"The loan moneys will be retained by us [Sims & Roper] until such time as they are applied in the acquisition of property on behalf of our client.

In the Court of Appeal, Potter LJ held that Mr Leach was in fact dishonest, precisely because he had deliberately shut his eyes.

It then held (controversially; an issue revisited in Barlow Clowes Ltd v Eurotrust Ltd[2]) that Mr Leach had not been dishonest enough for accessory liability.

[...] The terms of the trust upon which Sims held the money must be found in the undertaking which they gave to Twinsectra as a condition of payment.

For example, if Mr Yardley went bankrupt before the money had been so applied, it would not have formed part of his estate, as it would have done if Sims had held it in trust for him absolutely.

It follows that Sims held the money in trust for Twinsectra, but subject to a power to apply it by way of loan to Mr Yardley in accordance with the undertaking.

There was nothing to prevent Mr Yardley, having acquired a property in accordance with the undertaking, from mortgaging it to the hilt and spending the proceeds on something else.

The judge thought it might have been intended to give some protective colour to a claim against the Solicitors Indemnity Fund if Sims failed to repay the loan in accordance with the undertaking.

A claim against the fund would depend upon showing that the undertaking was given in the context of an underlying transaction within the usual business of a solicitor: United Bank of Kuwait Ltd v Hammoud [1988] 1 WLR 1051.

But a power is sufficiently certain to be valid if the court can say that a given application of the money does or does not fall within its terms: see In re Baden's Deed Trusts [1971] AC 424.

And there is no dispute that the £357,720.11 was not applied for the acquisition of property.Lord Hoffmann then said that the defendant must be conscious of the fact that he was "transgressing ordinary standards of honest behaviour" in order to be liable for dishonest assistance.

He interpreted Lord Nicholls in Royal Brunei Airlines v Tan to have articulated a combined test: for a person to be held liable as an accessory to a breach of trust, he had to have acted dishonestly by the ordinary standards of reasonable and honest people and have been himself aware that by those standards he was acting dishonestly.

Lord Millett's dissent maintained that Royal Brunei decided that the test of dishonesty is largely objective, although account must be taken of subjective considerations such as the defendant’s experience and intelligence and his actual state of knowledge at the relevant time.

His Lordship gave 3 reasons for this: By applying the Royal Brunei test, Lord Millett held that Leach was dishonest.

Lord Millett's analysis of the Quistclose trust closely mirrored the same approach he had suggested twenty years earlier in an article in the Law Quarterly Review.

So, Lord Millett concluded that the beneficial interest must remain with the lender, until the purpose for which the funds are lent is fulfilled on "resulting trust".

[4] He says the following regarding the role of intention in passing the beneficial interest of a resulting trust, referring to and endorsing Dr. Chamber's model:[5] 92.