1. The Plaintiff is a company which was wholly owned by Mr. Woods (now deceased). The Defendant is a Hong Kong based businessman. On various occasions, Mr. Woods caused funds to be transferred to a solicitors’ client account set up by the Defendant; such funds to be used only to purchase shares in a company called TSE for the Plaintiff. In 2004, the Defendant told Mr. Woods that using the money transferred to him, he had bought an additional 1,777,700 shares in TSE (the “Shares”) for the Plaintiff for £5,546,424.00 at the price of £3.11 per share. Mr. Woods later tried to regain control of the Shares in order to sell them to a Japanese company which was offering to buy them for £13.2005 per share. He failed to recover the Shares from the Defendant. In 2006, the Plaintiff discovered that the Defendant had made a number of unauthorized transfers out of the solicitor client account including the sum of £5,463,508.46 which the Defendant claimed had been used to buy the 1,777,700 shares mentioned above. 2. Accordingly, the Plaintiff sued the Defendant, claiming that the Defendant breached fiduciary duties owed to the Plaintiff by misappropriating the Plaintiff’s funds held in the solicitor client account (the “trust property”) and failing to purchase the Shares for the Plaintiff. Both the Court of First Instance and the Court of Appeal held in favour of the Plaintiff and ordered the Defendant to render an account of the trust property and to make an interim payment to the Plaintiff. They considered it unclear whether the Defendant actually bought the Shares. It was however accepted in the Court of Final Appeal by both sides that the Defendant had not in fact bought the 1,777,700 shares and that he had used the money extracted for his own unauthorised purposes. 3. The Court of Final Appeal confirmed the lower courts’ finding that the Defendant breached fiduciary duties owed to the Plaintiff, but concluded that it was not desirable or necessary to order an account to be taken. Instead, the Court made an order for equitable compensation requiring the Defendant to compensate the trust fund for the loss caused to it by the Defendant’s breach of his fiduciary duty. Such compensation is designed to restore the trust fund to the situation which it would have enjoyed if the Defendant had duly performed his fiduciary duty, using the funds entrusted to him to purchase the Shares. 4. The Court was entitled to assess the trust fund’s loss with “the full benefit of hindsight” and therefore took into account the fact that if he had duly carried out his duty, the Shares would have been acquired, that the Plaintiff would have been able to sell 42% of the Shares (746,634 shares) to the Japanese company, yielding a proceeds of £9,855,942.10 for the trust fund and the remaining 58% of the Shares (1,031,066 shares) could in due course have been sold. TSE had obtained a public listing on the London Stock Exchange in 2010 and the Court accepted that TSE shares’ quoted closing price on the date of the Court of First Instance’s judgment could be adopted to calculate the value of the remaining Shares (£8.84 x 1,031,066 = £9,114,623.44) for the purposes of equitable compensation. 5. Giving credit for the £4,823,768.51 already paid, the Court ordered the Defendant to pay to the Plaintiff (as representing the Plaintiff’s interest in the trust fund) £14,183,851.72 (£9,855,942.10 plus £9,114,623.44 plus £37,054.69 (representing other unauthorized withdrawals) minus £4,823,768.51) together with simple interest.