The Law About the Shared Home Essay Example For Students

The Law About the Shared Home Essay The common law favours the imposition of strict formality requirements on land transactions. If LP (MP) act 1989 s2 is not complied with there is no contract. Without a deed Legal estates and interests cannot be created or transferred under the LPA 1925 S52(1). Trusts of land can only be created by signed declarations in writing LPA 1925 s53(1)(b). The strictness of these requirements can sometimes ends in injustice, notably where relationships break down and the ownership of the property they share comes under scrutiny. This is outlined in the Discussion paper of shared homes. The decisions in some cases in this area of law has led to confusion. We will write a custom essay on The Law About the Shared Home specifically for you for only $16.38 $13.9/page Order now The paper comes to the conclusion that it is impossible to have a statutory framework in this area, and we must see if the decision in Hiscock has clarified this. In the Journal of social welfare and family law, an article titled ‘a law commission discussion paper with a difference’ is the criticism of the law commission discussion paper examining the legal rights of cohabitants in property. It states it ‘regrets its lack of consultation and its failure to make suggestions for reform and its adoption of a property law rather than a family law approach to the problem’. Previous cases, before Oxley have been contradictory in there nature and have never set a conclusive framework. Under the LPA 1925 S53 (1) (b) an express trust is unenforceable unless evidenced in writing but s53 (2) provides that this requirement does not affect the operation of resulting, implied or constructive trusts. In the previous cases it was the imposition of these trusts that caused the confusion. In the early 1970’s, the House of Lords had to consider two cases in which the claim of a divorced spouse to a share in the family home, was not based on financial contribution, but on the work done in the house (Pettit v Pettit), and on relatively minor contributions to household expenses (Gissing v Gissing). This latter case is important and set out the requirements for the modern common intention trust. In Gissing, Lord Diplock set out that there was a two stage in establishing a common intention trust of this sort .1) an agreement 2) some detrimental reliance on this agreement. There must be agreement between the parties at the time the property was acquired and that the partner without the legal estate is to have beneficial interest in the land. Such an agreement can be made in writing or orally, which the court may still be able to infer agreement from the conduct of one of the parties. Inferred intention may be by, contribution to mortgage instalments, price of property, deposit or legal charges, indirect mortgage payments such as paying bills to free money up of the mortgage payer. If the agreement is made in writing as mentioned above the agreement would constitute a declaration of trust for the purposes of LPA 1925 S53 (1)(b). Some cases illustrating written agreement are Eves v Eves, and Grant v Edwards. If the agreement made orally or it had to be inferred from conduct it would be unenforceable unless the court could find in implied, resulting or constructive trust, an example of this would be Midland Bank v Cooke. Diplock’s second requirement that the claimant had been induced to act to their detriment in belief that they are acquiring an interest. In Gissing this is suggested could be the same as those noted above from which an agreement may be inferred, but in later decision it was accepted a wider range of contribution which did not involve financial contribution. In the case of Gissing the House of Lords considered there was no evidence of any express agreement between the parties at the time the house was bought and nor were the contributions of the wife sufficient to support the interference of a common intention. There was no beneficial interest. The immediate result (of the court of appeal decision where the actions of the wife were accepted), of this decision was an increase use of this non express trust to achieve a fair result between parties when a strict application of legal rules would appear inequitable. Lord Denning, who had his own interpretation of Gissing read Lord Diplocks words as authorising the use of the new model constructive trust wherever it was equitable to do so. However in view of the more restrictive approach adopted by the Court of Appeal from the mid 1980’s onwards in now seems improbable that Lord Denning’s broad approach will have much influence today. Accordingly these are a few of his decisions. These are four cases where in an unmarried situation they upheld the plaintiffs claim to a share in the house owned by the partner. These claims would be an unlikely occurrence today. Cooke v Head, Eves v Eves, Hall v Hall, Hussey v Palmer. A Change of approach was again adopted, as mentioned above, in the mid 80’s, seen in Burns v Burns when an unmarried couple had