Principles of Equity and Trusts by Alastair Hudson

Author:Alastair Hudson [Alastair Hudson]
Language: eng
Format: epub
Publisher: Routledge

12.3.3 Profits from theft

Lord Browne-Wilkinson held in Westdeutsche Landesbank v Islington64 that stolen property must be held on constructive trust by the thief for the benefit of its true owner. In consequence, the victim of the crime acquires an equitable interest against the thief and therefore is able to establish an equitable tracing claim into any substitute property acquired by the thief with the stolen property (for example, after selling the stolen property),65 as considered in Chapter 20. Imposing a constructive trust on the thief has the ostensibly odd result of seeming to confer legal title in the stolen property on her as constructive trustee. One can see why judges might be uncomfortable at the suggestion that a thief acquires any type of property right. However, the Westdeutsche approach merely requires that the thief must hold the stolen property on a bare constructive trust for the victim of the crime and, as will often be the case, to hold any property acquired by disposing of the stolen property on constructive trust too. A different approach was taken in Shalson v Russo66 by Rimer J who held that a thief cannot acquire any proprietary interests in stolen property and therefore cannot be a constructive trustee. Nevertheless, his lordship held that a victim of crime should be permitted to trace into the property taken from him as part of the fraudulent scheme.

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