The Receipt-Based Constructive Trust: A Case Study of Personal and Proprietary Restitution in the Supreme Court

Abstract

This article analyzes the Supreme Court of Canada’s treatment of the receipt-based constructive trust in the companion cases of Gold v. Rosenberg and Citadel General Assurance Co. v. Lloyds Bank Canada. The author discusses the liability of those who participate in a breach of fiduciary duty to be held accountable as constructive trustees. He criticizes the Supreme Court’s decisions for being too equitable and, while correctly characterizing equitable recipient liability as restitutionary, for failing to adhere sufficiently to restitutionary principles in their reasoning. In addition, the author discusses different approaches used by the courts in determining the degree of knowledge necessary to hold a recipient of property liable as a constructive trustee. Ultimately, this article determines the Supreme Court’s failure to understand the juristic nature of the receipt-based constructive trust results in continued confusion in the treatment of the constructive trust.