Rights of Customer

In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The court held that the rights are to draw
cheques against his credit balance, to receive passbook from the bank, to sue when the bank
has not maintained the secrecy of his account. In case there is over crediting and over
debiting, a customer has right to get it corrected. A customer can sue the bank for wrongful
dishonour of cheques and right to interest.
Customer Duties
In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The court held that the customer has a duty
to disclose forgeries once he is aware of it.
In the case of Lloyds Bank v Cooke, the defendant, who was the maker of the cheque, was
sued by the payees of a promissory note because he had signed his signature on a blank
stamped piece of paper and assigned it to another with authority to fill up as a promissory
note for a certain amount payable. The individual had, however, fraudulently filled out the
paper with a greater sum and secured a loan for that amount from the bank. The defendant
was estopped from challenging the note's legitimacy between himself and the plaintiffs, and
so the suit may be brought against him for the full sum of the note. In contemporary
application, a consumer who signs a blank cheque and gives it to a third party to fill out is
violating the duty of care and will be barred from challenging the third party's authority.
In the case of Greenwood v Martins Bank Ltd, Greenwood went to the bank and opened a
cheque account. The wife, on the other hand, forged his signature and drew the cheque in the
name of a non-existent individual. She signed the cheque and went to the bank to get the
money. Mr. Greenwood discovered the transaction after several months, then waited for
seven months before reporting it. Mr. Greenwood continued to demand the money from the
cheque after his wife's death. The court held that simple silence does not constitute
representation, but that intentional silence following notification does. As a result, Mr.
Greenwood was unable to make a claim on the cheque because it was his responsibility to
notify the banker of any known fraud or forgery as soon as possible, which he had failed to
do.
In the case of Slingsby v District Bank Ltd, the plaintiff demanded that his attorney,
Cumberbirch & Potts, draw a cheque on their account payable to M/S John Prust & Co. to the
defendant's bank. The payee's name and the words "or order" were separated by a space on
the cheque. After signing, the solicitor wrote “per Cumberbirch & Potts” and indorsed and
obtained the payment. The court ruled that the general rule was that a client was responsible
for his own mistakes when writing a cheque. However, since the indorsement did not comply
with the mandate, the bank was unable to shift the liability to the client.
In the case of Bintai Kindenko Pte. Ltd. v Sanwa Bank Ltd. & Anor., The sum of 126260
was allegedly removed in favour of X, according to the appellant. The sum on the cheque that
the appellant intended to draw was actually 260 dollars. However, the cheque was tampered
with by a third party, X, who presented it to the second respondent bank for payment. By
debiting the appellant's account, the bank charged X the full sum claimed on the check. The
appellant alleged that his account had been debited without his permission by the bank. It was
decided that when drawing checks, a customer must take appropriate precautions to avoid
fraud.
In the case of London Joint Stock Bank v Macmillan, the clerk's job was to fill out
checques and show them to the partners for signature. One of these cheques had been signed
by a partner, and it only had the numbers “2.0.0” written on it. The clerk changed the number
to “120.0” and added the words “one hundred twenty pounds.” The cheque was later
presented and cashed. The company was found to have been negligent and was barred from
suing the bank. Customers' instructions must be followed by the bank. As a result, it is the
customer's duty to draw cheques with fair caution.
In the case of United Asian Bank Ltd v Tai Soon Heng Construction Sdn Bhd, the appellant
bank has a current account with the respondent. Several cheques drawn on the appellant bank
were fabricated by the respondent's accounts clerk, who was not an authorised signatory to
cheques. The forged signatures on all of the cheques were honoured. However, the forgeries
were only found a few months later, and the respondent sued the appellant bank for all of the
money that had been debited as a result of the forgeries. It is not an acceptable defence to say
that the bank is unaware of the forgery. A consumer has two responsibilities: Macmillan duty
and Greenwood duty, which are to not draw a cheque in a way that facilitates fraud and to
notify the bank of a cheque forgery as soon as he becomes conscious of it. The client, on the
other hand, has no legal obligation to take care in the ordinary course of his business to avoid
forgeries by his servants. As a result, the bank was held responsible for the damage caused by
the acceptance of forged cheques.
