Agip (Africa) Ltd v Jackson
Tracing at common law is not possible through a mixed bank account, but equitable tracing is available where there is a fiduciary relationship.
Facts
An accountant employed by Agip in Tunisia fraudulently altered payment orders so that over $10 million of Agip's money was paid to companies controlled by Mr Jackson and his partner, who were accountants in the Isle of Man. The money was passed through several bank accounts, including in New York, where it became mixed with other money, before being paid out to unknown persons. Agip sued the accountants for money had and received, and for knowing receipt and assistance.
Legal principle
The Court of Appeal held that Agip could not trace the money at common law, because it had passed through the New York clearing system, where it had become mixed with other money. However, it could trace in equity, because the money had been paid in breach of fiduciary duty by its employee. The accountants were liable for knowing assistance, because they must have known that they were laundering money, and had not made any inquiry. Millett J, at first instance, had said that common law tracing could not follow money through mixed funds.
Related cases on tracing and third party liability
- Baden v Société Générale pour Favoriser le Développement du Commerce et de l'Industrie en France SA [1993] 1 WLR 509
- Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37, [2006] 1 WLR 1476
- Barlow Clowes International Ltd v Vaughan [1992] 4 All ER 22
- BCCI (Overseas) Ltd v Akindele [2001] Ch 437
- Bishopsgate Investment Management Ltd v Homan [1995] Ch 211
- Devaynes v Noble (Clayton's Case) (1816) 1 Mer 572
- El Ajou v Dollar Land Holdings plc [1994] 2 All ER 685
- Federal Republic of Brazil v Durant International Corp [2015] UKPC 35, [2016] AC 297
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