AIB Group (UK) plc had given £3.3m in a remortgage of a home, worth £4.25m at the time, to Mr and Mrs Sondhi in June 2006.

It also argued that in any case it should only be liable for loss by comparison with the position that AIB would be in if Mark Redler had done what it should (registering the first charge) that around £275,000.

The Court of Appeal held that the claim was not so limited, and MR had no authority to release any funds until the redemption statement, unless the first charge for AIB was registered, but upheld the judge's award.

Compensation was to be measured at the date of trial, on a common sense view of causation of losses flowing from the breach.

Second, the plaintiff is to be put “in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation” (Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39, per Lord Blackburn).

He therefore approached the consideration of the rules of equity relevant to the appeal with a “strong predisposition” against holding that Redferns should be held liable to compensate Target for a loss caused otherwise than by the breach of trust.

Much of it has been helpful, but to attempt even to summarise the many threads of argument which run through it, acknowledging the individual authors, would be a lengthy task and, more importantly, would not improve the clarity of the judgment.

They have been made by a number of scholars, most recently by Professor Charles Mitchell in a lecture on "Stewardship of Property and Liability to Account" delivered to the Chancery Bar Association on 17 January 2014, in which he described the Court of Appeal's reasoning in this case as incoherent.

He expressed the hope that "if the case reaches the Supreme Court their Lordships will recognise that Lord Browne-Wilkinson took a false step in Target when he introduced an inapt causation requirement into the law governing … substitutive performance claims."

He added that if it is thought too harsh to fix the solicitors in this case with liability to restore the full amount of the loan (subject only to a deduction for the amount received by the sale of the property), the best way to achieve this is "not to bend the rules governing substitutive performance claims out of shape", but to use the Trustee Act 1925, section 61, to relieve them from some or all of their liability.

The primary criticism is that Lord Browne-Wilkinson failed to recognise the proper distinctions between different obligations owed by a trustee and the remedies available in respect of them.

[...] it would not in my opinion be right to impose or maintain a rule that gives redress to a beneficiary for loss which would have been suffered if the trustee had properly performed its duties.

But if causation of loss was not required for them to be liable, some other way had to be found for exonerating them from liability (unless the court was to use section 61 of the 1925 Act as a deus ex machina).

Trusts are now commonly part of the machinery used in many commercial transactions, for example across the spectrum of wholesale financial markets, where they serve a useful bridging role between the parties involved.

Commercial trusts may differ widely in their purpose and content, but they have in common that the trustee's duties are likely to be closely defined and may be of limited duration.

The basic equitable principle applicable to breach of trust, as Lord Browne-Wilkinson stated, is that the beneficiary is entitled to be compensated for any loss he would not have suffered but for the breach.Lord Reed concurred and said the following.

Notwithstanding some differences, there appears to be a broad measure of consensus across a number of common law jurisdictions that the correct general approach to the assessment of equitable compensation for breach of trust is that described by McLachlin J in Canson Enterprises and endorsed by Lord Browne-Wilkinson in Target Holdings.

In Canada itself, McLachin J's approach appears to have gained greater acceptance in the more recent case law, and it is common ground that equitable compensation and damages for tort or breach of contract may differ where different policy objectives are applicable.

The requirement that the loss should flow directly from the breach is also the key to determining whether causation has been interrupted by the acts of third parties.... 136.

Equally, since the concept of loss necessarily involves the concept of causation, and that concept in turn inevitably involves a consideration of the necessary connection between the breach of duty and a postulated consequence (and therefore of such questions as whether a consequence flows “directly” from the breach of duty, and whether loss should be attributed to the conduct of third parties, or to the conduct of the person to whom the duty was owed), there are some structural similarities between the assessment of equitable compensation and the assessment of common law damages.

This does not mean that the law is clinging atavistically to differences which are explicable only in terms of the historical origin of the relevant rules.

The classification of claims as arising in equity or at common law generally reflects the nature of the relationship between the parties and their respective rights and obligations, and is therefore of more than merely historical significance.

This increase in transparency permits greater scope for developing rules which are coherent with those adopted in the common law.

That proposition also was rejected in Target Holdings and in the Commonwealth cases.Lord Neuberger, Baroness Hale and Lord Wilson agreed with both judgments.