$(4)$ Tim Dig Construction $($TDC$)$ was founded by Tim and run by himself with his wife, Kate, and daughter, Angela. TDC became a major player in the construction industry. In $2004,$ TDC was unable to pay its debts of some $$53\mathrm{.}3$m and wound up$.$

The liquidator, having examined the affairs of the company, came to the conclusion that breaches of fiduciary duties had occurred on the part of the directors, among others, which included the improper disposal of the assets of the company. He also discovered that TDC was, in fact, insolvent from the financial year $1999/2000.$ What happened was that in order to maintain the $$A$1$ status of TDC$,$ a hallmark of creditworthiness which required TDC to have a net worth of $$5$m$,$ a scheme was hatched by Tim and others. This involved transferring losses of TDC to an affiliated company, Jim Goombay Construction Ltd$.($Jim Goombay$)$ by raising of sham bills over a period of some years, amounting in total to about $$25$m$.$

As part of the scheme to siphon money from TDC$,$ bills were also raised by Jim Goombay to TDC to enable large sums of money to be transferred from TDC to Jim Goombay. It should be noted that Jim Goombay did not carry out any business of its own other than being so made use of$.$ The moneys of TDC received by Jim Goombay were used by Tim and Kate to purchase residential properties under their personal names.

Tim and Kate also transferred in a total sum of some $$194$m from TDC and placed them on interest$-$bearing accounts, with Tim and Kate keeping the interest earned and returning only the capital sums to TDC$.$ Even after the winding up order was made, Tim withdrew a total of $$482,000$ from TDC for his own personal use.

One of the properties which Tim bought with moneys from TDC was a plot of land at No$.130$ John F Kennedy Drive. It was subsequently subdivided into four plots where four new houses were constructed and they were later known as Nos. $130$A and $130$B John F$.$ Kennedy Drive and Nos. $56$ and $57$ Blake Road. These four properties were registered in the names of Kate and Angela. The building costs were funded from a loan from First Street Bank but the interest due was paid by Jim Goombay, using funds from TDC$.$

Between $2000$ and $2004,$ TDC$$s funds of up to $$3\mathrm{.}7$m were utilized by Tim, Kate and Angela $($the Tims'$)$ for their personal benefit. The Tims also bought holiday houses in Canada and Barbados. The liquidators brought actions against the Tims and associated companies and parties who had wrongfully received assets from TDC$.$

The trial judge found that that the Tims had deceived TDC$$s creditors by manipulating the company$$s accounts, siphoned large sums of money for their personal benefit and caused TDC to transfer over $$984,000$ to a Bahamian company, Potcake, of which the sole shareholder and director was Tim$$s sister$-$in$-$law, Sharon, but which was managed by Tim and his daughter. With these funds, Potcake purchased three properties in the Bahamas, one of which was in Rolleville, Exuma. This property was sold in $2003$ for $$800,000.$ The trial judge found that one of Sharon$$s properties, the Sapodilla property, had been bought using proceeds from the sale of the house in Rolleville, Exuma.

The liquidator of TDC has brought an action against TDCs former directors and shareholders for conspiracy, fraud and breach of fiduciary duties.

$($i$)$ Are the Tims liable for their acts? If yes, what type of trustees are they? Please explain your answer.

$($ii$)$ Are Sharon and Potcake trustees? Please explain your answer.

$($iii$)$ Discuss the nature of tracing and whether the court should grant TDC a tracing order.