been living together for 19yrs – she cared for the kids and paid the bills and it was held not to be an inferred common intention. On the approach adopted by Lord Denning (eg Hall v Hall) one would have thought these facts would have amounted to some sort of implied trust, but the Court of Appeal followed Diplock’s views in Gissing emphasising need for agreement. The change is also shown in the case of Lloyds TSB bank v Rossett where the husband bought house with trust money. The result may well have restated the decision in Gissing, but the second paragraph, of the need for direct contribution seems to limit the scope of the principles as so far understood, and to rule out the indirect contribution to mortgage repayments by meeting household expenses which was accepted in Gissing and Burns. It is in describing the confusion of past law, that we must look at the most recent case of Oxley v Hiscock- an unmarried couple separated and the ownership of the house again came into question. The result was that they ‘got out what they put’ although the woman made contributions in other ways. The lady wanted a constructive trust to arise and therefore get equal shares. The judge must look at the view of overall fairness so although cohabitation had involved a classic pooling of resources, Hiscock’s greater financial contribution had to be take into account and an equal split would therefore not be fair. If there is a common intention to share, must look at whole course of dealing. The question is whether this decision has clarified the somewhat unstable law that has been occurring previously. A Journal Article Titled ‘Property rights in a family home’ from the Family Law journal welcomes the Court of Appeal decision in Oxley which clarifies the principles to be applied when deciding upon the property interests in the family home in the absence of an express agreement as to its division. It contrasts the previously conflicting approaches in Springette v Defoe where the property was divided into proportions equal to the parties’ contributions and considered Midland v Cooke where it was held that the parties’ total conduct relating to the property would be taken in to account in deciding a fair decision. It seems that the case has given stability to some extent in decisions in shared homes when separation occurs, as the recent decision in Oxley states that the whole course of dealing must be looked at and the result must be fair. In Gissing it was decided that after 30 years of marriage there should be no beneficial interest, which surely was not fair. Although there are now some guidelines that have arisen from this case, I would conclude that the clarification of the law is only to a certain extent as the aggrieved party may sill feel cheated after a long period of marriage and only a small share of the house. Part 2 Scenario Question 1 – Will the Children’s trust fund include any share in Ryburn? Mohan and Wendy have bought Ryburn which is a large house for  £350000 and they were beneficial joint tenants with no restrictions were entered onto the proprietorship register. Wendy contributed  £175 000 towards the purchase price, Mohan  £100000 and they borrowed  £75000. The express declaration of trust in the transfer deed is conclusive as to the nature of their co-ownership (and would be as to the size of their respective shares in the case of a Tenancy in Common). They are both in legal ownership. To enter in a joint tenancy Wendy would have been aware that although she put in more of the money, if they were ever to sever the Joint tenancy she would only receive half of the trust property rather than the 60% that she put in unless expressly declared otherwise. They own the property together, not in shares. As joint tenants there were four unities that must have existed when entering in to the tenancy. These are Time Title interest and possession. This means that they should vest in the property at the same time, have acquired the title of the property by the same means, their interests must be the same and they must be equally entitled to the possession. A crucial aspect of the joint tenancy means there is a right of survivorship or jus accrescendi on the death of one of the parties which means the surviving party would inherit the whole of the trust property. It cannot be disposed of in a will to someone else, nor will it pass on intestacy if no will is made. The last survivor becomes the sole beneficiary. A tenancy in common means the parties hold a share of the property, usually the amount of money they put into the purchase price. In this situation only one unity is needed, and that is the unity of possession, however there can be other unities present. If possession did not exist there would be no co ownership. It allows a notional share of the property. If all the unities are present, ‘words of severance’ may indicate a Tenancy in Common. This means the agreement of co-ownership would contain words such as ‘in equal shares’ or equally’ as in the case of Payne v Webb. It is the ‘right of survivorship’ that is the important aspect