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Constructive trusts - Coggle Diagram

- - - - (i) knowing receipt and dealing with trust property
      - (ii) knowing assistance in a dishonest and fraudulent design on the part of the trustees.
      - Following this decision, a stranger to a trust was held liable as a constructive trustee if they knowingly engaged in either of these limbs.
    - - (i) actual knowledge;
      - (ii) wilfully shutting one’s eyes to the obvious;
      - (iii) recklessly ailing to make such enquiries as a honest and reasonable person would make;
      - (iv) knowledge of the circumstances which would indicate the facts to an honest person;
      - (v) knowledge of circumstances which would put an honest and reasonable person on enquiry.
  - - - This case was cited with approval in Eagle Trust which involved the takeover of a group of companies where due to the Wall Street crash, a financial adviser was not liable for the alleged negligent selection of the underwriters. The first 3 Baden categories were applied. It was held that an honest and reasonable man would have inferred that the monies were probably trust money and were misapplied and either would not have accepted them until they were satisfied that the payer was entitled to use them to discharge the liability. Therefore, in a ‘knowing receipt’ case, it is only necessary to show d knew monies received were trust monies which made the payment a misapplication.
      - After Akindele you had to show for the first limb that the trustee was: “Unconscientious receipt and dealing with trust property”.
- - - - (i) breach of a fiduciary relationship;
      - (ii) inter-meddling by a stranger;
      - (iii) by unjust enrichment/property interference (the new model constructive trust, which you do not need to cover for the fe1 exam).