Property Law - Claiming Flashcards
What are the three conditions to make a claim, AFTER following/tracing?
Receipt of property, retention of property and not a BFP
When could a tracing claim still be made in dissipation?
If Jones v De Marchant applied
What type of claim can persist even after dissipation, regardless of Jones v De Marchant?
Knowing receipt
What is the nature of the claim for the trust property?
Specific/substitutive performance of T’ duty
What two duties are breached when trust property is misappropriated?
‘Stewardship’ duty and duty to act in B’s exclusive interests
What is a ‘stewardship’ duty?
T duty to act in an authorised way
Banton v CIBC Corp
If property in which Bs have an equitable interest generates income, they an claim this too
If property in which Bs have an equitable interest generates income, they an claim this too
Banton v CIBC Corp
If trust asset survives in its original form in T’s hands, name four things B can do
Ask for an account, falsify the account, ask court to force T to fulfil his duties or force T to transfer legal title to new Tq
What section of what Act allows Bs to force T to retire and transfer legal title to new Ts?
S.19 and 20 TOLATA
What judge and in what case highlighted how holding T to account is a right, preceding any order?
Lord Millett in Libertarian Investments v Hall
What is the link between a claim in KR and a claim when trust assets survive in original form in hands of a 3rd volunteer?
Both place 3rd as CT for B
Westdeutsche v Islington LBC on trust asset in original form in hands of 3rd volunteer
Lord B-W said innocent must return property, and if acting in bad faith then additional duty to account AS IF HE WERE A T
What would 3rd need to have knowledge of, and at what time, to be liable to account to Bs AS IF HE WERE a T?
Knowledge of breach of trust whilst property is in his hands
If 3rd acts in bad faith, with notice of breach of trust, what two claims does B have?
KR and proprietary claim
Clark v Cutland
KR in ADDITION to tracing claim - not separate
KR in ADDITION to tracing claim - not separate
Clark v Cutland
Independent Trustee Services v GP Noble Trustees, per Lloyd LJ
Refer to innocent 3rd as CT, as long as no duties on power to deal with assets UNTIL he has notice
Refer to innocent 3rd as CT, as long as no duties on power to deal with assets UNTIL he has notice
Independent Trustee Services v GP Noble Trustees, per Lloyd LJ
What did Lloyd LJ say in regard to 3rd volunteers in Independent Trustee Services v GP Noble?
Refer to innocent 3rd as CT, as long as no duties on power to deal with assets UNTIL he has notice
How could traceable proceeds of trust assets in T’s hands otherwise be expressed?
T holding profits from a breach of fiduciary duty, then held on CT for Bs
What type of substitution is it when Bs money is used to buy a new asset?
Clean substitution
State Bank of India v Sood
3rd is usually protected by overreaching
3rd is usually protected by overreaching
State Bank of India v Sood
Wright v Morgan
Bs can adopt/claim traceable proceeds in specie, or secure monetary value of property dispersed by lien on new asset
What did the court require Bs to be to adopt traceable proceeds in Wright v Morgan?
Unanimous
Why is it an issue that Bs be unanimous before adopting/claiming traceable proceeds?
If Bs are minors, they cannot be unanimous
Trustee Act 1925 s.57
Allows application to court to held authorise sale
S.19 TOLATA
Bs can replace T
Allows application to court to held authorise sale
Trustee Act 1925 s.57
Bs can replace T
S.19 TOLATA
Foskett v McKeown
Lord Millett restates Wright, so equitable ownership through adoption OR equitable lien
What is equitable ownership?
Specific performance claim
What is an equitable lien?
Asking T to replace money wrongfully dispersed, secured by traceable proceed similar to a charge
What happens if the equitable lien over the new asset does not cover entirety of money dispersed?
Personal debt of T to B
What judge in what case restated Wright v Morgan?
Lord Millett in Foskett v McKeown
What is another word for Bs?
Cestuis que trustent
What type of charge is possible if we are concerned with a bank account?
ONLY a lien
Why may a lien be potent?
If Bs can trace into a number of different sets and funs, allows B to locate his contribution in any part of the mixture
Foskett v McKeown general
Insurance policy
Re Diplock general
Charity payments
Insurance policy
Foskett v McKeown
Charity payments
Re Diplock
Why does Re Ziplock not conflict with Foskett?
