Comment on the Decision of The House of Lords in Target Holdings Ltd v Redferns [1996] 1 AC 421

AuthorAlessia Muscas Henrye
PositionUniversity of Southampton
[2017] University of Southampton Student Law Review Vol.7
Comment on the Decision of the House of Lords in
Target Holdings Ltd v Redferns [1996] 1 AC 421
Alessia Muscas Henrye
University of Southampton
This case note and comment addresses the academic literature following the House of
Lords’ decision in the 1995 case of Target Holdings Ltd v Redferns. It will be argued
that the leading judgment delivered by Lord Browne-Wilkinson did not establish a
“false step”; rather, it constituted a necessary departure from orthodox principles. This
approach was taken in order to consolidate the lacuna in the law of trusts with regard
to misapplied trust property. The discussion will also highlight tensions in the
continuing debate on whether conceptual boundaries between common law and equity
should be merged. An analysis of AIB Group (UK) plc v Mark Redler & Co Solicitors
illustrates that the debate remains unresolved and affirms Lord Brown-Wilkinson’s
“inapt causation” to achieve a commercially sensible outcome.
he outcome in Target Holdings Ltd v Redferns237 is generally welcomed, yet, it
is Lord Browne-Wilkinson’s reasoning regarding misapplied trust property in
the leading House of Lords judgment which has evoked controversy238. It departs from
orthodox principles of trust law and adopts common law remedies to achieve a
commercially practical solution. His Lordship’s supposed “inapt causation” 239 has
been regarded unnecessary and unorthodox. 240 The Supreme Court was recently
granted the opportunity to revisit Target in AIB Group (UK) plc v Mark Redler & Co
Solicitors.241 The alleged “false step”242 taken by Lord Browne-Wilkinson has resulted
in an indication that substitutive performance claims, in regard to misapplied trust
property, no longer operate in English law.243 This article will discuss the seminal case
of Target (notably reaffirmed in AIB Group) which has attempted to flesh out the
problems indicated by academics regarding the distinction of trusts, causation and
237 Target Holdings Ltd v Redferns [1996] 1 AC 421, referred to hereafter as Target.
238 Steven B Elliott, Compensation Claims Against Trustees (DPhil Thesis, University of Oxford 2002),
239 Charles Mitchell, ‘Stewardship of Property and Liability to Account’ (2014) 3 Conv 215, 226.
240 Peter J Millett, ‘Proprietary Restitution’ in Simone Degeling and James Edelman (eds ) Equity in
Commercial Law (Lawbook Co 2005), 311.
241 AIB Group (UK) plc v Mark Redler & Co Solicitors [2014] UKS C 58, referred to hereafter as AIB
242 Mitchell (n 239) 227.
243 Andreas Televantos and Lorenzo Maniscalco, ‘Stay on Target: Compensation and Causation i n
Breach of Trust Claims’ (2015) 4 Conv 348, 351.

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