Topic 11 slides - Constructive Trusts(5).pptx - Equity...

Equity & Trusts 70517
Lecture 11 – Topic 11
Constructive Trusts

Equity & Trusts 70517
Topic 1 - History and Nature of Equity
Topic 2 - Unconscionable Dealing and Undue Influence
Topic 3 - Equitable Estoppel
Topic 4 - Equitable Estates and Interests
Topic 5 - Equitable Assignment of Legal Property
Topic 6 - Equitable Assignment of Equitable Property
Topic 7 - Fiduciary Obligations
Topic 8 - Accessory Liability for Breach of Fiduciary Duty or Trust
Topic 9 - Tracing and Account of Profits
Topic 10 - Equitable Compensation
Topic 11 - Constructive Trusts
Topic 12 - Resulting Trusts
Topic 13 - Express Trusts
Topic 14 - Duties, Powers, Rights and Liabilities of Trustees; Rights of
Beneficiaries
Topic 11 - Constructive Trusts

Equity & Trusts 70517
1. INTRODUCTION
2. CATEGORIES OF CONSTRUCTIVE TRUSTS
3. TIMING OF CONSTRUCTIVE TRUSTS
Topic 11 - Constructive Trusts

Equity & Trusts 70517
1. INTRODUCTION
A constructive trust is a type of trust that arises by operation of law in circumstances
where a court determines that it would be a “fraud” in equity, or “unconscionable”,
or against conscience for the holder of the right to deny the trust.
As said by Cardozo CJ in Beatty v Guggenheim Exploration Co (1919) 122 NE 378, 380:
“When property has been acquired in such circumstances that the holder of the
legal title may not in good conscience retain the beneficial interest, equity
converts him into a trustee.”
Stephenson Nominees Pty Ltd v Official Receiver; Ex parte Roberts (1987) 76 ALR 485,
per Gummow J:
“Whilst the constructive trust may readily . . be seen as a restitutionary remedy for unjust
enrichment . . ., this by no means will always be the case. The constructive trust
may be imposed as a cautionary or deterrent remedy even where there has been
no unjust enrichment . . . [I]n such situations the constructive trust operates not to
restore to the [plaintiff] that of which it was deprived by the conduct complained of,
but to enforce observance of the fiduciary duty not to prefer personal interest to
duty.”
Topic 11 - Constructive Trusts

Equity & Trusts 70517