Unauthorised fiduciary gains and the constructive trust

• Main Author: SEE, Alvin W. L.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2016
• Subjects: Constructive trust; Disgorgement; Restitution; Fiduciary; No-profit rule; Commercial Law; Contracts; Property Law and Real Estate
• Online Access: https://ink.library.smu.edu.sg/sol_research/1822; https://ink.library.smu.edu.sg/context/sol_research/article/3774/viewcontent/Unauthorised_fiduciary_gains_and_the_constructive_trust__1_.pdf
• Institution: Singapore Management University

This article challenges the traditional assumption that all cases of unauthorised fiduciary gain warrant the same legal treatment, in particular the imposition of a constructive trust as a disgorgement remedy. It proposes a method of categorising the cases and ranking them based on the strength of the principal’s interest. It is suggested that in cases where the principal’s interest is not particularly strong, there is room for taking into account the interests of innocent third parties and affording them the necessary protection. For this purpose, the remedial constructive trust supplies the needed flexibility.