Reanalysing Institutional and Remedial Constructive Trusts

Abstract

It is often said that English law does not impose “remedial” constructive trusts because it is manifestly inappropriate and fundamentally unjustified to impose trusts through the exercise of judicial discretion and with retrospective effect. This paper observes the definitional deficiencies in this understanding, and reanalyses constructive trusts in terms of the rights which they give effect to. This understanding reveals that English law sets its face against the exercise of discretion in relation only to some “remedial” constructive trusts and not others, and that the perceived difficulties with remedial constructive trusts are often exaggerated. It ends by noting some crucial implications of the reanalysis for the future development of the law.

Keywords: Institutional Constructive Trusts, Remedial Constructive Trusts, Discretion, Primary and Secondary Rights, Precedent, Retrospectivity, Australia, Canada

JEL Classification: K10, K11, K19