BAILII Citation Number: [1998] EWHC 321 (Ch)
Case Nos. CHANF 97/1461/3, CHANF 97/1471/3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Chadwick)
Royal Courts of Justice
Strand, London WC2

Date: Monday, 21st December 1998

B e f o r e :

LORD JUSTICE NOURSE
LORD JUSTICE SCHIEMANN and
LORD JUSTICE BROOKE

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SATNAM INVESTMENTS LIMITED
Plaintiff/Respondent

-v-

(1)  DUNLOP HEYWOOD & CO LTD
(2)  THOMAS ANDREW MALCOLM MURRAY
(3)  MORBAINE LIMITED
Defendants/Appellants

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Handed Down Judgment
Smith Bernal Reporting Limited
180 Fleet Street  London EC4A 2HG
Tel: 0171 421 4040  Fax: 0171 831 8838
(Official Shorthand Writers to the Court)

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Mr P Vallance QC and Mr A McCullough (instructed by Messrs Bullivant Jones & Co, Liverpool) appeared on behalf of the Appellant First and Second Defendants.
Mr M Kent QC, Miss C Newman QC and Mr A O'Connor (instructed by Messrs Park Nelson, London WC2) appeared on behalf of the Appellant Third Defendant.
Mr M Hapgood QC and Mr M Lazarus (instructed by Messrs Dibb Lupton Alsop, Birmingham) appeared on behalf of the Respondent Plaintiff.
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J U D G M E N T
	
Lord Justice Nourse:

	This is the judgment of the court, to which each of its members has contributed.

An Overview
	These appeals primarily concern claims by a property development company Satnam Investments Ltd (“Satnam”) against their surveyors Dunlop Heywood & Co Ltd (“DH”) and a rival development company Morbaine Ltd (“Morbaine”).  DH, without the knowledge of Satnam, sent a letter dated 17th July 1995 (“the Disclosure Letter”) to Morbaine which disclosed certain information to Morbaine.  It disclosed that administrative receivers had been appointed over Satnam’s assets, that Satnam had interests in a site with development potential and that the Local Planning Authority were well disposed towards the development of that site.  Mr Justice Chadwick held that this disclosure was a breach of a fiduciary duty owed by DH to Satnam, that the breach was known by Morbaine to be such and that it caused Morbaine to purchase a site (“the Brewery Street site”) for the purchase of which Satnam at the time of the disclosure, though not at the time of purchase, had an option.  The judge declared that Morbaine held the Brewery Street site on a constructive trust for Satnam, ordered Morbaine to transfer it to Satnam and further ordered that DH and Morbaine should pay equitable compensation to Satnam.  The main thrust of the appeals is a submission that the Disclosure Letter disclosed nothing that was new to Morbaine or would not in any event have come to the knowledge of Morbaine within days and that in consequence the disclosure has not harmed Satnam one whit.  It is further submitted that the judge was wrong to hold that there was a constructive trust in circumstances such as the present, relief for which there is admittedly no precedent.  Satnam cross-appeals, arguing that the judge should equally have held that Morbaine also held another site, known as the Hope Mill site, on trust for Satnam.

The facts : Background
	Satnam has at all material times been controlled by a Mr Dhillon and his family interests.  In late 1987 a site in Stockport, Greater Manchester, considered by him to be ripe for development ("the Tiviot Way site") came to his attention.  It was in several ownerships.  At that stage the precise nature of any eventual development and the precise boundaries of the land needed in order to carry it out were uncertain.  Satnam acquired a parcel of land within the site and, in early 1988 instructed DH to act for it in the acquisition of ownership or control of other parts of the site.  Mr Millington was the director of DH with whom Satnam had its principal dealings, and he continued to be involved in that capacity on the project as a whole until December 1995.  Piecemeal, Satnam acquired various plots within the site.  One important plot within the Tiviot Way site was a site of 1.1 acres known as the Brewery Street site.  It was occupied by Chamberlain Phipps Holdings Ltd (“CPH”) who in June 1993  gave Satnam an option to acquire it.  Whoever controlled that plot was in a position seriously to inhibit any large scale development of the Tiviot Way site by whoever controlled the remainder.

	On 23rd August 1993 Satnam and Tesco jointly put in a planning application for permission to build a retail foodstore and petrol filling station on the Tiviot Way site.  By this time Satnam had agreed to sell the Tiviot Way site to Tesco subject to Satnam acquiring good title and planning permission.

	The change of use to food superstore had the support of the local planning authority but there were potential problems in relation to traffic.  Satnam and Tesco appealed against the non-determination of the planning application and a public enquiry was held which lasted 10 days.  On 28th March 1995 the Secretary of State upheld objections by the Department of Transport to the effect that the proposed development would lead to an unacceptable volume of traffic using the neighbouring junction 13 on the M63 and dismissed the appeal.

	After the refusal of planning permission for the food store Satnam started to explore the possibilities of a non-food development of the site.  Their Mr Griffiths,  after several meetings with the planning authority’s officers and some of its members, believed that if an application for planning permission for a non-food retail scheme which did not generate too high traffic flows were to be submitted it would be likely to receive consent.  This was not a surprising conclusion.  It is obvious to anyone familiar with planning appeals dealing with shopping developments that non-food stores generate less traffic than food stores.  The Council’s formal position was that it wished to see if a food retail solution was possible notwithstanding the refusal.  In April 1995 Mr Murray was brought into the DH team by Mr Millington, since he had contacts with B&Q, which Satnam wished to interest in the possibility of a non-food store on the site.  Mr Murray, who was also a director of DH, had had dealings with Morbaine on various matters for a number of years.  In particular, he had discussed possible development opportunities with Mr Finlan of Morbaine on numerous occasions over the past four years.

	Morbaine, which at this stage was taking a close interest in the Tiviot Way site, was being advised by Mr Liptrott, a planning consultant.  He stated that on the failure of the planning appeal he advised Morbaine that the Tiviot Way site might present a business opportunity since Satnam might not appreciate that another development might be profitable.  The judge gave no indication as to whether or not he accepted Mr Liptrott’s evidence, either in whole or in part.

	Meanwhile Satnam was negotiating with CPH in an endeavour to persuade CPH to alter the terms of the option so as to lower the price which had been negotiated at a time when the Tesco development seemed likely to get permission.  CPH was content to negotiate since it wished to relocate.  However, because of its wish to relocate, it was also anxious to sell a neighbouring site (“the Hope Mill site”) and to make that sale part of the renegotiated option.  

