Constructive trusts

Question 1

Mortgage Corporation v Mitchell Roberston

Answer 1

1. “I confess an almost instinctive abhorrence of the notion of constructive trusts in the law of Scotland” (per Lord Johnston)

Question 2

Sutman International Inc v Herbage

Answer 2

1. A company’s directors bought land with company funds in breach of trust
2. The land held by the directors was on constructive trust for the company

Question 3

Ted Jacob Engineering Group Inc v RMJM

Answer 3

1. “If funds have been transferred in breach of fiduciary duty, it is now established in Scots law that a recipient (a third party) who takes the funds in the knowledge that they have been transferred to him in breach of fiduciary duty is not only liable to pay those funds to the person truly entitled to them but is also a constructive trustee of those funds” (per Lord Drummond Young)