UK and Jersey: Judicial Committee considers 'backward tracing'

The Judicial Committee of the Privy Council gave its opinion earlier this week in The Federal Republic of Brazil v Durant International Corporation (Jersey) [2015] UKPC 35, an appeal from the Court of Appeal of Jersey ([2013] JCA071): see here or here (pdf). The hearing took place in May, and can be watched here (part 1) and here (part 2). The Board's opinion is an important one concerning the doctrine of tracing and, in particular, backward tracing. Lord Toulson, delivering the board's opinion, stated (para. [40]):

The Board ... rejects the argument that there can never be backward tracing, or that the court can never trace the value of an asset whose proceeds are paid into an overdrawn account. But the claimant has to establish a coordination between the depletion of the trust fund and the acquisition of the asset which is the subject of the tracing claim, looking at the whole transaction, such as to warrant the court attributing the value of the interest acquired to the misuse of the trust fund. This is likely to depend on inference from the proved facts, particularly since in many cases the testimony of the trustee, if available, will be of little value".

A summary of the Board's opinion is available here (provided by the ICLR).