Tracing Flashcards
Foskett v McKeown
Premiums on life insurance
Lord Millet: tracing is neither a claim nor a remedy, it is merely a process
Lord Steyn: tracing is a process of identifying assets: it Belongs to the realm of evidence
Does not depend on whether it is fair just or reasonable, it is a case of hard-nosed property rights
Donee cannot get better title than the wrongdoer
Boscawen v Bajwa
To be innocent, a person should neither know nor have reason to suspect the money or property is not his own
Mr B agreed to sell his house, Abbey National lent money, paid to purchasers solicitor, but they sent it to Mr B before completion, paid of a charge on the property
Re Hallett’s Estate
Current account into which the trustee had paid some trust money and some of his own money- made some withdrawals but the balance remaining in the account was at least as much as the trust money that had been paid in-
Beneficiaries could claim the full amount of the trust money from the account; the trustee was deemed to have acted rightfully by preserving the trust fund and not using it for unauthorised purposes.
Re Oatway
Modifies Hallet in certain circumstances- first withdrawal invested in shares, the rest of the money was then withdrawn and dissipated.
Judge held that the trustee was not entitled to treat the dissipated money as trust money. Any money no longer recoverable is to be regarded as the trustees money, and the trustee was not entitled to treat his own money as free of obligations until the trust fund was restored.
Turner v Jacob
States that Re Hallet provides the general rule; Oatway is an exception only applicable on its facts
Barlow
Dillon LJ: not prepared to did-apply Claytons simply on the grounds of fairness because the Pari Passu rule can be unfair to later contributions
Roscoe v Winder
Lowest intermediate balance- if trustee later pays in more money, the later payment is irrelevant and cannot be traced into
Sinclair v Brougham
Pari passu
Clayton case
First in first out- first debt is paid off first
Barlow Clowes v Vaughan
Pari passu used where claytons is contrary to the parties intentions and where Application of claytons would be impractical
Shalson v Russo
Problems with claytons- buying a car example
Bishops Gate
Where money is used to pay a debt the money is dissipated (Diplock)- the same argument arises where money is paid into an overdrawn account
Re Diplock
It is impossible to trace a secured debt because when the debt is repaid it, and the security, cease to exist
Boscowen
COA decided the original charge did not cease to exist, but continued for the benefit of the claimant
This is the up to date authority but uncertain whether it will be followed because Millet LJ believed that a charge by subrogation would not have been imposed upon an innocent party if this would be inequitable-
Westdeutsche Landesbank v Islington
Backwards tracing had only ever been used in this first instance case
