Critically evaluate the basis upon which courts award and assess damages in lieu of injunction. To what extent is the approach in HKRUK (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch) open to valid criticism?

Feb 15, 2024

Critically evaluate the basis upon which courts award and assess damages in lieu of injunction. To what extent is the approach in HKRUK (CHC) Ltd v Heaney [2010] EWHC 2245 (Ch) open to valid criticism?

Law

Students must answer one question (from a choice of three) in Part A and one question (from a choice of four) in Part B.
Part A: 3. ‘For the claimant seeking to trace their misappropriated assets, it will be as a last resort that they look instead to claim against a stranger to the trust.
Liability in equity is notoriously difficult to establish, with concepts such as
knowledge and dishonesty far from definitively understood and applied’.
With reference to cases and the views of academic commentators, critically
discuss this statement.
Part B: 5. Critically evaluate the basis upon which courts award and assess damages in
lieu of injunction. To what extent is the approach in HKRUK (CHC) Ltd v
Heaney [2010] EWHC 2245 (Ch) open to valid criticism?

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WORD LIMIT
o The word limit for this assessment is 3,000 words.
o You do not need to adhere to any system of referencing, but you must
include a bibliography and use in-text references to identify sources such
as cases, statutory provisions, books and journals. Please do not include
footnotes or endnotes in your answers.
o Your bibliography is not included in the word count. It should contain a
list of sources referred to in the body of your answers, such as books,
journal articles or reports. You do not need to include a list of cases or
statutory provisions.
o The word limit must not be exceeded. Penalties for the word counts in
excess of the published word limit are as follows:
• Penalty 1: Immediately at the point that the word limit is
exceeded: mark is reduced by one step.
• Penalty 2: Where the word limit is exceeded by more than 10%:
mark is reduced by two steps.
• Penalty 3: In addition to the two steps penalty, any material in
excess of 20% above the published word limit will not be read.
• Please note that misstatement of the correct length of your work may
be treated as a disciplinary offence.
SUBMISSION
• The examination paper will be released on the KLE at 9.15am on
Wednesday 18th May 2022.
• You must submit your answers (including those for any pre-seen
questions), in a single document, within 24 hours of the release of the
examination paper by 9.15am on Thursday 19th May 2022. You are
strongly advised to submit earlier, if possible, to avoid any last-minute
problems or complications.
• You must submit in electronic form. Submit your work whilst logged in
to the KLE in your own name. Make a note of the Turnitin Paper ID once
the submission is complete (you can also find your Turnitin Paper ID in the
automatic receipt sent by Turnitin to your Keele email).
PLEASE NOTE:
• Your electronic submission must be made whilst you are logged into
the KLE with your own Keele Identity.
• Work may be submitted at any time before the deadline.
PRESENTATION AND CONTENT
• All submissions must be double spaced and typed using a 12-point
font, with 1-inch (2.5cm) margins.
• Once you have completed your answers, you must certify the total
number of words used.
Do not plagiarise from any source or copy from each other.
• You must write your answers independently. All work will be submitted
through Turnitin to help identify plagiarism and collusion.
• You must not cite your lecture notes. Verbatim replication of lecture
notes will be treated as academic misconduct.
• You must answer by reference to the syllabus, using the sources and
resources recommended by the Module Leader. You are expected to
compile your notes in advance of the examination. Where questions are
unseen, you are not expected or required to undertake any further
research once those questions are released.
• In all cases, you must use in-text citations where you are using ideas
developed by others and provide full references in your bibliography.
• Please note that the inappropriate use of a proofreader, as outlined in
Section 5 of the University’s proofreading guidance
(http://www.keele.ac.uk/studentacademicconduct/) could be classed as
academic misconduct.
MARKING
• All submissions are marked anonymously. Put your student number
and the module title on your submitted work. Do not put your name on any
part of your submission.
• In marking and commenting on your work, markers will have regard to
the University’s Generic Assessment Criteria, insofar as they are
applicable to this specific assessment. The Generic Assessment Criteria
may be found in the Policy Zone of the Keele website:
https://www.keele.ac.uk/policyzone/data/assessmentcriterialevel3456ug/
• For the purposes of this assessment, markers will focus on the strength
of your knowledge and arguments, your substantive content and use of
authority. You are expected to acknowledge sources in the text and to
provide a bibliography, but research-level referencing, and assignment quality presentation are not expected from this form of open-book
assessment.
Students must answer one question (from a choice of three) in Part
A and one question (from a choice of four) in Part B
PART A

