#6546 - Equitable Personal Remedies Ii - Equity

EQUITABLE PERSONAL REMEDIES II: EQUITABLE PROPRIETARY REMEDY OF CONSTRUCTIVE TRUSTS EQUITY 40 EQUITABLE COMPENSATION Restore persons who have suffered loss to the position in which they would have been if there had been no breach of the equitable obligation. * Compensation for a breach of an equitable obligation o Eg. fiduciary obligation * Aims at restitution or restoration rather than compensating for harms done * Discretionary Proof of an adequate or sufficient connection between the equitable compensation claimed and the breach of fiduciary duty * Maguire v Makaronis o Law firm lent funds to a client to purchase a property, which was secured by a mortgage. It wasn't disclosed that the firm was the mortgagee and the client thought a bank was Firm had a retainer to act for the client. The client defaulted on the second payment and the firm claimed for unpaid funds, while client claimed breach of fiduciary duty. o HELD: breach of duty of interest and there was no informed consent. Equitable compensation for the funds advanced, with interest. * Once a breach of fiduciary duty has been shown, it is no longer a defence to a claim of compensation o The need to show that the defendants breach was a cause of the plaintiffs loss Flexibility of Equitable Compensation: * Moulded to meet the justice of the case o Based on the plaintiff's loss and/or the defendants gain o Awarded to effect restitution even where the defendant has made no gain Interest: * May award simple or compound interest * Focus on the interest that would have accrued had the plaintiff invested the funds in an alternative manner o Only as an element in restitution not a punishment EQUITY 41