Constructive Trusts Flashcards
What is meant by a constructive trust?
One that is said to arise by operation of the law, not based on the intention of the parties to create a trust
What is the difference between an institutional and remedial constructive trust?
- Institutional: Treated as arising by operation of law on occurence of a certain event where a constructive trust has been recognised in previous law
- Remedial: Recognised where a judge considers that it is appropriate that the defendant should hold property on trust for the claimant (recognised in a number of Commonwealth countries but rejected in England)
What is the first type of constructive trust that can arise from Lysaght v Edwards?
Vendor-purchase constructive trust, where there is a sale of land by contract a trust arises to maintain the land
What equitable maxim justifies the vendor purchaser constructive trust?
‘Equity looks on as done that which ought to be done’
Used as a basis in Walsh v Lonsdale
What does the case of Scott v Southern Pacific Mortgages tell us?
A purchaser of land does not have sufficient interest in property to confer an equitable proprietary right before completion of sale
How might a constructive trust arise in the case of a mistaken payment?
- Chase Manhattan Bank v Israel-British Bank: Where money is paid under a mistake, the defendant will hold the money on trust for the claimant
- Westdeutsche Landesbank v Islington LBC: No constructive trust because the local authority had no knowledge sufficient to raise such before the money became untraceable. Distinguished above on the basis that once a party is aware of the mistake and retains the money, a trust arises
Which case shows a constructive trust arising due to the rights of another?
Binions v Evans: the defendants by allowing the claimant to remain in their home for a discount had created a constructive trust and it would be unconscionable for the court to allow the claimant to be evicted
What is the duty of the trustee in a vendor purchaser constructive trust?
Extent of the duty to the purchaser is to maintain the trust property and no more
Englewood Properties Ltd v Patel