  1. Jet is the sole, lay trustee of the Black Trust, established in 2020, whereby £2
    million was settled for the benefit of the settlor’s children. In recent times, Jet
    has undertaken the following actions:
    i) he invested £30,000 in cryptocurrency, which is now valued at £10,000.
    He sought advice prior to the investment from his 16-year-old son, Harris;
    ii) he insisted on being paid £15,000 per year for his services to the Trust;
    iii) he received a secret commission of £10,000 from Tony for ensuring that
    the trust hired Tony’s company to build a new home for the beneficiaries;
    iv) while unsuccessfully negotiating a business opportunity for the Trust, Jet
    decided to put up his own funds and take advantage of that opportunity
    himself. He has already made a profit of £20,000;
    v) he wrongly paid out £30,000 to Cliff, who produced a forged birth
    certificate that purported to show that he was a child of the settlor.
    Advise the Trust. It has been made clear that Jet intends to invoke s.61 of the
    Trustee Act 1925 and the Trust wishes to know whether Jet is likely to succeed
    with that defence.
  2. Beneficiaries of the St James’ Trust are concerned that its trustee, Myke, has
    not been able to account for all of its trust funds and assets. The sum of
    £100,000 and a solid silver trophy are missing and unaccounted for.
    In November last year, Myke sold the silver trophy to Jonjo and placed the
    proceeds of sale (£15,000) into his own current account. Myke was overdrawn
    at the time and the deposit of the sale proceeds raised the balance of the
    account to £5,000 overdrawn. Two weeks prior to the sale of the trophy, Myke
    had used his overdraft facility to fund the purchase of a large toy helicopter at
    a cost of £20,000.
    Two months ago, Myke had £10,000 of his own funds in his current account
    before placing £100,000 of St James’ Trust funds into the same account, in
    breach of trust. The balance of the account then stood at £110,000.
    Myke proceeded to make three withdrawals. He purchased £10,000 of shares
    in Krafth Ltd, which quickly doubled in value. He spent £70,000 on a business
    trip to Saudi Arabia, staying in the finest hotels. The remaining £30,000 he
    gifted to his friend Amanda. Amanda received the money in good faith and
    used it to finance an extension to her luxury Tyneside villa.
    The beneficiaries of St James’ Trust seek your advice as to whether they may
    bring any personal or proprietary claims. Explaining the relevant rules and
    principles, advise the beneficiaries.
    How would your advice differ (if at all) had the £10,000 balance available two
    months ago in Myke’s account not been his, but funds misappropriated from
    another trust?
  3. ‘For the claimant seeking to trace their misappropriated assets, it will be as a
    last resort that they look instead to claim against a stranger to the trust.
    Liability in equity is notoriously difficult to establish, with concepts such as
    knowledge and dishonesty far from definitively understood and applied’.
    With reference to cases and the views of academic commentators, critically
    discuss this statement.
    PART B
  4. Lars is the freehold owner of a small entertainment complex, comprising an
    art house cinema and a Danish themed restaurant. Prior to the pandemic,
    Lars had entered into an agreement with Thure to purchase a retail unit to the
    north of the complex enabling him to expand his services. He had also
    successfully found a tenant, Ulrich, to run the cinema, leaving him (Lars) free
    to manage the restaurant. In negotiating the terms of the lease, Lars entered
    into a covenant that he would keep the restaurant open around film times,
    putting Ulrich’s mind to rest that the cinema would attract sufficient local
    custom. Ulrich agreed that he would keep the property in good repair and that
    he would carry out some renovations to the back of the building, adding some
    additional spaces for parking.
    Lars now seeks your advice. He has been forced to close the restaurant on
    Monday and Tuesday each week which are very quiet days. He had been
    convinced that the acquisition of the retail unit would help with trade, but
    Thure (citing his own economic hardship) no longer wishes to sell the unit to
    Lars. Lars is unhappy with Ulrich because he (Ulrich) has yet to start his
    building work and has allowed parts of the cinema to deteriorate substantially.
    Making detailed reference to case law, and outlining any additional
    information you require (if any), advise Lars.
  5. Critically evaluate the basis upon which courts award and assess damages in
    lieu of injunction. To what extent is the approach in HKRUK (CHC) Ltd v
    Heaney [2010] EWHC 2245 (Ch) open to valid criticism?
  6. To what extent have the courts been successful in developing clear, coherent
    and consistent guidance for judges hearing applications for interim
    injunctions? In your answer, you should refer to the views of judges and
    academic commentators.
  7. ‘In an interim application for injunctive relief to restrain the misuse of private
    information, the court is not looking for the balance of convenience and a very
    different and higher threshold test applies. Nonetheless, the press can now be
    confident that where such an injunction is granted, the court will have had
    principled reasons for doing so, supported by a growing body of case law
    precedent’.
    Discuss.

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