Constructive trusts

A constructive trust can be imposed in equity on the basis of unconscionability or common intention. In relation to unconscionability, where a defendant unjustly gains a benefit at the expense of a plaintiff, this is arguably an unjust enrichment in restitution law. (See Goff & Jones 1986, pp. 13 and 16; and Baumgartner v Baumgartner (1988) 62 ALJR 29, and Muschinski v Dodds (1986) 160 CLR 583.)

Parties may be found to hold their respective interests on trust to repay other parties’ contributions and to divide the residue between them. Some cases have drawn the analogy between the failure of a relationship and the failure of a joint endeavour in terms of the rights and interests created. In Swettenham v Wild ([2005] QCA 264) a joint endeavour (a granny flat), which was to be for mutual benefit, failed through no attributable fault of either party and gave rise to a constructive trust so that the elderly widower had a proportionate interest in the property. And see Giumelli v Giumelli [2007] VSCA 89 for an example of the fulfillment of an equitable obligation by ‘making good the expectation’ that had been encouraged (cited in Barkehall-Thomas 2008, p. 154).