Tracing

Question 1

Shanahan’s Stamp Auctions Ltd v Farrelly [1962] IR 386

Answer 1

Company which grouped inventors into syndicates and used their money to buy stamps went into liquidation -

Question of priority of payments to creditors as well as syndicated and unsyndicated investors -

Budd J held: Fiduciary relationships existed between the investors and company and allowed both classes of investors to trace

Question 2

Re Money Markets Int’l Stockbrokers Ltd [1999] 4 IR 267

Answer 2

Laffoy J gave further consideration to the rule in Clayton’s case:
P transferred money to stockbroker to buy shares for him on Irish Stock Exchange (ISE)

The next day ISE suspended the company’s right to transact, and it subsequently wound up

P’s money mixed with other funds in company’s bank account

Dispute between parties as to whether Clayton’s case should apply to determine entitlement to money

Question 3

Re Irish Shipping Ltd [1986] ILRM 518

Answer 3

Payment by mistake into account could be seen as giving rise to a fiduciary relationship

Question 4

Westdeutsche v Islington London Borough Council [1996] AC 669 (UKHL)

Answer 4

D (Islington LBC) entered into interest rate swaps with the bank C

The interest rate swap contract was void in fact

C argues that the money it paid to D under the contract is held by D for it under resulting trust

C’s claim rejected, the money was not held for C under presumed resulting trust (PRT)