Yardley was employed as wages and personnel manager for BALIOL between 1994 and 2007. One of his jobs each month was to prepare for payday when the staff was paid in cash on the last day of the month. He would cash the check at the LBSC and sort the cash into brown envelopes for each of the employees, with their pay slip. BALIOL'S arrangement with LSBC meant that its cheques would only be honored if signed by Yardley or countersigned by any member of BALIOL's governing body. Between 1994 and 2004, the size of the cheques rose from £300k per month to £500k per month.
In January 2005, the cheque was £1m and in June 2007 Yardley went missing and BALIOL became suspicious of fraud. In January 2008, Yardley was arrested at Johannesburg airport flying in from the Comoros Islands. He pleaded guilty to criminal deception and is now in prison. He confessed to forging cheques and spent the money.
[...] Money Laundering Law and Regulation. Oxford University Press. Lionel Smith (1999) The Law of Tracing. Oxford University Press. Ibid. R J Smith, (2003) Property Law. 4th Edition Longman. Ibid. (1815) 3 M & S 562. [1991] CH 547 [1994] 1 NZLR 1 Lionel Smith (1999) op.cit. [1994] op.cit. [2001] AC 102 Lionel Smith, op.cit. (1816) 1 Mer Millet, PJ (1991) Tracing the Proceeds of Fraud Law Quarterly Review 71. Todd and Wilsons (2007). Textbook on Trusts 8th Edition. Oxford University Press Ibid. [...]
[...] Furthermore, due to his position as Wages and Personnel manner, the case of Green & Clara Pty Limited v Bestobell Industries Limited[29] indicates that senior employees will owe a fiduciary duty to the company they work for. As such, the fiduciary duty imposes the highest duty of care and an essential limb of this duty is not to have a conflict of interest and a prohibition on profiting from the position without consent[30]. Accordingly, in misappropriating the funds through forgery and directly profiting from this, Yardley was in breach of fiduciary duty to BALIOL. [...]
[...] The case of Taylor v Plummer[6]asserted that the common law doctrine of tracing required the property to be identifiable and distinguishable from other property. It is likely that the main difficulty for BALIOL under the common law of tracing will be the mixture of funds however it will still be able to make a claim under the equitable doctrine of tracing. This was asserted by the ratio of the Court of Appeal case in Agip Africa v Jackson[7] where it was held that that equity will allow tracing through mixed bank accounts. [...]
[...] However, as asserted by the Privy Council in Re Goldcorp Exchange Ltd[24] and also the approval of Re Diplcok's Estate[25] by the House of Lords in the decision of Westdeutsche Landesbank Girozentrale v Islington London Borough Council[26]; it is now “clear beyond doubt that tracing in equity requires an initial fiduciary relationship”[27]. Accordingly, in order for BALIOL to rely on equitable tracing to recoup its funds, it must firstly establish that Yardley had a fiduciary relationship with BALIOL and that they are the real owners of the money in his bank accounts[28]. [...]
[...] Ibid. Ibid. [1992] 4 ALL ER 22. R J Smith (2003) op.cit. Graham Moffat (2005). Trust Law: Cases and Materials. 4th Edition Cambridge University Press. Todd & Wilsons (2007) op.cit. Ibid. [1995] 1 AC 74. [1948] Ch 465. [1996] 2 ALL ER 961. Todd and Wilsons (2007) op.cit. See also [...]
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