regarding the children’s share in Ryburn. If Mohan and Wendy were still joint tenants when Mohan died the property will belong to Wendy as Mohan will not have been able to leave it in a will to his children. If they were Tenants in common, the children would receive half share or the equivalent to the amount Mohan put in to the purchase of the house. Wendy has met Peter and they have fallen in love, and they would like to move in together. All Wendy’s money is tied up in her share of the house and so she has emailed him asking to buy her share and if he won’t agree to then put the house on the market and split the price equally. This would mean a severance of the joint tenancy and this principle is shown in the case of Goodman v Gallant. A primary reason for severance of a joint tenancy is to avoid the effects of the right of survivorship. Due to the Law of Property Act 1925 S36(2) it is not possible to sever a legal joint tenancy, this is, however possible in Equity, making the tenancy a Tenancy in Common. This is affected in a number of ways set out in the proviso of s 36(2). .uf24ca57437c81728601fa00cc0d0c4cc , .uf24ca57437c81728601fa00cc0d0c4cc .postImageUrl , .uf24ca57437c81728601fa00cc0d0c4cc .centered-text-area { min-height: 80px; position: relative; } .uf24ca57437c81728601fa00cc0d0c4cc , .uf24ca57437c81728601fa00cc0d0c4cc:hover , .uf24ca57437c81728601fa00cc0d0c4cc:visited , .uf24ca57437c81728601fa00cc0d0c4cc:active { border:0!important; } .uf24ca57437c81728601fa00cc0d0c4cc .clearfix:after { content: ""; display: table; clear: both; } .uf24ca57437c81728601fa00cc0d0c4cc { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uf24ca57437c81728601fa00cc0d0c4cc:active , .uf24ca57437c81728601fa00cc0d0c4cc:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uf24ca57437c81728601fa00cc0d0c4cc .centered-text-area { width: 100%; position: relative ; } .uf24ca57437c81728601fa00cc0d0c4cc .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uf24ca57437c81728601fa00cc0d0c4cc .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uf24ca57437c81728601fa00cc0d0c4cc .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uf24ca57437c81728601fa00cc0d0c4cc:hover .ctaButton { background-color: #34495E!important; } .uf24ca57437c81728601fa00cc0d0c4cc .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uf24ca57437c81728601fa00cc0d0c4cc .uf24ca57437c81728601fa00cc0d0c4cc-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uf24ca57437c81728601fa00cc0d0c4cc:after { content: ""; display: block; clear: both; } READ: The True Value Of Family And Law EssayIn this case we must therefore establish if there has been severance of the joint tenancy making it a tenancy in common and this will decide what share the children recieve a share in Ryburn. This would mean showing if the email has amounted to severance of this joint tenancy, which if it has would mean that Wendy cannot receive the full property on right of survivorship but only a share of the property, therefore leaving Mohan’s children with the rest. There are several ways of severing a joint tenancy. The first way is by notice in writing. It is then necessary to decide whether the email that Wendy sent to Mohan could be classed as a notice in writing as Mohan did not actually read the email before he died. Due to this we should make reference to Land Property Act s 196. The LPA 196(4) sets out that severance letters left at the last known ‘place of abode or address’ are sufficient notice. If this service is adopted it is irrelevant that the owner does not in fact receive knowledge of the notice as shown in the case of Re 88 Berkley Road. Alternatively the notice can be sent by registered post and if not returned undelivered LPA 196(3) (as shown in Kinch v Bullard) can be held to be severance by notice in writing. If this was to apply here then there would be severance due to this email, as it was left at Mohan’s last know email address which is obviously still in use as Mohan decided not to read the email before he went to his dinner. It could also be argued that is was registered when it was sent, as all emails can be traced and it was not returned undelivered as a failed delivery report would have been sent to Wendy’s inbox. It is also possible to sever a joint tenancy by ‘acts of other things’. Williams v Hensman set out the requirements for severance of a Joint tenancy in this manner. This could be by ‘An act operating upon his own share’ for example on sale, mutual agreement, or forfeiture. In this situation there could be severance by mutual agreement. As both parties have discussed for the past couple of months to sell the house this could also amount to severance by mutual agreement. Mutual agreement occurs in the case of Burgess v Rawnsley. Finally there must also be a clear intention to sever immediately as in Harris v Goddard. This is stated in the email as Wendy wants everything to be sorted as soon as possible and therefore put on the market right away. It may be said that this does not amount to severance as the LPA s196 does not apply to emails and it is not deemed to be held as severance