Westpac Banking Corporation v Victor Warren Ollis & Ors [2007] NSWSC 956

New South Wales Supreme Court

CITATION : Westpac Banking Corporation v Victor Warren Ollis & Ors [2007] NSWSC 956 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 20/08/07, 21/08/07, 22/08/07, 23/08/07, 24/08/07

JUDGMENT DATE : 31 August 2007

JURISDICTION : Equity Division Commercial List

JUDGMENT OF : Einstein J

DECISION : Plaintiff's case made out – Short minutes to be brought in.

CATCHWORDS : Banking and financial institutions - Banker and customer relationship - Mistake - Recovery of moneys paid under mistake by bank to customer - Bank error in not cancelling or suspending customer's auto-transfer replenishment facility - Customer with knowledge of mistake - Mistake fundamental or basic to transaction - Customer dishonestly taking advantage of bank's mistake by writing cheques totalling approximately $11 million over seven-month period - Jones v Dunkel - Principles - Moneys fraudulently procured by customer held on trust for the bank - Principles concerning fraud claims - Where moneys paid by mistake impressed with trust - Barnes v Addy - Third party recipient liability - Remedies

LEGISLATION CITED : Bankruptcy Act 1966 (Cth) Evidence Act 1995 (NSW)

Addstead Pty Ltd (in liq) v Liddan Pty Ltd (1997) 70 SASR 21 Adler v Australian Securities and Investments Commission [2003] NSWCA 131 Anscor Pty Ltd v Clout (Trustee) (2004) 135 FCR 469 ASX Operations Pty Limited v Pont Data Australia Pty Limited (No 1) (1990) 27 FCR 460 Baden Delvaux & Lecuit v Societe Generale Pour Favoriser le Developpement du Commerce et de L'Industrie en France SA [1992] 4 All ER 161 Banque Belge pour L'Etranger v Hambrouck (1921) 1 KB 321 Barnes v Addy (1874) LR9ChApp 244 Barrett & Sinclair v McCormack [1999] VUCA 11 Beatty v Guggenheim Exploration Co (1919) 122 NE 378 Black v S Freedman & Co (1910) 12 CLR 105 Briginshaw v Briginshaw (1938) 60 CLR 336 Carl Zeiss Stiftung v Herbert Smith & Co (No 2) [1969] 2 All ER 367 Cashflow Finance Pty Ltd (in liq) v Westpac Banking Corporation [1999] NSWSC 671 Chase Manhattan Bank NA v Israel-British Bank (London) Ltd [1979] 3 All ER 1025 Clarke v Shee (1774) 1 Cowp 197 Creak v James Moore & Sons Proprietary Ltd (1912) 15 CLR 426 Cox v Smail [1912] VLR 274 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Dilosa v Latec Finance Pty Ltd (1966) 84 WN (Pt1) (NSW) 557 Dover Pty Ltd & the Companies Act 1961, Re (1981) 6 ACLR 307 Eldan Services Ltd v Chandag Motors Ltd [1990] 3 All ER 459 Eromanga Hydrocarbons NL v Australis Mining NL (1988) 13 ACLR 804 Espin v Pemberton (1859) 44 ER 1380 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 French Caledonia Travel Service Pty Ltd (in liq), Re (2003) 59 NSWLR 361 Goode, Re; Ex parte Mount (1974) 24 FLR 61 Halletts Estate, In re (1880) 13 Ch D 696 CASES CITED : Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 Ilich v R [1987] 162 CLR 110 Jones v Dunkel (1959) 101 CLR 298 Jones v Southall & Bourke Pty Ltd [2004] FCA 539 Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191 K & S Corp Ltd v Sportingbet Australia Pty Ltd (2003) 86 SASR 312; [2003] SASC 96 Magafas v Carantinos [2007] NSWSC 917 Metall und Rohstoff AG v Donaldson Lufkin & Jenrette Inc [1989] 3 All ER 14 Miller v Race (1758) 1 Burr 452 Montagu's Settlement Trusts; Duke of Manchester v National Westminster Bank Ltd & Ors; Re [1987] Ch 264 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 Ninety Five Pty Ltd (in liq) v Banque Nationale de Paris [1988] WAR 132 Nocton v Lord Ashburton [1914] AC 932 Norwich Union Fire Insurance Society Ltd v William H Price Ltd [1934] AC 455 Oatway; In re [1903] 2 Ch 356 Official Receiver for and on behalf of the Official Trustee in Bankruptcy v Klau & Ors [1987] FCA 242 Orix Australia Corporation Ltd v Moody Kiddell & Partners Pty Ltd [2005] NSWSC 1209 Pascoe v Commissioner of Taxation (Cth) (1956) 30 ALJR 402 Pedler v Richardson (unreported, Supreme Court of NSW, Young J, 16 October 1997, BY CONSENT 9705263) Porter v Latec Finance (Qld) Pty Ltd [1964] HCA 49; (1964) 111 CLR 177 Robb Evans of Robb Evans & Associates v European Bank Ltd (2004) 61 NSWLR 75 Schellenberg v Tunnel Holdings Pty Ltd (2000) 170 ALR 594 Sinclair v Brougham [1914] AC 398 Strang v Owens (1925) 42 WN (NSW) 183 Wambo Coal Pty Ltd v Stuart Karim Ariff [2007] NSWSC 589 Watson v Foxman (1995) 49 NSWLR 315 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 Wookey v Pole (1820) 4 B & Ald 1