George v Webb

George v Webb was a case before the Supreme Court of New South Wales where the central issue was whether funds paid into a firm of solicitors' trust account were held on trust for the plaintiff, who had stipulated that the moneys were to be used for a prescribed purpose. The court was also required to determine whether the trust had been breached by the disbursement of funds for purposes other than those prescribed. Further, the case examined whether the plaintiff was entitled to equitable compensation for the breach of trust and if a third defendant could be held liable as an accessory to the breach of the express trust or a Quistclose trust.

The court held that an express trust in favour of the plaintiff was established as the funds were intended for a specific purpose. The breach of trust was confirmed when the funds were used for purposes other than the prescribed one. The plaintiff was entitled to equitable compensation for the breach of trust. Additionally, the third defendant was found liable for receiving and becoming chargeable with trust property and for knowingly assisting in the breach of trust. The court also considered whether the solicitors, as trustees under a Quistclose trust, owed the plaintiff a duty of care and whether that duty was breached, concluding that a breach of duty would have been established if this issue had arisen.

In terms of contract law, the court determined that a contract existed between the plaintiff and the third defendant and that, had the issue arisen, the third defendant would have been liable for either total failure of consideration or frustration of contract. The case also addressed the issue of proportionate liability under the Civil Liability Act 2002 (NSW), concluding that liability for breach of trust, where it was not predicated on failure to take reasonable care, was not an apportionable claim. Additionally, the court held that the cross-defendant was liable for misleading and deceptive conduct under the Fair Trading Act and had to indemnify the plaintiff for losses caused by misrepresentation. Lastly, the court held that if equitable contribution had arisen, it should be pro rata between concurrent wrongdoers.