Non-Consensual Trusts: Resulting and Constructive Trusts PDF

10/9/24 Non resulting trusts- arise in a particular circumstance. The exam- we need to re ect on how the law is working and there is an opportunity for you to do that. There's also information about this on iLearn. See videos available as well....

10/9/24 Non resulting trusts- arise in a particular circumstance. The exam- we need to re ect on how the law is working and there is an opportunity for you to do that. There's also information about this on iLearn. See videos available as well. Non-consensual Trusts: Resulting and Constructive Trusts LAWS2500/8010 DR MICHAEL NANCARROW 1 Introduction They will create Resulting and Express trust, those trusts constructive whether private either with trusts are not trusts or created by charitable trusts, private citizens. Resulting and are create by They are created constructive private citizens by trusts are who want Express spoken words (subject to s23C(1)(b) if it is different from someone to own land) – even if the declarant/settlor doesn’t express trusts the legal title to understand the legal significance of those words e.g. Bob says, ‘I want Bill to property for the have my property from now on. I don’t want it for Doctrines of equity and/or benefit of myself, I want him to have it’ = an express declaration another/others. of trust, even if Bob has never heard of trusts Judicial decisions More often, express written words in a trust deed/instrument drafted by a lawyer. OFFICE | FACULTY | DEPARTMENT 2 2 With resulting and constructive trusts they arise out of the doctrines of equity that have evolved over time and through the work of the courts in looking at a situation and deciding whether or not one of these trusts is appropriate in di erent circumstances; the conduct of the parties, the relationship between the parties will also be relevant in that situation. 1  10/9/24 Resulting Trusts OFFICE | FACULTY | DEPARTMENT 3 3 Resulting trusts WHAT’S THE RATIONALE? Easier to start with the idea Bryan’s description of that resulting trusts are resulting trusts as a either presumed or Presumed resulting trusts negative intention may not automatic. Both are by the be helpful operation of law rather than the person’s intention. In NSW this only applies The presumption is that If you pay for property and it when someone buys land people do not intend to is registered in a ‘stranger’s’ and registers it in someone make whopping great gifts name, they will be the legal else’s name, not when they of property to ‘strangers’ i.e. owner (s42 RPA) but they will hold it on trust for you already own land and make someone who is not their a gift of it to another. spouse or child. and you will be the owner in equity. OFFICE | FACULTY | DEPARTMENT 4 4 Mostly because land is under the Torrens system that's why you have to study property law before you do equity and trusts. The presumption is that people do not intend to make large gifts of property to strangers. 2  10/9/24 Presumed resulting trusts EXPLAINING THE REALITIES We need to be mindful that Bosniac is out of date (achronistic) So, I buy a house to live in, but I register it in my It is hard to sister’s name. I understand why do this because I some equity run a lawyers and business/practise Equity will judges are In other words, as a lawyer etc presume that they stop people This is because because I paid troubled by tax is paid on and I am worried presumed parking property beneficial for the house, that they really that if I incur any she holds the resulting trusts ownership of substantial debts when they have a still own and property, and or judgments that legal title on trust clear practical control in their creditors can I cannot pay, my for me. My and policy family or property will be equitable interest associates’ make claims can be claimed justification: against beneficial sold to pay my they prevent people names to avoid owners too. creditors. If the by creditors, the tax or debts. ATO etc. As it obtaining the benefit house is should be! of property while registered in my avoiding the proper consequences of sister’s name, it owning property, is theoretically m ost im portantly, hers and cannot m aking it available for creditors. be claimed by creditors. OFFICE | FACULTY | DEPARTMENT 5 5 E.g. Let's say that I'm a lawyer and I own a property and also run a business ( rm). But let's say I get in some nancial hot water (debts) and I don't want to loose the house to creditors so therefore I put the house under constructive trust under my sisters name. That's a good example of a resulting trust. Theoretically (legally) it's owned by the sister but Equity will presume that because I paid