What is the test for a constructive trust in a personal injury case?

Ontario, Canada


The following excerpt is from Sutton Group Professional Realty Inc. v. Stone, 2008 CanLII 84103 (ON SC):

The proposed amended pleading does claim a remedy against the defendants based on a constructive trust. The conditions necessary for a court to impose a constructive trust based on wrongful conduct are as set out in Soulos v. Korkontzilas, 1997 CanLII 346 (SCC), [1997] 2 S.C.R. 217 at p. 241 as follows: (1) The defendant must have been under an equitable obligation, that is, an obligation of the type that courts of equity have enforced, in relation to the activities giving rise to the assets of his hands; (2) The assets in the hands of the defendant must be shown to have resulted from deemed or actual agency activities of the defendant in breach of his equitable obligation to the plaintiff; (3) The plaintiff must show a legitimate reason for seeking a proprietary remedy, either personal or related to the need to ensure that others like the defendant remain faithful to their duties and; (4) There must be no factors which would render imposition of a constructive trust unjust in all the circumstances of the case; e.g., the interests of intervening creditors must be protected.

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