Author: Penelope Reed (2002)

Penelope Reed looks at where the law now stands on Quitclose trusts and knowing assistance
for breaches of trust
(taken from Issue No 20 –  July 2002

Background
The recent decision of the House of Lords in Twinsectra Ltd. v Yardley and others¹gave their Lordships the opportunity to clarify two very troubled and quite different areas of the law of trusts. The first was the nature of a Quistclose trust², and the case undoubtedly introduces some clarity into this area. The second, quite distinct issue which their Lordships had to decide was the test of dishonesty required in relation to what has over the years become known as `knowing assistance`. In that area, the law has certainly been clarified, but somewhat unfortunately perhaps it is the strong dissenting judgement of Lord Millett which appears to reach the right result.