BRIBES AND SECRET COMMISSIONS AGAIN

Abstract

Where a fiduciary receives a bribe or a secret commission in breach of fiduciary duty it remains controversial whether the bribe or secret commission will be held on constructive trust for the principal. The Court of Appeal has held that in most cases there will only be a personal liability to account. That is incorrect. The duty of the fiduciary is to serve the interest of the principal to the exclusion of his own interest. A fiduciary who keeps a profit for himself abuses the trust and confidence placed in him by the principal. He is bound to hand it over to his principal the moment he receives it. Equity's response to a breach of this duty is to enforce the duty by means of the constructive trust.

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