Solicitor S withdraws $10 000 of client C’s money from the client account in breach of duty. He is assisted by A, the firm’s accountant. S gives $10 000 to X, who spends $2000 on a family holiday and pays the remaining $8000 to Y. Y uses $4000 to buy a valuable painting and gives the balance of $4000 to Z, who pays it into his bank account. S is insolvent. Leaving aside the worthless claim against S, C has potential claims against A, X, Y and Z. C may be able to recover against them, either because equity regards them as wrongdoers too (which is discussed in this chapter), or because equity will allow C to trace and claim property from them (discussed in chapter 21).

These claims are both personal and proprietary. C can claim a constructive trust over Y’s painting as representing part of the stolen money. This is a proprietary claim. C can also claim the $4000 paid into Z’s bank account. This involves a tracing (or identification) exercise to identify the money in Z’s account. C can then elect to take the money from the account. On the other hand, C’s claims against A and X will be personal. A never received C’s money and X no longer has the money he received from S.