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The majority emphasized the broad principles underlying the constructive
trust, noting that “the equitable principle on which the remedy of constructive
trust rests is broad and general; its purpose is to prevent unjust
enrichment in whatever circumstances it occurs”.36
Some years later, in 1997, Justice McLachlin, as she then was, undertook
a detailed analysis of the constructive trust and endorsed a broad, flexible
approach in Soulos v. Korkontzilas37 that appears to adhere closely to Lord
Denning’s initial clarion cry that a trust may be imposed where justice and
good conscience so require. Speaking for the majority in Soulos, Justice
McLachlin held that good conscience underpins the constructive trust:
It thus emerges that a constructive trust may be imposed where good conscience
so requires. The inquiry into good conscience is informed by the
situations where constructive trusts have been recognized in the past. It
is also informed by the dual reasons for which constructive trusts have
traditionally been imposed: to do justice between the parties and to maintain
the integrity of institutions dependent on trust-like relationships.
Finally, it is informed by the absence of an indication that a constructive
trust would have an unfair or unjust effect on the defendant or third parties,
matters which equity has always taken into account. Equitable remedies
are flexible; their award is based on what is just in all the circum-
stances of the case.
Good conscience as a common concept unifying the various instances in
which a constructive trust may be found has the disadvantage of being
very general. But any concept capable of embracing the diverse circumstances
in which a constructive trust may be imposed must, of necessity,
be general. … The goal is but a reasoned, incremental development of the
law on a case-by-case basis.38
Justice McLachlin also commented on the established bases for imposing
a constructive trust—namely, for wrongful acts such as fraud and breach of
duty of loyalty, and to remedy unjust enrichment. Notably, within these
broad categories, she held that “there is room for the law of constructive
trust to develop and for greater precision to be attained as time and experience
may dictate”.39
More recently, in 2016, the Court of Appeal for British Columbia confirmed
the broader availability of the constructive trust contemplated by
Soulos. In BNSF Railway v. Teck Metals Ltd.,40 the court considered whether
the categories for constructive trust were closed, being limited to breach of
fiduciary duty and unjust enrichment. Justice Newbury answered this
question in the negative, holding that the constructive trust may be
imposed in other circumstances:
The existence of constructive trust as a remedy in two types of situations
does not negate the availability of the substantive constructive trust
in other circumstances. Notwithstanding the prevalence in Canada of the