Chapter 20 Scenario Questions

Hannah is a trustee for Sophie. Hannah misappropriates £100 from the trust and gives it to Caroline. Caroline is suspicious that the money might have come from the trust but deliberately decides not to investigate where the money came from. Caroline spends the money on wine which she drinks.
What claims might be available to Sophie?

Sophie can trace her £100 into the wine and has a proprietary claim over Caroline's other assets for the value of £100.

Sophie's equitable proprietary interest has been extinguished and there are no other claims available.

Sophie might have had a personal claim for unconscionable receipt, but Caroline did not know for certain that the money was trust money and so the receipt was not unconscionable.

Sophie has a personal claim for unconscionable receipt.

Pierre is a trustee for Camille. The trust fund contains lots of vintage and classic cars. Pierre misappropriates one of the cars, worth £50,000 and gives it to Vladimir. Vladimir is aware that Pierre is a trustee of many valuable cars and that the car likely came from the trust, but he asks no further questions. The car fell in value quite significantly and Vladimir decided to sell it for £20,000. He spent the £20,000 on a cruise.
What claims might be available for Camille?

Camille might have a claim for unconscionable receipt. Vladimir would be required to account for £50,000.

Camille might have a claim for unconscionable receipt. Vladimir would be required to account for £20,000.

Camille would not have a claim for unconscionable receipt.

Camille would have a claim against Pierre for £50,000.

Frances is a solicitor who advises Ferdinand, a trustee. Frances encourages Ferdinand to sell some trust property to her brother, Ronald. She thinks that it is a good deal and that any reasonable person would agree that she was giving good advice. Ferdinand agrees to the sale, not realizing that he is acting in breach of trust. The sale causes a major loss to the trust fund.
What claims might be available to the beneficiary?

There is no claim available, Frances acted honestly.

There is no claim available, Frances did not think that other people would consider her conduct dishonest.

The beneficiary has a claim against Frances for dishonest assistance.

The beneficiary has a claim against Frances for unconscionable receipt.

Daniel dishonestly assists a breach of trust. He encourages the trustee, Ella, to sell shares at an overvalue in breach of trust and to give Daniel some of the profits. Daniel gets £1,000 and the trust suffers a loss of £500 worth of shares.
What remedy is available to the beneficiary?

Compensation for loss of £500.

Disgorgement of £1,000.

Both compensation and disgorgement for £1500.

The beneficiary must seek a remedy from Ella who may apply for a contribution from Daniel.

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