“To the extent that Cedar LLC has dealt with the€10 million or any part thereof: a) the Claimants will seek an inquiry or account as to all such dealings and subsequent dealings; b) the Claimants claim to be able to trace into the hands of any recipient in respect of its beneficial interest; and c) in so far as any payment was made to Mr Mankarious or Cedar Ltd, that recipient is liable to account to the Claimants as a constructive trustee in respect thereof as having received it in breach of the said fiduciary duties, alternatively as having knowingly received it in breach of Cedar LLC’s constructive trust.”
“(4) The Claimants be at liberty to apply against each of the Defendants for such accounts, inquiries, and directions as are necessary and/or appropriate.”
“2(a) a declaration as to the extent of the claimants’ equitable charge over the freehold property at Conduit Lodge, 41 Lyndhurst Road, London NW3 5PE (“the Property”) or its proceeds of sale resulting from the claimant’s entitlement to trace the Fee (or any part of it) into its purchase and/or improvement; (b) an order for the sale of the Property unders.14(2)(a) of the Trusts of Land and Appointment of Trustees Act 1996 and such directions as the Court shall think fit for the distribution of the proceeds to discharge the claimant’s equitable charge; (c) an order joining Jennifer Lyn Mankarious as a defendant to this part of the claim underCPR r19.2 (2)(a) as joint legal owner of the Property. (d) declarations as appropriate upon the taking of the said account and/or the making of the said inquiry as to the extent of the claimant’s equitable charge over any other property or asset into which it shall be determined that the claimants are entitled to trace the Fee or any part thereof together with such further directions as the Court shall think fit to enable such charge to be satisfied. (e) monetary judgment as appropriate upon the taking of the said account and/or the making of the said inquiry against the first and third defendants respectively in the amount of all benefits received by them respectively from the Fee (save as already the subject of relief under paragraphs 2 and 3 above) on the basis of knowing receipt, alternatively equitable compensation for breach of fiduciary duty, alternatively liability to account as a constructive trustee; (f) interest in equity or pursuant to statute on all sums found due from the first and third defendants …”
“The Claimants and the Defendants each proceeded on the broad basis that there was no material distinction between the Defendants either for the purposes of the claim or the counterclaim.”
“when the private money of the trustee and that which he held in a fiduciary capacity have been mixed in the same banking account, from which various payments have from time to time been made, then, in order to determine to whom any remaining balance or any investment that may have been paid for out of the account ought to be deemed to belong, the trustee must be debited with all the sums that have been withdrawn and applied to his own use so as to be no longer recoverable, and the trust money in like manner be debited with any sums taken out and duly invested in the names of the proper trustees. The order of priority in which the various withdrawals and investments may have been respectively made is wholly immaterial. I have been referring, of course, to cases where there is only one fiduciary owner or set of cestuis que trust claiming whatever may be left as against the trustee. In the present case there is no balance left. The only investment or property remaining which represents any part of the mixed moneys paid into the banking account is the Oceana shares purchased for 2137l. Upon these, therefore, the trust had a charge for the 3000l. trust money paid into the account. That is to say, those shares and the proceeds thereof belong to the trust.”
“The process of ascertaining what happened to the plaintiffs' money involves both tracing and following. These are both exercises in locating assets which are or may be taken to represent an asset belonging to the plaintiffs and to which they assert ownership. … Tracing is the process of identifying a new asset as the substitute for the old. Where one asset is exchanged for another, a claimant can elect whether to follow the original asset into the hands of the new owner or to trace its value into the new asset in the hands of the same owner.” “Tracing We speak of money at the bank, and of money passing into and out of a bank account. But of course the account holder has no money at the bank. Money paid into a bank account belongs legally and beneficially to the bank and not to the account holder. The bank gives value for it, and it is accordingly not usually possible to make the money itself the subject of an adverse claim. Instead a claimant normally sues the account holder rather than the bank and lays claim to the proceeds of the money in his hands. These consist of the debt or part of the debt due to him from the bank. We speak of tracing money into and out of the account, but there is no money in the account. There is merely a single debt of an amount equal to the final balance standing to the credit of the account holder. No money passes from paying bank to receiving bank or through the clearing system (where the money flows may be in the opposite direction). There is simply a series of debits and credits which are causally and transactionally linked. We also speak of tracing one asset into another, but this too is inaccurate. The original asset still exists in the hands of the new owner, or it may have become untraceable. The claimant claims the new asset because it was acquired in whole or in part with the original asset. What he traces, therefore, is not the physical asset itself but the value inherent in it. Tracing is thus neither a claim nor a remedy. It is merely the process by which a claimant demonstrates what has happened to his property, identifies its proceeds and the persons who have handled or received them, and justifies his claim that the proceeds can properly be regarded as representing his property.”
“In re Oatway did not raise the question whether a beneficiary is entitled to any profit made out of the purchase of property by a trustee out of a fund consisting of his personal moneys which he mixed with the trust moneys, and so the judgment was not directed to and did not deal with that question.”
“Over the years the courts have strained to incorporate within resulting trust theory various other forms of financial contribution made at the point of purchase of a legal estate in land. The rationale for such contributions has usually been the idea that the basis of calculation under the resulting trust should be the “aggregate” or “gross” cost of the purchase in hand. …. However, in so far as these kinds of contribution arise within a domestic context, their effect (and indeed the many problems of computation which they present) are nowadays best resolved within the more flexible framework of the constructive trust. Here the court can more sensitively factor the individual circumstances of the case into an overall quantification of the beneficial shares taken by the parties.”
“the recipient’s state of knowledge should be such as to make it unconscionable for him to retain the benefit of the receipt”
“In my judgment Mr Mankarious knew very well that the Joint Venture partners would object to the size of the fee and this was why he did not tell them. This meant that what he told BoS about the fee had to be said in such a way that he would not be asked questions which might oblige him to reveal the amount. It seems to me that the strong likelihood is that Mr Mankarious wished to give the impression that the fee was an immaterial or “minor issue” in the overall context of the transaction, and that he succeeded in conveying this impression.”