ABSTRACT
Constructive trusts arise by operation of law, which means that they arise automatically and their existence is recognised retrospectively by the courts. In general terms, a proprietary constructive trust will be imposed on a person who has knowledge that her dealings with an item of property have been unconscionable. This chapter discusses constructive trusts have also arisen in relation to contracts for the sale of land, in relation to some agreements to develop land, in relation to mutual wills, and in relation to specific equitable doctrines. The Companies Act 2006 permits company directors to receive authorisation from other directors in specific circumstances. The facts of the case of Westdeutsche Landesbank v Islington are a perfect illustration of the principles underpinning the constructive trust. Section 53 of the Law of Property Act 1925 provides that 'implied resulting or constructive trusts' do not require formalities in their creation.
