Comparing the institutional constructive trust with the remedial constructive trust

Abstract

The concept of the Institutional Constructive Trust was first recognised in Australia in 1907 by the most senior court, i.e. the High Court of Australia, in Black v S Friedman & Co. This arose in a decision involving stolen funds. Its importance was addressed in the State of Victoria in Nolan v Nolan where what was in issue involved the Limitations Act of the State of Victoria. It must be appreciated that in the Commonwealth of Australia, State Acts can, and sometimes do, differ. In 1985, in Muschinski v Dodds, Deane J of the Australian High Court placed different emphasis on the court’s ability to recognise and construe such a trust and gave it the imprimatur of “Remedial Constructive Trust”. The latter, whilst adopted in New Zealand and Canada, has had what might fairly be described as its critics in the UK and, indeed the UK Supreme Court in FHR European Venture LLP v Cedar Capital Partners LLC has stated at [47] that the remedial constructive trust is not part of the law of the UK.