Constructive trusts and agency

Abstract

The extent to which agents, acting on behalf of trustees, may incur personal responsibility as constructive trustees and so become accountable to the beneficiaries, has produced an extensive case law and some interesting distinctions, often turning upon the facts of the individual case, and the nature and extent of the agent's participation in the acts which are impeached. In the leading case of Barnes v. Addy, decided a century ago, a sole trustee had been appointed against the advice of a solicitor and the sole trustee misapplied the funds. Two solicitors who had prepared the deeds in the transaction in which the funds had been misapplied and who had received their costs were joined as defendants in a suit by two beneficiaries, along with the sole trustee.