Fisher v Dinwoodie: appeal partly allowed on equitable allowance and disputed receipt

The High Court has partly allowed an appeal arising from a long-running dispute between two former joint venture partners in a tailoring business. The underlying litigation concerned Mr Fisher's breach of fiduciary duty in failing to transfer shares in the joint venture companies to Mr Dinwoodie, leaving Fisher in sole control and enabling him to extract significant sums from the companies over several years. Following a liability judgement in 2021 and an unsuccessful appeal in 2023, an account was taken before HHJ Monty KC, who ordered Fisher to pay £220,364 plus equitable interest. Fisher appealed on four grounds.

Procedural fairness

Fisher argued that the judge should not have proceeded to a substantive determination at all, and that the hearing ought to have been for directions only. Sir Anthony Mann rejected the bias allegation — which had not been properly pleaded — and found no procedural unfairness in the judge embarking on what was, in substance, a summary judgement exercise. Dinwoodie's application had always been framed as a claim for payment rather than a directions application, and Fisher's own counsel had addressed the merits in his skeleton argument below.

However, the appeal succeeded on one factual point within this ground: the disputed £30,700 said to have been received from Studio 63. An apparent inconsistency in Fisher's account between two figures — one prepared on a receipts basis, one on accruals — had been resolved by the judge against Fisher without adequate justification. Fisher's explanation was not implausible and could not properly be rejected on a summary basis. That finding could not stand.

Definition of profits and nexus with the breach

The court confirmed that fees drawn by a fiduciary in breach of duty are capable of constituting profits for the purposes of an account, even where the fiduciary performed genuine work to earn them. The appropriate vehicle for recognising that work is not the definition of profits but the separate equitable allowance jurisdiction. Similarly, the judge was entitled to treat the alleged interest payments as accountable receipts given the absence of adequate supporting evidence, and the expenses reimbursement point failed on the same basis.

On nexus, Sir Anthony Mann applied the test recently confirmed by the Supreme Court in Recovery Partners GP Ltd v Rukhadze [2025] 2 WLR 529: the question is whether the profit owed its existence to a significant extent to advantages the fiduciary enjoyed as a result of his position. That test was plainly satisfied. Fisher's exclusive control of the companies — itself the product of his breach — was what enabled the payments to be made.

Equitable allowance

The appeal succeeded on this ground. The judge had refused an equitable allowance, citing the exceptional nature of the jurisdiction, Fisher's dishonesty and continued use of the companies after injunction, and inadequate evidence of the work done. Sir Anthony Mann accepted that the exceptionality threshold had perhaps been over-stated and that the lack of detail in Fisher's evidence should not have been held against him in circumstances where the procedural history had not required him to advance that case at the outset. The matter is remitted to the County Court for a proper determination on fuller evidence, though the court noted that Fisher may face considerable difficulty given the scale of fees he claimed but did not draw.

The appeal was otherwise dismissed. The order consequential on this judgement was reserved for further consideration following hand-down.

Copyright & permissions