The recent decision of the Court of Appeal in the long-running case, now known as Byers v Saudi National Bank,1 concerned a misapplication of trust property. The recipient of that property (Samba) did not dispute that its state of knowledge was sufficient in principle to satisfy the requirement for knowing receipt liability, namely that the Defendant’s knowledge was such as to make it unconscionable for it to retain the benefit of the receipt. The question facing the Court of Appeal was whether this of itself was adequate for knowing receipt liability. In answering this the Court noted the once widely held view that knowing receipt liability should be subsumed into the fault-based test for restitutionary liability: “Before Akindele was decided, it was sometimes suggested that liability for knowing receipt was restitutionary. Thus, in El Ajou v Dollar Land Holdings plc at first instance ([1993] 3 All ER 717) Millett J, at p 736, described knowing receipt as ‘the counterpart in equity of the common law action for money had and received’ and said that ‘both can be classified as receipt-based restitutionary claims’. Similarly, Lord Nicholls of Birkenhead observed in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378, 386, that liability for knowing receipt is ‘restitution-based’ and, writing extra-judicially in Cornish, Restitution Past, Present and Future (1998), said this at para 238–239: ‘Restitutionary liability, applicable regardless of fault but subject to a defence of change of position, would be a better-tailored response to the underlying mischief of misapplied property than personal liability which is exclusively fault-based. Personal liability would flow from having received the property of another, from having been unjustly enriched at the expense of another. It would be triggered by the mere fact of receipt, thus recognising the endurance of property rights. But fairness would be ensured by the need to identify a gain, and by making change of position available as a defence in suitable cases when, for instance, the recipient had changed his position in reliance on the receipt.”2
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