Constructive trust a constructive, trust is an
equitable remedy imposed by a court to benefit a party that
has been wrongfully deprived of its rights due to either a
person obtaining or holding a legal property, right?
Which they should not possess due to, and just enrichment or
interference, or due to a breach of fiduciary duty, which is
inter causative with unjust enrichment, and or property
interference, it is a type of implied.
Trust, for example, it is created by conduct not
explicitly by a settler in the United States.
It's in contrast to England a Constructor.
Trust remedy, generally does not recognize or create any
continuing fiduciary relationship.
That is a constructive. Trust is not actually a trust,
except in name rather. It is a fiction declaring that
the plaintiff has Equitable Title to the property at issue
and ordering the defendant to transfer legal ownership and
possession to the plaintiff. For instance, in some states,
the Slayer rule is implemented in the form of a constructive.
Trust definition, constructive. Are imposed by operation of law.
They are also referred to as implied trusts.
They are not subject to formality requirements, unlike a
resulting trust which also arises by operation of law.
A constructive trust is not give effect to the imputed or
presumed intention of the parties.
Instead. Constructive trusts are largely
said to be triggered by unconscionability.
This is the idea that a defendant would be unjustly
enriched if they were allowed to keep property for themselves.
The main issue with this argument Is that we would have
to have a really broad approach to unjust enrichment in order
for a constructive trust to come under.
That underpinning Concept in order for us to understand
constructive trust. This statement is incoherent and
without any basis in law or fact events generating constructive
trusts breach of fiduciary duty in a constructive, trust the
defendant breaches a duty owed to the plaintiff.
The most common such breach is a breach of fiduciary duty such as
when an agent wrongfully, obtains or holds property owned
by a. A controversial example is the
case of attorney general for Hong Kong be read in which a
senior prosecutor took bribes, Matha prosecute, certain
offenders with the bride money. He purchased property in New
Zealand, his employer. The Attorney General sought a
declaration that the property was held on constructive trust
for it on the basis of breach of fiduciary duty.
The privy Council, awarded a constructive trust.
The case is different from Regal Hastings, limited V.
Gulliver because there was no interference with a
profit-making opportunity that properly belong to the
prosecutor being a privy Council decision.
Re did not overrule the previous decision of the court of appeal
of England and Wales and mr. V stubs which held the opposite
partially because a trust is a very strong remedy that gives
proprietary rights to the claimant not enjoyed by the
defendants other creditors in the event of the defendants
insolvency the trust assets are Untouchable by the general
creditors supporters of Lister suggested that there was no
good. Reason to put the victim of
wrongdoing ahead of other creditors of the estate, there
was a tension in English law between Lister and read which
was highlighted in Sinclair Investments.
UK limited V Versailles trade Finance limited the United
Kingdom, Supreme Court, subsequently overruled, Sinclair
and fhr, European Ventures, Allah o, PD Cedar Capital
Partners, LLC holding that Lister was no longer, good law,
property interference in foskett, V McEwen, a trustee use
trust money together with some of his own money to Purchase a
life insurance policy, then he committed suicide, the insurance
company paid out to his family. The de frauded, beneficiaries of
the trust sought a declaration that the proceeds were held on
constructive trust for them. The House of Lords said that the
beneficiaries could choose between either a, a constructive
trust over the proceeds, for the proportion of the life-insurance
payout, purchased with their money or be an equitable lien
over the fund for the repayment of that amount.
There's controversy as to what the true basis.
Is of this, trust the House of Lords said that it was to
vindicate the plaintiffs original proprietary rights.
However, this reasoning has been criticized as Tata August by
some Scholars who suggests the better basis is unjust
enrichment. This is because there must be a
reason why a new property right is created.
For example, the trust. And that must be because
otherwise, the family would be unjustly enriched by receiving
the proceeds of the insurance policy purchase with a
beneficiary's money interference with a plaintiffs property can
justify why Why the plaintiff can get its property back from a
thief but it cannot explain why new rights are generated in
property for which the plaintiffs original property is
swapped in. Foskett V, McEwen the plaintiffs
original property was an interest in the trust fund the
remedy. They obtained with a
constructive trust over an insurance payout.
It is not obvious. Why such a new right?
Should be awarded without saying it is to reverse the family's
unjust enrichment, unjust enrichment, in Chase, Manhattan
Bank Navi, Israel, British Bank Then limited One Bank paid,
another bank a large sum of money by mistake note that the
recipient bank did not do anything wrong.
It just received money not about to it Goulding J.
