378 (PC).
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45; Twinsectra Ltd v Yardley  2 AC 164 (HL); Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd  UKPC 37,  1 WLR 1476 (PC).
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45.
 At 387–389.
 At 389.
 Twinsectra Ltd v Yardley, above n 46, at .
 Barlow Clowes International Ltd (in liq) v Eurotrust International Ltd, above n 46.
 At .
 Westpac New Zealand Ltd v MAP & Associates Ltd  NZSC 89,  3 NZLR 751 at .
 Hansard v Hansard  NZCA 433,  2 NZLR 158at .
 Sandman v McKay  NZSC 41,  1 NZLR 519 at , citing Westpac New Zealand Ltd v MAP and Associates Ltd, above n 53, Fletcher v Eden Refuge Trust  NZCA 124,  NZLR 227 and Spencer v Spencer  NZCA 449,  2 NZLR 190.
 At .
 At .
 Abou-Rahmah v Abacha  EWHC 2662 (QB)at .
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45, at 390–391.
 Clarke, above n 4, at [18.5.5]. Subsequent to the Butler text’s 2009 publication, the United Kingdom Supreme Court described the test for criminal dishonesty in similar terms: Ivey v Genting Casinos (UK) Ltd (trading as Crockfords Club)  UKSC 67,  AC 391 at .
 Cowan de Groot Properties Ltd v Eagle Trust plc 4 All ER 700 (Ch) at 761.
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45, at 390–392.
 Equiticorp Industries Group Ltd (in stat man) v The Crown (No 47), above n 37, at 640.
 Clarke, above n 4, at [18.5.10].
 Equiticorp Industries Group Ltd (in stat man) v The Crown (No 47), above n 37, at 645–646.
 Clarke, above n 4, at [18.4.1].
 At [18.4.1], citing Cowan de Groot Properties Ltd v Eagle Trust plc, above n 61; and Eagle Trust plc v SBC Securities Ltd  1 WLR 484 (Ch).
 At [18.4.2], citing Gold v Rosenberg  3 SCR 767; and Citadel General Assurance Co v Lloyds Banks Canada  3 SCR 805.
 At [18.4.3].
 Westpac Banking Corp v Savin  2 NZLR 41 (CA) at 53, 60 and 70.
 Nimmo v Westpac Banking Corp  3 NZLR 218 (HC); and Cigna Life Insurance NZ Ltd v Westpac Securities Ltd  1 NZLR 80 (HC) at 88.
 Clarke, above n 4, at [18.4.4(1)], citing Powell v Thompson  1 NZLR 597 (HC) at 608.
 Equiticorp Industries Group Ltd (in stat man) v Hawkins (No 46)  3 NZLR 700.
 Clarke, above n 4, at [18.4.4(1)], citing Lankshear v ANZ Banking Group (NZ) Ltd  1 NZLR 481; Nimmo v Westpac Banking Corp, above n 71; and Smith v Hugh Watt Society Inc  1 NZLR 537.
 Westdeutsche Landesbank Girozentrale v Islington London Borough Council, above n 6.
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45.
 Clarke, above n 4, at [18.4.4(1)], n 77.
 Westpac Banking Corp v Savin, above n 70.
 Clarke, above n 4, at [18.4.4(2)].
 At [18.4.4(2)].
 Farah Constructions Pty Ltd v Say-Dee Pty Ltd  HCA 22,  239 CLR 89 at –.
 Clarke, above n 4, at [18.4.4(3)], citing Equiticorp Industries Group Ltd (in stat man) v The Crown (No 47), above n 37.
 At [18.4.4(3)].
 Westdeutsche Landesbank Girozentrale v Islington London Borough Council, above n 6, at 704.
 Charles Rickett Laws of New Zealand Equity: Breach of Fiduciary Duty (online ed) at , citing for the proposition the cases favour an equitable wrongdoing analysis Westpac Banking Corp v Savin, above n 70 and Westdeutsche Landesbank Girozentrale v Islington London Borough Council, above n 6; and citing for the proposition recipient liability may eventually be recast as part of the law of unjust enrichment Royal Brunei Airlines Sdn Bhd v Tan, above n 45.
 At .
 Clarke, above n 4, at [18.6], citing Equiticorp Industries Group Ltd (in stat man) v The Crown (No 47), above n 37, at 645–661.
 See, for example, RP Austin “Commerce and Equity—Fiduciary Duty and Constructive Trust” (1986) 6 OJLS 444.
 PJ Millett “Equity’s Place in the Law of Commerce” (1998) 114 LQR 214 at 217–218. Compare Matthew Harding “Equity and the Value of Certainty in Commercial Life” in Peter Devonshire and Rohan Havelock (eds) The Impact of Equity and Restitution in Commerce (Hart Publishing, Oxford, 2019) 147.
 Cobbe v Yeoman’s Row Management Ltd  UKHL 2005,  1 WLR 1752 at .
 Butler, above n 3, at [39.10.04].
 Royal Brunei Airlines Sdn Bhd v Tan, above n 45, at 381.
 Butler, above n 3, at [39.10.04].
 At [39.10.04].