Foskett v McKeown  (HL)
Fiduciary has plans for property development which investors invested in. He then takes out life insurance worth £1,000,000 (which is secured after 2 premiums of £10,000). Fiduciary pays 2 premiums with own money and 2 with investor money before suicide. Do investors get their actual contribution (around £20,000) or their proportionate share of 2/4 (around £500,000)?
(1) tracing is a process not a remedy
(2) where clean substitutions have been made, principals are free to either follow to the 3rd party (unless there is equities darling) or trace to the property acquired by fiduciary using profits.
(3) where there are mixed funds (as here), principals can decide whether or not take their proportionate share (good if value has increased) or their actual contribution (good if value has decreased)
(4) obiter - tracing should be the same at law and equity.