Evans & Associates v Citibank Ltd and Ors [2003] NSWSC 204

New South Wales Supreme Court

CITATION : Evans & Associates v Citibank Ltd and Ors [2003] NSWSC 204 HEARING DATE(S) : 3-6 and 10 & 11 February, 2003 JUDGMENT DATE : 27 March 2003 JURISDICTION: Equity Division JUDGMENT OF : Palmer J DECISION : Judgment for Defendants on Plaintiff's Statement of Claim; judgment for Cross Defendant on Cross Claim.

CATCHWORDS : PRIVATE INTERNATIONAL LAW - CORPORATIONS - RECEIVERS - PENAL AND PUBLIC LAWS - ENFORCEMENT - Plaintiff appointed as Receiver of assets of certain Defendants by United States Court upon application of United States Federal Trade Commission pursuant to United States Federal Trade Commission Act - Plaintiff seeks to enforce claims against Defendants in Australia - whether claims of Receiver are directly or indirectly for enforcement of foreign penal or public law - character of Receiver's claims under Federal Trade Commission Act - principles discussed. HELD: Receiver's claims were for direct enforcement of foreign public law and were unenforceable in Australian Courts. - BANKING AND FINANCE - TRUST - Money deposited by Vanuatu corporation on interest bearing deposit with Vanuatu bank - Vanuatu bank in turn invests money with Australian bank - Vanuatu bank issues confirmation note to Vanuatu corporation which discloses its deposit with Australian bank - whether Vanuatu bank declared itself express trustee of the deposit with Australian bank. HELD: No express trust. - BANKING AND FINANCE - FRAUD - KNOWING RECEIPT - CONSTRUCTIVE TRUST - Proceeds of fraud deposited with Vanuatu bank which in turn invests with Australian bank - whether Australian bank receives money as mere depository - whether mere depository is a "recipient" for purposes of first limb of Barnes v Addy - principles discussed. HELD: Australian bank was a mere depository of the fund - a mere depository is not chargeable as a "recipient" of misapplied trust funds. - BANKING AND FINANCE - FORCE MAJEURE CLAUSE - CONSTRUCTION - Vanuatu bank makes deposit in US dollars with Australian bank - deposit effected by crediting and debiting accounts of correspondent banks of parties in United States - funds standing to credit of Australian bank in United States seized by FBI - whether Australian bank "prevented" from repaying deposit in US dollars. HELD: Australian bank prevented from repaying within the meaning of Force Majeure clause. - BANKING AND FINANCE - WORDS AND PHRASES - "DUE PERFORMANCE" - Practice of bankers in international banking transactions. HELD: "Due performance" means performance in manner expected or intended by bankers in accordance with international banking practice. - United States Federal Trade Commission Act (15 USC 45) LEGISLATION CITED : - Vanuatu International Companies Act - Vanuatu Serious Offences (Confiscation of Proceeds) Act - s.20 - Agip (Africa) Ltd v Jackson [1992] 4 All ER 385 - Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 10 NSWLR 86; (1988) 165 CLR 30 - Attorney-General (NZ) v Ortiz [1984] AC 1 - Barnes v Addy (1874) LR 9 Ch App 244 - Black v S. Freedman & Co (1910) 12 CLR 105 - Charter Reinsurance Co Ltd (in liq) v Fagan [1997] AC 313 - Foley v Hill (1848) 2 HL Cas 28 (9 ER 1002) - Foskett v McKeown [2001] 1 AC 102 - FTC v Pantron I Corp 33 F.3d 1088, 1095 (9th Cir 1994) at 1102-03 - Huntington v Attrill [1893] AC 150 - Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 - Joachimson v Swiss Bank Corporation [1921] 3 KB 110 - Linter Group Ltd (in liq) v Goldberg (1992) 7 ACSR 580 CASES CITED : - Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 - Menzies v Perkins (2000) NSWSC 40 - Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia [2003] FCAFC 3 - Ray Brooks Pty Ltd v NSW Grains Board [2002] NSWSC 1049 - Schemmer v Property Resources Limited [1975] 1 Ch 273 - Selangor United Rubber Estates Ltd v Craddock (No 3) [1968] 2 All ER 1073 - Stephens Travel Service International Pty Ltd v Qantas Airways Ltd (1988) 13 NSWLR 331 - United States v Inkley [1989] 1 QB 255 - United States v Ward (1980) 448 US 242 - Westpac Banking Corporation v Savin [1985] 2 NZLR 41 - Wilson v Anderson (2002) 190 ALR 313 - Michael Bryan: When Does a Bank Receive Money [1996] JBL 165 - Nygh & Davies: Conflict of Laws in Australia, 7th Ed. (2000) para 18.5. - Paget's Law of Banking (11th Ed., 1996) at p.161 - Scott on Trusts (4th Ed) §324.4 Robb Evans & Associates - Plaintiff Citibank Limited - First Defendant/Cross Defendant Benford Limited - Second Defendant J.K. Publications, Inc. - Third Defendant MJD Service Corp. - Fourth Defendant PARTIES : TAL Services Inc. - Fifth Defendant Kenneth Taves - Sixth Defendant Teresa Taves - Seventh Defendant European Bank Limited - Eighth Defendant/Cross Claimant Citibank NA - Ninth Defendant Discreet Bill, Inc. - Tenth Defendant FILE NUMBER(S) : SC 4999/99 A.S. Martin SC, C.C. Hodgekiss - Plaintiff COUNSEL : M. Walton SC, E.A. Collins - First Defendant/Cross Defendant T.F. Bathurst QC, R.J. Webb SC - Eighth Defendant/Cross Claimant M. Walton SC, E.A. Collins - Ninth Defendant Deacons - Plaintiff SOLICITORS : Dibbs Barker Gosling - First Defendant/Cross Defendant Baker & McKenzie - Eighth Defendant/Cross Claimant Dibbs Barker Gosling - Ninth Defendant