Property Law - Following and Tracing Flashcards Preview

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Flashcards in Property Law - Following and Tracing Deck (143):
1

Who noted Turner v Jacob is probably closer to what Oatway decided?

H&M

2

What did Conaglen say of backwards tracing?

It is a matter of legal policy on whether to allow backwards tracing

3

What case showed court recognising tracing is the court 'making a policy judgment' of whether one asset represents or is substituted for another?

Federal Republic of Brazil v Durant International

4

What is often unclear in cases of mixed substitution?

Evidence of where the money has gone or come from

5

What is the lowest intermediate balance rule?

If evidence clearly shows only £200 in the account could belong to B, this is all B can claim.

6

What does a claim depend on?

C's right to the original asset

7

Relfo v Varsani general

Money laundering, one transaction

8

What case conflicts with Foskett on backwards tracing and how?

Re Tilley's WT - intention not needed

9

What can a B do if there is a mixed substitution?

Trace into and claim proportion of traced asset, or lien to secure a personal claim against T

10

C is entitled ALMOST as of right to an interim freezing injunction to preverse claimed asset until trial outcome

UCB Home Loans v Grace

11

Relfo v Varsani required what for backwards tracing?

Prior arrangement that trust fund would be used to repay, and was so used

12

How did Lionel Smith view backwards tracing?

Should be allowed - look at what made release of debt caused by initial borrowing possible, such that if money is borrowed to buy a car, and X can only repay the debt through money from B, money from B explains X's ownership

13

If T mixed his own money with trust money, who has priority?

B

14

What judge in what case called Clayton the exception, not the rule?

LJ Cooke in Russell-Cooke Trust v Prentis

15

Sinclair Investments v VTF

Once trust money falls into a 'black hole', such that it is impossible to trace due to complex transactions, T bears the burden of showing money is not part of the trust fund

16

What is following?

Identifying the same asset from hand-to-hand

17

UCB Home Loans v Grace

C is entitled ALMOST as of right to an interim freezing injunction to preverse claimed asset until trial outcome

18

Barlow Clowes v Vaughan general

Ponzy scheme

19

Why did Clayton not apply in Barlow Clowes v Vaughan?

Investor intention clearly to share in profits and losses

20

What did the Vice-Chancellor say in Foskett v McKeown in the CoA?

Important D made the first payment, giving his children a vested interest and meaning B could only claim for misappropriated funds

21

What did Conaglen highlight as a reason not to allow backwards tracing?

Unsecured creditors are already in a precarious position compared to the far better protected position of Bs

22

Turner v Jacob judgment

If there is money left, B must start from the money

23

If T gives money to a BFP, who has priority?

BFP - claim extinguished

24

LJ Woolf in Barlow Clowes on Clayton

Only use if it does 'broad justice'

25

What kind of remedies are falsifying and surcharging?

Personal

26

What judge in what case suggested Clayton does not apply if 'inconvenient'?

Lord Greene in Re Diplock

27

What jurisdiction was Federal Republic of Brazil v Durant?

CoA of New Jersey

28

Who noted they couldn't overrule Clayton, but could displace it with a counterweight, and in what case?

LJ Dillon in Barlow Clowes

29

Space Investments v Canadian Imperial Bank general

Swollen assets theory

30

What other method could be used for bank accounts than pari passu or Clayton?

Rolling charge

31

Lord B-W in Foskett

Windfall is permitted because enforcement of property rights, not to reverse UE

32

Beaver skins, mistress

Jones v De Marchant

33

Who outlined the 'black hole' theory in Sinclair Investments v VTF?

Lord neuberger

34

What did Lord Steyn say in Foskett of the equitable/legal distinction of tracing?

Process of identification is 'genuinely neutral as to the right exigible'

35

What two judges were in the minority in Foskett?

Steyn and Hope

36

What was the split in the HoL in Foskett?

3:2

37

What case applies if there is evidential certainty in a tracing claim?

Roscoe v Winder

38

Turner v Jacob

Balance

39

What do L&O note about Turner v Jacob?

Probably closer to what Oatway decided

40

Foskett v McKeown general

Portugal development, insurance policy

41

Evidential uncertainty in tracing is resolved how?

Against the wrongdoer

42

What case showed the courts accepting rolling charge is probably the fairest method for bank accounts?

Charity Commission v Framjee

43

From what case and judge does the swollen assets theory come?

Space Investments v Canadian Imperial Bank, Lord Templeman OBITER

44

What did Hobhouse LJ say in Foskett in the CoA?

Payment of 4th and 5th made no difference

45

Jones v De Marchant judgment

Required to account to his wife for the 18 beaver skins

46

What are the three rules (cases) in the case of mixed substitution with evidential uncertainty?

Re Hallett's Estate; Re Oatway; Shalson v Russo

47

Why can't money in a bank account be followed?

It is not physical money, but a debt

48

Foskett v McKeown on backwards tracing, and what judge?

