Lovers of tracing and its more recondite details may be interested in the decision of the Queensland Court of Appeal in Hanson v Goomboorian Transport Pty Ltd [2019] QCA 41

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QCA/2019/41.html

Some money misappropriated from the plaintiffs by its employee was used by her to gamble but also to pay four of 95 monthly premiums on a policy insuring her own life. When she died, the insurance company paid $1,427,000 to her parents, the beneficiaries and defendants. The employee had misappropriated some $2.5 million from the plaintiffs. The trial judge found that the final premium paid before she died was paid with stolen money. With extensive reference to Foskett, he also accepted the plaintiffs’ argument that each premium paid for the coverage for that month, and he declared that 100% of the proceeds were held by the defendants in trust for the plaintiff from whom that money was taken.

On appeal, the Court of Appeal interpreted the contract differently, also relying on Foskett, holding for a range of reasons based on the features of the contract that the proceeds were paid in consideration of all the premiums. Thus the proceeds were held on trust as to 4/95 only.

The High Court has denied special leave to appeal. http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCATrans/2019/192.html Counsel for the applicant founded on an article by Edelman J arguing that the rules of tracing should be seen as causal. Bell and Keane JJ rejected the application, on the basis (as I read it) that these new arguments could not be raised at this stage.

Lionel