ABSTRACT
Where a claimant seeks to recover a specific item of property which belonged to her originally in the hands of the defendant, then the claimant will pursue a ‘following’ action to require the return of that specific item of property. If the claimant seeks to trace from that original item of property into its ‘clean substitute’ (i.e. where the property is not mixed with other property) then a ‘common law tracing’ action will be used. In the event that the original property or the substitute property has been mixed with 441other property then the claimant will only be able to bring an ‘equitable tracing’ action. An equitable tracing action requires that the claimant had some pre-existing equitable proprietary right in that property. Tracing is the process of identifying property against which a claim will be brought; it is then a separate question which remedy will be claimed. There can be no tracing claim in respect of property which has ceased to exist. In relation to mixtures of trust and other money held in bank accounts, a variety of approaches has been taken in the courts from the application of the old ‘first-in, first-out principle’, to a rolling charge approach, through to the establishment of proportionate shares in any substitute property. The possible remedies in relation to tracing claims include: the establishment of a constructive trust, an equitable charge, a lien, and subrogation. The defences available in relation to tracing claims include change of position, bona fide purchase of the property for value, estoppel by representation, and passing on.
