The Equitable Lien as a Remedy for Breach of Fiduciary Duty

The equitable lien (“EL”) is one of a range of remedial alternatives to the constructive trust (“CT”). In Australia, the prominence of the EL has risen, as the court has increasingly characterised the CT as a remedy of last resort in causes of action where a proprietary claim is made. The foundation of this development was the recognition by the High Court, in the early 1980s, of the CT as being partly remedial in character, rather than being strictly institutional. That choice put the Australian law of equitable remedies on a potentially divergent path from English law because, in the latter jurisdiction, the court has continued to conceptualise the CT as being institutional only. The purpose of this essay is to examine the nature and role of the EL as a remedy in Australia, in the context of breach of fiduciary duty. My thesis is that it is possible to identify stable categories of circumstances in which an EL tends to be ordered by the court, but that persuasive juridical rationales for the imposition of this form of remedy have not yet been found for all of the categories.