Barnes v Addy

Barnes v Addy
Court	Court of Appeal in Chancery
Decided	12 February 1874
Citation(s)	(1870) B 92; (1874) LR 9 Ch App 244
Case opinions
Lord Selborne LC
Court membership
Judge(s) sitting	Lord Selborne LC, Sir W M James LJ, Sir G Mellish LJ
Keywords
Breach of trust, accessory liability, knowing receipt, knowing assistance

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.

Although the decision remains historically significant in common law countries, the House of Lords significantly revised the relevant equitable principles in cases such as Royal Brunei Airlines v Tan (1995) and Dubai Aluminium Co Ltd v Salaam (2002).

In Royal Brunei Airlines v Tan, the House of Lords described this passage as the "much-quoted dictum" in Barnes v Addy:

This passage was adopted by the High Court of Australia as a statement of the 'rule in Barnes v Addy' in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007).

Henry Barnes appointed William Crush, John Lugar and John Addy to be testators and executors of his will. His money would be invested and then used as a £100 annuity for his widow, Ann, and his three daughters and son. John Addy, the sole remaining trustee, appointed another trustee, with an indemnity. Addy’s solicitors, including Mr William Duffield, had advised against appointing a sole trustee, but drew up the deeds of appointment and indemnity, introduced him to a , and the broker transferred the trustee money. This trustee misapplied the trust property and became bankrupt. The children sued Addy and the solicitors.

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