Banks dealing with corporate borrowers in financial distress may be liable as knowing recipients or knowing assistants under Barnes v Addy where they have knowledge (Baden Delvaux categories 1-4) that the transactions involve breaches of directors' duties. The fourth limb of Earl of Chesterfield v Janssen (equitable fraud based on public utility) extends to pre-insolvency commercial dealings and does not require proof of bad faith. Directors of companies in corporate groups must consider the interests of individual companies and their creditors, not merely the group as a whole, when the companies are insolvent or of doubtful solvency. The six-year limitation period in s 47 of the Limitation Act 1935 (WA) does not apply to claims giving rise to merely remedial constructive trusts.
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