for the house, my sister holds the legal title on trust for me. Presumption of advancement :CHALLENGING THE PRESUMED RESULTING TRUST A presumed resulting trust can be rebutted by evidence e.g. I don’t live in the house, my Presumption of advancement = a presumption that the Equity presumes that sister is poor, I love her dearly husbands do intend to make and I really did intend to make property was a gift if the legal gifts to their wives and that a gift of the house to her. The owner is the wife (yes, only presumption of resulting trust wife) or child of the person parents do intend to make gifts will be rebutted and she will be who paid. to their kids: Calverley v Green the sole owner at law and not hold it on trust for me. The presumption of a resulting trust and presumption of This is also rebuttable with advancement = duelling evidence e.g. Buffrey v Buffrey presumptions. They affect who bears the burden of proof in litigation. OFFICE | FACULTY | DEPARTMENT 6 6 Historically, these parameters have come out of heterosexual relationships so we need to be aware of how these principles apply to LGBTQIA+ relationships. In Bosniac there was a focus on the intention of the person(s) involved and who bears the burden of proof to distinguish between a resulting trust and the presumption of advancement. 3  10/9/24 The Courts have spoken about 'advancement' as a moral obligation with the husband being a provider and the question is whether that applies today? Presumption of advancement ‘Advancement’ = more than a gift; to set someone up in life, made by someone who has a natural obligation to provide for another. Is it ‘discriminatory’ because it only applies to wives and not husbands? Women do not yet earn equal wages (garbage collector v child care worker); overwhelming take extended time out of work after childbirth and work part-time thereafter, affecting their long term earning capacity (Changing female employment over time | Australian Bureau of Statistics (abs.gov.au), see fulltime employment graph That financial vulnerability is reflected in child support and family law legislation. De factos: after no-fault divorce (1975) everyone has the choice to be married or not. Applying the same legal consequences to people who choose not to be married is not necessarily right or progressive. In effect, the presumption meant that wives and children were/are preferred over creditors which may obviate the state/community obligation to support them, particularly in the past. Have a mind in thinking about the connection between law and big data (ABS). Also, don't be shy about writing an essay that connects to policy and data. OFFICE | FACULTY | DEPARTMENT 7 7 The Baumgartener case recognised nancial and non nancial contributions to the pooling of resources and where it's unconscionable to allow only one person in the relationship to hold the property and to have no entitlements to the other party that's where a constructive trust comes into play. Resulting Trusts cont Resulting trusts only apply to initial financial contribution to property with cash and via mortgage liability. Does not apply to subsequent m’ge payments or to non-financial work eg care. These are covered by constructive trusts. Resulting trusts protect the interests of people who have provided money and particularly, who have made themselves liable on a mortgage. OFFICE | FACULTY | DEPARTMENT 8 8 4 See SB (Sourcebook) page 558 10/9/24 In Calverley Green, there were two partners (Calverley and Green) and they were de facto partners and Mr Calverley made a $9000 deposit plus a further $250.00 and $18,000 was borrowed by them jointly. As agreed between them all loan payments were made by Mr Calverley therefore the loan was secured by mortgage over the property. Both of them live together (Mr and Mrs Calverley) but in 1978 their relationship broke down and then there is a claim. So Mrs Green brough an action seeking to sell the property and split the proceeds equally between her and Mr Calverley. Calverley Green Facts: $27K house, $9K cash deposit, $18K borrowed from bank. Jointly and severally liable but man made m’ge repayments. She claimed that as registered as joint tenants = legal title = 50/50 division of sale proceeds. He said in equity: Man Woman $9K deposit $9K m’ge $9K m’ge $18K $9K 2/3 1/3 as tenants in common (captures capital gain) Woman had to account for the 50% of m’ge repayments man had made for her. If someone pays a debt for you, you have to repay them. That is not about property ownership but rather obligation to pay your own debts. This case is supposed to indicate the circumstances in which a resulting trust will be imposed. OFFICE | FACULTY | DEPARTMENT 9 9 The