Abstract:
Attorney-General of Hong Kong v Reid was decided on two mutually inconsistent doctrinal bases, either that the bribe-taker Reid was a wrongdoer who must be stripped of his gains, or that he owed a pre-existing liability to account for any unauthorized gain because he was a fiduciary. The former basis of liability applies to wrongdoers who are not fiduciaries, and the latter requires no wrongdoing. Neither basis of liability requires, in principle, proprietary liability, ie that equity imposes a constructive trust over the bribe in favour of the victim of the wrong, and indeed, the rules of tracing show that the imposition of a constructive trust is liable to fail to strip wrongdoers of their actual gains, and to lead to unfairness against the wrongdoer’s other creditors.
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James Penner. ‘The difficult doctrinal basis for the fiduciary’s proprietary liability to account for bribes‘. Trusts & Trustees (2012) doi: 10.1093/tandt/tts123. First published online: October 30, 2012.
First posted 2012-11-06 06:52:57
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