What constitutes a constructive trust?

What constitutes a constructive trust?

In brief, a constructive trust is a trust which arises by operation of law where it would be unconscionable for a person who holds an asset to deny that another person has a beneficial interest in that asset. This is known as ‘common intention constructive trust’.

How do you prove a common intention constructive trust?

How do you prove a Constructive Trust?

1. Express Agreement for which a party relied upon and acted to their detriment or altered their position (such as paying money for a property related expense); or.
2. Implied Agreement – through common intention and conduct.

What is a constructive trust in property law?

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.

Is constructive trust an equitable remedy?

“A constructive trust is an involuntary equitable trust created as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.” In re Real Estate Associates Ltd.

What is the remedy for a constructive trust?

A constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is …

What are the four elements of a constructive trust?

The elements of a constructive trust are: (1) a promise; (2) transfer of the property and reliance thereon; (3) a confidential relationship; and (4) unjust enrichment.

When to use constructive trust in real estate?

If someone has possession of property (money, real estate, or other assets) that they should not have because they obtained it unfairly through fraud or breach of a fiduciary duty, this is unjust enrichment. The constructive trust is set up to solve the unfair situation that has happened.

What makes a constructive trust an equitable remedy?

A constructive trust is a duty by one person or company to hold some property for another person or company. A constructive trust is set up by a court as an “equitable remedy.”. An equitable remedy is something done by the discretion of the court and not in accordance with a statute.

What was the result of Sharpe going bankrupt?

However, Sharpe became bankrupt and the trustee in bankruptcy wanted to sell the property. This resulted in the Aunt putting forward her claim to an interest in the property.

What was the agreement between Sharpe and his aunt?

It was agreed between them that the Aunt could live there with Sharpe and his wife as long as she liked. The aunt paid some of this purchase price, as well as for decorations and various fittings for the property.