by notice in writing as the email was not read before Mohan died. In my opinion looking at the facts and applying the law, I would say that the tenancy has been severed and therefore leaving the children Mohan’s share of the property. Question 2 – What legal issues are raised by Maria’s acquisition of a 25% shareholding in VPC ltd? Mohan, before he died had set up a pharmaceutical company with his cousin Raman and his sister Pushpa and has died a wealthy man. He left his entire estate to his three children Sachin who is 24, poppy who is 20, 21 in April and Rahul who is 16, and they must receive the money when they reach 30 years old. Raman, Pushpa and Maria, Mohan’s solicitor are the trustees. The trustees have taken over a pharmaceuticals company called VPC, and Maria after telling the other Trustees, has bought some shares in VPC realising that after the takeover they will probably increase in price. The trustees must do the best for the trust property and invest money wisely. The decision to sell the shares to Maria is therefore an investment decision which the trustees should make. If it transpires that they should not have sold the shares, or sold them earlier to make a profit then the beneficiaries may have an action for breach of trust. They will have to show that there was a breach which was a failure to exercise reasonable care and skill in managing investments and that breach has caused a loss. Target Holdings Ltd v Redfern. A case where there was insufficient care in the investment is in the case of Nestle v Nat west Bank. The fact that Maria has bought the shares is another matter altogether. As outlined in Bray v Ford there is an inflexible rule on persons in a fiduciary duty that they can not make a profit and they are not allowed to put themselves ‘in a position where his interest and duty conflict’. Where any person in a fiduciary position obtains a profit or gain by virtue of that position he may not keep it for himself but will be liable for it to the person to whom he is a fiduciary. How do we know if there is a fiduciary relationship? The most obvious is that of a trustee and beneficiary, it is clear that a trustee must not put there personal interests in conflict with those of the trust. This principle is shown in the case of Keech v Sandford. The particular fiduciary relationship in this case is beneficiary and trustee, but in the course of time the principle of fiduciary relationships has been extended to other fiduciary relationships such as agents, tenants for life, tenancy in Common and Joint tenants. This means Maria is in a fiduciary relationship and is in breach of her duty as the purchase of trust property by a trustee invokes the rule against self dealing, a specific application of the overriding fiduciary obligation not to profit from the fiduciary position or put oneself in a position where personal interest and a duty to the beneficiaries may conflict. The core principles of fiduciary obligation in a contempory context are set out in the judgement of Bristol West building society v Mothew . In any event it does not matter if the trustees put their own interests before that of the trusts because they are in breach of their fiduciary duty by putting themselves in a position where there may be a conflict of interest even though there is no actual conflict. Even if Maria does not make a profit and she bought the shares at a fair price and making the other trustees aware, this is still self dealing and the transaction can be set aside at the request of the beneficiary as illustrated in Wright v Morgan and Kane v Radley – Kane. The profit made can also be recovered and kept by the beneficiary as the original money was the beneficiaries. It is a breach of a fiduciary duty if a person in a fiduciary position makes a profit from the use of knowledge or economic opportunity gained by the virtue of their position, the rule applies even if they acted bone fide. Maria has misused her knowledge of the company and the shares and knowing their price will increase after the takeover of VPC, therefore benefiting herself, as illustrated in Walsh v Deloitte and Touche and Boardman v Phipps. There are two basic kinds of remedies available in equity to prevent a fiduciary from profiting. The proprietary remedy is to make the unfair gain the subject matter of the trust. This mechanism and its effect were explained in AG for Hong Kong v Reid in the context of bribes and as soon as the bribe was received whether in cash or in kind, the false fiduciary held the bribe on constructive trust for the person injured. The other remedy which the fiduciary may be deprived of his unfair gain is to make him personally accountable for it to the person(s) they are fiduciary to. This is a personal remedy and they must give up an amount equivalent to the gain, no specific property is made subject to the trust. In our scenario I think the shares are now held on constructive trust for the beneficiaries. Also as there has been a considerable profit made the beneficiaries can insist the shares are resold on the open market and the profit