	On 5th July 1995 joint administrative receivers were appointed over the whole of the undertaking and assets of Satnam under debentures in favour of its bankers, Lloyds Bank Plc.  At the time of the appointment of the receivers the principal assets of Satnam were the Tiviot Way site and a site at Riverside Road, Warrington (“the Warrington site”), described in evidence as “oven-ready”.  Mr Dhillon’s view, which subsequently proved correct, was that the value of the Warrington site was more than sufficient to discharge its indebtedness to the bank.  Satnam’s problem was one of cash flow and a loss of the confidence of its principal bankers.  The receivers decided at an early stage to try and sell the site at Warrington first before deciding what to do with the land owned by Satnam within the Tiviot Way site. They authorised Mr Dhillon (and his team) to continue to take steps to exploit the value of the Tiviot Way site.

	The Directors of Morbaine included Mr Finlan and Mr Parle.  In the summer and autumn of 1995 Morbaine was involved in developing or attempting to develop two sites in Stockport which were very close to the Tiviot Way site, namely
(a) The Bredbury site, 1.5 miles away from the Tiviot Way site, upon which it was building a large food store and filling station for Safeway plc.  Planning permission for this had been granted in October 1994.
(b) The St George’s Road site, less than a mile away from the Tiviot Way site, in which Morbaine had acquired an interest in April 1995.  On that site they envisaged a non-food retail development.

	On 14th July 1995 Satnam’s receivership was registered at Companies House and on 17th July notice of the receivership was published in the London Gazette.  It soon became widely known in the area.

	The appointment of receivers over Satnam’s assets posed something of a problem to DH.  They had fees owing to them.  The receivers were likely to have their own advisers and the possibility of earning further fees for advising in relation to the site was slipping away.  It seems clear that this prompted the sending of the Disclosure Letter.

The Disclosure Letter
	On 17th July 1995 Mr Murray of DH sent to Mr Parle the Disclosure Letter which is at the centre of this appeal:
	“Tiviot Way, Stockport
	I refer to my conversation with John Finlan Junior and yourself regarding the above and more particularly our present clients Satnam Investments who have been placed in receivership.

	You may be familiar with the above site which was recently the subject of a planning application by Tesco which was refused, ironically not on use but on traffic generation at the nearby motorway roundabout.

	For your information, I attach an extract from the relevant Ordnance Survey sheet showing the site more accurately.  The area owned by Satnam I have outlined in red which extends to a fraction over 5 acres.  I outline in blue the adjoining sites which are controlled by the company on option agreements.

	The up to date planning position is that according to the local authority a B & Q Depot whilst acceptable user wise is fractionally above the Transport Department’s traffic flow analysis for peak times on the roundabout at motorway junction.  The Council are therefore of a mind to grant planning consent for a multi unit non food retail warehouse development on the site.

	I have also established that the receiver for the company is Malcolm Shearer of the Manchester Office of Grant Thornton and the Manager will be Mark Grundy.  

	Perhaps when you receive this letter, we can discuss the matter in more detail although it goes without saying from my point of view I would expect that Dunlop Heywood would be retained by your company on the acquisition, letting and investment sales/funding if you were available to secure this site.  Naturally I will give you early assistance in the matter.”

	Mr Murray attached to that letter a plan on which there purported to be shown, edged in red and in blue respectively, those parts of the Tiviot Way site which were owned or controlled by Satnam.  That plan had been prepared by his co-director, Mr Millington, as a result of a discussion between Mr Murray and Mr Millington on the previous day. 

	At the trial the evidence was that nobody remembered what had been said during the conversation which apparently preceded the sending of the Disclosure Letter.  The judge did not find, nor is it suggested that he should have found, that the Disclosure Letter had been solicited by Morbaine.  Mr Murray wrote a similar letter to another company on the same day, but that company took no action on his letter.

	The disclosure letter and plan contained a major inaccuracy.  The Brewery Street site alleged to be controlled by Satnam was not in fact controlled by Satnam at the time of the letter.  True it was that Satnam had an option to purchase the Brewery Street site, but this option could be terminated by CPH by reason of Satnam having gone into receivership.  Further the letter was arguably misleading in that there was no resolution by the Council or any person or body empowered to take a decision on its behalf to the effect that it was in favour of granting planning consent for a multi non-food retail development on the Tiviot Way site.  Indeed the Council were at that very time actively trying to achieve a food store notation for the Tiviot Way site in the Unitary Development Plan.

Events thereafter
	Mr Parle replied to Mr Murray’s letter on 18th July 1995.  He wrote:
	"Re: Stockport.

	Many thanks for sending through the post the information promised which was received in yesterday’s post.

	I confirm that we wish to explore this opportunity further and any information you can glean regarding the disposal of the site would be most useful.  I confirm that Dunlop Heywood will be retained as Morbaine’s agents on the acquisition letting and investment sale/funding - assuming of course we secure an interest in the site."

	Thereafter Morbaine sought to acquire an interest in the Tiviot Way site.  The course of events was as follows.

	Satnam did not inform CPH of the fact that receivers had been appointed.  This was in breach of their contractual duty to CPH.
 
	On 19th July 1995 Mr Finlan instructed Morbaine’s solicitors, Bullivant Jones, to undertake a title search of the properties comprising the Tiviot Way site.  He enclosed a photocopy of the plan which had been sent to it by DH.  The photocopy did not distinguish between land owned and land in respect of which there were option agreements.

	On 26th July Bullivant Jones received from the Land Registry the results of the title search.  The search revealed that the Brewery Street site:
	(a)   was held by CPH; and
	(b) did not appear to be the subject of any option or conditional contract, or to be protected by any caution or notice in Satnam’s favour, despite the fact that it was within the area marked on DH’s plan as being controlled by Satnam.

		On 1st August there was a meeting between representatives of Satnam, representatives of Morbaine and Mr Murray about the Warrington site.  Satnam said the receivership would be short lived and only the Warrington site was being sold.  According to Mr Dhillon, Mr Murray and Mr Finlan were particularly interested in Morbaine gaining control of two pieces of land at Warrington which were owned by companies in the Dhillon family group which were not in receivership.  Control of these pieces of land would be vital for the successful development of the Warrington site, and Mr Dhillon said it was clear to him that Morbaine hoped to use their control over these pieces of land as a means of forcing the receivers to allow them to participate in the development of the whole site.  He told Morbaine he was not interested in such a proposal.  Morbaine subsequently made an offer to the receivers for the Warrington site which was rejected on 10th August.

	Morbaine did not reveal to Mr Dhillon that it was interested in the Brewery Street site, and despite meeting Mr Dhillon on 1st August and hearing that the receivership would be short-lived, Mr Murray still did not tell him about the letter he had written to Morbaine on 17th July.  Mr Dhillon, however, was sufficiently concerned about Mr Murray’s involvement with Morbaine in relation to the Warrington site that he gave instructions that Mr Murray should no longer be involved in seeking a prospective retail partner for the Tiviot Way site.  Although DH continued to be retained as agents by Satnam in relation to the Tiviot Way site, a letter was sent to Mr Murray on 10th August formally asking him to return Satnam’s non-food layout plan and trusting that he would continue to treat this sensitive matter in confidence.

