“Proprietary remedies for breach of fiduciary duty require acquisition of beneficiary's equitable property.”
Versailles Trade Finance Limited was in administration. Sinclair Investments (UK) Limited claimed proprietary remedies against profits made by directors in breach of fiduciary duty. The profits arose from unauthorized diversion of business opportunities that should have gone to Versailles.
Whether proprietary remedies were available for breach of fiduciary duty where directors diverted business opportunities, or whether claimants were limited to personal remedies.
The Court of Appeal held that Sinclair was not entitled to proprietary remedies. The court ruled that proprietary remedies are only available where the fiduciary has acquired property that belongs in equity to the beneficiary.
This case significantly restricted the availability of proprietary remedies for breach of fiduciary duty, providing important clarification for commercial law. It established clear limits on when beneficiaries can claim proprietary interests in unauthorized profits. The decision has major implications for company law and insolvency proceedings.
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OSCOLA Citation
Sinclair Investments v Versailles Trade Finance [2011] EWCA Civ 347
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