transferred to them. The beneficiaries could also have the purchase set aside and the property recovered plus any income the shares have made in the meantime, or can insist the shares being resold on the open market. It may be said that there can be no defences to the trustees here, as none of the beneficiaries are Sui Juris and could agree to this self dealing. Boardman v Phipps shows this scenario well and their investment in shares was unauthorised even though the other trustees know about it, they had not fully disclosed it to the beneficiaries. Maria may say they are acting bone fide in good faith; however she would have known that she would be gaining from her knowledge and this would be likely to fail. In a proprietary remedy there is strict liability for ones own acts or omissions even if acting in good faith. Simpson 1951.A Trustee, or other person in a fiduciary position, is personally liable for his breach of trust of fiduciary duty, or in appropriate cases, for a proprietary remedy. As seen in the case of Re Diplock . Maria will therefore be liable and the shares dealt with in the manner the beneficiaries think correct. Question 3 – Advise the three children as to whether Maria, Raman or anybody else may be liable to compensate them for the losses caused by the withdrawals. Pushpa who is experiencing cash flow problems has started to dip into the trust fund at Krishna bank to tide her over. She has withdrawn  £10000 from the trust account to buy her daughter a wedding present, she withdrew another  £50000 and put it in to her own account and on the advice of her investment consultant frank she withdrew  £150000 to invest in Far Eastern securities. As Maria and Raman knew at some point about what has been going on and they have not done anything about it. Also they have not paid much attention to the trust over the past year as they have been overseeing other projects. Therefore if there has been a breach of trust they will be jointly and severally liable for the loss. Trustees cannot allow trust property to be under exclusive control of one of their number so therefore Maria and Raman must make it their duty to know what is going on at all times. The trust must remain under control of them all and it could be said that control has passed as they were not keeping an eye on trust money and therefore they have committed a breach of trust. The case of Re Flower states, ‘the duty of trustees is to prevent one of themselves having the exclusive control over the money, and certainly not, by any act of theirs, to enable one of themselves to have exclusive control over it’. Even if it was not proved that Raman and Maria allowed Pushpa full control over the money, the trustees are still likely to be joint and severally liable. A trustee cannot avoid liability for an administrative breach on the basis that they played no active part as in Bahin v Hughes. It is a default of the trustee to fail to supervise the actions of a co trustee, or to stand by while a co trustee commits a breach of trust. The trustee must restore to the trust the assets lost by reason of the breach, or pay the trust sufficient to make up for the loss. The amount of loss is calculated at the date of judgement. The Trustee Act 1925 s30(1) provides that no trustee shall be answerable for the acts of the other trustees unless the same happens by their own wilful default. .uf03e085242f09e376168a459b5a3ba86 , .uf03e085242f09e376168a459b5a3ba86 .postImageUrl , .uf03e085242f09e376168a459b5a3ba86 .centered-text-area { min-height: 80px; position: relative; } .uf03e085242f09e376168a459b5a3ba86 , .uf03e085242f09e376168a459b5a3ba86:hover , .uf03e085242f09e376168a459b5a3ba86:visited , .uf03e085242f09e376168a459b5a3ba86:active { border:0!important; } .uf03e085242f09e376168a459b5a3ba86 .clearfix:after { content: ""; display: table; clear: both; } .uf03e085242f09e376168a459b5a3ba86 { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .uf03e085242f09e376168a459b5a3ba86:active , .uf03e085242f09e376168a459b5a3ba86:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .uf03e085242f09e376168a459b5a3ba86 .centered-text-area { width: 100%; position: relative ; } .uf03e085242f09e376168a459b5a3ba86 .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .uf03e085242f09e376168a459b5a3ba86 .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .uf03e085242f09e376168a459b5a3ba86 .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .uf03e085242f09e376168a459b5a3ba86:hover .ctaButton { background-color: #34495E!important; } .uf03e085242f09e376168a459b5a3ba86 .