Equity has long
established that a person standing in a fiduciary relationship is not entitled
to allow there to be a conflict of interest between themselves and their
principal or beneficiary. Furthermore, any profits made by a fiduciary who
breaches their fiduciary duty of loyalty is required to account for any profits
made and give them over to the principal in all situations. In recent times
there has been much debate and speculation as to whether this strict principle
of equity is justified, particularly in relation to fiduciaries operating in a
business rather than a family context. The question as to the justification of
the rule was carefully analysed in a recent and fundamentally important
decision of the Supreme Court. This article examines the nature and scope of
this momentous decision.