When would you use a constructive trust?

When Would You Need a Constructive Trust?

• Undue influence.
• Duress or coercion.
• Mistake.
• Breach of fiduciary duty.
• Fraudulent misrepresentation or concealment.
• Embezzlement.
• Breach of trust.
• Commission of a crime, including theft or homicide.

What constitutes a constructive trust?

Constructive trusts are trusts that may be implied in the absence of a declaration of trust, where the trustee has induced another to act to their detriment in the belief that if they do so act to their detriment they would acquire a beneficial interest in the land (Gissing v Gissing [1971] AC 881 Case summary).

How do you establish a constructive trust?

Constructive trust

1. A holds funds that he knows have been paid to him by mistake.
2. A holds an asset that he has obtained by means of fraud.
3. A and another person (B) share a common intention that B should have a beneficial interest in an asset, and B has acted to his detriment on the basis of that intention.

How do you prove constructive trust?

The following must be shown for the court to impose a constructive trust: “(1) the existence of a res (property or some interest in property)’ (2) the right of a complaining party to that res; and (3) some wrongful acquisition or detention of the res by another party who is not entitled to it.” Communist Party v …

How do you create a constructive trust?

In order for a constructive trust to be imposed, the defendant must own the property. Constructive trusts are imposed by a court in order to avoid unjust enrichment of the person who is holding the property on behalf of another person.

What is the effect of a constructive trust?

A constructive trust is an equitable remedy that may be granted to address a breach of, or to give effect to, an equitable doctrine or right. The order gives rise to an interest in existing in specie property or other rights.

How is a constructive trust formed?

Constructive trusts arise from the parties’ conduct rather than express agreement. Various situations might result in the construction of a trust. A Court can award a constructive trust as a remedy where a party has benefited to the detriment of another.