Rayhan Langdana reports on the Supreme Court’s strengthening of constructive trust remedies against dishonest assistants
- The Supreme Court in Stevens v Hotel Portfolio II clarified that a constructive trust over unauthorised profits arises automatically, giving the beneficiary an immediate proprietary interest.
- Both a dishonest assistant and the constructive trustee are jointly liable for any loss caused by dissipation of those profits, regardless of whether the profits themselves arose from an earlier fiduciary breach.
- The court rejected set-off arguments and affirmed that equity’s purpose is to protect beneficiaries’ proprietary rights, not to reward dishonesty, thus strengthening the remedies available against dishonest assistants.
In Stevens v Hotel Portfolio II UK Ltd (In Liquidation) and another [2025] UKSC 28, the Supreme Court clarified the nature and extent of liability that can be borne by a person who dishonestly assists a constructive trustee. Lord Briggs, writing for the majority, concluded that a constructive trust of unauthorised profits immediately vests a proprietary interest in the beneficiary, and that both the trustee and any dishonest
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