Constructive trusts

Question 1

When do constructive trusts arise?

Answer 1

• arise in order to correct ‘unconscionability’.

Question 2

When do institutional constructive trusts arise?

Answer 2

• arise automatically in response to a particular event.
• Events:
  ○ Constructive trusts imposed to prevent fraud
  ○ Constructive trusts imposed to perfect an imperfect gift or trust
  ○ Constructive trusts imposed to compel parties to perform a specifically-enforceable contract (known as ‘vendor-purchaser constructive trusts’)
  ○ Constructive trusts imposed over profits made in breach of fiduciary duty

Question 3

When do common intention constructive trusts arise?

Answer 3

• There are two broad scenarios, both of which involve the claimant seeking to argue that, despite the absence of an express trust over the property, the legal ownership of the land does not reflect its true beneficial ownership:
• The land is registered in the sole name of the defendant but the claimant is seeking to establish that they also have an equitable interest in that land.
• The land is registered in joint names but the claimant argues that they are entitled to a share of the land worth more than 50%.
• In both cases, the common intention constructive trust is imposed to reflect the shared intention of the parties, based on their conduct in respect of the shared home.

Question 4

When are constructive trusts imposed?

Answer 4

• imposed to prevent fraud
• imposed to perfect an imperfect gift or trust
• imposed to compel parties to perform a specifically-enforceable contract (known as ‘vendor-purchaser constructive trusts’)
• imposed over profits made in breach of fiduciary duty