Volume 2 issue 1 APRIL 2014

The Legitimacy of Proprietary Relief

Sir Terence Etherton
This article explores the appropriate scope of proprietary relief for breach of fiduciary duty. It focuses on the respective approaches of the common law and equity to proprietary relief as background to the departure of the Court of Appeal in Sinclair Investments (UK) Limited v Versailles Trade Finance Limited from that of the Privy Council in AG of Hong Kong v Reid. 

The paper analyses the voluminous academic commentary on those cases. It calls for a better recognition of the coherence of well established equitable principles and of the danger of a lack of coherence introduced or re-introduced by the decision in Sinclair Investments in relation to opportunity gains obtained by fiduciaries in breach of their fiduciary duties. It argues that, if there is to be any departure from Reid, there must be a sound basis for doing so and one which will leave the law both coherent and internally consistent.