	Mr Finlan told Mr Murray before the meeting on 1st August that he intended to visit the Tiviot Way site, and Mr Murray understood from this that Morbaine was actively interested in this site.  Indeed, when the two men met a fortnight later to visit another site in the area, Mr Finlan suggested that they should meet at Tiviot Way.  Mr Murray parked his car on Brewery Street and when he met Mr Finlan, the latter drew his attention to a building opposite which was closed up and fenced off.  Mr Murray now knows this to be the CPH property.  He declined Mr Finlan’s invitation to find out more information about it.  He had been told by Mr Millington towards the end of July that the Satnam situation was not as straightforward as it might be, and that he should take no further action in relation to the Tiviot Way site with either Morbaine or the other company to whom he had written.

	On 16th August 1995, the day after he met Mr Murray in Brewery Street, Mr Finlan instructed Peter Bullivant of Bullivant Jones to approach CPH with a view to acquiring the Brewery Street site.  However, Mr Bullivant’s enquiries with Philip Jones of CPH revealed that Satnam did, in fact, have an option over the Brewery Street site.  At this stage, therefore, there appeared to be no opportunity for Morbaine to purchase the site prior to the expiry of the option on 30th April 1996.  In so far as there were any short term weaknesses in Satnam’s position DH had not revealed them to Morbaine.

	Philip Jones of CPH suggested to Peter Bullivant that his clients - whose identity Peter Bullivant had not revealed to him - make an offer for the Brewery Street site notwithstanding the existence of Satnam’s option.

	On 18th August a meeting took place between Mr Jones and Mr Goodwin of CPH, Mr Whittaker of Satnam and Mr Millington of DH.  At the meeting Mr Whittaker was informed by CPH that if the Brewery Street site was to be sold at a price less than the option price, the deal would have to include the sale of the Hope Mill site.  This of course was not good news for a company with liquidity problems.  Mr Whittaker was also informed by Mr Goodwin that another party had expressed an interest in purchasing the Brewery Street site.  This also was bad news for Satnam but Mr Whittaker did not believe him, thinking this was merely a seller’s attempt to strengthen his hand in negotiations.  No mention was made by Mr Whittaker either during that meeting or in his offer letter of 31st August which followed it - purportedly sent on behalf of Satnam - that Satnam was in administrative receivership. 

	On 31st August Mr Whittaker, purportedly on behalf of Satnam, but without revealing the existence of the receivership, made an offer to CPH of £275,000 for the Brewery Street site, completion to be in December, and a further offer to negotiate about the Hope Mill site with a view to acquiring an option to purchase or entering into a sale and lease-back arrangement.  DH, through Mr Millington, was actively involved in helping to formulate this offer, and had valued the Hope Mill site informally for this purpose, and Mr Whittaker sent Mr Millington a copy of his letter to CPH before departing for two weeks’ holiday.

	On 6th September Susan McGorian, a partner in Bullivant Jones, told Philip Jones, in confidence and on the express basis that this fact was not to be revealed to Satnam, that her client was Morbaine.  She also informed him that Satnam was in administrative receivership, having the previous day received the results of company searches which confirmed this point.  This was the first Mr Jones had heard of the receivership.  The following day Philip Jones informed Miss McGorian that receivership was, he thought, an event of termination in Satnam’s option agreement with CPH.  Neither Morbaine nor Bullivant Jones had previously known this.  At this point a further weakness in Satnam’s position vis-à-vis the Brewery Street site (apart from its liquidity problems which were well known) for the first time became clear to Morbaine and CPH.

	Also on 6th September 1995 one of  Satnam’s associated companies made an application for non-food retail planning permission on the Tiviot Way site.

	On 18th September 1995 a meeting took place between CPH and Morbaine.  On the following day Morbaine made a written offer to CPH comprising (1) £300,000 for the Brewery Street site with an uplift for development and (2) £300,000 for the Hope Mill site payable on 1st September 1996.  The fact of this offer and of the identity of Morbaine was not revealed to Satnam.

	On 19th September Mr Whittaker spoke to Mr Jones of CPH who told him he had heard about Satnam’s receivership and suggested that this gave CPH the right to terminate the option.  Mr Whittaker was surprised about this, but after checking the position, he confirmed to Mr Jones that this was in fact the case.  Both Mr Dhillon and Mr Whittaker told the judge that this was the first time they realised that the option was terminable as a result of the receivership, or indeed that they had been obliged to tell CPH of the receivership.  Mr Dhillon added that at their request Mr Jones spoke to the receivers who confirmed to him that they did not expect Satnam to be in receivership for long.

	On 22nd September, Satnam proposed to CPH that contracts for the Brewery Street site be exchanged on 13th October 1995 at a price of £275,000 with an uplift of £100,000 on receipt of planning approval for development, and that the Hope Mill site should be the subject of a put option exercisable by CPH at a price of £350,000.

	On the same day Mr Jones of CPH had a meeting with Messrs Dhillon and Whittaker.  He told them that CPH proposed to terminate the option and that a third party (unidentified), who was represented by a firm of Liverpool solicitors, had become involved.  Again he was not believed as to the existence of the third party offer.  Mr Dhillon’s evidence was that he did not believe that anyone knew that this property was available, and that this was merely a negotiating tool being used by CPH.  Mr Jones had told him that CPH was not marketing the properties and that they were most surprised by the unsolicited approach they had received, wholly out of the blue.  Mr Dhillon told Mr Jones that it would be ridiculous for anyone else to acquire the Brewery Street site, since Satnam had control of the rest of the site.  Mr Jones required of Satnam that the deferred Hope Mill sale be guaranteed by a discountable instrument.  Mr Dhillon was made aware of this requirement certainly at a meeting on 28th September and possibly at the earlier meeting on 22nd September.

	A termination notice in respect of Satnam’s option over the Brewery Street site was served by CPH on Satnam’s receivers by letter dated 3rd October 1995.  It was Mr Jones’ evidence that,  after the notice of termination had been sent, he and his solicitors Clifford Chance remained uneasy about the legality of the termination, in particular since the receivers refused to acknowledge it.  He told Mr Dhillon that he would be happy for him to purchase Brewery Street on its own at the option price of £505,000.  This was an offer Mr Dhillon never took up.  He thought it too much.

	On 5th October Satnam made an offer to CPH of (1) £275,000 for the Brewery Street site with an uplift upon receipt of a non-food retail planning permission and (2) £350,000 for the Hope Mill site payable on 1st September 1996 (no guarantee was offered since Mr Dhillon hoped to negotiate them out of it).  On the following day CPH informed Morbaine that the termination notice had been served on Satnam and that CPH wanted simultaneous exchange and completion on 20th October 1995, alternatively security for a later payment in respect of the Hope Mill site.

