Tang v Tang  HKCFA 3 is a recent decision in Hong Kong on making a profit from a fiduciary role. Lord Millett gave the lead judgment and it will be authoritative everywhere in systems based on English law.
An administrator of an estate helped himself to estate money to assist with funding the purchase of a property, without asking the beneficiaries. He repaid the money seven months later with reasonable interest, treating it as a loan, and the trial judge accepted that he had always intended to do so. The property then went up in value. Could the beneficiaries claim a suitable share in the property or had the administrator discharged his obligation to the estate by the repayment?
The court held that the beneficiaries could claim a share in the property. The administrator's use of estate money was a simple misappropriation and he had no right to characterise it as a loan; the money remained the estate's money and the beneficiaries could elect to treat anything purchased with it (the share in the property) as forming part of the estate.
The judgment is interesting in distinguishing between a claim to property bought with estate or trust money and a claim based on secret profits, for which see -.
Nicholas Le Poidevin, Q.C.
New Square Chambers