ABSTRACT
A person who dishonestly assists in a breach of trust will be personally liable to account to the beneficiaries of that trust for the loss to the trust. The test for dishonesty is an objective test which requires that the court consider what an honest person would have done in the circumstances, albeit seen through the lens of the personal characteristics 408and knowledge of the defendant. 1 There is a line of authority (now discredited) which held that the test for dishonesty should also require that the defendant was aware that their behaviour would be considered to be dishonest by honest and reasonable people. ‘Dishonesty’ in this context encompasses fraud, lack of probity and reckless risk-taking.
A person who knowingly receives trust property in breach of trust will be personally liable to account to the beneficiaries for the loss to the trust, provided that she has acted unconscionably. 2 ‘Knowledge’ in this context includes actual knowledge, wilfully closing one’s eyes to the obvious, or failing to make the inquiries which an honest and reasonable person would have made. 3
