tracing and equitable proprietary claims

Question 1

what are the 3 key advantages to equitable proprietary claims for the claimant?

Answer 1

1. not affected by D’s bankruptcy or insolvency
2. enables beneficiaries to capture increases in value of traceable proceeds
3. doesnt depend on fault: can have a claim against defaulting trustees and against innocent receipients

Question 2

what is ‘following’?

Answer 2

prices of following the same asset as it moves from hand to hand

Question 3

what is ‘tracing’?

Answer 3

process of identifying a new asset as the substitute for the old

Question 4

what is ‘claiming’?

Answer 4

assertion of a personal or proprietary right in relation to misapplied trust property or its traceable proceeds

Question 5

what are the 2 conditions that need to be satisfied for tracing/following/claiming?

Answer 5

1. claimant had right of property recognised in equity (in the asset which they seek to follow and/or trace)
2. asset was held by a person who was in a fiduciary relationship with the C

Question 6

what is the main defence for an equitable proprietary claim?

Answer 6

the purchaser of a legal interest without notice of the trust (bona fide purchaser for value without notice)

Question 7

what is a ‘wrongful mixture’?

Answer 7

a mixed fund comprising misapplied trust money and the trustee’s own money

Question 8

what is an ‘innocent mixture’?

Answer 8

a mixed fund comprising misapplied trust money and money derived from one or more innocent third parties

Question 9

what is a personal claim?

Answer 9

it is made against an individual and it is normally a monetary remedy (eg, equitable compensation and account of profits)

Question 10

what is a proprietary claim?

Answer 10

it is made against an asset
proprietary remedy (security interest charge/lien or beneficial interest under a trust)