Andrew Butler KC and Richard Alford earn reprieve for their client in important decision on the taking of accounts

Andrew Butler KC and Richard Alford achieved an important success in an appeal which contains much of interest to practitioners dealing with the taking of accounts, in Fisher -v- Dinwoodie [2026] EWHC 370 (Ch).

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The case, the latest instalment in a long-running piece of litigation, was an appeal against a decision of HHJ Monty KC, whereby F had been ordered to account for certain sums to D as a result of having (as HHJ Monty KC had previously found) breached his fiduciary duty to him, by failing to acknowledge the latter’s shareholding in several companies through which F operated a business and from which D had been excluded.

On appeal, questions arose as to whether the sums (which, on F’s evidence, represented payments of various different types, including the repayment of loans, interest, fees and expenses) were properly characterised as profits and whether, if they were, there was a sufficient nexus between the breach of fiduciary duty found to have occurred and the profit claimed. It was also argued, in the alternative, that the Judge had improperly denied F the chance to claim an equitable allowance in relation to the work he had undertaken by dealing with the account in a peremptory fashion at first instance.

Hearing the appeal, Sir Anthony Mann decided, by reference to English and Australian authority, that “profit” meant a benefit, and that the sums taken out of the companies by F properly came within the scope of that concept. To the extent that F had worked for the money, this was something in Sir Anthony’s view to be taken into account at the equitable allowance stage, rather than at the stage of identifying “profits”. On the question the nexus between the breach and the profits, Sir Anthony (applying the test laid down in the Supreme Court decision in Recovery Partners -v- Rukhadze [2025] 2 WLR 529) held that the profits were attributable to the requisite extent to “the application of the advantages which F arrogated to himself”, and so upheld the decision of HHJ Monty on that point too. However, on the question of the equitable allowance, Sir Anthony held that the Judge had misapplied the test of “exceptionality” as that was explained in Rukhadze, and had also impermissibly rejected evidence given by F without affording him the opportunity to be cross-examined on it. He therefore directed that the matter be remitted to the County Court for further determination on that point.

The decision contains numerous helpful observations about the nature of the remedy of an account and the appropriate procedure for Judges to adopt when taking them, as well as an application of the law as expounded in the Rukhadze decision.

You can read the full judgment here.