	According to Mr Dhillon it was not until about 13th October that he realised that there was a serious competitor.  He then took urgent steps to try and place his companies in a position in which they could meet CPH’s demands.  About £230,000 was immediately realisable from the sale of gilts owned by his family’s pension fund, and another of his companies held £130,000 in cash deposits from which they were able to realise about £70,000 for this transaction.  The only insuperable problem arose from the need to provide a bank guarantee at such short notice.  A further family company owned a car park site in Bolton, free of encumbrances, to which Mr Dhillon attached a value of over £850,000.  When his finance consultant Mr Summerfield approached the Dhillon group’s bankers for the first time by telephone on Friday 13th October, Barclays suggested that they could furnish a guarantee within two weeks, on being satisfied about the security.  The relevant Bank of Scotland manager, Mr Hesp, was not available until 16th October, and he told Mr Summerfield then that he thought it would take three weeks to make the necessary inquiries, an estimate Mr Dhillon thought was more realistic.  Both Mr Dhillon and Mr Summerfield told the judge that they would have had no difficulty in satisfying the Bank of Scotland’s requirements.  Mr Hesp said in a statement that he did not anticipate that there would have been any difficulties in providing £300,000 by way of loan or guarantee on the security of the Bolton site, on whose security they were to make a much larger offer of £500,000 two years later.

	Mr Dhillon’s idea was to acquire the Brewery Street site through a shell company called Satnam Properties Ltd, and the Hope Mill site through the owners of the Bolton car park, Securikar Parks Ltd.  Both sites would thereafter be transferred to Satnam itself (which was not in a position to buy the land at that time) once it had emerged from receivership.  The judge made no findings as to any of the evidence about Mr Dhillon’s companies we have just recorded.  It was suggested in cross-examination that Mr Dhillon would not have found it so easy to raise the money.

	On 16th October CPH’s solicitors sent out contracts to Satnam and Morbaine.  On 17th October Satnam withdrew because it could not provide the security in time.  On 20th October Morbaine exchanged contracts and completed the purchase of the Brewery Street site for £300,000 (with an uplift in the event of development) and the purchase of the Hope Mill site for £260,000.

	The Warrington site was sold on 11th December 1995 for £10.2 million, and on 24th January 1996 the joint administrative receivers were discharged.  The present action was commenced by the issue of a writ in May 1996.  Shortly thereafter Satnam registered a caution over the Brewery Street site.

The relief sought
	The relief sought against Morbaine included (1) a declaration that it held the Brewery Street site and the Hope Mill site on a constructive trust for Satnam and (2) an order that Morbaine convey to Satnam both the Brewery Street site and the Hope Mill site on payment of an amount equal to the amount that Satnam would have had to pay CPH to acquire that land in October 1995 on the basis that it was not in competition with Morbaine.  In addition Satnam sought damages against each of D H, Mr Murray and Morbaine.  Relief was sought on the basis (i) that Dunlop Heywood, through Mr Murray, was in breach of fiduciary duty in passing to Morbaine the information contained in the disclosure letter and in failing to disclose to Satnam, subsequently, that Morbaine intended to acquire an interest in the Tiviot Way site;  (ii) that Morbaine, through Mr Finlan and Mr Parle, knew of the breach of duty; (iii) that, but for the information provided by D H, Morbaine would not have acquired either the Brewery Street site or the Hope Mill site in October 1995; and (iv) that, but for the intervention of Morbaine, Satnam would have acquired those two sites.

The Judgment
The structure of the judgment under appeal is easy to follow.  After setting out the facts, or such of them as he thought relevant, the judge identified as the first question whether DH and Mr Murray owed fiduciary obligations to Satnam.  He held that they did.  His second question was whether DH and Mr Murray acted in breach of the fiduciary obligations which they owed to Satnam.  He held that they did so in two respects:  first, by communicating the information contained in the Disclosure Letter;  second, by failing to inform Satnam when DH learned on or about the 1st August 1995 that Morbaine were interested in acquiring the Brewery Street site.  He held that their conduct was such as to attract those remedies “which are peculiar to the equitable jurisdiction and are primarily restitutionary or restorative rather than compensatory”;  per Millett LJ in Bristol & West Building Society v. Mothew [1998] 1 Ch. 1, 18A.  He then asked himself whether Morbaine had notice of the fact that the information which had been given to them in the Disclosure Letter was provided in breach of DH’s obligation of confidence.  He found that it had, saying that Mr Parle and Mr Finlan knew this “perfectly well”.

	The next section of the judgment is headed “Equitable Remedies:  The Law”.  The judge cited a part of the judgment of Mummery LJ in Swindle v Harrison [1997] 4 All ER 705, 733f-734e.  This deals with liability for breach of fiduciary duty.  Having cited that passage, Mr Justice Chadwick continued:

	In Swindle v Harrison (supra) Lord Justice Hobhouse, at page 31 B-C in the transcript, drew attention to the difference between the traditional, or direct, equitable remedies for breach of fiduciary duty - rescission, account and restitution - and a claim for damages or “equitable compensation” of the character of damages, for breach of such duty.  In Bristol & West Building Society v Mothew [1997] 2 WLR 436, at 449 Lord Justice Millett drew the same distinction.  The distinction is between remedies which are restitutionary or restorative and remedies which are compensatory.  The distinction between restitution and compensation was, in my view, at the heart of the decision of the House of Lords in Target Holdings Limited v Redferns [1996] 1 AC 421, see in particular, the analysis in the speech of Lord Browne-Wilkinson between page 433E and 439B and his approval of the dictum of [Madam] Justice McLachlin in Canson Enterprises Limited v Boughton & Co [1991] 85 DLR (4th) 129 at page 163 of which mention was made by Lord Justice Mummery in the passage of his judgment in Swindle v Harrison to which I have just referred:

		“In summary, compensation is an equitable monetary remedy which is available when the equitable remedies of restitution and account are not appropriate”.

	Lord Browne-Wilkinson went on to say, in Target (supra) at page 439B:

		“Equitable compensation for breach of trust is designed to achieve exactly what the word compensation suggests: to make good a loss in fact suffered by the beneficiaries and which, using hindsight and commonsense, can be seen to have been caused by the breach”.

	In the present case Satnam’s primary claim is a restitut-ionary claim against Morbaine.  Morbaine is now the owner of the CPH site; a site which, as Satnam contends, it would have acquired but for the breach of fiduciary duty committed by Dunlop Heywood with the knowledge of Morbaine.  In such a case it may, indeed, be irrelevant to ask whether Satnam could have acquired the property but for Morbaine’s intervention - see the observations of Lord Guest in Phipps v Boardman (1967) 2 AC 46 at page 117:

		"It is irrelevant that the trustees themselves could not have profited by the transaction.  It is also irrelevant that the appellants were not in competition with the trustees in relation to the shares in Lester & Harris...........  The only defence available to a person in such a fiduciary position is that he made the profits with the knowledge and assent of the trustees.""

