Maxims of Equity in UK Law

In my judgment, that approach is out of place where a statute imposes a trust, and the question is whether some gap in the trust can be filled by reference to general trust law. This is because, once a trust is declared and attaches to assets, there are a series of default rules and principles which apply irrespective of the intention of the parties setting up the trust or, indeed, the FSA.

For the same reason the judge was not, as suggested by Mr Snowden, impermissibly legislating when he relied on rules of trust law. Those rules apply by default whenever there is a trust for which the applicable rules have not been fully articulated. They supplement but do not supplant, or predefine the meaning of, the provisions expressly laid down.

In connection with the role of general law, it is important to make it clear that this court has been asked not to deal with any individual tracing claim. Accordingly there has been no real argument on the rights of a client who pays money to a firm adopting the alternative approach under the general law. When the alternative approach is adopted, CASS7 contemplates that client money should be paid into a running account of the firm.

We have not been asked to consider whether, if any client has a tracing claim in respect of client money paid into a firm's account, it is an individual claim or one belonging to clients in the same position collectively. If the right of clients to trace monies into the firm account were a collective right, then it may be that the right to follow the monies misapplied belongs not to any individual client but to the clients entitled to share in the house account collectively.

I would provisionally conclude that the true requirement is simply for there to be a causative mistake of sufficient gravity; and, as additional guidance to judges in finding and evaluating the facts of any particular case, that the test will normally be satisfied only when there is a mistake either as to the legal character or nature of a transaction, or as to some matter of fact or law which is basic to the transaction.

I can easily see why these principles are critically necessary where the objective is that which was sought in the VTB case, namely to deem someone to be a party to a contract to which he plainly is not. But I have great difficulty in seeing why they must be satisfied for the form of piercing of the veil that is the telescoping order, which is almost invariably the situation confronted in financial remedy proceedings.