Citigroup Pty Limited v National Australia Bank Limited [2012] NSWCA 381

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Citigroup Pty Limited v National Australia Bank Limited [2012] NSWCA 381 Hearing dates: 17 July 2012 Decision date: 04 December 2012 Before: Bathurst CJ, Allsop P and Meagher JA (at [1]), Macfarlan JA (at [15]), Barrett JA (at [20]) Decision: 1. Appeal dismissed. 2. Appellant pay the respondent's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: RESTITUTION - in case of payment made under mistake - change of position defence - receipt by one bank from another and subsequent disbursement by recipient bank - each bank acted without negligence on an instruction subsequently shown to be fraudulent - whether recipient bank acted on the faith of the receipt in making subsequent payment - change of position defence established by recipient bank - basis for and significance of the decision in State Bank of New South Wales Ltd v Swiss Bank Corporation (1995) 39 NSWLR 350 discussed, explained and not followed in one respect - alternative defence of payment over - whether conditions for that defence satisfied - alternative defence of estoppel - whether conditions for that defence satisfied Cases Cited: Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd [2008] WASCA 119; (2008) 66 ACSR 594 Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; 164 CLR 662 Buller v Harrison (1777) 2 Cowp 565; 98 ER 1243 Bunge (Australia) Pty Ltd v Ying Sing (1928) 28 SR (NSW) 265 Carr v Carr (1811) 1 Mer 541n; 35 ER 799 Co-Buchong v Citigroup Pty Ltd [2011] NSWSC 1199 Colonial Bank v Exchange Bank of Yarmouth, Nova Scotia (1886) 11 App Cas 84 Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51 Cox v Prentice (1815) 3 M&S 344; 105 ER 641 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 Devaynes v Noble (1816) 1 Mer 529; 35 ER 767 Dextra Bank & Trust Co Ltd v Bank of Jamaica [2002] 1 All ER (Comm) 193 EA Negri Pty Ltd v Technip Oceania Pty Ltd [2010] VSCA 44; (2010) 27 VR 31 Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 86 ALJR 296 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 Foley v Hill (1848) 2 HL Cas 28; 9 ER 1002 Garland v. Consumers' Gas Co (2004) 237 DLR (4th) 385 Gordon Derby v Scottish Equitable PLC [2001] EWCA Civ 369; [2001] 3 All ER 818 Gowers v Lloyds and National Provincial Foreign Bank, Ltd [1938] 1 All ER 766 Grand Lodge, AOUW of Minnesota v Towne (1917) 161 NW 403 Hills Industries Ltd v Australian Financial Services & Leasing Pty Ltd [2012] NSWCA 380 Holland v Russell (1861) 1 B&S 424; 121 ER 773 Holt v Markham [1923] 1 KB 504 Kleinwort, Sons, & Co v Dunlop Rubber Company (1907) 97 LT 263 Kwai Hung Realty Co Ltd v Kung Mo Ng [1998] 1 HKC 145 Larner v London County Council [1949] 2 KB 683 Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548 Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; (2008) 232 CLR 635 Moritz v Horsman (1943) 9 NW 2d 868 National Bank of New Zealand Ltd. v. Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 National Westminster Bank plc v Somer International (UK) Ltd [2002] QB 1286 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 Perpetual Trustees Australia Ltd v Heperu Pty Ltd [2009] NSWCA 84; 76 NSWLR 195 Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661 Prasad v Sangha [2012] NSWCA 92 R E Jones, Ltd v Waring and Gillow, Ltd [1926] AC 670 Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 Rural Municipality of Storthoaks v Mobil Oil Canada Ltd (1975) 55 DLR (3d) 1 Scottish Equitable plc v Derby [2001] 3 All ER 818 Skyring v Greenwood (1825) 4 B&C 281; 107 ER 1064 State Bank of New South Wales v Swiss Bank Corporation (1995) 39 NSWLR 350 Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 The Deutsche Bank (London Agency) v Beriro (1895) 1 Com Cas 123; on appeal (1895) 1 Com Cas 255 Texts Cited: E Bant, The Change of Position Defence (2009) P Birks, An Introduction to the Law of Restitution (1989) P Birks, "Change of Position and Surviving Enrichment" in W Swadling (ed), The Limits of Restitutionary Claims: A Comparative Analysis (1997) P Birks, Unjust Enrichment, 2nd ed (2005) A S Burrows, "Change of Position: The View from England" (2003) 36 Loyola of Los Angeles Law Review 803 A S Burrows, The Law of Restitution, 3rd ed (2011) J Edelman and E Bant, Unjust Enrichment in Australia (2006) W M C Gummow, "Moses v Macferlan: 250 years on", (2010) 84 Australian Law Journal 756 P Key: "Excising Estoppel by Representation as a Defence to Restitution" (1995) 54 Cambridge Law Journal 525 P Key, "Estoppel by Representation as a Defence to Restitution: The Exception Proves the Rule?" (2001) 60 Cambridge Law Journal 465 Kwai-Lian Liew, "Mistaken Payments - The Right of Recovery and the Defences" (1995) 7 Bond Law Review 95 K Mason, J W Carter and G Tolhurst, "Mason and Carter's Restitution Law in Australia", 2nd ed, (2008) Restatement of the Law of Restitution: Quasi Contracts and Constructive Trusts (1937) Category: Principal judgment Parties: Citigroup Pty Limited - Appellant National Australia Bank Limited - Respondent Representation: B A J Coles QC/P T Newton - Appellant B W Walker SC/P D Reynolds - Respondent Mills Oakley Lawyers - Appellant NAB Group Governance & Legal - Respondent File Number(s): 2011/171676 Decision under appeal Citation: Co-Buchong v Citigroup Pty Ltd [2011] NSWSC 1199 Date of Decision: 2011-10-12 00:00:00 Before: Hammerschlag J File Number(s): 2011/171676