	The next section of the judgment is headed “Causation:  The Facts”.  That section sets out over some 16 pages various facts which were largely uncontroversial and the substance of which we have stated earlier in this judgment.  There then follows a short passage headed “Conclusions”.  It reads as follows:

	I am satisfied that, using hindsight and common sense - as Lord Browne-Wilkinson has indicated in Target should be the proper approach in these cases - the loss of the opportunity to acquire the Brewery Street site for the benefit of Satnam (if necessary, by the intervention of another company or companies controlled by Mr Dhillon) was caused by the breaches of fiduciary duty by DH and Mr Murray which I have identified and of which Morbaine had knowledge.

	It follows that this is a case in which I think it appropriate to grant the remedies, peculiar to equity which are required to ensure that Morbaine does not profit from its conduct.  I declare that the Brewery Street site is held by Morbaine upon trust for Satnam and direct that that site be conveyed to Satnam on payment by Satnam of Morbaine’s costs of acquisition.  DH and Mr Murray are liable to pay damages by way of equitable compensation.  Such damages to be assessed in the light of my order in relation to Morbaine.”

	That judgment was delivered towards the end of July 1997.  A dispute then arose as to the terms in which the order should be drawn up.  That dispute was resolved by the judge on 17th September 1997 and the final form of the order was in substance as follows:
	1.   A declaration that Morbaine held the Brewery Street site upon trust for Satnam

	2.   An order that Morbaine convey the Brewery Street site to Satnam upon payment by Satnam to Morbaine of Morbaine’s costs of acquiring the same .....

	3.  An order that there be an enquiry as to the amounts actually expended by Morbaine in acquiring the Brewery Street site.

	4. Judgment for Satnam against each of the defendants for damages by way of equitable compensation to be assessed.

Various other orders were also made which it is now not necessary to recite.  

	A number of issues of fact and of law were canvassed in front of the judge and in front of us.  We propose to look at these issues in turn.

Did DH and Mr Murray owe a fiduciary duty to Satnam?
	DH and Mr Murray had undertaken to act in the interests of Satnam.  They clearly had both contractual and equitable obligations to Satnam and that has not been challenged.  The core obligation of this type of fiduciary relationship is the obligation of loyalty.  The incidents of that duty in the circumstances of the present case are the same whether one traces its origins to the common law of contract which imposes a duty of fidelity upon an agent or to equity.  As Lord Browne-Wilkinson put it in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145, at p 205:
	“Although the historical development of the rules of law and equity have (sic), in the past, caused different labels to be stuck on different manifestations of the duty, in truth the duty of care imposed upon bailees, carriers, trustees, directors, agents and others is the same duty : it arises from the circumstances in which the defendants were acting, not from their status or description.”

We agree with the judge that it is plain that DH and Mr Murray were persons who owed fiduciary duties to Satnam.

Were DH and Mr Murray in breach of their fiduciary duties to Satnam?
	The judge found that DH and Mr Murray were in breach of their fiduciary duties to Satnam both in sending the information in the Disclosure Letter and in not disclosing that Morbaine was seeking to acquire an interest in the Brewery Street site.  That finding is challenged by Mr Vallance QC on behalf of DH and Mr Murray.  The basis of the challenge was that DH were released from their duty to Satnam upon the appointment of the receivers, alternatively, that it was in the interest of Satnam when in receivership for DH to introduce potential purchasers to interests in land which Satnam was in a position to sell.  We do not regard this challenge as justified.  There is no reason why the appointment of receivers should in itself alter the nature of, let alone bring to an end, the duties owed by DH to Satnam.  Moreover, DH were clearly acting behind the backs of the directors of Satnam and the receivers and did not assume that they had the authority of either to offer to third parties information about their client.  We agree with the judge that DH and Mr Murray acted in breach of their fiduciary duties to Satnam in both respects alleged.

Did Morbaine know that DH and Mr Murray were acting in breach of their fiduciary duties to Satnam?
	The judge found that Morbaine knew that, in sending the Disclosure Letter and in not informing Satnam of Morbaine’s interest, DH were acting in breach of duty.  That finding is challenged by Mr Kent QC on behalf of Morbaine.  The essence of the challenge is that there was no material entitling the judge to find that Morbaine knew that DH lacked specific authority from the directors or receivers of Satnam to disclose the relevant material in the Disclosure Letter.  While we see some force in the argument if one looks at the position as at, say, the 20th July, the behaviour thereafter of DH and Morbaine in not revealing what was going on to Satnam provides ample material to justify the judge’s finding that: 
	“both Mr Parle and Mr John Finlan Junior knew perfectly well that the information given to them in the letter of 17 July 1995 was given in breach of Dunlop Heywood’s obligations of confidence to their clients Satnam”.

Did the breaches of fiduciary duty by DH and Mr Murray cause loss to Satnam?
	The judge held that “the loss of the opportunity to acquire the Brewery Street site for the benefit of Satnam (if necessary by the intervention of another company or companies controlled by Mr Dhillon) was caused by the breaches of fiduciary duties by DH and Mr Murray of which Morbaine had knowledge”. 

	The first thing to note is that the loss of Satnam’s opportunity to purchase the Brewery Street site did not finally occur until, on 20th October 1995, Morbaine acquired the site.  A variety of matters contributed to this loss of opportunity.  One was the receivership, which meant that Satnam was no longer in a position to compel CPH to sell the site to them at the option price of £505,000.  A second was the fact that Satnam had a cashflow problem, and there was not sufficient liquidity elsewhere in Mr Dhillon’s companies and other interests to enable him to buy both Brewery Street and Hope Mill without the help of bankers.  A third was that CPH was not prepared to part with the Brewery Street site without also including in the deal the Hope Mill site.  This made Satnam’s cashflow problem of greater significance.  A fourth was that on 16th August Morbaine approached CPH and thus became a potential rival.  A fifth was that, when told on 18th August 1995 that there was a potential rival Satnam refused to believe it.  A sixth was that when again told on 22nd September 1995 that there was a potential rival Satnam refused to believe it.  A seventh was that, measured from 13th October when Satnam finally realised that there was a competitor, there was not enough time for Satnam to raise the required funds.

	There can be no doubt that Morbaine reacted to the Disclosure Letter.  Mr Kent submitted that Satnam would have heard about the receivership within a few days anyhow.  The judge made no finding on this point.  Mr Kent submitted that the steps which Morbaine took on receipt of the Disclosure Letter were steps which Morbaine would have taken anyway upon hearing of their rival’s receivership, even if the other matters disclosed in the Disclosure Letter had not been disclosed.  The judge made no finding on this point.  Nor did he make any finding as to whether, had DH not sent the Disclosure Letter, Satnam would have acquired the Brewery Street site.  If findings on these points are crucial, the question arises whether this court is in a position to make them itself or whether it is necessary to send the case back to be retried.

