New Judgment: AIB Group (UK) v Mark Redler & Co Solicitors  UKSC 58
05 Wednesday Nov 2014
On appeal from:  EWCA Civ 45
The Supreme Court unanimously dismissed the appeal brought by the appellant in regards to their equitable compensation claim following a breach of trust by the respondents when a re-mortgage transaction went wrong. They had agreed to lend Mr and Mrs Sondhi £3.3m secured by a legal charge over their home on the condition that the existing legal charge in favour of Barclays Bank plc was redeemed on or before the completion of the appellant’s mortgage advance. The solicitors erred by paying Barclays £300,000 less than the amount needed to redeem the mortgage. The appellant had argued that it was entitled to recover the full amount of its loan less the £867,697 recovered through the repossession of Mr and Mrs Sondhi’s property.
Lord Toulson stated that considering the principles of Target Holdings v Redfern, a monetary reward which reflects neither loss caused nor profit gained by the wrongdoer, such as the one argued by the appellant, would be penal. He stated that instead one must look at the rationale of the monetary remedy for breach of trust and therefore recover losses suffered by reason of the breach of duty.