Supreme Court clarifies need for continuing equitable interest in knowing receipt claims

Citation: [2023] UKSC 51
Judgment on


The Supreme Court’s judgment in the case of Byers and others v Saudi National Bank ([2023] UKSC 51) addressed the nuanced question of whether a claimant, in a knowing receipt claim, must have a continuing proprietary equitable interest in property transferred in breach of trust. This article analyses the judgment, dissecting the legal principles and arguments that underpinned the court’s decision. It is tailored for legal professionals in the UK, providing a clear understanding of the case and the implications of its outcome.

Key Facts

In this case, Saad Investments Co Ltd (SICL) and its joint liquidators (“the appellants”) claimed against the Saudi National Bank (“the respondent”), successor in title to Samba Financial Group, for knowing receipt of shares that were originally held on trust for SICL and were transferred in breach of trust by Mr. Al-Sanea to Samba. The pivotal issue was whether Sama’s receipt of the shares, which extinguished SICL’s equitable proprietary interest under Saudi law, barred the knowing receipt claim under English law.

The legal principles examined in this case pertain to:

  1. Knowing Receipt: An equitable wrong distinguished from dishonest assistance, where a person knowingly receives property in breach of a trust or fiduciary duty.
  2. Continuing Proprietary Interest: The requirement that a person asserting a claim in knowing receipt must demonstrate a proprietary equitable interest in the property at the time of receipt.
  3. Unencumbered Title and Overriding Interests: Whether the recipient’s acquisition of legal title to the property, free from any beneficial interest of the claimant, negates a knowing receipt claim.
  4. Equitable Tracing: The process by which a claimant identifies property as the substitute for their originally held asset and the related legal claims consequent upon successful tracing.
  5. The Role of Unjust Enrichment: Although not argued in this case, the potential interplay between knowing receipt and unjust enrichment is considered in the broader context of equitable claims.

The court systematically addressed these principles, distinguishing between personal and proprietary claims and considering their linkage in the context of knowing receipt. It also focused on the fact that a bona fide purchaser’s acquisition of an asset free from trust obligations extinguishes any subsequent claim in knowing receipt.


The Supreme Court, in detailed judgments by Lord Hodge and Lord Burrows, dismissed the appeal, upholding the decisions of the lower courts:

  • Extinguishment of Proprietary Interest: It held that a knowing receipt claim requires the claimant to have a continuing equitable proprietary interest in the property at the time of its receipt by the defendant.
  • Equitable Tracing: The court concluded that the principles of equitable tracing, requiring an initial equitable proprietary interest, aligned with knowing receipt claims, reinforcing the need for such an interest for the claim to succeed.
  • Unencumbered Title: The conferral of unencumbered legal title to the respondent prevented a knowing receipt claim, as the proprietary interest of the appellants had been extinguished.
  • No Unjust Enrichment Claims: Notably, the appellants did not rely on unjust enrichment, and the court did not address such claims directly.


The Supreme Court’s decision in Byers and others v Saudi National Bank clarifies the necessity for a claimant to maintain a continuing equitable proprietary interest for a knowing receipt claim to succeed. This requirement remains pivotal even if the property has been validly transferred under applicable foreign law. The judgment reaffirms the protective scope of English equity against opportunistic legal maneuvers, ensuring that the foundations of trust law are preserved even in the wake of foreign lawful transactions that extinguish equitable interests.

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