	The letter disclosed three things - 1. Satnam’s interest in the site, 2. the attitude of the local authority to a non-food development of the site and 3. the receivership.  We look at these in turn.

	1.  The judge made no finding as to what Morbaine knew, prior to their receipt of the Disclosure Letter, about Satnam’s ownership and control of the development site.  As it seems to us, it is highly likely that, before the Disclosure Letter was sent, Morbaine knew that Satnam in all probability owned or controlled all or nearly all of the Tiviot Way site.  A natural consequence of Morbaine’s interest in the Bredbury site 1.5 miles away (where they were building a large food-store) and their interest in the St George's Road site less than a mile away (where they envisaged a non-food retail development) was that during and before 1995 Morbaine had a keen commercial interest in what other sites in the area might be granted permission for retail development - just as Mr Dhillon knew of Morbaine’s sites, Morbaine knew that Satnam had had an interest in the Tiviot Way site at the time of the processing of the planning application.  It would have been obvious to anyone looking at the planning application.  Such an application reveals the ownership position.  In the present case it no doubt revealed that Satnam owned much of the Tiviot Way site and that CPH owned the Brewery Street site.  It would not reveal the existence of, still less the terms of, the option.  But developers do not in general pursue lengthy and costly planning appeals unless they are in a position to reap the benefits if the appeal is successful.  The probability of some arrangement between CPH and Satnam would have been obvious to Morbaine.  All that Morbaine learned from the letter as regards ownership were some details as to boundaries which, looking at the matter as one of probabilities, would seem of no significance in the decision whether or not to start further investigating title to the site.  There was no evidence that these details were of any significance in this context.  As regards control, Morbaine learned that Satnam had an option over land which it did not own.  This Morbaine could, and in all probability would, have guessed.  The letter instructing solicitors on 19th July 1995 and its accompanying photocopy map made no use or mention of what had been revealed in relation to the options.  The confirmation of the existence of options again is something which in the nature of things is unlikely to have stimulated Morbaine into further investigations into title.  Nor was there any evidence before the judge that it did.

	2.  The judge made no finding as to what Satnam knew about the intentions of the local authority in relation to the site.  There seems to us no reason to suppose that Satnam’s advisers knew anything much which Morbaine’s advisers did not know.  The formal position was that the local planning authority favoured a food retail development but were faced with traffic problems which seemed insuperable.  It would be obvious to any professional who had been following developments on the site that, if these could not be overcome, then the authority would favour some sort of development which would stimulate urban regeneration.  Non-food retail would clearly be a front runner.  While of course local authority officials at times have to keep information confidential there was, as it seems to us, nothing remotely confidential in such information as those officials had passed to Mr Griffiths of Satnam.  In our judgment it is clear that the disclosure in the letter that the Council were “of a mind to grant planning consent for a multi-unit non-food retail warehouse development on the site” was not something which would cause Morbaine to start investigating title.  Nor did the judge find that this was the case.

	So far as Satnam’s case was concerned, we should note in passing that the judge made no findings on Mr Dhillon’s evidence that the market believed that there would be no chance of getting any form of development other than industrial development permitted on the site.  Mr Dhillon said that following the rejection of the food retail plans, neither Satnam nor its agents received a single proposal from any other developer.  However, although the evidence also showed  that no other developer moved in on hearing of the receivership, it appears to us on the evidence that no other developer had the same interest as Morbaine in this site.  It was Morbaine’s developments on the nearby Bredbury and St George’s Road sites which were threatened by potential competition from the Tiviot Way site.  We are conscious that the evidence also showed that Morbaine had not moved into any other site on the appointment of a receiver but there was no reason to suppose that Morbaine had previously been in a position where a receiver had been appointed over the assets of a rival developer who had an interest in a site close to  sites which Morbaine was itself developing.

	3.  What according to Morbaine did cause it to ask its solicitors to research the ownership position was the revelation that Satnam had gone into receivership.  This seems to us to be crucial.  Although the judge made no findings, Morbaine’s evidence in our view accords with the probabilities of the case  What had seemed an impregnable position was shown to be a vulnerable one which was worth considering whether to exploit.  In  the nature of things, there was no evidence to contradict Morbaine’s assertion that it was the knowledge of the receivership which was the spur to its action.

	We consider that despite the judge’s lack of findings there is enough evidence in the transcripts to entitle this court to find that :- 

	1.	By 17th July Satnam was no longer entitled to exercise its option to purchase the Brewery Street site.

	2.	In the absence of the Disclosure Letter Morbaine would nevertheless have learned of the receivership before the end of July.

	3.	If DH had told Satnam in early August about the Disclosure Letter and about the fact that Morbaine was making inquiries about the Tiviot Way site this would not necessarily have worried Mr Dhillon at that time (although it might have put him on his guard since he knew, from the meeting on 1st August, that Morbaine had predatory instincts).  In early August he thought he had the option (and that he could exercise a right to buy the Brewery Street site at the now excessive price of £505,000 if the worst came to the worst) and he had forgotten that it was terminable in the event of a receivership.

	4.	As a consequence of 3, there is no reason to suppose, on the balance of probabilities, that on the receipt of the information which DH ought to have given it, Satnam would have behaved between 1st and 18th August in any different way from the way in which it did in fact behave.

	5.	Even in the absence of the Disclosure Letter Morbaine  would probably on about 16th August 1995 (or at any rate before the end of August) have instructed Bullivant Jones to approach CPH, and pursued its objective of acquiring the Brewery Street site on the best terms it could negotiate.

	The difficulty we now face, in the absence of relevant findings of fact by the judge, is whether we can go on to make findings as to what Mr Dhillon and his associates would probably have done, if DH had told them what they had done and of Morbaine’s subsequent interest, on and after two crucial dates.  The first was 18th August when Mr Jones of CPH told Mr Whittaker that another party had expressed an interest in purchasing the Brewery Street site.  The second was 22nd September when Mr Jones told Mr Dhillon that a third party, represented by a firm of Liverpool solicitors, had made an unsolicited approach, quite out of the blue, for the purchase of the Brewery Street site.

	If we were to accept everything contained in Mr Dhillon’s and Mr Whittaker’s statements and transcripts, the gist of which we have summarised earlier in this judgment, we would perhaps be entitled to conclude that alarm bells would have been ringing so loudly in Mr Dhillon’s ears that Morbaine was on the warpath that he would have taken effective steps much earlier than 13th October to get his finances in order and raise any necessary guarantees or loan finance, secured by the Bolton property.  In those circumstances we might be entitled to find that notwithstanding the loss of the option the Dhillon interests would have won the contract race, and Satnam would have benefited from this victory when it emerged from receivership.

