Keywords: Fiduciary Duty; Bribes; Secret Commissions; Constructive Trusts; Proprietary Remedy; Insolvency; Fraud; Ponzi Schemes
In my case note ( Conv 518) on FHR European Ventures LLP v Cedar Capital Partners LLC  UKSC 45,  AC 250, I said (at p 522) that:
If one reads the many judgments in the Sinclair litigation, a rather unattractive picture of a very undeserving claimant appears to whom it was right to deny priority over Versailles’ creditors.
I was referring to the extensive litigation up to and including the most famous Sinclair case, Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd  EWCA Civ 347,  Ch 453. That is the most famous case in the series, where the claimants, Sinclair Investments, lost before the Court of Appeal on their claim that they should have a proprietary remedy over the applicable breach of fiduciary duty. That case has now been overruled and a proprietary remedy is always available for unauthorised profits made by a breach of fiduciary duty: FHR v Cedar.
So, it should be expected that, if similar facts are presented to the courts again, another Sinclair would win. The amount of money at stake was huge, some £28.7m. So why is it that I was so concerned? I had planned to use the reconstructed backstory of Sinclair v Versailles that follows in my thesis, but thanks to the Supreme Court in FHR v Cedar my sub-thesis that the decision and formulation Sinclair was right is, putting it mildly, heavily obsolete. I have no formal use for the backstory. But it does demonstrate my point, and is an interesting read; it is even ‘somewhat racy’ according to Professor TT Arvind. Hence it is made available here.