Once a fraud, forever a fraud: the time-honoured doctrine of parol agreement trusts

Abstract

This paper, through doctrinal analysis of the relevant case-law, examines the extent to which the prevention of fraud justifies equity's imposition of trusts that arise out of parol agreements. The authorities reveal that although there are a variety of circumstances in which equity will operate in such a manner, the nature of the fraud that prompts equity's intervention is always the same. Furthermore, it is argued that, since very early times, these trusts have been regarded as what are now best described as constructive trusts, and that all such trusts are enforced pursuant to a coherent doctrine of equity.