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

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