Beyonics Technology Ltd v Goh Chan Peng [2016] – HC rules on causation for equitable compensation

Beyonics Technology Ltd v Goh Chan Peng [2016] SGHC 120 – HC rules on causation for equitable compensation

Significance: in this murky area of the law of equity and trusts, Hoo Sheau Peng JC decided that the causation rule for awarding equitable compensation for breach of fiduciary duties involving the core fiduciary obligations of acting in the best interests of the principal would be the less strict approach taken by the Privy Council in the Brickenden v London Loan & Savings Co of Canada [1934] 3 DLR 465 (“Brickenden”) decision and discussed in previous SGHC decisions of Quality Assurance Management Asia Pte Ltd v Zhang Qing [2013] 3 SLR 631 (HC) (“Quality Assurance”) and Then Khek Koon v Arjun Permanad Samtani [2014] 1 SLR 245 (HC) (“Then Khek Koon”).

That is, in a situation where there is (a) a fiduciary who is in one of the well-established categories of fiduciary relationships; (b) who commits a culpable breach; (c) who breaches an obligation which stands at the very core of the fiduciary relationship” (at [135]), then the fiduciary is liable to pay equitable compensation even if the principal is unable to prove ‘but for’ causation. In other scenarios, the principal still has to satisfy the strict ‘but for’ causation. However, the fiduciary is not immediately liable for all losses once the principal successfully proves that the breach is “in some way connected” to the loss. There is thereafter a shift of the evidential burden to the fiduciary to prove that “but for” his breach of fiduciary duties, the loss would still have occurred. See [131]-[137].

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