Facts: Mr Reid was the Acting Director of Public Prosecution for Hong Kong. He took bribes to stop prosecution of criminals and used the money to buy some land in New Zealan. The claimant wanted a proprietary remedy to follow the property
Held: The Privy Council overruled Lister v Stubbs and held that a proprietary constructive trust is imposed as soon as the bribe is accepted by its recipient – this means the employer is entitled in equity to any profit generated from the bribe received
Facts: The defendant and claimant negotiated to form a joint venture to exploit some land. The defendant continued negotiating while privately reserving his desire to enter the joint venture, but decided it would be best to keep the claimant on board until a better prospect emerged.
Held: It was held that there was a constructive trust as there was sufficient agreement that it was the parties’ common intention to enter a joint venture
Facts: Bannister inherited 2 cottages when her husband died, including the one where they lived. She transferred them to her brother in law for under market value. They orally agreed she would remain in the property rent free for life. He subsequently tried to kick her out
Held: The fraud consists of denying the trust, so a proprietary right was given to Bannister under a constructive trust
Facts: Money was transferred to the defendant (i.e. the bank). By mistake a second transfer of money was made to the bank. Before the mistake was identified and before the money was repaid, the defendant went into insolvency
Held: It was held there was a trust over the money so Chase Manhattan was a secured creditor in insolvency
Facts: The claimant was assured the local council would built a right of way to his land. The claimant relied on this assurance to sell part of his land leaving it landlocked. The council subsequently did not build the right of way and demanded ÂŁ3000 for it to be build
Held: The claimant succeeded on a claim of proprietary estoppel
Facts: FHR purchased shares from Monte Carlo Hotel for €211.5m. Cedar acted as a FHR’s agent (so there was a fiduciary relationship) in negotiating the purchase. Cedar had also agreed with the vendor they would get a €10m fee following a successful transaction of the shares, which was later received. FHR later claimed for recovery of €10m from Cedar as they owed a fiduciary duty meaning they could not make a secret commission; accordingly, FHR claimed all profits were held on constructive trust
Held: The Supreme Court held there was a constructive trust on the fee for FHR
Facts: This set out the test, which remains good law, that the common intention of the parties as to how the property should be held is the determinative factor. In the case, a house was bought in the husband’s name and he was the mortgagor. The wife made some contribution to the upkeep of the house.
Held: The House of Lords found she had no proprietary interest in the house, however, they said it was possible a constructive trust could be found where there was a common intention that the ben interest be shared, either equally or otherwise
Facts: Family property that was on lease was left on trust for an infant. Sandford was the trustee of the property, but the lease subsequently expired and the landlord refused to renew the lease. So Sandford renewed it in his own right as he saw it as a good investment. When the infant (Keech) grew up he sued.
Held: The court held tat the property was held on constructive trust for Keech → it is unconscionable for Sanford to benefit here as he would be taking an unauthorised personal benefit
Facts: The defendant was bribed to place certain orders with certain suppliers. The plaintiff (i.e. claimant) wanted to establish a proprietary claim to the profitable investments the defendant made on the bribes by arguing there is a constructive trust
Held: The Court of Appeal held that to allow this would offend property rules and therefore could not claim title to the property acquired by the bribes
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Facts: A husband and wife financed the purchase of a home by borrowing from the husband’s trust fund, and was registered in husband’s sole name. The wife claimed the beneficial interest on the basis of her contribution to decorating the home and supervising the builders who helped decorate it. She succeeded at first instance. But the case went to the court of appeal
Held: The Court of Appeal found the wife’s activities insufficient to infer a common intention that she should have an interest
Facts: The defendant and the plaintiff (i.e. claimant) owned adjacent land. Some woodland was for sale and the parties agreed that the defendant would bid for it for them both, with the exact proportions on which the land was to be held to be agreed later. The defendant succeeded but the parties were unable to agree how to divide the land.
Held: The judge did not make an order for specific performance, however, where property was obtained by one party as part of a joint enterprise, the property was held on constructive trust for both parties.
Facts: An army sargeant took a bribe and was used in a smuggling operation
Held: It was held, by doing this, he breached his fiduciary duty to the Crown. So the Crown could recover payments paid to him as a bribe → this certainly looks like a proprietary remedy was granted over the bribes (although this isn’t strictly speaking a constructive trust as the money had been seized by the Crown on the soldier’s conviction)
Facts: A couple made a will in each other’s favour absolutely, and in default to the husband's 3 children. In 1974 they reduced the share of 1 daughter, Martha, to a life interest. After the husband died the wife made a new will consistent with the earlier. She later left her residue to Martha and her new husband, and nothing to the other two children
Held: It was held, the wife's executors held the estate on trusts of the 1974 will as there was sufficient evidence of an agreement to make Mutual Wills from the conduct of the parties
Facts: A husband and wife made mutual wills in a similar form leaving property to the other absolutely. There was no evidence the arrangement should be irrevocable. After the husband died, the wife married again and made a new will
Held: The second will was upheld by the court → Astbury J said that the fact the two wills were identical does not necessarily make it a Mutual Will; it is necessary that there is an agreement and a long-term binding intention extending beyond death
Facts: Land was transferred to the defendant to hold on trust. This was not put in writing and the defendant mortgaged the land. The claimant sought a declaration of trust, but the defendant argued the trust was not enforceable due to lack of writing
Held: It was held that equity will not allow a statute to be an instrument of fraud and it would be unconscionable here for the defendant to keep the land (Lindley J)
Facts: Versailles Trading group comprised companies set up by Cushnie which were intended to operate a fraudulent ponzi scheme. Through the money Cushnie made he bought a house in Kensington and he wanted to establish a proprietary constructive trust to the house. It was counterclaimed that there should be no proprietary constructive trust and it should be sold and the proceeds distributed in insolvency proceedings
Held: The Court of Appeal held there should be no constructive as to maximise assets available to unsecured creditors
Facts: The parties in this case bought a house and registered as joint tenants of the legal estate. When their relationship broke Mr Stack obtained a court order that the house be sold and the proceeds be divided equally. However, Mrs Dowden had provided more than 50% of the cost of acquiring the property and she appealed against this decision. The court of appeal held she was entitled to 65% share, and Mr Stack appealed to the House of Lords - he claimed the parties had been joint tenants of both the legal estate and the beneficial interest, and relied on the rule in Goodman v Gallant [1986] that severance of a beneficial joint tenancy produces a tenancy in common in equal shares
Held: The House of Lords held that the starting point of joint legal ownership is joint beneficial ownership, and the burden of proof is on the claiamant to rebut this presumption. Lady Hale emphasised it would only be in very unusual cases the court would find the parties intended their holding of the beneficial interest should not follow that of the legal title. The House of Lords held this was one of those unusual cases i.e. the parties did not intend to hold the beneficial interest as joint tenants – this was based on a number of factors, including contributions that were not direct to the purchase price (contrary to Lloyds Bank v Rosset)
Held: Lord Browne-Wilkinson, said a constructive trust could not have arisen over the second payment in Chase Manhattan v Israel-British Bank [1981] until the bank was aware that the second transfer was a mistake (as you have to know you have property to be a constructive trustee of it). He says that the recipient’s conscience must have been affected, which cannot be so if you don't know you have the property by mistake
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