Stevens v Hotel Portfolio II UK Ltd (In Liquidation) and another

Stevens v Hotel Portfolio II UK Ltd (In Liquidation) and another

A dishonest assistant who assists in the dissipation of trust property held on constructive trust for unauthorised profits is jointly liable with the trustee to compensate the beneficiary for the loss of its proprietary interest, regardless of whether the profits were themselves the result of an earlier breach and regardless of any set-off argument. The constructive trust is a real trust, not merely a remedy, and the loss is assessed by reference to the value of the property dissipated.

Parties
Respondent: Stevens; Appellants: Hotel Portfolio II UK Ltd (In Liquidation) and another
Jurisdiction
England and Wales
Judgment Date
23 July 2025
Procedural Posture
Appeal / Supreme Court Judgment
Outcome
Appeal allowed (majority); order of trial judge restored. Dissent: appeal dismissed.
Legal Topics
Constructive Trusts, Dishonest Assistance, Fiduciary Duty, Equitable Compensation, Account of Profits, Set Off in Breach of Trust
Equity Trusts Company Law Constructive Trusts Dishonest Assistance Fiduciary Duty Equitable Compensation Account of Profits +1 more

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Parties

Stevens

Respondent

Hotel Portfolio II UK Ltd (In Liquidation) and another

Appellants

Procedural Posture

Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether a dishonest assistant to a constructive trustee is liable to compensate the beneficiary for loss caused by dissipation of trust property representing unauthorised profits
  2. 2 Whether compensation can be ordered for breach of a constructive trust of unauthorised profits
  3. 3 Whether equitable set-off applies to gains and losses from connected breaches of trust

Ratio Decidendi

A dishonest assistant who assists in the dissipation of trust property held on constructive trust for unauthorised profits is jointly liable with the trustee to compensate the beneficiary for the loss of its proprietary interest, regardless of whether the profits were themselves the result of an earlier breach and regardless of any set-off argument. The constructive trust is a real trust, not merely a remedy, and the loss is assessed by reference to the value of the property dissipated.

Court Disposition

Appeal allowed (majority); order of trial judge restored. Dissent: appeal dismissed.

Orders

  • Mr Stevens is ordered to compensate HPII for the loss caused by dissipation of the trust property representing unauthorised profits.
  • No set-off allowed against the loss caused by dissipation.