Facts
Royal Brunei Airlines appointed Borneo Leisure Travel Sdn Bhd to be its agent for booking passenger flights and cargo transport around Sabah and Sarawak. Mr Tan was Borneo Leisure Travel’s managing director and main shareholder. It was receiving money for Royal Brunei, which was agreed to be held on trust in a separate account until passed over. But Borneo Leisure Travel, with Mr Tan’s knowledge and assistance, paid money into its current account and used it for its own business. Borneo Leisure travel failed to pay on time, the contract was terminated, and it went insolvent. Royal Brunei claimed the money back from Mr Tan. [1]
Royal Brunei (RB) Airlines Sdn Bhd is the national flag carrier airline of Brunei Darussalam, headquartered in the RB Plaza in Bandar Seri Begawan. It is wholly owned by the government of Brunei. Its hub is Brunei International Airport in Berakas, just to the north of Bandar Seri Begawan, the capital of Brunei.
Sabah is a state of Malaysia located on the northern portion of Borneo. Sabah has land borders with the Malaysian state of Sarawak to the southwest and Indonesia's Kalimantan region to the south. The Federal Territory of Labuan is an island just off the Sabah coast. Sabah shares maritime borders with Vietnam to the west and the Philippines to the north and east. Kota Kinabalu is the state capital city, the economic centre of the state and the seat of the Sabah state government. Other major towns in Sabah include Sandakan and Tawau. As of the 2015 census in Malaysia, the state's population is 3,543,500. Sabah has an equatorial climate with tropical rainforests and abundant animal and plant species. The state has long mountain ranges on the west side which form part of the Crocker Range National Park. Kinabatangan River, second longest river in Malaysia runs through Sabah and Mount Kinabalu is the highest point of Sabah as well as of Malaysia.
Sarawak is a state of Malaysia. The largest among the 13 states, with an area almost equal to that of Peninsular Malaysia, Sarawak is located in northwest Borneo Island, and is bordered by the Malaysian state of Sabah to the northeast, Kalimantan to the south, and Brunei in the north. The capital city, Kuching, is the largest city in Sarawak, the economic centre of the state, and the seat of the Sarawak state government. Other cities and towns in Sarawak include Miri, Sibu, and Bintulu. As of the 2015 census, the population of Sarawak was 2,636,000. Sarawak has an equatorial climate with tropical rainforests and abundant animal and plant species. It has several prominent cave systems at Gunung Mulu National Park. Rajang River is the longest river in Malaysia; Bakun Dam, one of the largest dams in Southeast Asia, is located on one of its tributaries, the Balui River. Mount Murud is the highest point in Sarawak.
The Judge held Mr Tan was liable as a constructive trustee to Royal Brunei. The Court of Appeal of Brunei Darussalam held that the company was not guilty of fraud or dishonesty, and so Mr Tan could not be either. The case was appealed to the Privy Council, where the Privy Council found in favour of the claimant, reversing the decision of the Court of Appeal.
Donald James Nicholls, Baron Nicholls of Birkenhead, PC, is a British lawyer and retired Law Lord.
Overseas Tankship (UK) Ltd v Morts Dock and Engineering Co Ltd, commonly known as Wagon Mound , is a landmark tort law case, which imposed a remoteness rule for causation in negligence. The Privy Council held that a party can be held liable only for loss that was reasonably foreseeable. Contributory negligence on the part of the dock owners was also relevant in the decision, and was essential to the outcome, although not central to this case's legal significance.
English trust law concerns the creation and protection of asset funds, which are usually held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, but also share a history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts were mostly used where people left money in a will, created family settlements, created charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investments, especially in unit trusts and pension trusts, where trustees and fund managers usually invest assets for people who wish to save for retirement. Although people are generally free to write trusts in any way they like, an increasing number of statutes are designed to protect beneficiaries, or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and the Charities Act 2011.
T Choithram International SA v Pagarani[2000] UKPC 46 was a decision of the Judicial Committee of the Privy Council on appeal from the British Virgin Islands in relation to the vesting of trust property in a trustee.
Armitage v Nurse [1997] EWCA Civ 1279 is the leading decision in English trusts law concerning the validity of exemption clauses. The Court of Appeal held that in English law trustee exemption clauses can validly exempt trustees from liability for all breaches of trust except fraud. Millet LJ gave the leading judgment.
Royal Brunei Airlines is the national air carrier of Brunei Darussalam. In addition to the aircraft business, it also has a number of subsidiaries.
Cook v Deeks [1916] UKPC 10 is a Canadian company law case, relevant also for UK company law, concerning the illegitimate diversion of a corporate opportunity. It was decided by the Judicial Committee of the Privy Council, at that time the court of last resort within the British Empire, on appeal from the Appellate Division of the Supreme Court of Ontario, Canada.
Twinsectra Ltd v Yardley[2002] UKHL 12 is a leading case in English trusts law. It provides authoritative rulings in the areas of Quistclose trusts and dishonest assistance.
Speight v Gaunt [1883] UKHL 1 is an English trusts law case, concerning the extent of the duty of care owed by a fiduciary.
Knowing receipt is an English trusts law doctrine for imposing liability on people who receive property that belonged to a trust, or was held by a fiduciary, and knew that it been given to them in breach of trust. To be liable for knowing receipt, the claimant must show, first, a disposal of his trust assets in breach of fiduciary duty; second, the beneficial receipt by the defendant of assets which are traceable as representing the assets of the claimant; and third, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty.
The Attorney General for Hong Kong v Reid (UKPC)[1993] UKPC 2[1993] UKPC 1993_36 was a New Zealand-originated trust law case heard and decided by the Judicial Committee of the Privy Council, where it was held that bribe money accepted by a person in a position of trust, can be traced into any property bought and is held on constructive trust for the beneficiary.
Air Jamaica Ltd v Charlton [1999] UKPC 20 is an English trusts law case, concerning resulting trusts. In it Lord Millett expressed the view that a resulting trust arises because of the absence of intention to benefit a recipient of money.
Barnes v Addy (1874) LR 9 Ch App 244 was a decision of the Court of Appeal in Chancery. It established that, in English trusts law, third parties could be liable for a breach of trust in two circumstances, referred to as the two 'limbs' of Barnes v Addy: knowing receipt and knowing assistance.
Baden v Société Générale pour Favoriser le Developpement du Commerce et de l'Industrie en France [1983] BCLC 325 is an English trusts law case, concerning breach of trust and knowing receipt of trust property. It was most famous for giving rise to the "Baden scale" or the "Baden knowledge scale" following on from the judgment of Peter Gibson J as to the five different types of relevant knowledge in knowing assistance cases. The use of the Baden scale has since fallen out of judicial favour in the United Kingdom.
Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48 is an English vicarious liability case, concerning also breach of trust and dishonest assistance.
Brinks Ltd v Abu-Saleh [1996] CLC 133 is an English trusts law case, concerning breach of trust and liability for dishonest assistance. It established an apparently high threshold for liability for dishonest assistance.
Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37 is an English trusts law case, concerning breach of trust and liability for dishonest assistance.
Tang Man Sit v Capacious Investments Ltd [1995] UKPC 54 is an English trusts law case, concerning breach of trust and liability for dishonest assistance.
Belmont Finance Corp Ltd v Williams Furniture Ltd [1980] 1 All ER 393 is an English trusts law case, concerning breach of trust and dishonest assistance.
