25 - constructive trusts

Question 1

constructive trusts can be looked at as

Answer 1

similar to remedies, to fix a legal wrong

Question 2

example of constructive trust:
A (trustee for B) decides to embezzle money from trust

Answer 2

A holds CT for B

Question 3

example of constructive trust:
A (under fidcuiary duty to C) takes a bribe from B

Answer 3

A holds CT for C

Question 4

example of constructive trust:
A (trustee for B) makes money off their trusteeship (using insider knowledge to sell shares or buying trust property at a lower rate or making a profit from selling the property etc) without permission

Answer 4

A holds money CT for B

Question 5

Gillies V Keogh

Answer 5

• keogh made contributions to house, exceeded reasonable payment for lodging
• G made clear to K, house would belong to G.
• When the relationship ended, K thought he was entitled to some of the increase in value.
• Court held: They was not prepared to impose a constructive trust G had consistently said that the house was hers and they would not be sharing it.

Question 6

Lankow v Rose

Answer 6

• 10 year de facto relationship - breakup, rose claim 1/2 prop

Background: Rose argued for a beneficial interest, citing joint efforts leading to asset increases during their relationship.

Court’s Criteria for Constructive Trust:
1. Rose made direct or indirect contributions to the property.
2. Contributions must extend beyond unequal spending on household items.
3. Rose’s expectation of an interest in the property was reasonable.
4. Lankow reasonably should have expected to give Rose an interest in the property.

Outcome: Court established a constructive trust in favor of Rose.

Question 7

Hawke’s Bay Trustee Company v Judd

Answer 7

• The court recognized that despite her awareness of the trust’s ownership and her non-beneficiary status, it was still reasonable for Ms. Judd to expect a share in the property.
• The court ruled that knowledge of the trust alone was insufficient to dismiss her expectation of benefit.