Bribes: what kind of constructive trust?

Secretary for Justice v Hon Kam Wing ([2003] 1 HKLRD 524) concerned an action by the Hong Kong Government to recover what it alleged to be bribes and property paid for with those alleged  bribes. They had been received not later than 1971 and the Government knew of them by 1976 but did not bring proceedings until March 2000. There was a question as to whether the action was time-barred by the provisions of sections 4(1)(a) and 4(2) of the Limitation Ordinance. It was accepted on both sides that the bribes, if such they were, would be held on constructive trust. But what kind of constructive trust was it? The court had to apply Lord Millett’s distinction between ‘real’ constructive trusts and situations where someone is made accountable as if they were a constructive trustee (Paragon Finance Plc v DB Thakerar & Co). The court decided that this was a ‘real’ constructive trust with the result that there was no limitation period. The crucial pointer to this conclusion was that the recipient of the alleged bribes held them on trust for the employer as soon as they were received (para. 62).

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