Constructive trusts: examples
Profits made by a fiduciary
“[A trustee] is not, unless expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict” - Lord Herschell in Bray v Ford
Receipt of bribes
Attorney General for Hong Kong v Reid - Where a person receive bribes in breach of their fiduciary duty then they become a constructive trustee of them and so here the bribes were the property of their employer in equity. thus the employer was entitled to claim the profits from the bribes when they were invested.
Joint ventures
Where X and Y agree to acquire and develop land jointly and Y acquires it in his own name with the agreement of X but then seeks to retain the land for his own benefit, the court will regard him as holding the land on trust for the joint venturers i.e. both X and Y [Pallant v Morgan]
Statute as an instrument of fraud
Usually straightforward as in Rochefoucauld v Boustead, but
Midland Bank Trust Co. Ltd v Green - An option granted by a father to his son to purchase a farm had not been registered as required by the land Charges Act 1972 and the father, having changed his mind about the sale, then carried out a ‘sham’ sale to his wife so that his son’s option was then defeated. The son’s claim failed, lord Wilberforce observing that ‘it is not fraud to rely on legal rights conferred by an Act of parliament’.