Accessory Liability Cases

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  • Created by: k1016450
  • Created on: 25-04-14 13:40
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  • Accessory Liability
    • BCCI v Akindele 2000
      • Facts:The defendant invested money to be repaid with an annual return plus compound interest. This was used for money laundering and when he became aware of something possibly illegal, he cashed in his agreement. Liquidators argued he was liable as a constructive trustee for sums paid to him.
      • Principle: Knowing assistance cases must satisfy an element of dishonesty. Knowing receipt cases must have knowledge that assets are traceable to a breach of trust/to make it unconscionable to retain the benefit (with no requisite that they acted dishonestly).
      • Outcome: Akindele did not owe any money as he acted as a normal person would have and did not have knowledge of the wrong.
    • Polly Peck International v Nadir (No. 2) 1992
      • Facts: A chief executive misappropriated money from his company through banks to Cyprus.
      • Principle: For knowing receipt, it must be proved that the assets were traceable to the breach of trust.
      • Outcome: The bank was not in breach as it could not be proved that the bank knew who the funds belonged to, as the overall company shared the accounts.
    • Royal Brunei Airlines v Tan 1995
      • Facts: The airline appointed the travel agent to put all related sales money in a separate account held on trust for the airline, however the travel agent did not do this. The company then went insolvent, so the airline sought to attach liability to the company director.
      • Principle: Accessory liability is concerned with interference by the trustee of the fiduciary obligations and must be dishonest as held by the standard of an ordinary honest person, if assisted a breach of trust knowingly.
      • Outcome: The director was liable as he had put the money in his own company accounts.
    • Twinsectra v Yardley 2002
      • Facts: A lender required a personal undertaking of a solicitor to secure a loan. The first solicitor refused but the second agreed that the money would be used solely for the purchase of land (the first then took no steps to ensure this). Some of the money was then used for other purposes and proceedings commenced against the first solicitor for dishonestly assisting in the second's breach of trust.
      • Principle: Knowing assistance is where you act dishonestly and knew that you fell short of the expected standard of honesty.
      • Outcome: The solicitor was not liable as he did not know that the purpose was set.


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