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Year 5 > Tracing > Flashcards

Tracing Flashcards

1
Q

What is tracing?

A

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

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2
Q

What is it called in common law?

A

Tracing

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3
Q

This following is available to who?

A

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

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4
Q

The trace must prove ?

A

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

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5
Q

Can chattels be traced?

A

It cannot

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6
Q

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

A

Provided the property is identifiable

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7
Q

Obiter of who in which case?

A

Lord Ellenborough in Taylor v Plummer

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8
Q

What happened in the case?

A

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

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9
Q

What did the court hold?

A

Held that it is still traceable

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10
Q

Can trust funds be traced to a bank account

A

Yes

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11
Q

If?

A

It is the only fund therein

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12
Q

In equity?

A

Tracing can be done even when the fund is mixed

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13
Q

Case?

A

Taylor v Plummer , AGIP v Jackson

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14
Q

TRACING AT EQUITY

To trace in equity which relationship must be there?

A

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

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15
Q

Case?

A

Re Diplock

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16
Q

Case?

A

Re Hallet’s Estate

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17
Q

What happened

A

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

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18
Q

What must the beneficiary show?

A

Show that he has proprietary interest in the property

19
Q

Is there need to prove legal ownership in equity

A

No

20
Q

How is the power to trace exercised

A

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

21
Q

Case?

A

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

22
Q

What can defeat a tracing claim?

A

A bona fide party purchaser for value without notice

23
Q

Case?

A

Re Diplock

24
Q

Tracing in equity covers?

A

Equitable interest in property

25
Q

When does tracing terminates

A

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

26
Q

Case?

A

Bishopsgate Investmenr Management V. Homan

27
Q

What happened in the case?

A

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

28
Q

Principles the court may used in mixed funds

1?

A

The first withdrawal principle

29
Q

What happens here

A

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

30
Q

Case?

A

Re Hallett’s estate

31
Q

What happened in the case?

A

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

32
Q

What did the court note?

A

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

33
Q

Second principle

A

First in, First our principle

34
Q

The principle was in what case?

A

Clayton’s case

35
Q

What happens here?

A

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

36
Q

Third principle

A

Date of payment principle

37
Q

Case?

A

Oatway’s case

38
Q

What was held?

A

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

39
Q

4th principle

A

Lowest intermediate balance principle/ rule

40
Q

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

A

The balance should be traced to its new destination

41
Q

Case?

A

Roscoe v Winder

42
Q

Case?

A

Quistclose V Barclays Bank

43
Q

What happened in Jones v Jones

A

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

Year 5 (12 decks)

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