Constructive Trusts Of Immovable Property – Guernsey And Jersey Law's Differing Paths

A constructive trust is an equitable remedy imposed at the discretion of a court. It benefits a party that has been wrongfully deprived of its rights due to another person obtaining or holding a legal property right that it should not possess and has thereby been unjustly enriched at the cost of the claimants. It is an implied trust created by conduct.

In the recent case of The Serious Fraud Office & anor v Litigation Capital Limited & ors¹ ("SFO") the English High Court, in the absence of any binding Jersey authority on the point, considered an important issue of Jersey Law: whether and, if so, in what circumstances, a constructive trust can arise over Jersey immovable (real) property. Although the subject of debate in Jersey for some time, the issue had not previously been addressed, definitively at least, by the Jersey Courts. The High Court in England has now determined that it cannot.