Remedies for equitable wrongs: Coherence and limitation principles AIB Group (UK) Plc v Mark Redler & Co Solicitors [2014] UKSC 58

Abstract

A Introduction Since the House of Lords’ decision in Target Holdings Ltd v Redfern, uncertainty has arisen over whether causation limits equitable compensation for breach of trust. The traditional view of remedies for breach of trust was that a trustee who had misapplied trust funds was obliged to give an account and restore the misapplied assets in specie, failing which, the trustee was liable to make monetary compensation to restore the trust fund to the position it would have been in if not for the breach. To borrow the language of Professor Birks, the former is merely the enforcement of a trustee’s primary right of having the trust funds maintained which arose from a ‘not-wrong’ ie the beneficiary’s interest in the trust, whereas the latter is a remedial right which flows from the former. It was assumed that a beneficiary’s right to have the trust fund restored was not affected by any supervening causative events which might have led to a decrease in value of the trust fund.