CONSTRUCTIVE TRUSTS

Arise by operation of law, irrespective of parties express or presumed intentions
1. Court decides when property should be held for benefit of someone whom equity and good conscience demand it to be held for!
2. HUSSEY V PALMER Paid money, moved into SIL's house, extension not built
  1. CT imposed wherever justice and good conscience require it!
No formal written requirements excluded from s53(1)(b) & (c) does not have to be evidenced in writing
PROFITS BY PERSON IN FIDUCIARY RELATIONSHIP
1. BRAY v FORD
  1. Person as a FR is not allowed or entitled to make a profit unless expressly provided for
    1. Cannot put himself in position where interests and duty conflict
      1. TITO v WARDELL
        Tree analogy While fruit is on the tree, have a FR, once fruit on ground FR is gone.
2. READING v AG - FR exists when one person entrusts another with a job to perform
  1. Sergeant helping to move contraband
    1. He'd been entrusted to perform a job, the contraband was not part of that job, bribe money recovered
3. FID liable in 3 circumstances
  1. 1) receiving remuneration to which he is not entitled
    1. ie making unauthorised payments to himself - SUGDEN v CROSSLAND £75 inducement to retire
      1. 2) Entering into transaction on own behalf instead of principals
        KEECH v SANDFORD - market lease for minor, trustee could not keep lease for himself.
        C/F RE BISS Widow applying for lease, refused so son took it on, could keep as not a trustee, no FR just one of the next of kin
        3) Using confidential information for own ends
        KEECH v SANDFORD takeover assisted by confidential information gained whilst working for the trust
        IDC v COOLEY C was MD, left job saying ill but really to perform other contract, had to pay back money
        C/F QUEENSLAND MINES v HUDSON QM interested in mining operation. H obtained the licences for QM to do job
        QM couldn't afford to proceed, H resigned as MD& with QM's knowledge undertook the work. Did not have to pay the profit back.
        BRIBES
        LISTER & CO v STUBBS
        AC held that when fiduciary accepts a bribe, not held as CT
        Overturned in AG of HK v REID public prosecutor taking bribes, bought property in NZ with money. Right in rem imposed could claim all the property
        followed in CROWN RESOURCES AG v VINOGRADSKY
        BUT - SINCLAIR INVESTMENTS UK v VERSAILLES TRADE FINANCE said that AC should follow own decisions unless 'per incuriam or of doubtful reliability
        Beneficiary cannot claim proprietary relief unless:
        Asset or money was or had been beneficially property of beneficiary
        OR, trustee had acquired the asset by taking advantage of opportunity or right which was the beneficiaries
        So, personally liable in equity but no proprietary interest!!
4. Existence of FR question of fact not law from ENGLISH v DEDHAM VALE PROPERTIES LTD
Only arises when a FID uses trust property to make an unauthorised profit
1. No need to prove fraud
2. Distinction between
  1. Being held personally liable/in personam
  2. Held as CT - right in rem so rights over property

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CONSTRUCTIVE TRUSTS

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