Recovery was sought from the partners of a defaulting solicitor.
Lord Herschell LC disposed of the argument about concealment first, and then turned to section 8, saying: ‘My Lords, the only remaining question is, Did the statute apply? It is contended that it did not, because of the exception contained in the 1st sub-section to section 8: ‘Except where the claim is founded upon any fraud or fraudulent breach of trust to which the trustee was party or privy.’ My Lords, it seems to me to be impossible seriously to say that the respondents were ‘party or privy’ to the fraud in this case. The fraud was a fraud committed by Searle entirely subsequent to the transaction in which they had any interest or any concern, and they neither knew of it, nor assented to it, nor received any benefit from it, nor took part in it in any sort of way. Under these circumstances, I am at a loss to see how it can be said that they were ‘party or privy’ to it.’
Lord Macnaghten said: ‘By a recent and I think very beneficial change of the law, a trustee who has committed a breach of trust is entitled to rely on any Statute of Limitations as fully as anybody may do who not a trustee, provided his conduct has been free from any taint of fraud, and provided he had not derived and is not in a position to derive any personal benefit from the transaction impeached as a breach of trust.’
Lord Davey referred to the concept of fraud imputable to the person who invokes the aid of the Statute of Limitations, but did so in the context of concealment. On section 8, he agreed with the other members of the Appellate Committee and with the judges in the courts below
Lord Herschell LC, Lord Macnaghten, Lord Davey
[1895] AC 495
Trustee Act 1888 8
England and Wales
Citing:
Appeal from – Thorne v Heard CA 24-Jan-1894
A first mortgagee, Heard, had sold property under the power of sale and had retained a solicitor, Searle, to act in relation to the sale. Searle received the proceeds of sale, satisfied the first mortgage debt, but retained the balance, falsely . .
Cited by:
Cited – Dixon Coles and Gill (A Former Firm) v Baines, Bishop of Leeds and Another CA 20-Jul-2021
Innocent co-trustee not liable for Default
Proceedings were brought by former clients against their former solicitors. One of the partners stole money held in the firm’s client account on behalf of the claimants. The other two partners were entirely innocent of, and in no way implicated in, . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 July 2021; Ref: scu.666144
