chapter  7
18 Pages

CONSTRUCTIVE TRUSTS

Essentially, a constructive trust is a trust relationship arising by operation of law and not by reason of the expressed or implied intention of the parties. There is no clear or comprehensive definition of the constructive trust, and it has been suggested that the courts have deliberately kept its boundaries vague in order not to hamper its future development.1 In some jurisdictions, notably in the United States and Canada, the constructive trust is regarded as a remedial device to be applied wherever a defendant's conduct is found to be unconscionable, and in order to prevent his unjust enrichment. For a time, especially under the influence of Lord Denning, English law appeared to be approaching the North American position by the development of 'a constructive trust of a new model', to be imposed 'wherever justice and good conscience required it',2 but in the last two decades the English courts have generally retreated from the 'new model' constructive trust, though it may still have a part to play in the Caribbean in the context of the family home.3 It may therefore be justifiable to return to the traditional view that, in English law, constructive trusts are imposed only in certain well established contexts, such as: (a) where a fiduciary makes a profit from his position, and (b) where a stranger to the trust knowingly receives trust property, or

dishonestly assists in a breach of trust by the trustees,

in addition to constructive trusts of the family home,4 and miscellaneous categories, such as secret trusts,S mutual wills6 and constructive trusts arising on a specifically enforceable contract for the sale of land and/or shares in a private company.7