HC (by majority) decided that by declaring it , it was presumed that a trust had been declared in proportions representing the contributions by Mr Calverley and the equal contributions as to the balance. The joint judgement of J Mason and Brennan looked at this idea of what the presumption means and they said that when two or more purchasors contribute to the property and the property is conveyed to them as joint tenants, the equitable presumption is that they hold the legal estate on trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal. Cummins v Cummins Cummins was a Barrister F: Mr and Mrs C bought a house and were registered as joint tenants. She paid 76% of purchase price and he paid 24%. He didn’t pay tax for 45 years and before he was bankrupted by ATO he transferred his share to his wife. This was a voidable transaction. ATO said they owned as joint tenants in equity and ATO could claim is 50% share. Mrs C said she owned 76% because of purchase price resulting trust. H: Sourcebook [See page 569] Held; The HC unanimously held that the wife and husband had a 50% share in the property. The presumption of a resulting trust on the contributions was rebutted on the facts. The ATO only had recourse against the husbands' portion. If the resulting trust was operative then when he transferred the property into his wife's name then that would have not ended well for the ATO. The Court observed that there's no occasion for equity to fasten upon the registered interest held by the joint tenants, a trust obligation representing di erent proportionate interests as tenants in common. The Court was looking at the substance of the relationship and drawing conclusions as a result of the facts at play. OFFICE | FACULTY | DEPARTMENT 10 10 5  10/9/24 (which did apply in the Cummins case) Bosanac v Bosanac 🌶🌶🌶 We have the more recent decisions from the 2022 Bosanac case Facts: Mr B and Mrs B bought a marital home in Perth for $4.5m. He was a share trader and she was an ‘influencer’. He earned $388K and she earned $57K. They were both liable on the m’ge but the property was registered in her name alone. Mr B owed ATO (i.e. us) $9 m. ATO tried to claim 50% of the Perth home on grounds that Mr B had contributed 50% of purchase price by being jointly liable on m’ge and by continuing to share trade with m’ge account. ATO said Mrs B held it on resulting trust for herself and Mr B in 50/50 shares. Further, the presumption of advancement (which would make his contribution a gift, giving her 100% ownership) should not apply to marital home (Cummins) or be law anymore because it is discriminatory in favour of married men: 1. If creditor goes after Mr B, Mr B gives no evidence and the presumption of advancement will hold that property is Mrs B’s alone: safe from his creditors. 2. If creditor goes after Mrs B, Mr B gives evidence that he did not intend the property to be a gift and that she holds it on trust for him: safe from her creditors. ATO said Only married men (and parents) have this choice in litigation (Mr B chose 1.). Unmarried men and women do not, therefore discriminatory. Held: see case and case note on iLearn. In this case J Gaegler a rmed that it was the intention of the parties that would prevail and no particular weight should be given to the nancial contributions or the parties relationship since those form parts of the totality of the case and are of little practical relevance. OFFICE | FACULTY | DEPARTMENT 11 11 The facts of Bosanac included both a husband and wife who were originally married and then divorced but kept living in the marital home that they jointly purchased. But both of them also had other properties (assets) that they bought individually and together. In the joint judgement of CJ Kiefel and Gleeson was the (a) mutual intentions of the parties on the acquisition of the property and the weight that should be given to those presumptions (b) the presumption of advancement; the judges stated that it is especially weak today this presumption. Both of them held that it was su cient that most of the property was in Mr B's wife's name. Automatic resulting trusts E.g. an express trust fails against the rule of perpetuities What if money has been used If a trust fails (because there is for trust but can no longer be no certainty of objects, it It will be held by trustees on automatic resulting trust for because there are no offends RAP, it is not a valid beneficiaries/objects? settlor (if still alive) or the charitable purpose etc) what happens to the property that testator’s beneficiaries under If charitable = cy-pres was meant to be held on trust? the will or via intestacy. If private = resulting trust for settlor. Quistclose