I would like to apologize, I have not attempted this question myself. Although would appreciate advice on how to structure and answer to such a scenario.
Larry, the sole trustee of the Klondike Trust, signed a cheque for £50,000 from the Klondike Trust bank account at Money Bank, payable to himself. He deposited the cheque into his personal bank account at New Bank.
Larry withdrew £10,000 from his New Bank account and gave it to his friend Ian to help him to meet the costs of training for the 2012 Olympics. Ian was delighted to receive such a generous donation. He spent the money on a six week visit to an exclusive health spa which he had booked before receiving the donation from Larry.
Larry next withdrew £25,000 from his New Bank account and bought his father a sailing boat. His father asked him where he had got the money from and Larry replied, “if you knew that you might not get to keep the boat!”
Larry used the final £15,000 from his New Bank account to buy an expensive oriental rug for his mother. She kissed him and said, “I knew you would be successful in the end darling.”
At the suggestion of Hilary, a financial advisor to the Klondike Trust, Larry handed Hilary a £15,000 cheque drawn on the Klondike Trust bank account, payable to HIP Ltd. Larry believed Hilary when she told him that HIP Ltd was an investment management company which would invest the money wisely on behalf of the Klondike Trust. HIP Ltd was in fact owned and controlled by Gary, a con-man who specialized in defrauding trust funds. Hilary was paid a 25 per cent commission by HIP Ltd. This high level of commission is never paid by reputable investment management companies.
Larry has been declared bankrupt. The oriental rug was stolen in a burglary and the boat was sunk by vandals and cannot be recovered. Neither the rug nor the boat had been insured. HIP Ltd is insolvent with no assets and Gary is untraceable. Hilary has spent her commission.
Advise the beneficiaries of the Klondike Trust of any causes of actions and possible remedies they may have against any person.