Restitution Discussion Group Archives
| Sender: |
Lionel Smith |
| Date: |
Tue, 19 May 1998 16:01:37 |
| Re: |
Remedial Constructive Trust |
Eoin
O'Dell has pointed out that the Court of Appeal has overruled a first-instance
holding that there was an arguable case that English law would recognize
a remedial constructive trust absent a fiduciary relationship. Re
Polly Peck (No. 4) is reported in yesterday's Times (on line at http://www.the-times.co.uk/).
Such a trust was claimed over some of the assets of a company in liquidation
and the claimants needed leave to commence proceedings. The test for leave
was whether there was a seriously arguable case. The CA denied leave, saying
that there was no prospect that such a trust would be imposed. An extract
from the Times report of the judgment of Mummery LJ:
"Miss Dohmann submitted that "the law moves". That was true. But it could
not be legitimately moved by judicial decision down a road signed "no
entry" by Parliament. The insolvency road was blocked off to remedial
constructive trusts, at least when judge-driven in a vehicle of discretion.
The applicants should be refused leave to commence proceedings. To a
trust lawyer and, even more so, to an insolvency lawyer, the prospect
of a court imposing such a trust was inconceivable."
Lionel
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