Brady v Stapleton (1952) 88 CLR 322

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  • A man became bankrupt but beforehand, transferred shares to another man in order to keep them from the creditors
  • The 2nd man, who had his own shares, knew this was happening
  • The 2nd man then transferred them to the man’s wife
  • Which shares were transferred?
  • ALL the shares could be used to satisfy the creditors
  • If a man mixes trust funds with his own, the whole will be treated as trust property, except where it is clearly distinguishable
  • Grey horse/black horse – equity imposes a charge on the horse or horses.
  • The right to trace only ceases when the new property cannot be identified
  • Trust property can be traced even when it is an ‘indistinguishable mass’ – in this case a charge can be brought over the whole amount

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