Book contents
- Frontmatter
- Contents
- Preface
- 1 Historical introduction
- 2 Equitable remedies
- 3 The classification of trusts and powers
- 4 The three certainties
- 5 Constitution of trusts
- 6 Formalities for the creation of a trust
- 7 Private purpose trusts
- 8 Unincorporated associations
- 9 Resulting trusts
- 10 Constructive trusts
- 11 Trusts of the family home
- 12 Secret trusts and mutual wills
- 13 Charities; the Charities Act and the rules of cy près
- 14 Trustees: appointment, retirement and capacity
- 15 Duties and powers of trustees
- 16 Variation of trusts
- 17 Fiduciary duties and breach of fiduciary duties
- 18 Breach of trust and defences to breach of trust
- 19 Remedies against strangers to a trust
- 20 Tracing
- Index
20 - Tracing
- Frontmatter
- Contents
- Preface
- 1 Historical introduction
- 2 Equitable remedies
- 3 The classification of trusts and powers
- 4 The three certainties
- 5 Constitution of trusts
- 6 Formalities for the creation of a trust
- 7 Private purpose trusts
- 8 Unincorporated associations
- 9 Resulting trusts
- 10 Constructive trusts
- 11 Trusts of the family home
- 12 Secret trusts and mutual wills
- 13 Charities; the Charities Act and the rules of cy près
- 14 Trustees: appointment, retirement and capacity
- 15 Duties and powers of trustees
- 16 Variation of trusts
- 17 Fiduciary duties and breach of fiduciary duties
- 18 Breach of trust and defences to breach of trust
- 19 Remedies against strangers to a trust
- 20 Tracing
- Index
Summary
Key points
tracing is neither a claim nor a remedy but a process;
tracing is a proprietary claim and gives the claimant priority over creditors in bankruptcy and also allows any increases in value to be claimed;
tracing allows the claimant to claim a substitute asset for his own;
tracing should be distinguished from following which allows the claimant to recover his asset as it moves through the hands of different people;
tracing at common law is based on legal ownership of property;
tracing at common law ceases where funds become mixed unless the asset can be separated from the whole;
tracing in equity allows tracing into mixed funds;
in order to trace in equity the claimant must prove a fiduciary relationship and an equitable interest in the property;
where a trustee mixes trust funds with his own funds in a bank account the rules always presume that the trustee withdraws his own funds first;
where funds in a bank account of a trustee are dissipated a beneficiary can claim against any asset purchased by the trustee with the funds;
where funds of two innocent volunteers are mixed the court traditionally could choose either to apply Clayton’s Case or distribute the funds pari passu, which is today the preferred method; and
the right to trace ceases when the assets have been dissipated or when the property is in the hands of a bona fide purchaser for value or when it is inequitable to trace.
Introduction: what is tracing?
Tracing is a process or mechanism which involves the owner of property identifying an asset in the hands of a third party. Tracing is not a remedy nor is it a claim.
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- A Student's Guide to Equity and Trusts , pp. 348 - 363Publisher: Cambridge University PressPrint publication year: 2012