Case of Lister & Co v Stubbs (1890):
- Held that a bribe received by a fiduciary from a third party was not held on trust for
the principal
- This is because proprietary claims were available only where there was a proprietary
base for the claim
- It is a personal obligation to account to the Principal for all the bribes or
unauthorised gains.
A bribe is not the property of the principal but is property held by the fiduciary in breach of
fiduciary obligation. In this case, the relationship is that of a debtor and creditor, not a
trustee and beneficiary.
However, this was reversed in Attorney General for Hong Kong v Reid (1994):
- Held that the claimant able to establish a proprietary interest in the bribe monies
received by Reid on the basis of the equitable maxim that “equity sees as done that
which ought to be done”
- Means that defendant held property purchased with bribe money (which had
increased in value) on constructive trust for claimant
- benefits obtained from a third party in breach of a fiduciary duty, such as bribes,
belong in equity to the principal from the moment of receipt
This case seeks to show those who think to exploit a fiduciary relationship that such a
thing will not be tolerated.
- Held that a bribe received by a fiduciary from a third party was not held on trust for
the principal
- This is because proprietary claims were available only where there was a proprietary
base for the claim
- It is a personal obligation to account to the Principal for all the bribes or
unauthorised gains.
A bribe is not the property of the principal but is property held by the fiduciary in breach of
fiduciary obligation. In this case, the relationship is that of a debtor and creditor, not a
trustee and beneficiary.
However, this was reversed in Attorney General for Hong Kong v Reid (1994):
- Held that the claimant able to establish a proprietary interest in the bribe monies
received by Reid on the basis of the equitable maxim that “equity sees as done that
which ought to be done”
- Means that defendant held property purchased with bribe money (which had
increased in value) on constructive trust for claimant
- benefits obtained from a third party in breach of a fiduciary duty, such as bribes,
belong in equity to the principal from the moment of receipt
This case seeks to show those who think to exploit a fiduciary relationship that such a
thing will not be tolerated.
