The liability to account for profits on breach of the self-dealing rule and the fair-dealing rule does not arise from a breach of duty at all. In his judgment such liability is the consequence of an equitable disability rather than of a breach of duty, such as a breach of trust by a trustee or, it appears, a breach of an analogous duty, such as the fiduciary obligations of a company director to his company. The claim for an account of profits is a claim for unjust enrichment, which may succeed, even in the absence of the commission of any wrong, such as a breach of trust or of fiduciary duty or the misuse or misapplication of any of the assets of the beneficiary of the duty. the fair-dealing rule was not confined to trustees, but ‘to many others, such as agents, solicitors and company directors’. It would be anomalous if the limitation applied to trustees, but not to others subject to the same rule. ‘A possible line of escape from the anomaly would be to treat agents, solicitors and the rest as constructive trustees for this purpose, so that all would be subject to the six years period: but I should be reluctant to resort to such artificiality unless driven to it.’
Sir Robert Megarry VC
[1977] 1 Ch 107
Limitation Act 1939 19(2)
England and Wales
Cited by:
Cited – DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH v Koshy and Other (No 3); Gwembe Valley Development Co Ltd (in receivership) v Same (No 3) CA 28-Jul-2003
The company sought to recover damages from a director who had acted dishonestly, by concealing a financial interest in a different company which had made loans to the claimant company. He replied that the claim was out of time. At first instance the . .
Cited – Bhullar and Another v McArdle CA 10-Apr-2001
The defendant had registered a caution against the claimant’s land at the Land Registry. The claimant sought its removal and now appealed an order for rectification of the register against him. The parties had reached oral agreements as to the . .
Lists of cited by and citing cases may be incomplete.
Company, Limitation
Leading Case
Updated: 10 November 2021; Ref: scu.187427
