The Place of the 'Dishonest and Fraudulent Design' Requirement in Accessorial Liability for Assisting in a Breach of Trust or Fiduciary Duty

Currently in Australia, a plaintiff may sue a third party on the basis that such party has knowingly assisted in a trustee or fiduciary’s dishonest and fraudulent design in furtherance of the latter’s breach of trust or fiduciary duty. This is known as the equitable claim of accessorial liability. The ‘dishonest and fraudulent design’ limitation has received considerable criticism. This paper will investigate whether this requirement has any justifi cation in principle and/or legal policy as a component of the test for accessorial liability, by evaluating its strengths and weaknesses. It is suggested that the removal of this limitation is necessary, because it is both incoherent and unfair. Equity should be able to intervene where the third party can be shown to have dishonestly assisted in any breach of trust or fiduciary duty, regardless of whether the defaulting trustee or fiduciary has additionally exhibited any fraudulent behaviour.