The rules on common law and equitable tracing should be united into a coherent system of rules. Discuss.

Introduction: explain what tracing is and why there are two sets of rules. The aim of tracing needs to be explained; as a remedy for breach of trusts and the protection of property rights.

The limits of common law tracing, the inability to trace into a mixed fund and the problems this can cause from cases such as Agip (Africa) Ltd v Jackson. This is one of the key problems.

Equity does not 'stop at the bank's door' and this makes it more flexible. Common law will only trace clear substitutions but equity has rules to trace into mixed funds. Outline the rules in relation to this. There appears to be no reason why common law will not trace into mixed assets.

Common law tracing requires a person to have a legal title. So it is unavailable to beneficiary of a trust. This is a limitation as the only person who could use common law tracing in a situation where a trustee is in breach is another trustee.

Equity requires that the claimant has a beneficial interest. This can be problematic as in cases such as Taylor v Plumer it may be difficult to prove the necessary beneficial interest. Equity seems to have imposed constructive trusts readily to overcome this problem, even a thief holds on constructive trust: Twinsectra v Yardley.

As this step means most can use equitable tracing it seems unnecessary to have different rules. It has led to the artificial situation where common law claims have a defence of change of position from Lipkin Gorman whilst claims in equity use the Re Diplock unconscionability, with largely the same result.

Look at statements in cases such as Twinsectra and arguments to bring the two sets of rules together. Or is such a move in practice unnecessary?