Proprietary claims

Question 1

Foskett v McKeown (two stages)

Answer 1

two stages:

1) EVIDENTIAL (following and/or tracing)
2) Rules determining substantive right (claiming)

Question 2

Following

Answer 2

same asset moved hands

Question 3

Tracing

Answer 3

swap of asset for new thing (“substitute”)

Question 4

claiming

Answer 4

making a claim (once asset is identified)

Question 5

Non-fungible measures (dissipation)

Answer 5

1) asset physically attached to another
2) asset physically attached to land
3) asset combined into whole new asset (“specification”)

3 is not dissipation if done by wrongdoer (Jones v De Marchant)

Question 6

Clayton’s Case

Answer 6

first in first out

Question 7

Re Oatway

Answer 7

investment was made for B

Question 8

Re Hallet’s Case

Answer 8

T burnt own money first

Question 9

Shelson v Russo

Answer 9

B can cherry pick

Question 10

Turner v Jacobs

Answer 10

don’t apply this (CA at similar time to Shalson)

• Shalson wasn’t cited to judge
• it said to use Re Hallet if account can be balanced this way and can fulfil the claim

Question 11

Roscoe v Winder

Answer 11

B is limited by maths

Question 12

Re Diplock

Answer 12

Pro rata if T mixes funds of two innocent beneficiaries

Question 13

Clayton’s Case (in two innocent beneficiaries)

Answer 13

POSSIBLE - approved by Barlow Clowes in 1992

• unless arbitrary and unfair
• in Barlow itself, they didn’t use it

Question 14

Commezban v IMB

Answer 14

used pro-rata (Clayton’s not fair)

Question 15

Russell-Cooke

Answer 15

usually impractical and unjust to use first in first out (so use pro rata)

Question 16

Rolling charge?

Answer 16

obiter in Barlow Clowes

• woolf and legatt LJ
• B shares loss/gain in proportion to interest in fund immediately prior to withdrawal (FramJee rejected it)

Question 17

Trust money mixed with innocent volunteer?

Answer 17

BFP = defence

Not BFP = B can follow prop to 3P hands and trace through

Question 18

Rea v Russell

Answer 18

payments of debt does not mean dissipation always

1) Debt was secured by charge over D’s prop = subrogation

2) backwards tracing may be possible
- implicitly approved by CA in Relfo v Varsini
- needs to be sufficient evidence to establish a clear link

Question 19

Federal Board v Brazil

Answer 19

backwards tracing allowed because 2 transactions part of 1 scheme

Question 20

Space Investments v CIBC

Answer 20

Swollen Assets theory - goes against idea that maths is your limit
(e.g. if B = £200, and T = £800, and £1000 disspated, then T puts £500 back in, B can claim £200 from that)

but that’s WRONG

rejected in sinclair investments

Question 21

Foskett v McKeown (what can B do)

Answer 21

1) assert equitable ownership

2) equitable lien against new prop to secure personal claim against T to reconstitute the trust fund

Question 22

Paul Davies v Davies (australian)

Answer 22

if T uses B money to buy prop in T name

• T is treated as having not contributed to mortgage money when calculating quantum of B’s claim
• B can claim whole house
• T can counter-claim mortgage payments actually made

Question 23

Re Montagu

Answer 23

B’s money used to buy new asset by 3P - 3P has to give it back

Question 24

Subrogation cases

Answer 24

Boscawen v Baiwa
Prim lake v Matthews Assocs

(only for secured debts, and revival of debt cannot be more favourable than original terms)

Question 25

BFP defence

Answer 25

1) provision of value
2) good faith (bona fide)
3) lack of notice

2 and 3 often operate together in cases

Question 26

Notice for BFP defence

Answer 26

any of 1-5 on baden scale (so incl failure to take steps to verify)

Barclays Bank v O’Brien

Question 27

independent trustee v GP noble trustees

Answer 27

Consideration can be in the form of not suing

consideration can be revoked later (meaning no longer BFP)