	The judge saw and heard the witnesses and, as we have said, he found that the loss of Satnam’s opportunity to acquire the Brewery Street site was caused by DH’s and Mr Murray's breach of fiduciary duty.  He did not, however, give any reasons for this finding, and we do not know what route he took.  DH and Mr Murray did not in the event benefit at all from what happened, and we consider that it would be unfair to them if we were to uphold the judge’s finding without knowing what evidence he accepted and what evidence he rejected.  On the other hand we consider it would be unfair to Satnam if we were to conclude, simply because the judge made no findings, that they would probably not have beaten Morbaine in the contract race if DH and Mr Murray had told them what they should have told them if they had been loyal agents.  It appears to us that we have no option other than to exercise our powers under Order 59 Rule 11(1) and (3) to order a new trial between Satnam and DH and Mr Murray on this issue, and that we should hear counsel as to the precise terms of the question or questions we should formulate pursuant to Rule 11(3) for the purposes of a new trial.  We should add that since DH and Mr Murray have not profited from their breaches of fiduciary duty, it has not been suggested that Satnam would have any remedy against them other than damages by way of equitable compensation.

The case against Morbaine:  the Brewery Street site
	On the face of it, the judge’s conclusion that Morbaine’s knowledge of DH’s and Mr Murray’s breaches of their fiduciary duties to Satnam was a sufficient basis in law to constitute Morbaine a constructive trustee of the Brewery Street site for Satnam is a surprising one.  The reasoning which led him to that conclusion is not spelled out in his judgment and the conclusion is not established by the authorities to which he referred.  While we are conscious that the law relating to constructive trusts, confidential information, fiduciary obligations and the like is in a state of continuous development, we believe that the judge’s conclusion is not only unprecedented but contrary to the commercial good sense which such concepts are intended to serve. 

	In order to see whether the judge’s conclusion can be sustained, it is necessary to start with Satnam’s pleaded case against Morbaine and the material findings which the judge did or did not make.  

	In its amended statement of claim Satnam alleged that the information disclosed to Morbaine “was confidential and/or was not generally published”; that Morbaine knew that the information had been disclosed in breach of the obligations owed by DH and Mr Murray to Satnam;  and that Morbaine “has knowingly and/or unconscionably used and taken advantage of such information for the purpose of its business”.  There was a further allegation that DH’s and Mr Murray’s breaches of fiduciary duty had been procured or induced by Morbaine, but that allegation has played no part in the case.  There was then an allegation that “in the premises” Morbaine held the Brewery Street site on a constructive trust for Satnam.  It was also alleged that Satnam had suffered loss and damage caused by all three defendants.  Finally, there was an alternative allegation that Morbaine was obliged to account to Satnam in respect of any profits it had received or would receive by reason of its purchase of the Brewery Street site.

	Thus there was an allegation that the information disclosed to Morbaine was confidential.  But there was no allegation that Morbaine had participated in DH’s and Mr Murray’s breaches of their fiduciary duties to Satnam or that Morbaine had itself come under a fiduciary duty to Satnam or that it had acted dishonestly.  (The allegation that Morbaine had unconscionably used and taken advantage of the information cannot be treated as one of dishonesty.)

	We turn to the judge’s findings.  In the section of his judgment dealing with Morbaine’s knowledge of DH’s and Mr Murray’s breaches of fiduciary duty he said that it was clear that the Disclosure Letter contained some information which a developer would regard as confidential.  He instanced, in particular, the annexed plan.  He also referred to the information as to the attitude of the local planning authority being something which a potential developer of the site would not wish to become known either to a rival or generally.  The judge summarised his view of the Disclosure Letter thus:
	“Taken as whole, the effect of the letter of 17 July 1995 is to bring to the attention of a rival developer the business opportunity provided by the Tiviot Way site in the circumstances that Satnam had been placed in receivership.”

	We think it clear that the judge did find that some at least of the information was confidential at the time that it was disclosed, in that its disclosure to a rival developer would or might be detrimental to Satnam.  The judge confirmed his view at the beginning of his supplemental judgment on 17th September 1997, when, in reference to his main judgment he said:
	“I held also that Morbaine . . . knew that the information that was being disclosed to them by Mr Murray was information confidential to the plaintiff.”

	As for the findings the judge did not make, he did not find that Morbaine had participated in DH’s and Mr Murray’s breaches of fiduciary duty, nor that Morbaine had itself come under such a duty to Satnam, nor that it had acted dishonestly.  Although in his supplementary judgment he referred to “the breach of fiduciary duty to which [Morbaine] was knowingly party”, we cannot treat that as a finding that Morbaine participated in the breaches.

	We turn to the law applicable to the findings made by the judge.  We are indebted to Miss Newman QC, second counsel for Morbaine, for her argument on this part of the case.  Two preliminary observations must be made.  First, Morbaine, having been the recipient of information which was confidential and known by it to have been disclosed in breach of fiduciary duty, could prima facie have been temporarily restrained by injunction from making use of the information to the detriment of Satnam.  On the facts, however, it seems unlikely that an injunction would have been granted, if only because by the time the Disclosure Letter was received notice of Satnam’s receivership had been published in the London Gazette.  Secondly, in the light of the recent decision of this court in Re Polly Peck International Plc (No 2) [1998] 3 All ER 812, Mr Hapgood QC, for Satnam, did not seriously suggest that the court could have imposed a remedial constructive trust on the Brewery Street site.  He argued for a conventional or, as it is sometimes now called, an institutional constructive trust, being one which arises by operation of law as from the date of the circumstances that give rise to it;  see Westdeutsche Landesbank Girozentrale v. Islington LBC [1996] AC 669, 714G, per Lord Browne-Wilkinson, where the difference between an institutional and a remedial constructive trust is explained.

	It is necessary to emphasise that Morbaine did not participate in DH’s and Mr Murray’s breaches of their fiduciary duties to Satnam;  that Morbaine did not itself come under a fiduciary duty to Satnam;  and that it did not act dishonestly.  It was a commercial competitor of Satnam’s which, by disclosure to it of information part of which was confidential at the time, was given an opportunity to outdo Satnam in business.  The question is whether, in that state of affairs, Morbaine’s knowledge that the information had been disclosed to it in breach of DH’s and Mr Murray’s fiduciary duties was sufficient to subject the Brewery Street site to a constructive trust in favour of Satnam when it was acquired by Morbaine on 20th October 1995.

