Royal Brunei Airlines Sdn Bhd v Tan Kok Ming

JurisdictionUK Non-devolved
CourtPrivy Council
Judgment Date24 May 1995

Judicial Committee of the Privy Council

Before Lord Goff of Chieveley, Lord Ackner, Lord Nicholls of Birkenhead, Lord Steyn and Sir John May

Royal Brunei Airlines Sdn Bhd
and
Tan

Privy Council - Brunei - breach of trust - third party liable to beneficiaries

Third party liable to beneficiaries for loss in breach of trust

A third party who assisted a trustee to commit a breach of trust, or procured him to do so, was liable to the beneficiaries for the resulting loss provided that the third party had acted dishonestly and not merely negligently. However, it was not necessary for the conduct of the trustee to have been dishonest or fraudulent.

The Judicial Committee of the Privy Council so held in allowing an appeal by the appellant, Royal Brunei Airlines Sdn Bhd, from the judgment of the Court of Appeal of Brunei Darussalam allowing an appeal by the respondent, Philip Tan Kok Ming, from the judgment of the Chief Justice, Sir Denys Roberts, in the High Court whereby the respondent had been ordered to pay the appellant the amount owed by Borneo Leisure Travel Sdn Bhd (BLT) to the appellant.

Mr Michael Beloff, QC, Mr Raymond Lam, of the Brunei Bar, and Mr Murray Hunt for the appellant; Mr Daljit Singh Sandhu and Mr Geoffrey Sim, both of the Brunei Bar, for the respondent.

LORD NICHOLLS said that the proper role of equity in commercial transactions was a topical question. Increasingly plaintiffs had recourse to equity for an effective remedy when the person in default, typically a company, was insolvent.

Plaintiffs sought to obtain relief from others who were involved in the transaction, such as directors of the company, or its bankers, or its legal or other advisers, and to have them held personally liable for assisting the company in breaches of trust or fiduciary obligations.

An insolvent travel agent company owed money to the appellant airline, which sought a remedy against the company's principal director and shareholder.

Its claim was based on the dictum of Lord Selborne, Lord Chancellor, inBarnes v AddyELR ((1874) LR 9 Ch App 244, 251-252): "strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions … 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."

The first limb was concerned with the liability of a person as a recipient of trust property...