In the case of Syarikat Islamiyah v BBMB, the bank attempted to push liability to customers
for not discovering forgery. This is because a bank should have some level of liability when
honouring a forged cheque, according to the court. It could not have been the customer's
absolute responsibility to ensure that the cheque was free of any anomalies.
In the case of Keptigalla Rubber Estates Ltd v National Bank of India Ltdcheques, the
cheques were forged by an employee and cashed by him. The court held that there is no
implied obligation for customer to prevent forgery by employee is not within their contractual
relationship thus there is no such duty.
In the case of Westpac v Metlej, a building contractor's account that needed two signatures,
one from the contractor and the other from a solicitor who worked with the contractor. He
had stolen several blank cheques from the builder's car when the cheque book was still in the
car. Following that, the lawyer faked the contractor's signature, and the bank paid out
$62,000 in accordance with the cheque. The court ruled that it was the contractor's
responsibility to keep the cheque book in a secure location to prevent forgery. Clarke J, on
the other hand, opposed it and adopted the theory in Tai Hing, according to which the
customer's responsibility is limited to drawing his cheques and informing the bank of any
forgeries or fraud of which he is informed.
In Proven Development Sdn. Bhd. v Hongkong & Shanghai Banking Corporation, the
plaintiff had a current account at the defendant bank. One of the plaintiff company's directors
gave a verbal instruction to the defendant bank to debit some funds from its account. Plaintiff
claimed that the debit was not authorised and filed a lawsuit against the defendant. The
defendant bank, on the other hand, stated that the oral instructions were approved by the
bank's directors, but that the bank was unable to deliver the same due to the passage of time.
The court held that any anomalies must be reported to the bank as soon as the company
becomes aware of them. If it fails to do so, it should be estopped from bringing a lawsuit
against the bank.
In the case of Consmat S’pore pl. v Bank of America National Trust & Savings Assocn.,
Customers of the defendant bank were the victims. The plaintiffs found that the defendants
had honoured and paid 15 of the plaintiff's cheques. The cheques were discovered to be
forged. The court decided that the plaintiff had a duty to inform the defendant of a debit on
the plaintiff's statement of account resulting from a forged or unauthorised check. The fact
that no one was notified was proof that the account was accurate.
Countermand by Customer
In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The court held that the banker’s duty is to
carry out the customer’s mandate that is their instructions.
In the case of London Provincial & South Western Bank v Buszard, the defendant drew a
cheque on his account at the bank's Oxford Street branch, which he then stopped. The
cheque, however, was cashed by the bank's Victoria Street branch for the payee, who was a
client of that branch. The cheque was labelled "ordered not to pay," indicating that the bank
would seek to recover the money from the drawer in due time. A notice of countermand of
payment, according to the defendant's lawyers, was valid at all of the bank's branches. A
notice to avoid payment was found to be only successful at the branch to which it was
delivered.
In the case of Burnett v Westminster Bank Ltd., the plaintiff drew a cheque from the
Borough branch and had an account there. He changed the address and initialed the cheque
after crossing out the word Borough and replacing it with Bromley. The plaintiff's
modifications were not read by the computer system, so the cheque was forwarded to
Borough Branch, where the employees were not informed of the countermand. The money
was eventually debited into the plaintiff's account at the Borough Branch. The court
determined that a customer's stop instruction extends to all accounts at the same branch of a
particular account that is not specified. The court decided that the change was not adequate
notice to the bank, and that the money should be credited to his Borough account.
In the case of William Cuirliani Ltd. v Royal Bank of Canada, This case involves a
cheque dispute between the plaintiff, a used car dealer, and the defendant, a chartered bank.
The complainant is a defendant's client who had an account at the Bloor and Jane Streets
Branch in Toronto. Mr. Jung received a cheque from the plaintiff for the payment of a motor
vehicle. Mr. Jung took the cheque to the defendant's Chestnut and Dundas Sts. branch. In the
city of Toronto, he received $2,900 in cash, with the residual $1,000 transferred into his
account. Later that day, the plaintiff's president called the Bloor and Jane sts.,
countermanding the cheque and requesting that the payment be halted. This action was taken
in order to recoup the amount. When the countermand was implemented, however, the cash
was paid out. The countermand was only successful in the Bloor and Jane branch, not the
Dundas branch, as the court held. As the issuer of the cheque, the Dundas branch had the
authority to ensure payment against the complainant.
