Duhaime's Law Dictionary


Constructive Trust Definition:

A trust which a court declares or imposes onto participants in very specific circumstances such as those giving rise to an action for unjust enrichment, and notwithstanding the lack of any willing settlor to declare the trust.

Related Terms: Trust, Resulting Trust, Unjust Enrichment

Also known as an involuntary trust.

In Underhill and Hayton - Law Relating to Trusts and Trustees, the authors define a constructive trust as follows:

"A constructive trust of property is a trust imposed by equity in respect of property on proof of a variety of special circumstances ... where equity considers it unconscionable for the owner of particular property to hold it purely for his own benefit."

In Re EVTR:

"...resulting or constructive trust normally arises by implication of law when circumstances happen to which the parties have not addressed their minds...."

Osborn, with his typical genius, defines it as:

"A trust which is raised by construction of equity in order to satisfy the demands of justice and good conscience without reference to any presumed intention of the parties."

Packaging express, constructive and resulting trusts succinctly, Lewin on Trusts adds:

"A general distinction might be drawn between express, resulting and constructive trusts on the basis that express trusts ... are founded on the express or inferred intention of the settlor, resulting trusts are founded on the presumed (but rebuttable) intention of the transferor or purchaser of the property, and constructive trusts are imposed on a person who holds title to property, against his intention."

References:

  • Duhaime, Lloyd, Duhaime on Trusts: Resulting and Constructive Trusts
  • Hayton, David, Underhill and Hayton - Law Relating to Trusts and Trustees (London: Butterworths LexisNexis, 2003), page 55.
  • Mowbray, John and others, Lewin on Trusts, 17th Edition (London: Sweet & Maxwell, 2000), page 181.
  • Re EVTR 1987 BCLC 646 (CA)

Categories & Topics:


Always looking up definitions? Save time with our search provider (modern browsers only)

If you find an error or omission in Duhaime's Law Dictionary, or if you have suggestion for a legal term, we'd love to hear from you!