What are the principles applicable to a remedial constructive trust?

British Columbia, Canada


The following excerpt is from Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd., 2000 BCCA 458 (CanLII):

The principles applicable to this case are contained in the passage I have just quoted from the reasons of Madam Justice McLachlin in Soulos v. Korkontzilas. A remedial constructive trust will be imposed only if it is required in order to do justice between the parties in circumstances where good commercial conscience determines that the enrichment has been unjust. But a remedial constructive trust is a discretionary remedy. It will not be imposed where an alternative, simpler remedy is available and effective. And it will not be imposed without taking into account the interests of others who may be affected by the granting of the remedy. In this case that would include other creditors of the bankrupt, (both secured creditors and general creditors, since the trust may defeat both), and any relevant third parties.

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