Sir Robert Megarry VC held that the solicitor’s knowledge of clause 14(B) should not be imputed to the tenth Duke so as to affect his conscience.
Further, I do not think that the Duke was at any relevant time conscious of the fact that he was not entitled to receive the chattels and deal with them as beneficial owner… ... the doctrines of purchaser without notice and constructive trusts are concerned with matters which differ in important respects.
The former is concerned with the question whether a person takes property subject to or free from some equity.
I do not see why one of the touchstones for determining the burdens on property should be the same as that for deciding whether to impose a personal obligation on a man.
(5) Whether knowledge of the Baden types (iv) and (v) suffices for this purpose [ie circumstances that would indicate facts to honest and reasonable person, or put him on inquiry] is at best doubtful; in my view, it does not, for I cannot see that the carelessness involved will normally amount to a want of probity.