Recovery of Misappropriated Trust Money from Third Parties: Knowing Receipt and the Law of Restitution

Abstract

The ‘knowing receipt’ claim confers upon equitable owners of trust funds a remedy against some third party recipients of those funds. A problematic aspect of this remedy is what constitutes sufficient knowledge by the recipient to justify the use of the remedy. This article critically examines an argument advanced by Birks that this remedy is restitutionary in nature and, as such should result in strict liability.