trust = money given to someone for a particular purpose = first trust. That fails. Ideally, this can be avoided by specifying where the money is Money then held on resulting to go if there are no more trust for settlor = second trust. Difficulty is proving that money beneficiaries to benefit. was held on trust initially and not just money paid into someone’s general account. OFFICE | FACULTY | DEPARTMENT 12 12 6  10/9/24 Resulting trusts and illegality It is not uncommon for people to put property in other people’s name to avoid tax or obtain a benefit, e.g. parents buying property and registering it in a child’s name because the child will get a first homeowner grant that parents could not get. Often, this goes under the radar. But what if person who pays for property wants to argue that it is really theirs? What if their evidence is “I only put it in their name to avoid tax/get a benefit”? Can they rely on their own act of illegality? You can't use your illegality to rely on a trust (e.g. claim to a property) OFFICE | FACULTY | DEPARTMENT 13 13 Nelson v Nelson Facts: Mother registered property in son and daughter’s name. She did this so she could get a Dpt of Defence benefit for another property that she would only be entitled to if she owned no other land. She said on form she had no interest in other property = fraud = criminal. First property sold and daughter claimed 50%. Could mother rely on her own illegality to rebut presumption of advancement? Held: Sourcebook 22.3.2f and 2.2c OFFICE | FACULTY | DEPARTMENT 14 14 7  10/9/24 Constructive Trusts OFFICE | FACULTY | DEPARTMENT 15 15 inequitable not unconscionable Constructive Trusts Translation = if someone is the legal owner of property but equity thinks that someone else is entitled to it, the legal Constructive trusts are imposed by operation of law when it would be owner will be made to hold the property inequitable for the defendant to deny the on trust for that other person. That other person will be the owner in equity, which obligations of trusteeship. is the ownership that ultimately counts (other than against a bona fide purchaser or a s42 RPA registered proprietor). Constructive trusts might arise Alternatively, the wrongdoer may be made At the tim e the wrongdoer did the thing giving rise to to ‘account’ (cough up) as a constructive the trust = ‘institutional’ trustee e.g. someone guilty of knowing At the tim e a court says they did som ething wrong and assistance in breach of trust. They won’t m akes orders = ‘rem edial’ have property they can be made to hold on trust, but they will be treated as though they were a trustee who had property, and made to account for breaches of trust, including loss of trust property. OFFICE | FACULTY | DEPARTMENT 16 16 Brian (textbook) makes the point that in Australia constructive trusts fall into categories and you need to have one of those categories for the constructive trust to be imposed. It will not merely be imposed merely for reasons of justice and fairness (Muschinski v Dodds). I know there's a belief that's what equity is about but we have said repeatedly that equity doesn't work like that- yes it's concerned with practical justice but it is constrained by the principles that have evolved over time. 8  10/9/24 Contracts of sale Starting at page 636 (TB) The most obvious example of a constructive trust is the one that arises when a vendor/lessor/mortgagor etc.) enters a specifically enforceable contract to grant an interest in land (fee simple, lease, mortgage, easement etc.) to a purchaser/lessee/mortgagee etc. We did this in Property: Vendor → Purchaser contract of sale This is one category s54A Conv Act Legal f.s. Equitable f.s. Equity regards as done what ought to be done = vendor holds their registered title on trust for purchaser. P won’t have the legal title to land until they are registered (s42 RPA) but in the meantime, V can only deal with the land in a way that is consistent P’s equitable interest (which is to get the legal title on payment of the balance of the purchase price). OFFICE | FACULTY | DEPARTMENT 17 17 Chang v Registrar of Titles HCA 1 SB 23.9A Facts: From the end of 21 Dec 1972, the Whitlam government withdrew recognition of Republic of China, aka Taiwan, as a sovereign state. Thereafter it only recognized the People’s Republic of China (Beijing) as a sovereign state. However, earlier in the day on 21 Dec, Taiwanese officials contracted to sell land that the Republic of China owned to Mr and Mrs C. The contract was executed by officials of Taiwan using their government’s seal. The Changs paid the full purchase price, which the contract stipulated was to be held by the vendor’s solicitors until the