Constructive Trusts and Tracing

Does the mere mention of a trust conjure up images of equity‐speak in favour of Great Aunt Maud? Does a constructive trust give you sick building syndrome? Does tracing send you back to the drawing board? The following paper may be just what you need. It explains the concept of a simple trust, and how its fundamental principles manifest themselves in the court‐imposed constructive trust, paying particular attention to the vexed issue of knowledge, the linchpin of constructive trusteeship and the cause of great confusion among those called upon to analyse it. This paper will then examine the related concept of tracing, and amplify how the principles underpinning these remedies are employed by the courts to maximum effect, by reference to recent cases. The inevitable conclusion is that the use of ill‐fitting equitable concepts in a complex and fast‐moving world of commerce is an outmoded approach, which, if anything, creates more problems than it solves.