In the case of Bank Bumiputra (M) Bhd. v Hashbudin b Hashim, the Bank Bumiputra is the
appellant, and the payee is the respondent. The appellant was seeking the recovery of the
amount of RM25,000, plus interest and costs, after it was countermanded by a bank customer
prior to payment. The bank had no obligation or jurisdiction to pay the respondent's check,
and the respondent had no authority to collect the proceeds, according to the court. The court
used equitable principles to order the respondent to return the funds.
In the case of Chua Neoh Kow v Malayan Banking Bhd, the appellant drew a $500 cheque.
Despite his contention that he had countermanded the check, the bank continued to honour it.
The bank was found to have broken their obligation because the countermand was an order to
stop payment, which they had ignored.
In the case of Curtice v London City and Midland Bank Ltd, in order to pay for some horses,
the plaintiff drew a cheque on the defendant bank. The horses did not arrive. The plaintiff
told the defendant not to pay the cheque later that day. The telegram was sent to the bank's
letter box the same evening by a telegram messenger. The telegram was not removed from
the box until November 2nd, due to an error. Meanwhile, it had been offered for payment on
November 1st. The plaintiff filed suit, charging that the bank was not authorised to debit his
account for the balance of the cheque. The court held that the action would be dismissed
because the cheque had not been successfully countermanded at the time of payment. The
case would have been won if the plaintiff had pled negligence.
In the case of Westminster Bank Ltd v Hilton, the complainant sends a telegram to prevent a
particular cheque from being cashed. Plaintiff's account is also debited by the bank, which
finances the cheque. The court held that the countermand must be clear and accurate and the
bank not liable for customer’s mistakes.
In the case of Baines v National Provincial Bank Ltd, the plaintiff had an account with the
defendants' bank, which closed at 3 p.m. Plaintiff drew a cheque in W's favour and
delievered it to him at such an hour that he couldn't present it for payment before 3 p.m. He
did, indeed, deliver it for payment shortly after 3 p.m. and was paid. Plaintiff tried later in the
day to postpone the payment of the check and sent his son to the bank at the bank's opening
time the next morning, but he discovered that the money had already been paid. The court
held that a bank has the right to deal with a cheque within a fair business margin after their
advertised closing time, and that defendants were within their rights in cashing the check.
In the case of Alex Ting Kuang Kuo v. Credit Corporation (Malaysia) Bhd, Plaintiff, a
homebuyer, applied for a home loan from CCMB and pledged the property as collateral.
However, the developer had postponed completion and demanded payment of the first stage
of completion in the amount of RM73,250 two weeks before the deadline for delivery of
vacant possession. The Plaintiff expressly requested that the money not be released by the
bank. However, in violation of the explicit guidelines, the defendant released payment to the
developer. However, two additional payment notices were withheld. CCMB requested
repayment of the loan funds released after the housing project was abandoned. The plaintiff
was adamant about not paying. The plaintiff's licence to occupy the property was then
revoked by CCMB. The court ruled that when a bank transfers funds to a third party on the
orders of a client, the bank is obligated to follow those instructions. It is an implied term of
the bank-customer relationship that the bank would exercise fair competence and care in and
around the execution of the customer's instructions. Payment to the developer was rendered
without mandate because the defendant did so in violation of the express terms of the
agreement as well as the plaintiff's written instructions. As a result, the plaintiff should not be
considered in default. As a result, the plaintiff's notice of licence termination was a
repudiation of the Deed of Assignment. As a result, the plaintiff retained legitimate and
beneficial ownership of the land.
Garnishee Orders
In the case of BP(Sabah) Sdn. Bhd. v Syarikat Jubrin Entprise, the plaintiffs sought RM1
million from the defendant for the remainder of the purchase price for petroleum products
that were supplied and shipped. An injunction was issued, prohibiting Chung Khiaw Bank
(M) Bhd, Tuaran Branch, from dealing with the money left in the defendant's account. An
account could only be garnished if there was a credit balance in the account, according to the
ruling.
In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The court determined that serving a
garnishee order on a bank constituted a requirement on the bank to pay the customer's debt.
