What question did this study set out to answer?

The central aim is to evaluate whether the rule in Clayton's case is still applicable in tracing claims. The critique addresses the criticisms and exceptions surrounding the rule.

February 8, 2026Open Access

A critique of the rule in Clayton’s Case

Key Points

The central aim is to evaluate whether the rule in Clayton's case is still applicable in tracing claims. The critique addresses the criticisms and exceptions surrounding the rule.
Analyzed judicial criticism of the rule in Clayton's case.
Reviewed academic perspectives on the applicability of the rule.
Explored the exceptions to the rule and their implications for tracing claims.
Identified significant judicial criticism regarding the first in first out presumption.
Outlined various academic arguments questioning the rule's relevance today.
Revealed potential limitations of exceptions to the rule in practical applications.

Abstract

Abstract Under the so-called rule in Clayton’s case (Devaynes v Noble, Baring v Noble (1816) 1 Mer 572; 35 ER 767), where a trustee mixes the funds of two separate trusts, or an innocent volunteer mixes trust money with his own money, in an active (running) bank account, withdrawals out of the account are presumed to be made in the same order as payments in (ie, first in, first out). The rule has been criticised both judicially and academically and is the subject of a number of exceptions. This article takes a critical look at the rule and asks whether it still has application in the context of a tracing claim.

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