Agip (Africa) Ltd v Jackson

Agip (Africa) Ltd v Jackson [1990] EWCA Civ 2 is an English trusts law case concerning the common law remedies for receipt of trust property.

Facts

Mr Zdiri, an Agip Ltd employee, changed the name on a payment order of $518,000 to Baker Oil Services Ltd, a puppet controlled by Mr Jackson and other accountants, who acted on clients’ instructions. The money was transferred from Banque du Sud in Tunisia to Baker Oil’s account with Lloyds Bank in London. All but $43,000 was then paid on to unknown parties. Agip Ltd sued Mr Jackson for return of the money.

Judgment

High Court

Millett J held Agip Ltd was entitled to an equitable proprietary claim for the $43,000 from Mr Jackson and the accountants were liable for ‘knowing assistance in a breach of trust’. But Agip Ltd could not succeed for receipt at the money at common law (which did not allow electronic rather than physical tracing) or in equity (because the money was not transferred for the accountants’ benefit). Banks can be liable in knowing receipt only if they receive and apply trust money to reduce or discharge a customer’s overdraft.^[1] Otherwise banks merely pay and receive money as agents of their customers. It must be for their own ‘use and benefit’. He suggested that the liability for knowing receipt could be imposed if the circumstances would put an honest and reasonable person on inquiry. Agip Ltd appealed on the common law point.

Court of Appeal

Court of Appeal upheld Millett J’s decisions, but did not allow a claim at common law, because Agip Ltd’s money had been mixed in the New York clearing system and could not therefore be traced.. Fox LJ gave judgment. Butler-Sloss LJ and Beldam LJ concurred.

See also

Notes

References

• English trusts law

External links

• THE ACCOUNTANTS' LAUNDROMAT