''Re Hallett’s Estate'' (1880) 13 Ch D 696 is an

English trusts law English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...

case, concerning asset tracing.

Facts

Mr Hallett, a solicitor, held bonds for Mrs Cotterill worth £2145 until he wrongfully sold them and put the proceeds in his current bank account, with Winning’s Bank, mixed with his own money. When he died the account had £3000.

Judgment

High Court

Fry J Sir Edward Fry, (4 November 1827 – 19 October 1918) was an English Lord Justice of Appeal (1883–1892) and an arbitrator on the Permanent Court of Arbitration. Biography Joseph Fry (1795-1879) and Mary Ann Swaine were his parents. He was ...

was concerned with whether Mr Hallett had a fiduciary relation, given he held as a bailee, and not a trust, strictly speaking. He held the first in first out rule applied, following Pennell v Deffell (1853) 4 De GM&G 372, so that a large proportion of Mrs Cotterrill’s money was in fact already paid out.

Court of Appeal

Lord Jessel MR held that there was a fiduciary relationship, and the proceeds of the sale of the bonds could be traced. It then went back to determine how much could be traced. A trustee cannot say trust money is merely lost. He reversed

and held that the claimants were entitled to an equitable charge of £2,145 over the fund. There was a presumption that a fiduciary is acting honestly and therefore intends not to dissipate the beneficiary’s money rather than his own. Baggallay LJ concurred. Thesiger LJ dissented, arguing they were bound by '' Pennell v Deffell''. The Court also held that in the case of a mixture of trust funds with the trustee's own money, only an equitable lien would be available as a remedy. This has since been overruled by ''

Foskett v McKeown is a leading case on the English law of trusts, concerning tracing and the availability of proprietary relief following a breach of trust. Facts In breach of trust, Mr Murphy took £20,440 from a company he controlled. Over 200 investors ( ...

001 001, O01, or OO1 may refer to: *1 (number), a number, a numeral *001, fictional British agent, see 00 Agent *001, former emergency telephone number for the Norwegian fire brigade (until 1986) *AM-RB 001, the code-name for the Aston Martin Valkyrie ...

1 AC 102, where the

House of Lords The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...

held that the beneficiary has the option of choosing an equitable lien or a constructive trust in the case of a mixed fund.

1 AC 102 at page 131 per Lord Millett. A constructive trust would allow a claim in the new asset in proportion to the contribution of the beneficiary's trust fund.

Notes

{{reflist, 2

References