Scott VC said only allowed if C can prove T intention at time of borrowing was to repay with trust money

49

Roscoe v Winder

Lowest intermediate balance

50

In what case did the CoA reject Clayton for mixed substitution and evidential uncertainty?

Re Hallett's Estate

51

Re Hallett's Estate general

Mix, dissipation, balance

52

Re Hallett's Estate judgment

Presume T spent his money first because presumption of honesty

53

Why do L&O prefer Shalson?

For Rimer J's view of the merits

54

What types of substitutions can there be in a tracing claim?

Mixed and clean

55

What judge in Bishopsgate said no to backwards tracing because fallacious?

LJ Leggatt

56

Who criticised Millett's reference to 'tracing the value' in Foskett and why?

If understood to mean market value, it is nonsense to say you are tracing the value because it may not be the same

57

Who called Clayton's case 'capricious, arbitrary and apposite', and in what case?

LJ Leggatt in Barlow Clowes

58

Foskett v McKeown judgment

B's payments were swapped for 'shares' in policy - proportional share of pay-out with children

59

What case shows an exception to the specification doctrine?

Jones v De Marchant

60

Clayton's Case

First in first out rule

61

What case explained why the money is considered dissipated upon paying into an overdrawn account?

Rea v Russell

62

Why did LJ Leggett say no to backwards tracing?

Fallacious

63

If both sources in a mixed substitution are innocent, who has priority?

Pari passu

64

When can there not be a lien in the case of mixed substitution?

If there are innocent competing contributors

65

What case suggests a similar theory to swollen assets but ISN'T?

Sinclair Investments v VTF

66

What two cases stand in conflict under evidential uncertainty for mixed substitution in tracing?

Turner v Jacob and Shalson v Russo

67

Russell-Cooke Trust v Prentis

LJ Cooke called Clayton the exception, not the rule

68

How did they reason the allowance of backwards tracing in Federal Republic of Brazil v Durant?

If not allowed because of transaction order, would allow camouflage of interconnected transactions to obscure true purpose and effect

69

what did Millett say of pro rata in a mixed substitution case?

It is the 'best that the wrongdoer and his donees can hope for'

70

Lord Hope in Foskett

Contributions made a difference by reducing costs to insurer, but no difference to rights exercisable by children

71

What is the general rule for dissipation?

If money is used to pay an unsecured debt or pay into an overdrawn account, the money has dissipated and end of tracing

72

What did the CoA require in SFO v Lexi Holdings?

Equitable charge to attach to traceable proceeds

73

Lord Steyn in Foskett

Contributions made no difference, so not pro rata

74

Relfo v Varsani judgment

Looked at surrounding circumstances to find many transactions were actually one

75

What two subsequent cases tried to limit the effect of Clayton?

The Mecca and Re Sherry

76

SFO v Lexi Holdings

Rejected obiter in Space Investments

77

What is a mixed substitution?

New asset acquired with a mixture of misapplied trust property and T's own property

78

Charity Commission v Framjee

Rolling charge probably the fairest method, but never applied in English law. Open to adopt it, but used pari passu

79

Who said to only use Clayton if it does 'broad justice'?

LJ Woolf in Barlow Clowes

80

How do H&M try to explain Millett's use of the term value in Foskett?

Connotes the potential for exchange inherent in an assignable right

81

How do L&O argue Templeman's swollen assets theory is wrong?

Misread Jessel MR's judgment in Re Hallett's that when trust funds are mixed 'the whole will be treated as trust property' - only meant to concern particular account

82

What two cases rejected the rolling charge method?

Barlow Clowes v Vaughan; Russell-Cooke Trust v Prentis

83

What two cases suggest courts are more willing to allow backwards tracing in recent years?

Relfo v Varsani; Federal Republic of Brazil v Durant

84

What judge in Shalson v Russo said no to backwards tracing?

LJ Rimer

85

What judge failed to bring clarity to the law by his judgment in Bishopsgate v Homan?

LJ Henry

86

Millett in Foskett

No equitable/legal distinction in tracing, rejected confinement to a lien and pro rata

87

What judge in Bishopsgate v Homan allowed backwards tracing?

LJ Dillon

88

What case is an example of money used to pay into an overdrawn account?

Bishopsgate v Homan

89

What judge in Foskett rejected legal/equitable distinction in tracing

Millett

90

What case showed the courts open to adopting rolling charge method?

Charity Commission v Framjee

91

What does T have against a bank for the money in his account?

A chose in action

92

What is a non-fungible mixture?

Mixture is specific so you can tell what happened to the original property

93

What is the swollen assets theory?

B can trace into all assets T has when T wrongfully takes money for himself, subjecting all his assets to a charge

94

What is a clean substitution for tracing?

One asset is swapped directly for misapplied trust property

95

Who said following and tracing are 'exercises in locating assets which are taken to represent the trust asset'?

Lord Millett in Foskett v McKeown

96

What is the rolling charge method?

