property, and provides value for it, then it cannot be traced into their hands. Another is where the property has been dissipated or destroyed, for example when money has all been spent on living expenses. Lastly, if the money has been used to improve the land; in that case, it is inequitable to trace, and the beneficiaries cannot assert any property claim. In Re Diplock, a large amount of money was thought to be held on charitable trust. That charitable trust was invalid, but by the time that was established, a lot of money had been given to charities. The Court of Appeal looked at how much of that money could be traced into the hands of the charities that received it as innocent volunteers. It was held that any charity that had used the money that it received to improve their land, the tracing claim failed Backwards tracing Backwards tracing applies where the asset was acquired before the breach of trust, and trust money is used to pay off a loan used to buy the asset. It is only allowed if there is 'co-ordination' between the acquisition of the asset and the breach of trust. The trustee must have borrowed the money with the intention, at the time, of using trust money to discharge it. In Federal Republic of Brazil v Durant International Corporation it was held that backwards tracing is not allowed where the trustee uses the money to pay off a loan, and thereby acquires unencumbered title to whatever was bought with the loan. You cannot backwards trace an asset which was acquired before the breach of trust unless there is co-ordination between the acquisition of asset and the breach of trust. References Bibliography Equity (law) English property law English trusts law Judicial remedies Restitution