Tracing

Question 1

What is tracing?

Answer 1

Where the beneficiary decides to track down or pursue the trust property especially where the trustee has misappropriated it

Question 2

What is it called in common law?

Answer 2

Tracing

Question 3

This following is available to who?

Answer 3

To a person with legal title in the goods meaning only the trustee can follow

Question 4

The trace must prove ?

Answer 4

Prove that his title is better than that of the third party purchaser

Question 5

Can chattels be traced?

Answer 5

It cannot

Question 6

Where the trust property has taken a new identity, can he still follow?

Answer 6

Provided the property is identifiable

Question 7

Obiter of who in which case?

Answer 7

Lord Ellenborough in Taylor v Plummer

Question 8

What happened in the case?

Answer 8

Where the part of 22,000 Pounds was used to purchase gold bullion

Question 9

What did the court hold?

Answer 9

Held that it is still traceable

Question 10

Can trust funds be traced to a bank account

Answer 10

Yes

Question 11

If?

Answer 11

It is the only fund therein

Question 12

In equity?

Answer 12

Tracing can be done even when the fund is mixed

Question 13

Case?

Answer 13

Taylor v Plummer , AGIP v Jackson

Question 14

TRACING AT EQUITY

To trace in equity which relationship must be there?

Answer 14

There must be fiduciary relationship btw the beneficiary and the trustee or third part with the property

Question 15

Case?

Answer 15

Re Diplock

Question 16

Case?

Answer 16

Re Hallet’s Estate

Question 17

What happened

Answer 17

Fiduciary relationship was construed where it was her solicitor that also managed her estate

Question 18

What must the beneficiary show?

Answer 18

Show that he has proprietary interest in the property

Question 19

Is there need to prove legal ownership in equity

Answer 19

No

Question 20

How is the power to trace exercised

Answer 20

By alleging constructive trust or making a declaration of charge in respect of the property notwithstanding that it has been mixed

Question 21

Case?

Answer 21

Foskett v McKeown
Where the trustee used 24,499 from the trust money to pay for 2 out of his 5 life insurance installment which paid out 1 million pounds . The court held that the beneficiaries were entitled to 2/5 of the 1 million being the proportionate share

Question 22

What can defeat a tracing claim?

Answer 22

A bona fide party purchaser for value without notice

Question 23

Case?

Answer 23

Re Diplock

Question 24

Tracing in equity covers?

Answer 24

Equitable interest in property

Question 25

When does tracing terminates

Answer 25

If the trust property has been dissipated I.e where neither the property cannot be found nor can the converted form be found

Question 26

Case?

Answer 26

Bishopsgate Investmenr Management V. Homan

Question 27

What happened in the case?

Answer 27

The account was overdrawn and no investment accruing from the money could be found

Question 28

Principles the court may used in mixed funds | 1?

Answer 28

The first withdrawal principle

Question 29

What happens here

Answer 29

Looks at the money that was first withdrawn as that of the trustee/ account holder then the balance in the account is for the trust

Question 30

Case?

Answer 30

Re Hallett’s estate

Question 31

What happened in the case?

Answer 31

Hallett paid 770 pounds from one trust into his account. Pod 1804 pounds from another trust into his account . His account was buoyant and was able to satisfy both claimants

Question 32

What did the court note?

Answer 32

Assuming Hallett had withdrawn some money, the first withdrawn is deemed to be his own and the rest for the trust

Question 33

Second principle

Answer 33

First in, First our principle

Question 34

The principle was in what case?

Answer 34

Clayton’s case

Question 35

What happens here?

Answer 35

Where more than 2 trusts try to claim an insufficient account, it is presumed that the first trust that was pain in is the first that was withdrawn then what is left in the account is that of the trust that was paid in second or later

Question 36

Third principle

Answer 36

Date of payment principle

Question 37

Case?

Answer 37

Oatway’s case

Question 38

What was held?

Answer 38

The first to be paid into account would take priority . Then the rest of the fund can be traced to the various investment if they can be found

Question 39

4th principle

Answer 39

Lowest intermediate balance principle/ rule

Question 40

What happens where the sum in the sum in the bank account falls below that taken from the test fund?

Answer 40

The balance should be traced to its new destination

Question 41

Case?

Answer 41

Roscoe v Winder

Question 42

Case?

Answer 42

Quistclose V Barclays Bank

Question 43

What happened in Jones v Jones

Answer 43

The court held that where the trust fund was fraudulently invested and made profits, the beneficiaries are entitled to recover the fund including profit