Look at each transaction to determine what happens to each investor at each point

97

If one source in a fungible mixture is a wrongdoer, and some is given away, what happens?

B has priority

98

Why did Millett say pro rata distribution?

Later events cannot determine ownership of a policy

99

Why did Barlow Clowes and Russell Cooke reject rolling charge?

Prohibitive costs and complications

100

what judge rejected confinement to a lien in mixed substitution cases, and in what case??

Millett in Foskett

101

Rea v Russell

NZ CoA show how there is no new asset when paying into an overdrawn account, so no proprietary representation

102

From what jurisdiction is the rolling charge method?

America

103

What are following and tracing?

Evidentiary processes

104

Re Oatway judgment

Assume T preserve B's assets first so can claim investment

105

Jones v De Marchant general

Beaver skins, mistress

106

What did Millett say of CoA argument in Foskett?

'Capricious and unacceptable'

107

Re Oatway general

Mix investment, dissipation

108

Foskett v McKeown, per Lord Millett on following and tracing

They are 'exercises in locating assets which are taken to represent the trust asset'

109

If 3rd is a volunteer without notice (but not BFP), and doesn't mix, who has priority?

B

110

If two innocent sources contribute to a fungible mixture, and some is given away, what happens?

Both share proportional to their shares

111

What do H&M say of the reference to 'value' by Millett in Foskett?

'Misguided and distracing'

112

Shalson v Russo general

Cherry pick

113

What case shows an example of money used to pay an unsecured debt?

Re Diplock

114

Clayton only applies to current accounts, not saving

The Mecca

115

What two types of mixtures may there be in a following process?

Fungible and non-fungible mixtures

116

what three judges were in the majority in Foskett?

Hoffmann, Millett and Lord B-W

117

What did L&O say of the court response to Clayton?

Courts are swift to find impracticality or injustice so it doesn't have to be applied

118

What judge in Foskett highlighted how the windfall is permitted because it is the enforcement of property rights, not to reverse UE

Lord B-W

119

How is Space Investments inconsistent with Roscoe?

Presumption should only be made against wrongdoer when there is evidential uncertainty

120

What are two exceptions to the general rule on dissipation?

If debt is secured by a charge over D's property, or if D borrows money to buy an asset, and trust money is used to repay the creditor

121

If T gives money to 3rd with notice, and 3rd mixes, who has priority?

B

122

Re Sherry

If money is paid on the same day, deal with it as though done at the same time, NOT Clayton

123

What judge in Re Tilley's WT said intention is irrelevant for backwards tracing?

Ingoed-Thomas J

124

Federal Republic of Brazil v Durant International on tracing

Jersey CoA recognised it is the court 'making a policy judgment' of whether one asset represents or is substituted for another

125

Who said pro rata in a mixed substitution case is the 'best that the wrongdoer and his donees can hope for'?

Millett in Foskett

126

What was the view taken in Federal Republic of Brazil v Durant?

Look at overall transaction for coordinated scheme

127

In what circumstances was LJ Dillon willing to allow backwards tracing in Bishopsgate v Homan?

Inference or intention to repay debt with trust money

128

What did Lord Greene say of Clayton's Case in Re Ziplock?

Bank accounts are complicated so the rule is useful, based on 'presumed intention' and if inconvenient, pari passu

129

What is the rule in Clayton's Case?

First in first out - first lot of money attributed to first transaction out, ad infinitum

130

What judge in Re Hallett's Estate suggested B is confined to a lien when substitution is mixed?

Jessel MR

131

If money is paid on the same day, deal with it as though done at the same time, NOT Clayton

Re Sherry

132

With what case is Space Investments v Canadian Imperial Bank inconsistent?

Roscoe

133

When would tracing/following be preferred to a personal claim?

If T is bankrupt, to establish a proprietary interest and gain priority

134

Lord Hoffmann in Foskett

Agreed with Millett (but not on unit)

135

What is the starting point for bank accounts?

Clayton's case

136

What is tracing?

Identifying the new asset swapped for the original asset, identifying the value of the old one in the new asset

137

What two reasons are there for not following Turner v Jacob and preferring Shalson v Russo?

Shalson not cited to Patten in Turner; wrongdoer shouldn't take advantage of his own wrongdoing

138

Who gave the priority rules in a tracing claim, and in what case?

Lord Greene MR in Re Diplock

139

The Mecca

Clayton only applies to current accounts, not saving

140

What is a fungible mixture?

Mixture compose of mutually interchangeable units, so it doesn't matter what part of the mass you are talking about

141

Shalson v Russo judgment

B can 'cherry pick' between Hallett and Oatway if balance and investment

142

In what three situations is B's asset considered destroyed in a non-fungible mixture?

Physically attached to dominant, such that it would be disproportionately expensive to separate the two, a fixture with the same effect or combined to create a new product under 'specification' doctrine

143

If 3rd is a volunteer without notice (but not BFP), and does mix, who has priority?

Pari passu

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