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Barclays Bank Ltd v WJ Simms: Difference between revisions
Barclays Bank Ltd v WJ Simms (view source)
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{{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 came to more or less the exact opposite conclusion. There is no [[discharge-for-value defense|discharge for value defence]] in the English law of [[restitution]]. A bank who pays its customer’s creditor without instructions to do so does not discharge its customer’s debt and, subject to the usual conditions, can recover the payment from the creditor in an action in [[restitution]]. | {{a|casenote|{{stupidbanker}}}}An interesting counterpoint to the recent, eye-catching decision of the New York District Court in {{casenote|Citigroup|Brigade Capital Management}}, in that it came to more or less the exact opposite conclusion. There is no [[discharge-for-value defense|discharge for value defence]] in the English law of [[restitution]]. A bank who pays its customer’s creditor without instructions to do so does not discharge its customer’s debt and, subject to the usual conditions, can recover the payment from the creditor in an action in [[restitution]]. | ||
===Facts=== | ===Facts=== | ||
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 the debtor then hands to a creditor instead 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 the builder went into receivership. As it was entitled to under the building contract, the customer cancelled cheque before it 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]]. One wonders whether it might have been decided differently in the hands of someone keener on the law of [[agency]]. | 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 the debtor then hands to a creditor instead 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 the builder went into receivership. As it was entitled to under the building contract, the customer cancelled cheque before it 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]]. One wonders whether it might have been decided differently in the hands of someone keener on the law of [[agency]]. | ||