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645 cases
  • Gregson v HAE Trustees Ltd and Others
    • United Kingdom
    • Chancery Division
    • 8 Mayo 2008
    ...and would not be property of BPTC available for its creditors generally.” 31 I should next refer to a passage from Royal Brunei Airlines Sdn. Bhd v. Philip Tan Kok Ming [1995] 2 AC 378 at 391, where Lord Nicholls said: “It is against this background that the question of negligence is to be ......
  • Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd and Another
    • Singapore
    • Court of Three Judges (Singapore)
    • 8 Marzo 1999
    ...second respondent participated in such wrongdoing in a manner analogous to that in Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378 where a third party is held liable for knowingly assisting a trustee to commit a breach his fiduciary duty to the beneficiary. 40.We can fin......
  • Sheikh Mohamed Ali M. Alhamrani and Four Others v Sheikh Abdullah Ali M. Alhamrani and Four Others
    • Jersey
    • Royal Court
    • 7 Febrero 2007
    ...Ltd., In re, 2005 JLR 137, applied. (7) Rowe v. Cross (1998), 1 ITELR 341, considered. (8) Royal Brunei Airlines Sdn. Bhd. v. Tan, [1995] 2 A.C. 378 ([1995] UKPC 22); [1995] 3 All E.R. 97, distinguished. (9) Twinsectra v. Yardley, [2002] 2 A.C. 164; [2002] 2 All E.R. 377, referred to. (10) ......
  • Canadian Pacific (Bermuda) Ltd v Nederkoorn Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 28 Febrero 1998
    ...626 (distd) Keith Spicer Ltd v Mansell [1970] 1 WLR 333; [1970] 1 All ER 462 (refd) Royal Brunei Airlines Sdn Bhd v Philip Tan Kok Ming [1995] 2 AC 378; [1995] 3 All ER 97 (distd) Taylor, In re;Cloak v Hammond (1887) 34 Ch D 255 (folld) Business Registration Act (Cap 32, 1985Rev Ed) Compani......
  • Request a trial to view additional results
10 firm's commentaries
  • International Fraud & Asset Tracing (3rd Edition), England & Wales
    • United Kingdom
    • JD Supra United Kingdom
    • 5 Marzo 2015
    ...(iii) dishonesty on the part of the defendant. One of the leading cases on dishonest assistance is Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 A.C. 378. The case established that ‘dishonest’ in this context means ‘not acting as an honest person would in the circumstances’. Assessing dishon......
  • Phillip Ivey v Genting Casinos UK Limited t/a Crockfords Club – The Supreme Court considers “honest cheating”
    • United Kingdom
    • LexBlog United Kingdom
    • 6 Noviembre 2017
    ...no longer to be given” [74]. Instead, the test of dishonesty is now as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and Lord Hoffman in Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37; [2006] 1 WLR 1476. As Lord Hughes states, ......
  • Clarification of Test for Dishonesty in English Criminal Law: Impact on Complex Fraud Cases
    • United Kingdom
    • JD Supra United Kingdom
    • 18 Mayo 2020
    ...correctly represent the law and that the correct test was the objective test set out in the cases of Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 4) [1982] QB 1053. 5) CPS case redefines the legal test for ......
  • The Court Of Appeal Has Confirmed The Test For Dishonesty In Criminal Proceedings
    • United Kingdom
    • Mondaq UK
    • 6 Septiembre 2020
    ...represent the law and directions based upon it ought no longer to be given". He said that the test set out in Royal Brunei v Tan [1995] 2 AC 378, as clarified by the Privy Council in Barlow Clowes v EuroTrust [2005] UKPC 37, should be used in all cases as "there can be no logical ......
  • Request a trial to view additional results
29 books & journal articles
  • Placing bankers in the front line: the secondary liability of bankers for their customers’ regulatory contravent
    • United Kingdom
    • Journal of Financial Crime Nbr. 12-3, July 2005
    • 1 Julio 2005
    ...is given an extended meaning appropriate toliability based on the receipt of another's property.(61) (1874) LR 9 Ch App 244.(62) [1995] 3 All ER 97; [1995] 2 AC 378 (PC).(63) And see Twinsectra, n. 67 below, where there is no suggestionthat a narrow view should be taken of `assisting'.(64) ......
  • ISSUES CONCERNING COMPLIANCE
    • United Kingdom
    • Journal of Money Laundering Control Nbr. 4-2, April 2000
    • 1 Abril 2000
    ...v ECGD [1999] 1 All ER 929, at 939g. (64) A-G v Reid [1994] 1 AC 325; A-G v Blake [1998] Ch 439. (65) Royal Brunei Airlines v Tan [1995] 2 AC 378, at 392. (66) Re Goldcorp [1995] 1 AC 74. (67) Bristol and West BS v Mothew [1998] Ch 1. (68) Agip v Jackson [1990] Ch 265, [1991] Ch 547. (69) K......
  • The Continuing Value of Relief for Directors' Breach of Duty
    • United Kingdom
    • The Modern Law Review Nbr. 66-2, March 2003
    • 1 Marzo 2003
    ...evidence that the defendant realised thathe or she had behaved dishonestly in the circumstances. As Lord Hoffmann57 n 43 above, 550.58 [1995] 2 AC 378, 389.59 See Re Produce Marketing Consortium Ltd, n 56 above.60 [2002] 2 WLR 802.61 ibid, 808, para 27, a phrase adopted by Lord Steyn (805, ......
  • The Liabilities of Financial Intermediaries and Their Advisers for Handling the Proceeds of Crime
    • United Kingdom
    • Journal of Financial Crime Nbr. 9-3, March 2002
    • 1 Marzo 2002
    ...heads are reflected in the speech of Lord Selborne LC in Barnes v Addy (1874) 9 Ch App 244 at 251. (3) See Royal Brunei Airlines v Tan [1995] 2 AC 378 (PC). (4) Paragon Finance v Thackrar [1999] 1 All ER 400 at 409 and 414. (5) [1999] Lloyds Rep D511. (6) [2000] Lloyds Rep PN 239. (7) [2000......
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