Brought at a time when trying and claiming thought to be the same
VC Scott in Foskett in CoA
Equity between two Bs is parti pass if money of both used to buy new asset
What case states that Equity between two Bs is pari passu if money of both used to buy new asset
Foskett v McKeown
What happens if T mixes his own and B’s money to buy a new asset?
B takes proportionate equitable ownership or lien
Why is the split proportionate if T mixes own money and B’s to buy a new asset?
Tracing is evidentiary, not punitive
Why did children have to share pay-out in Foskett?
They were volunteers, and equity does not assist a volunteer
Paul Davies v Davies general
Entire property
Paul Davies v Davies judgment
All held on trust for Bs, subject to counter-claim for T expenditure
Why was the entire property found to be held on trust for Bs in Paul Davies v Davies?
But for trust money, T wouldn’t have been able to buy property at all
Entire property
Paul Davies v Davies
What case shows what happens when T uses B money to buy property in Ts name, with a mortgage?
Paul Davies v Davies
What is the outcome if Bs money is used to buy a new asset, and traceable proceeds are in the hands of 3rd volunteer with notice?
KR
What is the outcome if Bs money is used to buy a new asset, and traceable proceeds are in the hands of 3rd volunteer w/o notice?
Need to give it back
Re Montagu’s Settlement
3rd volunteer with traceable proceeds needs to give up new asset
3rd volunteer with traceable proceeds needs to give up new asset
Re Montagu’s Settlement
Re Diplock on mixture of B’s and X’s money to buy a new asset
If 3rd acts in bad faith, B has priority, but if innocent then pari passu
What happens if there is a mixturre of B and X (innocent) money to buy new asset?
Pari passu
What happens if there is a mixture of B and X (bad faith) money to buy new asset?
B has priority
What case gives the priority rules for when there is a mixture of Bs and X money to buy a new asset?
Re Diplock
What rules apply if the traceable proceeds in the hands of bad faith 3rd volunteer are improvements to land?
Usual rules apply - B can claim proportionate ownership in property if improvement increases value, or lien if it doesn’t
What rules apply if the traceable proceeds in the hands of innocent 3rd volunteer are improvements to land?
If no increase in value, B has no claim, but if increase then lien only if equitable to do so
Two cases on when traceable proceeds in hands of 3rd volunteer are improvements to land?
Re Diplock and Foskett v McKeown
What case gives priority rules for when traceable proceeds are improvements to land in hands of 3rd?
Re Diplock
Foskett v McKeown general
Insurance policy
Foskett v McKeown on improvements to land
Lord B-W says IF there is any claim at all, it would be a lien
Re Diplock general
Charity payments
Re Diplock on traceable proceeds being improvements to land
If no increase in value, no claim against innocent, but increase then lien only if equitable to do so
What case explores the ‘lottery’ situation for traceable proceeds in the hands of 3rd volunteer?
Foskett v McKeown
What did the children try to argue in Foskett v McKeown (lottery)?
Would have used their own money if they had known
Why did the court reject lottery argument of children in Foskett?
Choice of what money to use was T’s, not the children’s, so distinguished from lottery
H&M on what happens if lottery situation and traceable proceeds in hands of 3rd volunteer
Probably restricted to a lien if 3rd is innocent
Lord Millett on lottery situation and traceable proceeds in hands of 3rd volunteer
Full claim against innocent 3rd would be an ‘affront to our notions of justice’
What judge in what case stated full claim against innocent 3rd would be an ‘affront to our notions of justice’?
Lord Millett extra-judicially
In what circumstance could C claim trust money traced into discharge of a previous debt, contracted in order to obtain money for a specific asset?
Would need to fall within backwards tracing claim or dissipation
What is the remedy if T uses trust money to pay off a debt secured on T’s property?
Subrogation
What is subrogation?
A legal fiction reviving the debt with the effect that C steps into the shoes of the original creditor
What is the lien in a subrogation remedt?
A NEW equitable lien, but content and priority resemble the original mortgage, reviving it
What are the two requirements for subrogation?
Money used ONLY to pay secured debt and revival cannot be on more favourable terms than it was originally
Banque Financiere de la Cite v Parc judgment
Metaphorical use of ‘revival’ and ‘transfer’ in subrogation
What case and who highlighted that the use of ‘revival’ and ‘transfer’ in subrogation is metaphorical?
Banque Financiere de la Cite v Parc, Lord Hoffmann
Boscawen v Bajwa general
Funds to secure discharge, no registration
Banque Financiere de la Cite v Parc general
Metaphorical
Boscawen v Bajwa judgment
Allowed mortgagee whose loan is used to repay another debt to subrogate the debt and rely on charge
What case allowed mortgagee whose loan is used to repay another debt to subrogate the debt and rely on charge?
