What is the test for constructive trust based on unjust enrichment?

British Columbia, Canada


The following excerpt is from Bank of Nova Scotia v Titanich, 2014 BCSC 1129 (CanLII):

In Soulos v. Karkontzilas, 1997 CanLII 346 (SCC), [1997] 2 S.C.R. 217, which was a commercial case involving some wrongdoing by a realtor, Justice McLachlin, as she then was, set out four prerequisites for finding constructive trust based on unjust enrichment, at paragraph 45: … I would identify four conditions which generally should be satisfied: (1) The defendant must have been under an equitable obligation, that is, an obligation of the type that courts of equity have enforced, in relation to the activities giving rise to the assets in his hands; (2) The assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of his equitable obligation to the plaintiff; (3) The plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties and; (4) There must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case; e.g., the interests of intervening creditors must be protected.

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