506 THE ADVOCATE
VOL. 80 PART 4 JULY 2022
transfer is pursuant to a contract that is later held to be voidable and
declared to be void, because in that situation the transferor will not have
received any valid consideration (the transferee must give the property
back on the declaration of voidness). In that situation, a court would declare
a substantive constructive trust.37 So it could be called either.38 As one
author stated:
If rescission revests equitable title, then the defendant holds the property
on trust for the claimant. Older cases describe this as a constructive trust,
modern ones as a resulting trust. Both labels are perhaps appropriate on
their own terms. The trust is resulting in the sense that the property
“results back” to the claimant; it is constructive in the sense that the
defendant is on notice (because the claimant will have given him notice
of her intention to rescind), so he cannot thereafter in conscience deal
with the property as his own.39
In some cases, it might not matter which it is called, but in some cases it
might. As a substantive constructive trust arises by operation of law immediately,
prior to and independently of any court order, a court has no discretion
as to whether to declare the existence of the trust.40 And there is no
discretion as to when it arises. However, a court has discretion as to both the
existence and the effective time of a resulting trust.41 So, a plaintiff would
always prefer to argue that the facts give rise to a substantive constructive
trust so as to eliminate the risk that the court might not grant the resulting
trust remedy or might not grant it retroactively.42
APPLICATION TO SECTION 60 OF WESA
It seems obvious that a resulting trust could not be imposed over a donee
who acquired property from a testator: the testator no doubt fully intended
to and did transfer full beneficial ownership of the property to the donee.
Similarly, it seems that a remedial constructive trust is not justified in
these circumstances: while the testator “may have done the disappointed
beneficiary wrong” by giving away the asset, the donee did not. The donee
may not have even known that the testator was married or had children.
Even if the donee did know, they had no way of knowing that the testator
would fail to make adequate provision in their will for their family. A remedial
constructive trust responds generally to unjust enrichment. Here, there
was nothing unjust (from the donee’s point of view) in accepting a gift from
the testator. To put it another way, if the testator had tried to sue the donee
to recover the property under a remedial constructive trust, the testator
almost certainly would have failed. The disappointed beneficiary, acting on
behalf of the estate, cannot be in a better position.
That leaves a substantive constructive trust.