Task 3
Kasper is a trustee of the Lantry Charitable Trust. In February 2019, he draws £10,000 of the trust’s money (in breach of the trust) and pays it into his own bank account in which he already has £10,000 of his own money. A month later, he bought shares for £7,000 using money from his account. A week later he withdrew £7,000 and bought a car. The next month, he withdraws £5,000 which he gives to his son Ben to use as a deposit on an apartment he is buying. Realising he is about to be declared bankrupt, Kasper transfers the shares to his daughter, Julia. They are now worth £8,000. On the day he is declared bankrupt, Kasper writes off his car in an accident.
You are required to:
● Advise the beneficiaries of the Lantry Charitable Trust on their position.
● Advise the son and daughter on the gifts made to them. In your answers, you must:
● Analyse the impact of illegality on legal presumptions. (AC2.3)
● Evaluate conditions for tracing in law and in equity. (AC4.1)
● Appraise the application of the change of position defense. (AC4.2)