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .uf03e085242f09e376168a459b5a3ba86 .uf03e085242f09e376168a459b5a3ba86-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .uf03e085242f09e376168a459b5a3ba86:after { content: ""; display: block; clear: both; } READ: Children and Family Relationship Bill 2013: Parental Uncertainty in Cases of Guardianship, Custody and AccessIt is necessary for the beneficiaries that Raman and Maria’s breach had a sufficient causative link to the loss to establish liability. There is no liability unless there is a loss and a breach that caused the loss as in Target v Redfern. We know there is a breach as Pushpa has stolen the money and the other trustees may have caused this as they were not giving their full attention to the trust. Several defences used by the trustees are, although not stated here, there may be an exemption clause that states the money can be used for their own benefit if fully replaced. However this is unlikely and Pushpa took the money for her own use because she was short of money. Exemption clauses are demonstrated in the case of Armitage v Nurse. With an appropriately drafted clause trustees can exempt themselves from anything short of outright dishonesty. However in this case I would say it is outright dishonesty. If actions by the beneficiaries to recover trust property are taken after 6 years from the breach then the right of action will have ceased. This is under the limitation act 1980 s 32(1). We will presume that the length of time in which the beneficiaries brought action was less than six years and therefore this cannot be used as a defence. The consent of a beneficiary who is ‘Sui Juris’ and with full knowledge consents to or requests to a breach of trust cannot claim against the trustee for example Re Paulings. However in this situation there is no evidence that the beneficiaries were consenting. If it appears to the court that the trustee has acted honestly, reasonably and ought to be fairly excused for a breach of trust or for omitting to obtain the directions of the court then the court may relieve the trustee wholly of partly (Trustee Act s61). Also the fact that Trustees have acted upon legal advice does not necessarily mean they will be excused under s61. This would mean the advice from Frank would not necessarily negate liability. However it is unlikely in any event that Pushpa would be found acting honestly by her actions. It may be proved that Frank as a stranger to the trust may be liable to compensate the losses which would help recover some of the money that has been lost. Accessory liability is formally known as â€Å"knowing assistance†. This ground for liability exists where a third party dishonestly participates in a breach of trust by procuring it or facilitating it. The primary problem is the meaning of dishonest in this context. Accessory liability is outlined in Royal Brunei Airlines v Tan. The issues in this case are whether a third party would be liable for assisting an innocent breach of trust? And what type of conduct gives rise to third party liability. There is a trust that has arisen as Frank is Pushpa’s investment consultant, and is guiding her with her financial matters. In this case this is not an innocent breach of trust as Pushpa knows exactly what she is doing stealing the money for her own benefit. Frank also knows what is going on and therefore assists the dishonesty and invested in Far Eastern securities. This shows this his breach caused the loss, Target v Redfern. The test for accessory liability is an objective test with a subjective element. Not acting as an honest person would be an objective standard and the subjective element would be what honest and reasonable persons of honest conduct would do in light of what the defendant knew at the time rather than what an honest and reasonable person would have known at the time. Turning a blind eye would also be dishonest (Nelsonian) as stated in Gruppo Torras v Al Sabah. Franks liability depends on his state of mind. So is Frank being dishonest at the time? If Frank is guilty, a constructive trust is imposed upon them and the likely view is that Frank will be personally liable to account to the beneficiaries for the amount of loss to the estate which would be the  £150000 that Frank advised her about. Frank may plead honesty and say he didn’t know where the money was coming from, but would the court think he was reasonable in doing so? Using a proprietary remedy some of the original money may be able to be traced. If the money is dissipated then it cannot be traced. This may be the case for the  £10000 that was spent on Pushpa’s daughters wedding present. Tracing is locating the property in its original form the beneficiaries seeking to recover it. It is also the process of identifying the value that now represents your original asset. For example if the wrongdoer has sold your asset you may be able to recover the money which now represents your asset which in this case would be the money from the shares. There is common law tracing, where the claimant is the legal owner of the trust property, and the claimants assets have been passed to someone else unlawfully. This can only be traced if it is in an unchanged form and has not been mixed up with anything else. This is shown in the case of Lipkin Gorman v Karpnale and FC Jones and sons where it could be traced directly into shares. The money can still be returned even if it has been invested. However the money cannot be traced in to a mixed bank account at common law which is what regularly happens. The money must be claimed in equity if it has been mixed