	The two well established categories of case in which someone who is not a trustee or does not owe a fiduciary duty to another can become liable as a constructive trustee of trust property have recently been described by Lord Nicholls of Birkenhead, when delivering the judgment of the Privy Council in Royal Brunei Airlines Sdn. Bhd. V. Tan [1995] 2 AC 378.  Having read a well-known passage from the judgment of Lord Selborne LC in Barnes v. Addy (1874) 9 Ch. App. 244, 251-252, he said, at p. 382D:
	“In the conventional shorthand, the first of these two circumstances in which third parties (non-trustees) may become liable to account in equity is ‘knowing receipt’, as distinct from the second, where liability arises from ‘knowing assistance’.  Stated even more shortly, the first limb of Lord Selborne LC’s formulation is concerned with the liability of the person as a recipient of trust property or its traceable proceeds.  The second limb is concerned with what, for want of a better compendious description, can be called the liability of an accessory to a trustee’s breach of trust.  Liability as an accessory is not dependent upon receipt of trust property.  It arises even though no trust property has reached the hands of the accessory.  It is a form of secondary liability in the sense that it only arises where there has been a breach of trust.”

	Before a case can fall into either category there must be trust property or traceable proceeds of trust property.  Clearly, DH and Mr Murray can be regarded as trustees of the information and, clearly, Morbaine can be regarded as having been a knowing recipient of it.  However, even assuming, first, that confidential information can be treated as property for this purpose and, secondly, that but for the disclosure of the information Morbaine would not have acquired the Brewery Street site, we find it impossible, in knowing receipt, to hold that there was a sufficient basis for subjecting the Brewery Street site to the constructive trust for which Satnam contends.  The information cannot be traced into the site and there is no other sufficient nexus between the two.  As for knowing assistance, of which dishonesty on the part of the accessory is a necessary ingredient (see below), we would not have wanted to shut out the possibility of such a claim’s being successful if the judge had made a finding of dishonesty against Morbaine, dishonesty for this purpose having been equated, for the most part, with conscious impropriety;  see Royal Brunei Airlines Sdn. Bhd. V. Tan, at p. 389D.  No such finding having been made, a claim in knowing assistance also fails.

	While there are no doubt other cases in which someone who is not a trustee or does not owe a fiduciary duty to another will be held liable as a constructive trustee, we believe, and so hold, that in English law the liability depends on there having been dishonesty on the part of the person who is sought to be made liable.  This question was fully considered by the Privy Council in Royal Brunei Airlines Sdn. Bhd. V. Tan, where the same conclusion was reached in relation to the law of Brunei.  After extensive reference to English and Commonwealth decisions and commentaries, Lord Nicholls said [1995] 2 AC 378, 392F:
	“Drawing the threads together, their Lordships’ overall conclusion is that dishonesty is a necessary ingredient of accessory liability.  It is also a sufficient ingredient.  A liability in equity to make good the resulting loss attaches to a person who dishonestly procures or assists in a breach of trust or fiduciary obligation.”

	The essence of Satnam’s complaint against Morbaine having been that Morbaine used the opportunity afforded to it by DH’s and Mr Murray’s breaches of fiduciary duty for its own purposes, Satnam’s case is in the mould of those which were successful in Regal (Hastings) Ltd v. Gulliver [1967] 2 AC 134 and Phipps v. Boardman [1967] 2 AC 46.  Mr Justice Chadwick’s reference to Phipps v. Boardman at the end of the section of his judgment headed “Equitable remedies:  the law” suggests that he thought that the principle of those cases was applicable here.  In each of them, however, the defendants owed fiduciary duties to the plaintiff, in the first as directors of the plaintiff company and in the second as persons who had placed themselves in a special position, of a fiduciary character, vis-a-vis the plaintiff beneficiary.  In the absence of a fiduciary duty the principle of those cases cannot apply.  Mere knowledge that the opportunity  has been afforded in breach of someone else’s fiduciary duty is not enough.  

	The only other basis on which it was suggested that Satnam could recover against Morbaine was that on which “The Sunday Times”, a third party, was held liable in A-G v. Guardian Newspapers Ltd (No. 2) [1990] 1 AC 109.  In that case it was held that the newspaper had been in breach of an obligation of confidentiality when it published the first serialised extract from Spycatcher in July 1987 and that it was liable to account for the profits resulting from that breach.  Mr Hapgood also relied on the decision of this court in Schering Chemicals Ltd v. Falkman Ltd [1982] QB 1.  While we do not question the correctness of either of those decisions, we decline to hold Morbaine liable for an account of profits on the facts of this case.

	What the judge found was that some at least of the information was confidential at the time that it was disclosed, in that its disclosure to a rival developer would or might be detrimental to Satnam.  However, even assuming that but for the disclosure Morbaine would not have acquired the Brewery Street site, it does not follow that it would be a proportionate response to hold it liable for an account of profits.  All the circumstances must be considered.  The information, though confidential, was not of the same degree of confidentiality as the information in the Spycatcher case and in Schering Chemicals Ltd v. Falkman Ltd.  All of it was either already available to Morbaine or would have been available to it on reasonable enquiry once, as was inevitable, the news of Satnam’s receivership became known.    There being no other basis of recovery available, it would in our view be inequitable and contrary to commercial good sense to allow Satnam to recover simply on the basis that there was a degree of confidentiality in the information at the time that it was disclosed to Morbaine.

	For these reasons, which make it unnecessary to consider any questions of causation, we reject Satnam’s case against Morbaine in relation to the Brewery Street site, including its claim for damages by way of equitable compensation.  As to such damages, it is enough to say that no award can be made where, as here, there is no basis on which equitable relief can be granted.  While Satnam may have a remedy against DH and Mr Murray, it has none against Morbaine.

The case against Morbaine:  the Hope Mill site
	Although in his main judgment the judge did not expressly reject Satnam’s case against Morbaine in relation to the Hope Mill site, it was obvious that he had done so.  That was made clear in his supplemental judgment, where he said:
	“I rejected the claim in respect of the Hope Mill site on the basis that the information which was disclosed to Morbaine in breach by Dunlop Heywood and Mr Murray did not relate to that site.”

Although on the view we take of the case the question is academic, we should say that, had we agreed with the judge on the Brewery Street site, we would also have agreed with him on the Hope Mill site.

Conclusion
	We allow both appeals, dismiss the cross-appeal and discharge the judge’s orders.  As between Satnam and DH and Mr Murray, we order a retrial on a question or questions to be formulated.  We dismiss the action as against Morbaine.

Order:	both appeals allowed, cross-appeal dismissed and paras 1-5 inclusive and 7 of the judge's order set aside;  retrial ordered as between the plaintiff and the first and second defendants and action dismissed as against the third defendant;  view expressed that the retrial should take place as soon as reasonably practical;  the third defendant to have the costs of the action and of the appeal and the cross-appeal, to be taxed or agreed;  other costs here and below to be costs in the retrial, but with liberty for counsel for the first and second defendants to make written submissions in relation to paragraph 12;  liberty for the third defendant to put in evidence in answer to Mr Dhillon's latest affidavit and for counsel for the plaintiff and the third defendant to make written submissions in relation to the reconveyance of the Brewery Street site;  order not to be drawn up in the meantime.