Knowing receipt: no liability for a bona fide purchaser who later learns of the breach

Knowing receipt is a personal liability that can arise where trust property is transferred in breach of trust to a recipient who, with the necessary knowledge, deals with it while the beneficiaries still have an equitable interest in it. In Byers v Saudi National Bank the Supreme Court held that the claim depends on the claimant retaining an equitable proprietary interest in the property when it reaches the defendant. Lord Briggs said it is clear that where trust property is transferred in breach of trust to equity's darling, a bona fide purchaser for value without notice, the transferee's later acquisition of knowledge of the breach gives rise to no liability in knowing receipt. Imogen paid full value in good faith without notice, so she took the shares free of the beneficiaries' interest. Learning of the breach eighteen months later cannot revive a claim against her. The beneficiaries' remedy lies against Lionel personally, and in tracing into the sale proceeds he received.

Why A is wrong: Later knowledge matters for a volunteer recipient, not for a bona fide purchaser who took free of the trust.

Why B is wrong: Knowing receipt is fault-based and in any case never reaches a bona fide purchaser for value without notice.

Why C is wrong: Whatever the knowledge test, once the interest is defeated by sale to equity's darling, no unconscionability inquiry arises.

Why E is wrong: Dishonesty is the test for dishonest assistance, not knowing receipt; Imogen escapes because she took free of the interest.