Mr Swindle, from a financial advice firm, passed on a bridging loan to Ms Harrison to buy a second home.
She sued Mr Swindle, and other members of the firm, for the loss of value of the home’s equity, which resulted from the purchase, arguing that following Brickenden v London Loan & Savings Co [1934] 3 DLR 465, Mr Swindle was liable to restore her to the position she was in when the breach occurred, regardless of whether she would still have made the purchase if full disclosure had been made.
The Court of Appeal held that the stringent test of causation in Brickenden did not apply to equitable breaches of duty, unless it amounted to fraud.
There was no fraud and Ms Harrison would have taken the loan even if all facts had been fully disclosed.
Evans LJ said that where a defendant commits a fraudulent breach of duty, the beneficiary can recover damages to be in the position before the breach, in the ‘restitutionary’ measure (misleading!