Held that the money was held on constructive trust for the First
Bank. The reasoning in this case has
been doubted and in West Orange landy's bank, erosion trial, V
Islington London Borough, Council the House of Lords
distanced itself from the idea that unjust enrichment, raises
trust in the claimants favor. This remains an area of intense.
Ever see these types of trusts are called institutional
constructive trusts. They arise the moment, the
relevant conduct breach of Duty unjust enrichment, Etc occurs.
They can be contrasted with remedial constructive trusts
which arise on the date of judgment as a remedy, awarded by
the court to do justice. In a particular case, an example
is the Australian case Miskin skeevy.
Dad's a de facto couple lived in a house owned by the man.
They agreed to make improvements to the property by building a
Shed for the woman to do arts and crafts work in the woman
paid for part of this. They then broke up the high
court held that the man held the property on constructive trust
for himself and the woman in the proportions in which they had
contributed to the improvements to the land, this trust did not
arise. The moment, the woman commenced
improvements that conduct did not involve a breach of Duty or
an unjust enrichment. Etc, the trust arose at the date
of judgment to do justice in the case, in Bathurst city council V
PW C property, He's the high court that is constructive.
Trusts are the most severe remedy in cases, of breach of
fiduciary duty, they should only be imposed when other remedies
are inappropriate in providing relief, common intention
constructive trusts common intention constructive, trust
consider, the intention of the parties.
This is significantly found in the familial context.
For example, do the cohabitants of a beneficial interest in
their home here. Equity will follow the law.
Following stack, feed out an equity will look at the Mr.
Donor is a property and then distributed in those
proportions. For example, if the parties had
joint legal ownership of a property, then there is a strong
presumption that they have a beneficial interest.
However, in those cases, with the cohabitants, one person has
legal title. In that case, the sole owner
would be presumed to have sole beneficial ownership.
This can be problematic in circumstances where the other
cohabitant, the one who doesn't have title, does a lot to
improve the property, you just contributes to it in some way.
Way, this can however be rebutted.
If there was common intention to hold the property differently in
such cases, the courts will find a constructive trust in those
proportions. Actual inferred and imputed
intention. If there is no evidence of
actual intention, the courts will search for inferred or
imputed intention in Jones V Kern at the Supreme Court
inferred intention to the parties.
Therefore, imputed intention involves a lot more judicial
discretion. Where is invert intention is
still Those to be based on the conduct between the parties
joint venture the focus, here is the joint venture between the
claimant and the defendant for there to be a joint venture.
It would be unconscionable for the defendant to deny the other
parties beneficial interest in the property.
The three main requirements for a joint venture constructive
trust our one an arrangement or understanding between the
parties to Reliance on that Arrangement or understanding and
three an inconsistent act Bender under a specifically in Possible
contract for sale, the seller holds land on a constructive
trust for the purchaser. However this is limited in
Rainer V Preston. The claimant had purchased a
property from the defendant but the house was then destroyed in
the fire before they could move in the defendant received a big
payout from the insurance company and refused to give that
money to the claimant. It was held at the claimant was
not entitled to the payout because it was not the trust
property and because of the nature of the dispute, the
trustee only had a low standard of care.
Particularly, when you compare it to an Express trustee the
purchaser also cannot transfer their beneficial interest before
receiving legal title voluntary transactions, made by mistake,
the court can set aside a gift or disposition where the
transfer was made by mistake. The property must have been
transferred by deed. Not an oral agreement usefulness
of constructive, trusts, for example, if the defendants deals
100,000 dollars from the plaintiff and uses that money to
buy a house, the court can trace the house.
Back to the plaintiffs money and Dean the house to be held in
trust for the plaintiff. The defendant must then convey
title to the house to the plaintiff.
Even if Rising property values had appreciated the value of the
house to 120,000 dollars by the time, the transaction occurred.
If the value of the house had instead depreciated to eighty
thousand dollars, the plaintiff could demand a remedy at law
money, damages equal to the amount stolen instead of an
equitable remedy, the situation would be different if the
defendant had mixed his own property with that of the - for
example, adding 50 thousand dollars of his own money to the
100,000 dollars, stolen from the plaintiff and buying a 150
thousand dollar house or using plaintiffs, 100,000 dollars to
add a room to the defendants existing house.
The constructive trust would still be available but in
proportion to the contributions, not wholly in the claimants
favor. Alternatively, the claimant
could elect for an equitable lien instead, which is like a
mortgage over the asset to secure repayment because a
constructive What is an equitable device?
The defendant can raise all of the available Equitable
defenses, against it including unclean hands, watches,
detrimental, Reliance and undue hardship.