When a trustee misapplies trust money, the strength of the beneficiary's position often turns on whether the property can still be identified in someone's hands. This chapter begins with the distinction between following and tracing and the proprietary base a claimant must establish, then explains why proprietary claims are so attractive and the choice between asserting beneficial ownership and claiming an equitable lien. It works through the rules for mixed assets and bank accounts — including the presumption against the wrongdoing trustee and the lowest intermediate balance rule — and the pari passu and first-in-first-out approaches where innocent parties' funds are mixed. It closes with the situations in which tracing fails, the subrogation remedy that may survive, and the defences of bona fide purchase, limitation and laches.
