Examination Timing: 00H01M18S
Mark is trustee of a charitable trust worth in excess of £100,000,000. In breach of trust, he transfers £50,000 from the trust fund to a bank account in the name of his wife, Sarah, which is empty. Sarah is unaware of the transaction. Sarah has recently lost her job. When she discovers the £50,000 in her bank, she immediately makes enquiries of Mark as to why the money has been sent to her, and he tells her that it is a payment from the charity which has recently begun helping unemployed people support themselves whilst looking for work. She soon finds another job and gives the £50,000 to her daughter, Emily, as a deposit for a house. Which of the following statements best describes the position?
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Your selected option: C
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The correct answer is E. Sarah could argue a defence of change of position, as she altered her position based on the mistaken belief induced by Mark that the money was a legitimate payment. Once she passed the money to Emily, she no longer retained the benefit, and it would be inequitable to require her to restore the funds. This defence is available when a defendant has changed their position in good faith, relying on the receipt of funds, making it unjust to compel repayment.
Key Point: The defence of change of position can protect individuals who have acted in good faith on the receipt of funds and have altered their position, making restitution inequitable.
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