Resulting & constructive trusts
Resulting and constructive trusts arise by operation of law rather than express declaration. They are exempt from the writing formalities under LPA 1925 s.53(2).
What "Resulting & constructive trusts" covers
- Automatic resulting trust: where an express trust fails or does not exhaust the beneficial interest, the equitable interest results back to the settlor (Vandervell v IRC).
- Presumed resulting trust: a voluntary transfer or contribution to the purchase price raises a presumption of a trust in favour of the provider (Dyer v Dyer), rebuttable by evidence of intention or the presumption of advancement.
- The presumption of advancement (gifts from father/husband) still exists but is weak and legislatively due for abolition; it is readily rebutted by evidence.
- A constructive trust is imposed to prevent unconscionable retention of property — including where a defendant's conscience is affected or through a common intention.
- Institutional constructive trusts arise by operation of law from the facts; English law does not generally recognise the remedial constructive trust (FHR European Ventures v Cedar Capital).
- A fiduciary who makes an unauthorised profit or takes a bribe holds it on constructive trust for the principal (Boardman v Phipps; FHR European Ventures).
- The Pallant v Morgan equity and Rochefoucauld v Boustead show constructive trusts preventing statute or agreements being used as an instrument of fraud.
Key cases & statutes
The authorities and provisions most likely to matter for this subtopic:
How it's tested in SQE1
SQE1 uses single best answer questions: a short factual scenario, one precise question, and five options of which only one is the best answer on the law applied to the facts. For resulting & constructive trusts, expect to be asked what the correct legal position is, what a party may or must do, or which outcome follows — with more than one option looking arguable. Reading the facts carefully and eliminating the near-misses is the skill that earns the mark.
Where candidates lose marks
- Treating the presumption of advancement as strong; modern courts rebut it readily.
- Assuming English law recognises a general remedial constructive trust — it does not.
- Forgetting that resulting and constructive trusts escape the s.53(1) writing requirements via s.53(2).
Learn this subtopic in the course
A video lesson, notes and exam-style practice on resulting & constructive trusts.
FAQ
Is resulting & constructive trusts tested on SQE1?
Yes — resulting & constructive trusts is part of the SQE1 Trusts syllabus (FLK2) and can appear in single best answer questions.
How is resulting & constructive trusts examined in SQE1?
SQE1 tests it by application: you're given a realistic scenario and choose the single best answer from five options. The focus is on using the law correctly, not reciting it — knowing the leading authorities (LPA 1925 s.53(2), Vandervell v IRC [1967]) helps.