P’s former employee D took bribes when commissioning companies to refurbish P’s property. P claimed that because of D’s breach of fiduciary duty P actually owned the money beneficially and D was merely holding it on CT. Collins J allowed P’s claim.
Collins J: As a matter of policy fiduciaries shouldn’t be allowed to keep property that they gain through fraud and it isn’t unfair to a defendant’s creditors, should he become insolvent, to categorise such property as held on trust since it was money that the fiduciary was never entitled to in the first place. “An agent or other fiduciary who makes a secret profit is accountable to his or her principal or cestui que trust.” He says that Reid should be followed and that Lister was wrongly decided. He also says that “I do not consider that Halifax Building Society v Thomas rules out a proprietary claim to the proceeds of fraud,” because the decision was “controversial”. How cryptic…”controversy” is a pretty vague basis on which to deny an earlier authority