Sarah Worthington DBE KC

After Byers v Saudi National Bank: confronting the unresolved issues in knowing receipt

The question in Byers v Saudi National Bank [2023] UKSC 51 (Byers) was disarmingly simple: does a beneficiary have a claim in knowing receipt against someone who receives absolute title to the trust property, but knows at the time that the transfer was in breach of trust? Answer: No, since it is logically impossible for the defendant to misdeal with the beneficiary's proprietary interests when the defendant never held any property subject to those interests (paras 6, 44, 158-159, 172, 201).

The majority reached that conclusion in nine short paragraphs, setting out what was agreed by all five judges as determining the outcome of the appeal. Lord Briggs and Lord Burrows delivered separate judgments ranging widely across a number of unresolved issues surrounding knowing receipt. Given the importance of these issues, this commentary ignores the unsurprising ratio of the case and focuses instead on the matters raised in these extensive dicta.

Fixed and floating charges: still favouring absolutism over multi-factored nuance

The academics did not fare well in Re Avanti Communications Ltd (in admin) [2023] EWHC 940 (Ch). Edwin Johnson J determined that the security in issue was fixed, not floating, but not without finding himself in respectful disagreement with Beale, Bridge, Goode (if only by book title), Gullifer and Worthington. It is perhaps predictable that one of us might rush to a defence. I hesitated, appreciating that judges are not similarly free. But the issue is important, and the approach advocated in Avanti appears, with the greatest respect, and even greater admiration for the unravelling of security documents needed in that case, to be unsupported by the cases and unworkable in practice. In short, even if the answer is right (space prevents that being addressed here), the means of reaching it is surely not. What follows seeks to defend that claim, and also to address further issues raised in Avanti which continue to create unnecessary confusion in this area.¹1 1