​KembaraXtra – Legal Terms – Liability for Receipt


Liability for receipt arises when a person receives trust property that has been transferred in breach of trust. The recipient may be held accountable depending on their knowledge of the circumstances.


A key requirement is that the recipient’s state of knowledge must make it unjust or unconscionable for them to retain the benefit. Courts assess whether the recipient knew or ought to have known about the breach.


If the property is still in the recipient’s possession, they may be treated as holding it on constructive trust. If it has been disposed of, they may instead be personally liable to compensate the trust for the loss.