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Barclays Bank Ltd v WJ Simms: Difference between revisions
Barclays Bank Ltd v WJ Simms (view source)
Revision as of 11:06, 17 February 2021
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Amwelladmin (talk | contribs) (Created page with "{{a|casenote|}}An interesting counterpoint to the recent, eye-catching decision of the New York District Court in {{casenote|Citigroup|Brigade Capital Management}}, in that it...") |
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The customer made out a [[cheque]]<ref>These are old fashioned equivalents of direct debit instructions. They are written payment instructions a debtor gives to its bank (“[[Darling Fascist Bully-Boy]], please pay Mr X £10 out of my account on presentation of this cheque”) that a debtor hands to a creditor in stead of paying actual cash. The creditor takes the cheque to the bank (I know: a proper pain in the arse, right?) to collect the money.</ref> to his builder, but then cancelled the instruction before the cheque was presented. The bank paid it anyway, by mistake. Clearly the bank was not entitled to claim the money from its customer, as it had acted in breach of its instructions, so it claimed the money back from the builder under the principles of [[restitution]]. By lucky hap the case came before Robert Goff J (as he then was), the father of the modern law of restitution. | The customer made out a [[cheque]]<ref>These are old fashioned equivalents of direct debit instructions. They are written payment instructions a debtor gives to its bank (“[[Darling Fascist Bully-Boy]], please pay Mr X £10 out of my account on presentation of this cheque”) that a debtor hands to a creditor in stead of paying actual cash. The creditor takes the cheque to the bank (I know: a proper pain in the arse, right?) to collect the money.</ref> to his builder, but then cancelled the instruction before the cheque was presented. The bank paid it anyway, by mistake. Clearly the bank was not entitled to claim the money from its customer, as it had acted in breach of its instructions, so it claimed the money back from the builder under the principles of [[restitution]]. By lucky hap the case came before Robert Goff J (as he then was), the father of the modern law of restitution. | ||
===Decision=== | |||
Eschewing the opportunity to use the equitable principle of [[durum caseum per magnos canibus]], Robert Goff J (as he then was) found for the bank, and set out his thoughts on the extent of a banker’s obligations to its customers, and the elements of a claim in [[restitution]]: | |||
:(1) If a person pays money where a [[mistake of fact]] is the operating cause of the payment, she is ''prima facie'' entitled to recover it as money paid under a [[mistake of fact]]. <br> | :(1) If a person pays money where a [[mistake of fact]] is the operating cause of the payment, she is ''prima facie'' entitled to recover it as money paid under a [[mistake of fact]]. <br> | ||
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::(a) she intended that the payee should have the money anyway, even if the facts were false; or | ::(a) she intended that the payee should have the money anyway, even if the facts were false; or | ||
::(b) she made the payment for good [[consideration]], in particular if it discharges a debt the payer (or her principal, if she is an agent) owed to the payee (or his principal, where he is an agent); or | ::(b) she made the payment for good [[consideration]], in particular if it discharges a debt the payer (or her principal, if she is an agent) owed to the payee (or his principal, where he is an agent); or | ||
::(c) the payee has changed his position in good faith in reliance on the payment. | ::(c) the payee has [[Change of position|changed his position]] in good faith in reliance on the payment. | ||
Robert Goff J (as he then was) wrote in a peculiarly leaden style which, because life is too short, I have edited it for brevity to remove his compulsive [[demnation]]s and alternative articulations of the same thing: | Robert Goff J (as he then was) wrote in a peculiarly leaden style which, because life is too short, I have edited it for brevity to remove his compulsive [[demnation]]s and alternative articulations of the same thing: | ||
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In the second case, however, the bank has ''no'' mandate. The bank therefore has no recourse to its customer; and the customer’s debt to the payee on the cheque is not discharged. | In the second case, however, the bank has ''no'' mandate. The bank therefore has no recourse to its customer; and the customer’s debt to the payee on the cheque is not discharged. | ||
Prima facie, the bank is entitled to recover the money from the payee, unless the payee has changed his position in good faith, or is deemed in law to have done so. | ''Prima facie'', the bank is entitled to recover the money from the payee, unless the payee has [[Change of position|changed his position]] in good faith, or is deemed in law to have done so. | ||
{{sa}} | |||
*[[Durum caseum]] | |||
*{{casenote|Citigroup|Brigade Capital Management LP}} | |||