Stripped down to essentials, what happened was this. A property developer, Y, told T that he needed £1 million bridging finance to buy Blackacre. T agreed to lend the money, and to transfer the necessary sum to the client account of S, a solicitor and associate of Y, on the basis of S’s undertaking that it would be held by him pending use, and applied “solely for the acquisition of property” on Y’s behalf. In addition S provided his personal undertaking that the sum would in any event be repaid after four months. In the event, Y did not need T’s loan to purchase Blackacre, and used finance from another source. But he did not tell T. Instead he allowed T’s money to be transferred to S, persuaded S to release it and used nearly all of it to pay his own creditors and prop up tame companies of his. This was, of course, a blatant breach of S’s undertaking. Furthermore, it was all done with the aid of L, Y’s solicitor, who knew the content of S’s undertaking. Subsequently S became bankrupt. In addition Y’s own finances became decidedly shaky, and his companies went into administration. Thereupon, T turned its guns on L, alleging dishonest assistance in a breach of trust committed by S. In addition it sought to follow its money into the hands of Y’s tame companies, which, although in administration, still had some of it.

On the facts it was held: (1) that Y had been guilty of fraud in accepting T’s £1 million without telling T that he had financed Blackacre from other sources;3 and (2) that L had had sufficient knowledge of S’s breach of his undertaking to amount to “dishonesty” within Royal Brunei Airlines Sdn Bhd v. Tan .4 But this still left an awkward gap: did T have a sufficient interest in the £1 million to make good his claims against L and against Y’s companies? T argued that it did: either (i) because S’s undertaking gave rise to an express trust in favour of T and/or a Quistclose situation, and hence to a sufficient equitable interest in itself as lender; or alternatively (ii) on the basis that Y’s fraud in having the money transferred to S impressed it with a trust in T’s favour. T was held entitled to relief on both counts.

As it turned out, it seems that T could have been awarded the relief he asked for with little if any fuss. Potter, L.J., was prepared to equate S’s position at the relevant time to that of a conveyancing solicitor holding mortgage monies, who pending completion clearly holds them on trust for the potential mortgagees.5 This finding alone, it is

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