Today, I will complete my review of the basic principles of trusts, which we continue to revisit with our students at Osgoode Hall Law School.

Constructive trusts have been said to be the hallmark of unjust enrichment, lying at the heart of this equitable doctrine. 

Historically, constructive trusts have been imposed in circumstances where “good conscience” requires it. More recently, there has been some debate over whether constructive trusts can still be applied where there is neither an unjust enrichment nor a wrongful gain.

The doctrine of unjust enrichment remains flexible and expansive. As we saw in Moore v Sweet, which remains a leading decision of the Supreme Court of Canada in this area of the law, the test requires:

• The enrichment of the defendant/respondent;
• A corresponding deprivation of the claimant; and
• The absence of “juristic reason” for both the enrichment and corresponding deprivation.

In class, we have identified a number of circumstances in which a constructive trust has been imposed that fall outside of what we normally think of traditionally as an unjust enrichment case, but, interestingly, where this test can still be satisfied and “good conscience” requires restitution. 

Have a great weekend,

Nick Esterbauer