Can a remedial constructive trust be applied in a commercial case?

British Columbia, Canada


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

The leading case on the application of a remedial constructive trust in a commercial case is Soulos v. Korkontzilas, 1997 CanLII 346 (SCC), [1997] 2 S.C.R. 217 (S.C.C.) where the judgment of a majority of five judges in a seven judge division was given by Madam Justice McLachlin. The case was a commercial case. After reviewing the authorities, Madam Justice McLachlin said this, at p.236, para.34: It thus emerges that a constructive trust may be imposed where good conscience so requires. The inquiry into good conscience is informed by the situations where constructive trusts have been recognized in the past. It is also informed by the dual reasons for which constructive trusts have traditionally been imposed: to do justice between the parties and to maintain the integrity of institutions dependent on trust-like relationships. Finally, it is informed by the absence of an indication that a constructive trust would have an unfair or unjust effect on the defendant or third parties, matters which equity has always taken into account. Equitable remedies are flexible; their award is based on what is just in all the circumstances of the case.

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