ABSTRACT
This chapter argues that the law of trusts will always try to come to the aid of the beneficiary: in effect, wrapping the beneficiary in cotton wool. It considers the liability of trustees for breach of trust; the personal liability of third party ‘strangers’ for their involvement in a breach of trust, whether because they assisted that breach of trust dishonestly or because they received property from a breach of trust unconscionably. The Court of Appeal held that it was enough to demonstrate that the recipient had the requisite knowledge both that the funds were trust funds and that they were being misapplied. A constructive trust is likely to be sought in circumstances in which the property is intrinsically valuable or when it is likely to be of use to the claimant. The chapter describes the situation in which trust property is misapplied such that the trust property is mixed with property belonging to an innocent third party.
