When would you use a constructive trust?
When Would You Need a Constructive Trust?
- Undue influence.
- Duress or coercion.
- Breach of fiduciary duty.
- Fraudulent misrepresentation or concealment.
- 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  AC 881 Case summary).
How do you establish a constructive trust?
- A holds funds that he knows have been paid to him by mistake.
- A holds an asset that he has obtained by means of fraud.
- 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.