After considering a situation in which trust money had been applied in making alterations to the property of an innocent third party but had not added to the value of the property,
Held: The origin of the equitable rules of tracing were described: ‘the metaphysical approach of equity coupled with and encouraged by the far-reaching remedy of a declaration of charge that enabled equity to identify money in a mixed fund.’ and
‘In the absence of authority to the contrary, our conclusion is that as regards the Diplock money used in these cases it cannot be traced in any true sense; and, further, that even if this were not so, the only remedy available to equity, viz., that of a declaration of charge, would not produce an equitable result and is inapplicable accordingly’
and ‘In the case of adaptation of property of the volunteer by means of trust money, it by no means necessarily follows that the money can be said to be present in the adapted property. The beneficial owner of the trust money seeks to follow and recover that money and claims to use the machinery of a charge on the adapted property in order to enable him to do so. But in the first place the money may not be capable of being followed. In every true sense the money may have disappeared. …. The result may add not one penny to the value of the house. Indeed the alteration may well lower the value of the house. …. Can it be said that in such cases the trust money can be traced and extracted from the altered asset? Clearly not for the money will have disappeared leaving no monetary trace behind. ….’
As regards limitation, the 12 year period for enforcing a will trust runs from the date of the death, even though a personal representative is not bound to distribute within a year from death.
Lord Greene MR
[1948] Ch 465
England and Wales
Citing:
Explained – Sinclair v Brougham HL 1914
An insolvent building society had, outside its powers, run a banking business. The House considered the competing claims of the unadvanced shareholders of the building society’s intra vires business, members of the society who had not been granted . .
Cited by:
Cited – Aluminium Industrie Vaassen B V v Romalpa Aluminium Ltd ChD 11-Feb-1975
The plaintiffs sold aluminium to the defendant and by a clause in the contract retained their title in the materials sold until payment was received. The purchaser went into insolvent receivership, and the seller sought recovery of the equipment and . .
Cited – Foskett v McKeown and Others CA 27-Jun-1997
Various people had paid money with the promise of acquiring an interest in land in Portugal. The scheme was fraudulent. The funds had been used to purchase a life/investment policy. The policy was held in trust for the fraudster’s mother but he had . .
Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .
Cited – Green and others v Gaul and Another; In re Loftus deceased ChD 18-Mar-2005
The claimants began an action in January 2003 to seek to set aside the appointment of an administrator from December 1991, and to have set aside transfers of property made within the estate.
Held: The limitation period against a personal . .
Appeal from – Ministry of Health v Simpson; In re Diplock dec HL 1950
The will of Cable Diplock purported to make a gift to charity, and was distributed accordingly. The house however found the gift to be invalid.
Held: A personal remedy existed for the recovery of amounts wrongly paid in the distribution of an . .
Cited – Gomez and others v Vives CA 3-Oct-2008
The claimant appealed a finding that the court did not have jurisdiction over income payable to a trust governed by English law under which the claimant was beneficiary.
Held: The appeal failed in part. Because Article 5 is in derogation from . .
Lists of cited by and citing cases may be incomplete.
Equity, Limitation
Leading Case
Updated: 11 November 2021; Ref: scu.182265