D sold bonds belonging partly to his marriage settlement and partly to his clients. He then mixed the proceeds with his own money in his personal bank account. D then made some withdrawals. On his death the beneficiaries of the marriage settlement and the clients sought to trace the property. CA granted equitable proprietary remedies to them both: It presumed that D withdrew his own money first and since there was enough money left in the account to satisfy both claims there was no need to decide which had priority.
Lord Jessel MR: Whether the sale is rightful of wrongful, providing the proceeds can be identified the claimant may be able to trace the property. The equitable proprietary remedy does not depend on there being an express trust: a fiduciary relationship will do. NB though a fiduciary relationship between the person claiming to trace and the party who has misapplied that person’s property is necessary for the equitable remedy of tracing to be available. If the fiduciary has misused the money to buy property, the party claiming to trace can either demand the transfer of that asset OR treat it as security for the trust money expended on the purchase.