Remedial constructive trust denied

Abstract

As a remedial constructive trust is not recognized in English law, an application for the misuse of money was dismissed in the English Chancery Division. The claimant advanced funds to one of the defendant companies on the recommendations of an adviser who had received assurances from the defendants that the responsible person would personally ensure the claimant's money was used for particular transactions. This was not the case. The money was transferred between bank accounts of the defendants which had the effect of falsely inflating their turnover and profits. When this was discovered the defendant went into receivership. Action was brought against them and the receivers, the second and third defendants, who entered into a series of settlements and received £5.2 million from the sale of property by one of the defendants. The claimant then sought a declaration that the proceeds of the sale were held on constructive trust for...