FIRST STATE GROUP PTY LTD v COMMONWEALTH BANK OF AUSTRALIA [1996] NSWCA 185

FIRST STATE GROUP PTY LTD v COMMONWEALTH BANK OF AUSTRALIA

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

HANDLEY, SHELLER and POWELL JJA 6 May 1996, 6 May 1996 [1996] NSWCA 185

CONTRACT — termination of- dishonoured deposit cheque

Sheller JA At an auction on 15 October 1994 the respondent, Commonwealth Bank of Australia, exercising its powers of sale under a mortgage, sold a property situated near Windsor to the appellant, First State Group Pty Ltd, for $1,500,000.

When the contract was signed on that day, the representative of the real estate agent asked the appellant's representatives for the required deposit of 10 percent. Mr Robinson, who was one of the appellant's representatives present, handed over a cheque for $100,500 payable to the estate agent and asked if the respondent would wait until Tuesday before depositing the cheque as the appellant might need a day to organise the funds. The bank's representative agreed to this request.

Due to an error in the agent's office, the cheque was deposited on the Monday, 17 October 1994. The appellant's bank statement from State Bank, Martin Place showed against the date 17 October the cheque number and a deposit in the amount of $100,500. Underneath that against the same date it showed "Referral fee debit $15".

For 18 October the bank statement showed "Entry reversal credit $100,500". There followed on 18 October an entry "D/C debit $30" and on 21 October "Unpaid payment fee debit $15".

On 18 October 1994 the representative of the real estate agent spoke to Mr Robinson, the appellant's representative, by telephone. He said there had been a mix up and indicated that the cheque had been accidentally banked. He suggested to Mr Robinson that he ring the bank and notify them that this had happened and make whatever arrangements "you think you need to do". Mr Robinson said that he would see what he could do about it.