dishonest assistance

dishonest assistance, also knowing assistance

England, Wales

Refers to the cause of action under which a non-trustee becomes personally liable for breaches of trust committed by one or more trustees. Liability arises where the non-trustee is an accessory to the breach of trust (whether by inducing or assisting in the breach) and has acted dishonestly. The test of honesty in this context is objective. Liability is imposed if the accessory has not acted as an honest person would, in the circumstances, have acted. In applying this test it is assumed that an honest person does not participate in a transaction if he knows that it involves a misapplication of trust assets (Royal Brunei Airlines Sdn Bh. v Tan [1995] 2 AC 378). Prior to the decision of the Privy Council in Royal Brunei Airlines, this cause of action was commonly known as knowing assistance. However, in Royal Brunei Airlines Lord Nicholls stated that use of the word "knowing" was the source of confusion and should be avoided. The leading cases on dishonest assistance are:

• Barnes v Addy (1874) L.R. 9 Ch. App. 244.

• Royal Brunei Airlines S DN B HD v Tan ([1995] 2 AC 378 (see Legal update, Accessory to breach of trust (www.practicallaw.com/6-100-3325)).

• Twinsectra Ltd v Yardley and others [2002] UKHL 12 (see Legal update, Loan: breach of trust (www.practicallaw.com/6-101-7153)).

See also knowing receipt.