Boscawen v Bajwa
What two categories of assets should be distinguished to answer WHY B can claim at all?
Original trust asset and traceable proceeds
What is the justification for B’s claim over original trust asset?
Consent - S INTENDED T to hold asset for B, and T must have agreed. Also, original consent persists for 3rd
Why doesn’t consent work to justify B’s claim over traceable proceeds?
S didn’t intend T to hold traceable proceeds for B
What did Lord Millett say in Foskett to justify B’s claim over traceable proceeds?
Proprietary right ‘subsists’ in traceable proceeds
What did Lord Browne-Wilkinson say in Foskett to explain how to perceive B’s claim over traceable proceeds?
Focus on B’s interests as interests in the trust fund
Lord Millett extra-judicially on subsisting interest in traceable proceeds by B
Such persistence is not a fiction, because abstractly the interest is exactly the same
Why did Lord Millett say the subsistence idea of the proprietary right of B in traceable proceeds is not a fiction?
Abstractly, the interest is exactly the same
H&M on inability to justify B’s claim over traceable proceeds
NEW property, and no obligation owed to Bs for it before, so not the same
Why do H&M argue it is hard to justify B’s claim over traceable proceeds?
NEW property, and no obligation owed to Bs for it before, so not the same
Why doesn’t the ‘vindication of property rights’ argument work for B to claim traceable proceeds?
Would only relate to original asset
What is the main conceptual issue with the vindication of property rights argument justifying B’s claim to traceable proceeds?
Argument is conclusory, rather than explaining where B’s rights come from
What are the three main arguments to justify B’s claim to traceable proceeds?
Consent, profiting a wrongdoer and unjust enrichment
what is the consent argument for B’s claim to traceable proceeds?
T agreed to hold original trust assets AND traceable proceeds
Where does the consent justification for traceable proceeds fail?
3rd wasn’t a party to the original agreement between T and B
What is the profiting a wrongdoer justification for B claiming traceable proceeds?
Analogous to common law tort of conversion - D strictly liable for unlawful interference, regardless of fat, because shouldn’t profit from wrongdoing
What is the profiting a wrongdoer justification analogous to?
Common law tort of conversion
Foskett v McKeown on UE justification of claim over traceable pocks?
Claim against 3rd not based on UE
How do H&M criticise Lord Millett in Foskett on UE?
Categorical error that property and UE can’t be in issue in a single claim, and for analysing claims to traceable proceeds in hands of 3rd in the same was as when in the hands of a T
Who criticises Lord Millett in Foskett for making a categorical error in regard to UE, and for analysing traceable proceeds claims in the same way for 3rd and Ts?
H&M
Birks on UE
Supports it - one of the causative events leading to proprietary claims is UE
Who argued UE is not mutually exclusive from law of property?
Birks
What academic is an advocate of the UE justification for B’s claim to traceable proceeds?
Birks
What are the three requirements for BFP?
Bona fide, purchaser for value and without notice, where actual or constructive notice are enough
What scale of knowledge is applicable for BFP
Baden scale of knowledge
What kind of knowledge if sufficient to remove BFP defence?
Any on Baden scale
Midland Bank v Green on purchaser for value in BFP test
Usually no enquiry into adequacy of consideration
Usually no enquiry into adequacy of consideration
Midland Bank v Green
Banque Belge v Hambrouck general
Cohabitation with lover
Cohabitation with lover
Banque Belge v Hambrouck
Banque Belge v Hambrouck judgment
Cohabitation insufficient to be ‘value’ for BFP defence
Why was cohabitation in Banque Belge v Hambrouck insufficient for value?
Mere factual exchange
Independent Trustee Services v GP Nobles Trustees general
Divorce, consent order interrupted
Divorce, consent order interrupted
Independent Trustee Services v GP Nobles Trustees
Independent Trustee Services v GP Nobles Trustees judgment
Value in agreement not to pursue further actions, but can be retrospectively retracted
What case showed value for BFP can be retrospectively retracted?
Independent Trustee Services v GP Nobles Trustees
Midland Bank v Green on notice
Per Lord Wilberforce, notice is separate from question of bona fide
What judge in what case stated that notice and bona fide are two separate questions?
Midland Bank v Green, per Lord Wilberforce
