Stripping the gains of wrongful fiduciaries: let a hundred flowers bloom?

Abstract

In common law jurisdictions, the principal remedy against a defaulting fiduciary is to strip his wrongful gains. This can be achieved through a wide gamut of remedies that may be both personal and proprietary. In relation to the personal action for account of profits, the established orthodoxy requires a fiduciary to disgorge all the unauthorised profits he made from his fiduciary position, subject to equitable allowance awarded by the court: Regal (Hastings) v Gulliver [1942] 1 All ER 378; Murad v Al-Saraj [2005] WTLR 1573. This strict position, however, has not been universally accepted in common law jurisdictions. Some courts have sought to lay down remedial principles to limit the extent of disgorgement, such as by requiring a closer connection between the breach and the gain: see, for example, Warman International v Dwyer (1995) 182 CLR 544; Kao Lee & Yip v Koo [2003] 3 HKLRD 296 .....