The rule in Clayton's Case will not be applied to allocate losses in a finance broker's trust account where its application would be impracticable or produce unjust results. Instead, a modified pari passu approach may be adopted that distinguishes between accounts where unauthorised mixing occurred and those where it did not. Where a trustee's subsidiary holds mortgages on express trust for investors who are bona fide purchasers for value, those investors' claims to the mortgages prevail over the tracing claims of other trust account beneficiaries.
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