The bank is required to stop working with the customer's account before the garnishee
proceedings are completed. If the bank refuses to pay, the customer cannot claim.
In the case of Rekstin v Severo Sibirsko & Co., The judgement debtor ordered their bank to
close their account and move their current account to another entity to which they do not owe
anything. The transaction had been completed, but before the transferee had been notified, a
garnishee order had been issued. The court held that the bank and the judgement debtors
already had a banker-customer relationship at the time of operation, and that the bank owed
the judgement debtor a debt on which the order nisi could be enforced. At the moment the
garnishee order nisi was issued, the judgement debtor's instruction was revocable.
In the case of Bagley v Winsome & National Provincial Bank Ltd., In a county court, a
creditor won a judgement against a debtor for the amount of 32 pounds and 19 pounds owed.
The judgement debtor had 50 pounds in his National Provincial Bank deposit account. The
money on deposit was withdrawn by the judgement debtor. The judgement creditor issued a
garnishee summons on the same day, but the garnishee warrant was denied. There was,
however, an appeal. All withdrawals must be given 14 days' notice, according to the ruling.
On January 11, 1952, the notification went into effect.
In the case of Rogers v Whitley, the court held that the effect of attaching “all debts” owing
or accruing due by garnishee to the judgment debtor is to make the garnishee custodier for the
Court of the whole funds attached, he cannot part with any of those funds without authority
of the Court.
In the case of Heppenstall v Jackson, a creditor won a judgement against a debtor for the
repayment of a loan. Following that, the judgement creditor started garnishee proceedings
and served a garnishee summons on a bank where the judgement debtor had an account.
Sums paid into the bank after the garnishee summons was served were not considered an
accruing debt from the bank to the judgement debtor and were not tied in the garnishee bank's
hands.
In the case of Harrods Ltd v Tester, a husband had opened a bank account in his wife's name
and had made all of the deposits into the account. The account was used for a variety of
domestic and non-domestic purposes. Before drawing on the account, the wife had always
sought her husband's permission and given the bank a mandate to allow her husband to do so.
The account, however, was garnished by the wife's judgement creditors. The account was
determined to be a resulting trust for the husband, and as such, it belonged to him. As a result,
creditors were unable to garnish her account, despite the fact that it was in her title.
In the case of Fern v Bishop Burns, the judgments do not have a bond. Any cheques for
payment against cheques issued before the receipt of such proceeds /funds in the account
must be honoured by the debtor and the bank. When a bank is served with a garnishee order
nisi, the court held that if there is an express agreement between the bank and the customer
enabling customers to draw against uncollected cheques, the bank is required to reveal certain
information. When a judgement creditor tries to infer such an arrangement from a pattern of
behaviour, he bears the burden of evidence.
In the case of Plunkett v Barclays Bank, Plunkett was a solicitor with a Barclays Bank
account that held not only his clients' money but also probably his fees. When a judgement
creditor served a Garnishee Order on Barclays Bank, the bank signed the cheque "Refer to
Sender" when it was submitted to draw money from the account. This was determined to be
accurate since the funds in the account were combined with those of the Trustee and thus
could be garnished.
In the case of Re A Solicitor, Mr Lincoln, a solicitor, had given the Bank commitments to
keep those leases, but he did not have them. The court decided that two trustees should be
appointed, one to oversee the trust fund and the other to oversee the bankruptcy. As a result,
if the trustee went bankrupt, the trust property could be recovered by a garnishee order.
In the case of Cheong Heng Loong Goldsmiths (KL) Sdn Bhd v Chan Kim Swi @ Tung
Kim Swi & Capital Insurance Berhad (Garnishee), under a jeweller's block scheme, the
plaintiff, who is the insured, took out a policy from the defendant, who is the garnishee.
Under the terms of the policy, the garnishee undertook to insure and indemnify the insured in
the event of a robbery or hold-up. The plaintiff won a default judgement against the insured
for a sum of money, but the insured was unable to be located. As a result, the judgement
creditor filed garnishee proceedings and secured an ex parte order adding all of the
garnishee's debts to the insured. It was decided that the insurers' responsibility under a policy
could not be considered a debt.
