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(B) TYPES OF REMEDY WHICH ARE AVAILABLE FOR EQUITABLE WRONGDOING

Where the defendant has committed an equitable wrong the following remedies may be available.

(i) Account of Profits

Usually, where the defendant obtains a profit as a result of committing an equitable wrong, the remedy which is awarded will be an account of profits. This is a personal remedy so that the defendant is simply liable to pay to the claimant the value of the benefit which he or she obtained from the wrong. This is clearly a gain-based remedy, even though the Supreme Court has described it as constituting ‘equitable compensation’.[1] But compensation focuses on remedying the claimant’s loss, whereas account of profits focuses on the defendant’s gain, so using the language of compensation to describe account of profits can only cause categorical confusion.

(ii) Proprietary Remedies

The courts have acknowledged that a proprietary remedy will be available following the commission of an equitable wrong where the nature of the wrong is such that any benefit gained by the defendant is held on constructive trust for the claimant.[2] Where property is held on constructive trust it follows that the claimant has an equitable proprietary interest in the property, which he or she can vindicate by means of restitutionary proprietary claim.[3] One of the most controversial matters concerning the award of gain-based remedies for equitable wrongdoing relates to the determination of when and why proprietary relief should be available.[4]

  • [1] FHR European Ventures Ltd v Cedar Capital Partners LLC [2014] UKSC 45, [2015] AC 250, [6] (LordNeuberger).
  • [2] See especially FHR European Ventures Ltd v Cedar Capital Partners LLC, ibid. The nature of theconstructive trust is examined at p 512, below.
  • [3] See Chapter 21. 8 This is considered at p 513, below.
  • [4] 9 See, in particular, Nocton v Lord Ashburton [1914] AC 932, 956-7 (Viscount Haldane LC); BishopsgateInvestment Management Ltd v Maxwell (No 2) [1994] 1 All ER 261; Target Holdings Ltd v Redferns (a firm)
 
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