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This is my first foray into the restitution web-group; I hope I've followed instructions correctly to get this message to everyone.

Like Lionel, I've also just written a note on Foskett v McKeown (for Nov LMCLQ). I found it a frustrating experience. Hobhouse LJ's judgment depends on a construction of the policy terms which leads him to conclude that the policy proceeds could not have been the traceable product of the misappropriated trust money, because they were 'bought' with the first two (untainted) premiums only. Yet he also thinks that the beneficiaries should be entitled to a lien over the policy proceeds on restitutionary grounds. These two findings seem mutually incompatible to me.

Meanwhile, Morritt LJ and Scott V-C both think that the policy proceeds were the traceable proceeds of all five premiums paid, and hence, inter alia, of the trust money which was used to pay premiums 4 and 5, and maybe some or all of premium 3 as well. Besides the fact that they go on to reach mutually incompatible decisions with regard to the remedy which the trust beneficiaries should therefore get, their view of the traceable proceeds issue clearly contradicts Hobhouse LJ's analysis of the policy terms - yet bizarrely they make no reference to this fact in their judgments.

Scott V-C's enthusiasm for backwards tracing seems a welcome development - but not his attempt to introduce a requirement that the intention to pay off the debt with a claimant's money shd have been formed before the debt was contracted.

Dr Charles Mitchell
School of Law
King's College London
Strand
LONDON WC2R 2LS

tel: 0171 873 2290