Claims against third party recipients of trust property

What is it about?

This article argues that claims to recover trust property from third parties arise in response to a trustee’s duty to preserve identifiable property, and that unjust enrichment is incompatible with such claims. First, unjust enrichment can only assist with the recovery of abstract wealth and so it does not assist in the recovery of specific property. Second, it is difficult to identify a convincing justification for introducing unjust enrichment. Third, it will work to the detriment of innocent recipients. The article goes on to show how Re Diplock supports this analysis, by demonstrating that no duty of preservation had been breached and that a proprietary claim should not have been available in that case. The simple conclusion is that claims to recover specific property and claims for unjust enrichment should be seen as mutually exclusive.

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Why is it important?

This article provides a clear explanation of the existing literature on third party recipients of trust property, providing a strong critique of the unjust enrichment analysis. The article explains that the property claim in Re Diplock was based on a false premise and cannot be supported, providing a compelling argument against those who are favour of allowing strict liability claims to exist alongside property claims in equity. The article also explains that claims to recover trust property are based on wrongdoing, which provides an important distinction with unjust enrichment which is based on 'not-wrongs'.