An account of profits is not limited to notions of ‘accounting profits’, but can encompass a wi
der view of ‘benefits’ obtained by a defaulting fiduciary.
In the case of Guo v Yufeng Investment Group (No 2), Nixon J entered judgment for the plaintiff for $39.8m, including interest.
This case concerned a single property joint enterprise. One defendant took all of the sale proceeds, and obtained a ‘benefit’ in excess of his 70% interest.
He was held liable to account, in equity, for the agreed 30% share of the net proceeds of sale, after payment of tax and the bank loan, and not merely the accounting profits.
Enforcement of the judgment is stayed, pending the transfer of a 30% shareholding in one of the related companies – reflecting equity’s ability to fashion a remedy appropriate to the circumstances, to avoid ‘double recovery’.
Tim D. Castle SC of 6 St James Hall Chambers, and Dana Levi of Ground Floor Wentworth Chambers, acted for the successful plaintiff on the account of profits quantification, instructed by Ge Wu of Legal Point Lawyers. Michael Henry SC and Dominic Delany of Alinea Chambers, instructed by Arnold Block Leibler, acted for the plaintiff on the claim establishing the breach of fiduciary duty.
The judgment can be found here.