Is there a constructive trust or constructive trust for the return of property acquired by mistake?

38 Both categories of constructive trust are recognized in the United States; although unjust enrichment is sometimes cited as the rationale for the constructive trust in the U.S., in fact its courts recognize the availability of constructive trust to require the return of property acquired by wrongful act absent unjust enrichment of the defendant and reciprocal deprivation of the plaintiff. Thus the authors of Scott on Trusts (3rd ed. 1967), vol. V, at p. 3410, state that the constructive trust “is available where property is obtained by mistake or by fraud or by other wrong”. Or as Cardozo C.J. put it, “[a] constructive trust is, then, the remedial device through which preference of self is made subordinate to loyalty to others”: Meinhard v. Salmon, 164 N.E. 545 (1928), at p. 548, cited in Scott on Trusts, supra, at p. 3412. Scott on Trusts, supra, at p. 3418, states that there are cases “in which a constructive trust is enforced against a defendant, although the loss to the plaintiff is less than the gain to the defendant or, indeed, where there is no loss to the plaintiff”.

39 Canadian courts also recognize the availability of constructive trusts for both wrongful acquisition of property and unjust enrichment. Applying the English law, they have long found constructive trusts as a consequence of wrongful acquisition of property, for example by fraud or breach of fiduciary duty. More recently, Canadian courts have recognized the availability of the American-style remedial constructive trust in cases of unjust enrichment: Pettkus v. Becker, supra. However, since Pettkus v. Becker Canadian courts have continued to find constructive trusts where property has been wrongfully acquired, even in the absence of unjust enrichment. While such cases appear infrequently since few choose to litigate absent pecuniary loss, they are not rare.

40 Litman, supra, at p. 416, notes that in “the post-Pettkus v. Becker era there are numerous cases where courts have used the institutional constructive trust without adverting to or relying on unjust enrichment”. The imposition of a constructive trust in these cases is justified not on grounds of unjust enrichment, but on the ground that the defendant’s wrongful act requires him to restore the property thus obtained to the plaintiff.