ABSTRACT
A constructive trust is an aspect of the creative jurisdiction of equity. It is an implied trust created by the courts when it is unconscionable for a defendant with the legal title to property to claim that property beneficially to the prejudice of the claimant. The trust is created independently of the intentions of the parties. The interest of a beneficiary under a constructive trust is proprietary in nature. In other words, the beneficiary’s interest exists ‘in rem’, and in the event of the bankruptcy of the trustee the beneficiary’s interest prevails over the trustee in bankruptcy and the claimant will take priority over the claims of his general creditors. Constructive trusts are sometimes described as institutional or remedial. An institutional constructive trust is the traditional constructive trust that is declared by the courts retrospectively from the date of the misconduct by the constructive trustees.
