Supreme Court decides whether recipient of a bribe holds it on trust for his principal

The issue in this case was whether a bribe received by an agent is held on trust for the principal  (i.e. the principal has a proprietary claim) or whether the principal merely has a claim for equitable compensation (in an amount equal to the value of the bribe), in which case  the claim is not proprietary. This is of practical significance because: 1) a proprietary claim would give the principal priority over the agent’s unsecured creditors in an  insolvency situation, and 2) the principal will be able to trace and follow the bribe in equity if  he has a proprietary claim. The Supreme Court unanimously held that for reasons of practicality and  principle (and because the courts were said to have taken a “wrong turn” following earlier caselaw  which was consistently in favour of the trust argument), a bribe accepted by an agent is held on trust for his principal.