Changs were able to be registered. If they could not register, it would be refunded to them. The Changs lodged the transfer but the RG refused to register it because of sovereign state issues. The Changs then tried to get a vesting order under s51 of the Trustee Act 1925 (Vic) which is another way to get legal title transferred into someone’s name. Rather than the purchaser registering a transfer form (or using PEXA today), the court makes an order directly to the RG to alter the register and record someone’s name as the new owner of land. Held: Yes, a vendor is a trustee for a purchaser but in these circumstances, with all the complications of foreign states etc, it is no appropriate to make the order. That a vendor is a trustee for a purchaser is the only part you need to know J OFFICE | FACULTY | DEPARTMENT 18 18 9  10/9/24 What if there is no contract? What if there is no contractual promise to give someone property but they think they are entitled to some interest in land? (It is usually land). Is there another way for them to get some interest in land? Yes, there are circumstances in which courts of equity will recognize someone is entitled to land or a share of it. It does so with the doctrine of constructive trusts. Constructive trusts are not ‘a medium for the indulgence of idiosyncratic notions of fairness and justice’: Deane J in Muschinski v Dodds. Not ‘idiosyncratic’ but judicial notions of fairness and justice. If a judge with equitable jurisdiction has been moved to decide, ‘that really is not fair’ – what judges call ‘unconscionable’ – then a constructive trust will be imposed. Other judges then have to make consistent decisions in accordance with the doctrine of precedent. However, it is silly to argue that there is some objective, independently identifiable concept of ‘unconscionability’. It is what judges at a particular time and in a particular place think is sufficiently unfair that they are prepared to give a remedy. E.g. constructive trusts in favour of women in de facto relationships are clearly a product of time and place and mirror the social and political values of the time, which are also expressed in legislation e.g. Family Law Act 1975 (Cth) and Property (Relationships) Act 1984 (NSW) Be conscious of the impact of this legislation but note that it's not the main legislation that we focus on in this course (Equity) OFFICE | FACULTY | DEPARTMENT 19 19 Refresher from Property OFFICE | FACULTY | DEPARTMENT 20 20 10  10/9/24 Common intention constructive trust RELATIONSHIP DISPUTES OVER PROPERTY These trusts arose as a result of the countercultural change in 1960s, specifically Second Wave Feminism (First Wave being when we got to vote in early 20 th c). Rise of women’s employment, availability of contraception, relaxation of social mores etc. meant that more people were choosing to live different lives, including having relationships outside traditional marriage. no-fault divorce was not possible until 1975, so many people were forced to live in de facto relationships because they could not get divorced and the division of property on the breakdown of relationships (marriage or de facto) However, the law had not yet caught favoured men: up: Legal title typically belonged to men e.g. land registered in man’s name and Equity gave preference to financial contribution through doctrine of resulting trusts; this favoured men as women had lower or no earning capacity. OFFICE | FACULTY | DEPARTMENT 21 21 Society began to believe that People could form and reform personal Family Law Act 1975 allows for relationships over their lifetimes but that no fault divorce, property Women and children should not be left division between spouses and destitute in the process, with the state the continued support of the picking up the tab Caring for children was work that should lesser earning spouse (usually be recognised and valued. the woman) and children. Child support legislation introduced in 1988 to ensure These social and political ideas that parents (usually fathers) informed changes in equity with continued to financially support the rise of common intention children after relationship and other constructive trusts. breakdown. OFFICE | FACULTY | DEPARTMENT 22 22 11  10/9/24 Green v Green (1989) 17 NSWLR 343 SB 23.2b WARNING: THE FACTS OF THIS CASE ARE DISTRESSING AND INVOLVE CHILD SEXUAL ABUSE. Facts: Mr G was a used car salesman. He had 3 wives – one legal and two de facto. He had children with all and lived in each household a few nights a week. He met Mrs G No.3 in the late 60s in a hotel in Thailand. She was 13 or 14, possibly younger. He managed to bring her back to Australia and put her in a boarding house where he visited her regularly. When she went through puberty, she had two children in 1968 and 1972. Mr G initially ‘gave’ her a house in Kirawee to live in, but it was registered in another’s name ‘for tax purposes’. He then moved her and the kids to a house in Blakehurst, registered in the name of his eldest son from his first marriage, Robert Green. It was never intended to be Robert’s beneficially and so when Mr G died, the question was, ‘did Robert hold the property on trust for Mr G alone or for Mr G and Mrs G No.3?’ Mrs G was not the RP, so she was not the legal owner, but did she have any claim to the property in equity? Resulting trust? No, she made no financial contribution to it (other than possibly $3000 from her grandma). Could there be a ‘common intention’ constructive trust because the parties had a common intention that she should have an interest in the land? If so, what kind? Sole or shared? Tenant in common in equity or joint tenant? Held: Sourcebook 23.2b OFFICE | FACULTY | DEPARTMENT 23 23 In Green v Green his honour establishes that the evidence in acting by the respondent to her detriment on the faith of the relevant promises or representations occurred- she came and lived and had children with him. Therefore the Courts imposed the constructive trust due to 'common intention.' Muschinski v Dodds HCA 78 SB 23.3a PRINCIPLES AND UNCONSCIONABILITY Facts: Ms M and Mr D were in a relationship from 1972-1980. They bought land in Picton with Ms M paying the purchase price. However, they were registered as tenants in common in equal shares because Mr D was going to pay for a kit home and do renos on an old cottage that Ms M would use for her business. They were also going to subdivide the land and sell part of it. None of this happened and the relationship broke down. They agreed that she had contributed $25K and he had contributed $2.5K. She said he held his half on trust for her. Held: Sourcebook 23.a. The HCA held that the parties held their respective legal interests as tenants in common upon trust after payment of any joint debts incurred for improvement of the property- to repay each his or her contribution as to the residue to both of them in equal shares. Therefore a constructive trust was identi ed. The shared intention we're trying to identify is common intention- but it's not a broad cheque to determine that we're going to apply these equitable principles in the interests of justice and fairness. OFFICE | FACULTY | DEPARTMENT 24 24 12  10/9/24 The both have the same surname Baumgartner even though she was not married to Mr Baumgartner. Baumgartner v Baumgartner HCA 59 SB 23.3b POOLING OF RESOURCES AND UNCONSCIONABILITY Facts: Mr and Mrs B (who were not actually married) live together from 1978-1982. They had a child together, initially living in a unit owned by him and then in a house bought with the proceeds of sale and a mortgage. The house was registered in his name alone, but they pooled their joint earnings. When the relationship broke down, Mr B asserted his registered legal title and that Mrs B had no interest in the house. She argued that he held it on constructive trust for them both. Held: Sourcebook 23.3b What arose was a discussion on this "joint venture" relationship and pooling of resources. The focus in this case was on the direct and indirect contributions made to the property. E.g. including mortgage payments, but non- nancial contributions that improved the property also qualify. (Improvements to the property in Baumgartner can be both nancial and non- nancial). This is now governed by legislation (it doesn't govern the situation today) but it's interesting that the principle of this case still survives today e.g. if friends pool together resources in purchasing a property. OFFICE | FACULTY | DEPARTMENT 25 25 ‘How Australians Use their Time’ ABS Source: How Australians Use Their Time, 2020-21 financial year | Australian Bureau of Statistics (abs.gov.au) NB. These are latest statistics for these categories currently available as at 2024 26 26 13  10/9/24 Relationship constructive trusts today Most people in relationships, whether married, de facto, same sex or heterosexual, will be covered by legislation in the event of property dispute: Family Law Act 1975 (Cth) or Property (Relationships) Act 1984 (NSW). Check this legislation carefully to see if your client’s relationship is captured. But, people fall outside these e.g. if they don’t live together full time or if they are family members rather than sexual partners (although these people are covered by the Prop (Rel) Act if they live together). Further, the starting point for both Acts are the underlying doctrines of property and equity – to the