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Constructive Trusts Notes

GDL Law Notes > GDL Equity and Trusts Notes

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A more recent version of these Constructive Trusts notes – written by Cambridge/Bpp/College Of Law students – is available here.

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E&T: Constructive Trusts Introduction

- Constructive trust: arises by operation of law, not dep. on parties' intentions. imposed by equity: when justice + good conscience require person in possession of property to hold it for another. cf. resulting trusts: where failure to dispose of whole beneficial interest. last resort: when court feels trust should be imposed + no other form exists in circumstances. have been imposed in variety of situations: but list not closed.

- Substantive or remedial?
constructive trustee's duty : usually, only to transfer property to beneficiary ? appears remedy. vs. substantive trusts: duty to administer property for beneficiary. 'remedial' constructive trust: widely accepted in USA, Canada, Australia, NZ. substantive constructive trust: view adopted by English courts. substantive rights to beneficiary over property - Westdeutsche Landesbank Girozentrale v Islington LBC [1996]. significant difference - timing of operation: esp. effect on third parties with interests in property. 'remedial' CT: operates from time of court order. substantive CT: existing proprietary interest - from date of circs. giving rise to CT.

Categories of Constructive Trusts

- Trustees' unauthorised profits. trustee: duty not to profit from position ? CT of profits for trust fund + beneficiary. e.g. Keech v Sandford [1726].

- Other fiduciaries' profits: same principle as trustee.

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