GREAT INVESTMENTS AND GOOD RETURNS: KNOWING RECEIPT AS AN EQUITABLE WRONG INDEPENDENT OF CONTRACT.

Obiter dicta by Lord Nicholls in Criterion Properties plc v Stratford UK Properties LLC suggest that in circumstances where a director contracts on a company's behalf and transfers company property pursuant to that contract, any resultant claim is to be singularly determined by principles of company and agency law. Therefore, a claim in equity for knowing receipt is irrelevant. Whilst a Full Federal Court in Great Investments Ltd v Warner appears to adopt a similar approach, this article argues that the Australian judgment is distinguishable, and seeks to retain knowing receipt as a viable and important source of liability whether or not property is transferred to a knowing recipient pursuant to a contract binding on the company. It argues that there are clear doctrinal reasons that justify knowing receipt's characterisation as a freestanding equitable wrong, as well as the availability of remedies reflective of this wrong that are more extensive than the return of the value of the misappropriated property. Nonetheless, it recognises the practical difficulties that a subsisting contract may pose to a successful pursuit of a claim for knowing receipt. [ABSTRACT FROM AUTHOR]