extent that the legislation is adjusting property rights, those property rights are determined by the common law and equity. The Acts only apply in the event of relationship breakdown and bankruptcy Finally, the equitable principles can be applied in commercial contexts OFFICE | FACULTY | DEPARTMENT 27 27 Equitable estoppel Revise equitable estoppel in contracts This is because in all cases: The legal title is vested in another person (as it is usually land, this means it is registered in their name: s42 RPA); Litigants frequently argue constructive The plaintiff has done something or been led to trust and equitable or proprietary believe that they have an interest in the land, estoppel as alternatives. and They need to find an equitable doctrine to demonstrate they have some claim to the land. Of course, the most common way that someone proves they have an equitable interest in land is by proving that the legal owner made a contractual Constructive trust and equitable promise to transfer them an interest in estoppel can both do this. land, but as these are invariably family or relationship cases, there is rarely a contractual agreement as a matter of fact. Families and spouses don’t tend to contract with each other. OFFICE | FACULTY | DEPARTMENT 28 28 14  10/9/24 This is about how a constructive trust might work and a constructive trust was being sought by the son who had made contributions to the property and it's important to think about how equity will mould the circumstances to the case. Giumelli v Giumelli HCA 196 SB 23.4a SEE ALSO LECTURE ON PROPRIETARY REMEDIES Facts: Robert and his brother worked on their parents’ farm for years, for little or no wages (common in rural Australia). Parents told him they would subdivide the land and give him one lot (the Promised lot). He built a house on this and planted an orchard. He then decided to marry, and his parents disapproved of his wife. They told him to choose between his wife and property. He sensibly chose his wife and left. His brother, Stephen, moved into the house on the Promised lot and did substantial work on it. Robert sued his parents, arguing that they held the property on constructive trust for him or that they were estopped from relying on their strict legal title and denying he had any interest in the land. The lower court had held that the parents held the lot on constructive trust for Robert. Held: Sourcebook, 23.4a Robert was not entitled to be given title to the Promised lot. That was more than was necessary to remedy the detriment he had suffered. He was entitled to an equitable lien equivalent to the value of the Promised lot minus any work Stephen had done. This was to be charged on the whole property, not just the Promised lot. That is a proprietary remedy, not a personal remedy as Bryan suggests at 23.31 of the textbook. In other words, if and when the property was sold, Robert would be paid that amount from the proceeds of sale. OFFICE | FACULTY | DEPARTMENT 29 29 Constructive trusts and breach of fiduciary duty This is just logical – if a fiduciary wrongly takes property from a person to whom they owe a duty or acquires property from a 3rd party by breaching a fiduciary duty, they will hold that property on trust for the principal. Disregard the discussion of bribes in textbook 23.37-40, with the exception of the paragraph on Grimaldi – in Australia, bribes and payments received in breach of fiduciary duty will be held on constructive trust. OFFICE | FACULTY | DEPARTMENT 30 30 15  10/9/24 Chan v Zacharia HCA 36 SB 23.5.1B Facts: C and Z were doctors in practice together. They had a lease of practice premises with an option to renew. They fell out and then C paid the LL a $10K premium to grant him a new lease on his own. Held: If a fiduciary obtains a benefit from their position or as a result of a conflict between their interest and duty, they will hold that benefit on constructive trust i.e. the renewed lease was C’s at law (he was the registered lessee) but he held that on trust for himself and Z in equity. There was a constructive trust imposed in this case. I'm not saying that you have to go away to read this case but there are a few paragraphs in this judgement that show the imposition of a constructive trust. It's just interesting Leeming at paragraph 29 talks about the documents involved concerning a constructive trust (a rming that the courts will look at those documents). Also, but what's more important is from paragraph [79-92] comments on all of those cases we were just looking at. In he distinguishes between what is a constructive trust versus what is a resulting trust. (This is very helpful for the exam). OFFICE | FACULTY | DEPARTMENT 31 31 16