Articles
The second limb of Barnes v Addy
The exposure of persons who knowingly assist a trustee or fiduciary to breach their duties as a trustee or fiduciary (a cause of action otherwise known as the ‘second limb of Barnes v Addy‘) has and continues to receive judicial attention. The principles were recently clarified by the High Court of Australia in Farah Constructions Pty Limited v Say-Dee Pty Limited. The second limb of Barnes v Addy is a reminder of the potential liability of professionals (particularly solicitors, accountants or other financial advisors) who provide ancillary services or assistance to trustees or fiduciaries. Because this cause of action focuses on knowledge and honesty, it inevitably gives rise to insurance coverage issues.
This article was published in the August 2009 issue of the Australian Insurance Law Bulletin.
Significant cases, legislation or articles referred to
- Barnes v Addy (1874) LR 9 CH App 244 at 251-252
- Farah Constructions Pty Limited v Say-Dee Pty Limited
- The Bell Group (In liq) v Westpac banking Corporation (No 9)[2008] WASC 239
- Briginshaw v Briginshaw (1938) 60 CLR 336
- Consul Development Pty Limited v DPC Estates Pty Limited (1975) 132 CLR 373
- Imobilari Pty Ltd v Opes Prime Stockbroking Ltd [2008] FCA 1920
- Quince v McLaughlan [2008] QSC 61
- Lurgi (Australia) Pty Limited v Ritzer Gallagher Morgan Pty Limited 2000 VSC 277
- Quince v Varga [2008] QCA 376
- Pedersen v Larcombe [2008] NSWSC 1362
- McCarthy v St Paul Insurance Co Ltd [2007] FCAFC 28
- Derry v Peek (1889) 14 App Cas 337
- A & D Douglas Pty Ltd v Lawyers Private Mortgages Pty Ltd [2006] FCA 520
- McMillan v Joseph (1987) 4 ANZ Ins Cas 60-822