12- CONSTRUCTIVE TRUSTS

How do constructive trusts arise?

• by operation off law

• a trust that arises for a reason other than the deliberate declaration of trust by the settlor

LYSAGHT V EDWARDS 1876

JEROME V KELLY 2004

where the holders of a title to land enter into a contract to sell it, equity will usually enforce that contract specifically

• no declaration of trust by anyone- clear CONSTRUCTIVE TRUST

RE ROSE 1952

Equity will perfect imperfect gifts

• through the imposition of a trust on the donor

• trust was imposed on Mr Rose when he had done what he needed to do to make a gift of shares to his wife

• she had the power to complete the transfer by registration, even though the shares were not yet vested in her

• no declaration of trust on his part= constructive trust

FHR EUROPEAN VENTURES LLP V CEDAR CAPITAL PARTNERS LLC 2014

• a secret payment (commission) received by a fiduciary was held on constructive trust for his principal from the moment of its receipt

• trust imposed was constructive

CHASE MANHATTAN BANK NA V ISRAEL-BRITISH BANK 1981

• a trust of a mistaken payment was imposed

• constructive trust imposed

What case confirmed FHR and Chase being an okay imposition by the Supreme Court?

Prosecution Service v Aquila Advisory Service Ltd 2021

DEFINITION

• a legal remedy imposed by a court

• someone who unjustly holds property must transfer it to the rightful owner because it would be UNCONSCIONABLE to let them keep it

• often arises from fraud