ABSTRACT
Constructive trusts arise by operation of law. That means that constructive trusts are imposed by the courts regardless of the parties’ intentions. Constructive trusts are the clearest example of how equity seeks to achieve fair results on a case-by-case basis. In Westdeutsche Landesbank v Islington, Lord Browne-Wilkinson explained a constructive trust as arising in any circumstance in which the defendant deals with property in circumstances in which the defendant knows that she is acting in an unconscionable manner. For example, stealing property is an unconscionable act in relation to that property, and so the thief will be treated as constructive trustee of that property. In this chapter we will consider the principal examples of unconscionability which give rise to constructive trusts. As will emerge in this chapter, there are two means of using constructive trusts: either to create an institutional, proprietary constructive trust over identified property, or as a means of imposing liability to account on a defendant who has participated in a breach of trust.
