Chapter 18 Multiple choice questions

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. Which of the following is not a statement about "tracing" made by their lordships in Foskett v McKeown [2001] 1 AC 102, House of Lords?

There is nothing inherently legal or equitable about the tracing exercise. correct incorrect

It belongs to the realm of evidence. correct incorrect

It tells us nothing about legal or equitable rights to the assets. correct incorrect

The distinction between tracing at common law and in equity is theoretically undesirable but inevitable in practice. correct incorrect

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. In Foskett v McKeown [2001] 1 AC 102, House of Lords, M misappropriated money entrusted to him and used some of it to pay part of the premium on a life insurance policy. After M committed suicide, the claimants sought to recover their money traced into the proceeds of the policy. In the Court of Appeal Hobhouse LJ suggested that the addition of the claimants' money to the insurance premiums was analogous to the improvement of land. Which analogy did the House of Lords favour?

Mixture of moneys in another person's bank account. correct incorrect

Improvement of another person's asset correct incorrect

Buying cheap land for which another person has secured planning permission. correct incorrect

Flushing a quail and bagging a pheasant. correct incorrect

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. Suppose that the original owner of certain property claims to be able to identify property currently held by you as being their original property in a new form. What defences might you raise to the common law restitutionary claim?

Giving of consideration. correct incorrect

Giving of consideration and change of position. correct incorrect

Change of position. correct incorrect

None. Liability is strict. correct incorrect

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. At Common Law, "tracing runs into problems when it encounters…….." What is the missing word?

The door of the bank correct incorrect

Electrons correct incorrect

Mixing correct incorrect

Bank accounts correct incorrect

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. Which of the following statements is true?

Beneficiaries can be subrogated to the trustees' right to sue at common law if the trustees have that right but are themselves are unwilling to exercise that right. (Parker-Tweedale v Dunbar Bank plc [1990] 2 All ER 577). correct incorrect

The rights of beneficiaries are recognised only in equity; accordingly they can not claim the benefit of tracing at common law. correct incorrect

The trustees' right to trace at common law cannot be held for their own benefit. It must therefore be a benefit they hold on trust for the beneficiaries. It follows that the beneficiaries are entitled to trace at common law. correct incorrect

Beneficiaries can always compel the trustees to trace misapplied trust property at common law. correct incorrect

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. Which of the following is an advantage that proprietary remedies have over personal remedies?

Proprietary claims do not depend for their success upon the personal solvency of the defendant. correct incorrect

A proprietary claim to property in the defendant's hands has the added advantage that the claimant recovers his original asset even if it has increased in value. correct incorrect

In a proprietary claim, interest accrues from the date of the court's judgment and may be back-dated to the date of the writ. correct incorrect

A proprietary claim can be brought without limit of time. correct incorrect

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. It is not possible to trace in equity against one of the following. Which?

The original trustee correct incorrect

An innocent volunteer correct incorrect

A bona fide purchaser for value of the legal estate correct incorrect

A non-fiduciary correct incorrect

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. In Foskett v McKeown [2001] 1 AC 102, House of Lords, Lord Millett stated that "The simplest case is where a trustee wrongfully misappropriates trust property and uses it exclusively to acquire other property for his own benefit. In such a case the beneficiary is entitled at his option either to assert his beneficial ownership of the proceeds or to bring a personal claim against the trustee for breach of trust and enforce an equitable lien or charge on the proceeds to secure restoration of the trust fund". What is the status of the "equitable lien or charge"?

Personal right correct incorrect

Personal security correct incorrect

Property right correct incorrect

Proprietary security correct incorrect

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. It is important to appreciate that in a tracing action, the claimant can trace the money "not because it is the claimant's, but because it is derived from a fund which is treated as if it were subject to _____ in the claimant's favour" (London Allied Holdings Ltd v Lee [2007] EWHC 2061 (Ch)). What is the missing word?

A debt correct incorrect

A trust correct incorrect

An equity correct incorrect

A charge correct incorrect

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. Which of the following statements is true

When a trustee puts trust money into an account containing his own monies, the trustee is presumed to withdraw his own monies first. correct incorrect

When a trustee puts trust money into an account containing his own monies, the trustee is presumed to withdraw trust monies first. correct incorrect

When a trustee puts trust money into an account containing his own monies, every withdrawal is presumed to made from the trust money and the trustee's own money in proportion to the those components of the fund as proportions of the whole. correct incorrect

When a trustee puts trust money into an account containing his own monies, the order of withdrawal is determined in retrospect so as to always favour the trust. correct incorrect