Smith$$s Investments Ltd$.($Smith$)$ made a claim for recovery of a proprietary nature in consequences of alleged breach of fiduciary duty. It was made in the aftermath of a fraudulent conspiracy carried on by Louis Cooper and Michael Cambridge in $2000.$ Their fraud was one whereby so$-$called $$traders$,$ including Smith, were induced to advance money to an offshore company called Commonwealth Sunshine Ltd$.($CSL$)$ by false representations that the money would be used by CSL for trading transactions of a particular type. Smith was induced to advance $$5\mathrm{.}7$m to CSL$.$

In fact money advanced by the traders was not used by CSL for such transactions. It was instead in a $$cross$-$firing$$ operation involving transfers between bank accounts held by CSL$,$ Inagua Trading Company $($ITC$)$ and other companies in the control of Messrs. Cambridge and Cooper with the object and effect of falsely inflating CSL$$s turnover, profit and assets. ITC was a subsidiary of Inagua Group plc $($IGP$),$ a listed company. The further effect of the fraud was falsely to inflate the value of IGP$$s shares and so enable Mr$.$ Cooper to procure his company Marlin Ltd$.($Marlin$)$ to sell shares it held in IGP at that inflated price: Marlin sold approximately $5\%$ of its IGP shares on $9$ November $1999$ for just under $$58.$

Marlin also held $($through Hibiscus, a subsidiary$)$ a valuable house, which Mr$.$ Cooper, at $24$ Strawberry Gardens, Blue Hill Road $($Blue property$).$ Hibiscus had purchased it on $17$ June, $2001$ with the help of a loan from the Bank of Wealth Ltd plc on the security of a charge of the property. The charge was paid off by $14$ September $2003.$ With $($in round figures$)($i$)$ $$18\mathrm{.}6$m of the proceeds of sale of the IGP shares that Marlin had sold in August $2001$ and $($ii$)$ $$750,000$ provided by Mr$.$ Cooper from an unknown source.

The sham basis of ITCs trading activities and on which IGP attained its status as a listed company could not continue undiscovered indefinitely. The collapse came on $1$ September $2003$ when three creditor banks appoint joint administrative receivers in respect of ITC and IGP. The joint receivers later entered into a series of settlement agreements with Mr$.$ Cooper and Marlin, a result of which the Blue property was sold on $5$ December $2005.$ Out of the proceeds, and pursuant to the agreements, some $$10\mathrm{.}4$m was paid to the receivers, which they still hold.

Discuss the following:

$($a$)$ Did a fiduciary relationship arise in this scenario and if so to whom?

$($b$)$ Who is entitled to funds and on what grounds?

$($c$)$ Is Smith Investments Limited entitled to proceeds from the Blue property?