ASSIGNMENT ON ANALYSIS OF DISHONEST ASSISTANCE.

Running head: ANALYSIS OF DISHONEST ASSISTANCE
Analysis of Dishonest Assistance
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ANALYSIS OF DISHONEST ASSISTANCE1
Table of Contents
Analysis of Dishonest Assistance................................................................................................2
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ANALYSIS OF DISHONEST ASSISTANCE2
Analysis of Dishonest Assistance
A trust is a formal transfer of the assets by the owner or someone holding it to a small
group of person or persons who are responsible for maintaining and using the asset for the
benefits of others. In a formal trust structure, there are two parties to a trust. They are the trustor
and the trustee. However, there arise situations when a third party becomes liable for the terms of
a trust. Under the English Trust Law, a dishonest assistance is a form of a third party liability
where the third party becomes liable for the breach of trust by one or more of the trustees. The
general provisions of this law suggest that a third party other than the defendant can be held
liable for dishonest assistance only if the court of law is able to determine a breach of a trust or
fiduciary duty by such party, and the defendant helped the third party in carrying on such a
breach1. The defendant must also have a dishonest state of mind. However, the major issue in the
dishonest assistance cases is related to determining the dishonest state of mind. The controversy
related to the dishonest state of mind has become more prominent since the judgement in the
case of Twinsectra Ltd2. In this case, Twinsectra Ltd had provided a loan of £1m to Mr Yardley
for the purchase of a real estate property near Apperley Bridge, Bradford. However, it suggested
that the loan would be provided only if someone gave a guarantee on behalf of Mr Yardley. Mr
Paul Leach, the solicitor of Mr Yardley refused to give such guarantee on his behalf. However,
another solicitor firm headed by Mr Sims, who owed £1.5 million to Mr Yardley from previous
dealings, agreed to give the guarantee. The loan was provided on the condition that the loan
amount would be retained by Mr Sims, until the funds were used only for the purchase of the
property. However, Mr Sims passed on the money to Mr Yardley through his solicitor Mr Leach.
Mr Yardley breached the agreement regarding the purchase of the property and used £357720.11
1 Barnes v Addy (1874) LR 9 Ch App 244
2 Twinsectra Ltd v Yardley [2002] UKHL 12