But ... strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a court of equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.This passage was adopted by the High Court of Australia as a statement of the 'rule in Barnes v Addy' in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007).

Lord Selborne LC held that neither of the solicitors had any knowledge of or reason to suspect dishonesty in the transaction.

We cannot consistently with the evidence, or with justice, or reason, disbelieve Mr. Duffield, when he says he never knew nor suspected any dishonest purpose, or believed that any actual fraud would result from what was done; and if that be a true interpretation of the facts, I certainly, for one, am unable to hold him responsible.

With respect to the receipt of the money, he received nothing except two sums, one which belonged to the Barlow family, and on which nothing turns, and the other a part ... of which a third came from the Barnes' share, representing £65; and it is said he is to be charged with that (though he did not retain or use for his own benefit a single shilling of that money) because the authority of the trustees to apply that money in the payment of certain costs of a previous suit, which had been compromised, was not obtained from this Court ...In any event, Barnes had not established a breach of trust by Addy: The trustee, Addy, authorized the sale for [the] purpose [of compromising a suit brought against him as trustee] and that application of the money, and it was so applied; and I am most clearly of opinion, first of all, that there is nothing before us to shew that such an application was improper on the part of Mr. Addy, the trustee; but, secondly, that if it had been, the solicitor could not possibly have been held on that account responsible.Sir W M James LJ and Sir G Mellish LJ agreed.

Barnes v Addy was the starting point for the academic debate as to the proper grounds of accessory liability and claims for knowing receipt of trust property.