up in used bank accounts. The  £500000 that was finally transferred into Pushpa’s bank may be fully recovered if none of it has been spent and there is enough money in her bank to replace it, even if it takes some of her own money. In equity there must be a fiduciary relationship and the money or property has been lost through a breach of fiduciary duty. Agip Ltd v Jackson. Therefore the money transferred into Pushpa’s own bank account may be recoverable through tracing. Any withdrawals are counted as withdrawing her own money first. In conclusion, Pushpa has stolen the money and is liable to pay back the losses to the trust. As the money has been used purely by Pushpa for her own benefit on the principle of unjust enrichment, she could be held liable to restore the entire amount without any contribution from the other trustees. However this may be of little practical value to the beneficiaries as it is unlikely that Pushpa has sufficient funds to reimburse the full amount. However if it is proved that Maria and Raman also played a part in the breach of trust, they will be jointly and severally liable with all the trustees. Frank as a stranger to the trust may also be found to be a cause of the breach and be liable for losses. If some of the money can be traced with a proprietary remedy that that may be found useful by the trustees. In any event the money needs to be recovered whether if is from Frank or the trustees who will be jointly and severally liable, or through tracing. BIBLIOGRAPHY * Pettit v Pettit [1970 AC 777 * Gissing v Gissing AC 886 * Eves v Eves 1 WLR 1338 * Grant v Edwards 1 Ch 638 * Midland Balk PLC v Cooke 4 ALL ER 562 * Cooke v Head 1 WLR 518 * Eves v Eves [1975 1 WLR 1338 * Hall v Hall 3 FLR 379 * Hussey v Palmer 1 WLR 1286 * Burns v Burns 1 Ch 317 * Lloyds TSB bank v Rossett 1 AC 107 * Oxley v Hiscock 2004 EWCA Civ 546 * Springette v Defoe (1992) 2 FLR 388 * Gillett v Holt Ch 210 * Barlow, A. (2003) Sharing homes: a Law Commission Discussion paper with a difference. Journal of Social Welfare and Family Law , 25(1), 83-96. Available from: * Payne v Webb (1874) LR 19 Eq 26) * Goodman v Gallant Fam 106 * Re 88 Berkley Road 1971 CH 648 * Kinch v Bullard 1999 1 WLR 423 * Williams v Hensman (1861) 1 John H 546 * Burgess v Rawnsley Ch 429 * Harris v Goddard 1 WLR * Target Holdings Ltd v Redfern 1995 3 WLR 352 * Nestle v Nat west Bank 1994 1 ALL ER 118 * Bray v Ford (1986) AC 44 * Keech v Sandford 1926 Sel Cas Temp King 61 * Bristol West building society v Mothew * Wright v Morgan 1926 AC 788 * Kane v Radley – kane 1998 3 ALL ER 753 * AG for Hong Kong v Reid 1994 1 AC 324 * Re Diplock Ch 456 * Boardman v Phipps 1967 2 AC 46 * Re Flower (1884) 27 ChD592 * Bahin v Hughes 1886 31 chd 390 * Re Paulings 1964 ch 303 * Royal Brunei Airlines v Tan 1995 3 ALL ER 97 * Gruppo Torras v Al Sabah CA 2000 ALL ER 1643 * Lipkin Gorman v Karpnale and FC Jones and sons 2 AC 548 * Agip Ltd v Jackson Ch 547 * Westlaw (2005) Westlaw online http://web2.westlaw.com/signon/default.wl?bhcp=1newdoor=true December/January 04/05 * Lawtel (2005) Lawtel Online Available from http://www.lawtel.com/ [accessed December/January 2004/2005 * Edwards, R. Stockwell, N. Trusts and Equity. Sixth Edition, Pearson Longman Publishers. * Phillips, M. Mackenzie, JA. Textbook on Land Law. Ninth Edition, Oxford University Press. * Leeds Metropolitan Lecture Notes * Edwards, S. (2004) Property rights in a family Home. Family Law Journal , January, pp 524-527, Available from: www.lawtel.co.uk . Law of Property (Miscellaneous provisions) act 1989 s 2 Law of Property Act 1925 s25 Pettit v Pettit AC 777 Gissing v Gissing AC 886 Eves v Eves 1 WLR 1338 Grant v Edwards 1 Ch 638 Midland Bank PLC v Cooke 4 ALL ER 562. Cooke v Head 1 WLR 518 Eves v Eves [1975 1 WLR 1338 Hall v Hall 3 FLR 379 Hussey v Palmer 1 WLR 1286 Burns v Burns 1 Ch 317 Lloyds TSB bank v Rossett 1 AC 107 The wife claimed that she had a beneficial interest in the property under a constructive trust and this took effect as an overriding interest binding on the bank under LRA 1925 s70(1)(g). There was not enough for detrimental reliance in an express intention, let alone sufficient to support an inferred agreement. Oxley v Hiscock 2004 EWCA Civ 546 Springette v Defoe (1992) 2 FLR 388 Payne v Webb (1874) LR 19 Eq 26). Goodman v Gallant Fam 106 Re 88 Berkley Road 1971 CH 648 Kinch v Bullard 1999 1 WLR 423 Williams v Hensman (1861) 1 John H 546 Burgess v Rawnsley Ch 429 Harris v Goddard 1 WLR Target Holdings Ltd v Redfern 1995 3 WLR 352 Nestle v Nat west Bank 1994 1 ALL ER 118 Bray v Ford (1986) AC 44 Keech v Sandford 1926 Sel Cas Temp King 61 Wright v Morgan 1926 AC 788 Kane v Radley – Kane 1998 3 ALL ER 753 Walsh v Deloitte and Touche 2001 ALL ER 326 Boardman v Phipps 2 AC 46 AG for Hong Kong v Reid 1994 1 AC 324 Re Diplock Ch 456 Re Flower (1884) 27 ChD592 Bahin v Hughes 1886 31 Chd 390 Armitage v Nurse Ch 241 Re Paulings 1964 ch 303 Royal Brunei Airlines v Tan 1995 3 ALL ER 97 Gruppo Torras v Al Sabah CA 2000 ALL ER 1643 Lipkin Gorman v Karpnale and FC Jones and sons 2 AC 548 Agip Ltd v Jackson Ch 547