In the case of Malaysian International Trading Corporation Sdn Bhd v RHB Bank Berhad,
a garnishment was attempted to the judgment debtor’s monies in fixed deposit accounts
pledged to a lending bank as security. The court held that if the monies had been assigned to
the bank prior to the grant of the garnishment order, the monies is not subject to garnishment.
A judgement creditor cannot garnish the judgement debtor's monies if the lending bank has a
prospective right of set-off over the judgement debtor's monies that have yet to crystallise.
Mareva Injunction
In the case of Mareva Compania SA v International Bulkcarriers SA, the plaintiff was a
shipowner who leased their vessel to the defendants for a long time. The defendants, on the
other hand, avoided paying charter fees, claiming they could no longer afford them. The loss
of the charter would have been very costly to the shipowners, who were unlikely to be able to
replace the income with another charter. Fees paid to the defendant by a third party that were
in a bank were the only assets available in England to satisfy the judgement. The judge issued
a temporary order freezing the defendant's bank account so that the plaintiffs could serve the
order on him. The defendant, though, could not be served right away, and the plaintiff was
concerned that the funds would be taken out of the country after the freezing order expired.
The plaintiff appealed for the order's duration to be extended. The court held that the court's
inherent power may be applied to retain assets to satisfy the judgement because the plaintiff's
argument was so solid. The court would have inclined to hear from both sides, but that
refusing to extend the injunction in the absence of arguments from the defendant would have
been unjust in the circumstance.
In the case of Zainal Abidin b Hj Abd. Rahman v Century Hotel Sdn. Bhd, plaintiff had
entered into a contract with the defendant corporation, which leased the plaintiff the entire
third floor of the Century Hotel building for three years to operate a recreational centre. The
plaintiff had done substantial upgrades and repairs to the property. The plaintiff, on the other
hand, claimed that the defendant had barred him and his agents from entering the premises.
Newspapers have stated that the defendant wanted to close the hotel's business and
appropriate the assets. The plaintiff sought a restraining order to prevent the defendant from
selling or moving the property. The counsel for the plaintiff had applied for a Mareva
injunction. The Federal Court held that the order had failed because the invocation of a
Mareva injunction must be based on a serious issue to be tried and a serious suspicion that
property would be excluded from the jurisdiction of High Court, which the case in question
lacked.
In the case of Prince Abdul Rahman b Turki Al Sudairy v Abu Taha & Anor, the plaintiff,
His Royal Highness Prince Abdul Rahman Bin Turki Al Sudairy, filed an action against the
defendants, Anwi and Beda, for breach of an verbal agreement involving the selling of a car
for 43,000 pounds. The judge in the case issued a temporary injunction prohibiting the
defendants from withdrawing their assets from the nation. The court decided that a Mareva
injunction could be issued even if the individual was based in the country if there was a risk
of assets being taken from the jurisdiction or otherwise dealt with in such a way that the
plaintiff's rights would be jeopardised.
Orders for Discovery & Inspection
In the case of Bankers Trust Co. v Shapira & Ors., the details is that two men presented two
counterfeit cheques totaling $1,000,000 USD, which they then deposited into their own
accounts. The plaintiff attempted to track down properties by contacting the banks involved.
It was decided that using the Norwich Pharmacol procedures to obtain details from the bank
in order to trace the assets was legal. The banks have a responsibility to support the plaintiffs
by providing full details and disclosure of the wrongdoers' information to them and the court.
According to Lord Denning, a plaintiff who has been deceived has a right in equity to trace
the money and to lift the banker's door latch.
Termination of Banker-Customer Relationship
In the case of Ng Cheng Kiat v Overseas Union Bank, the plaintiff's current account was
debited, and the bank closed the account. The plaintiff had not received notice from the bank
when the account was closed. The plaintiff deposited RM3200 into his account the next
month, which was approved by the bank. Later, the complainant drew two separate checks on
the account, which were dishonoured with the justification "Account locked," and he was told
to collect the RM3200 deposit refund. The first cheque was returned before the plaintiff was
aware that his account had been closed, and the second cheque was returned after the plaintiff
had accepted the termination. The plaintiff was only informed of his closed bank account as a
result of this case. The court decided that the bank had an obligation to honour the first
cheque because the plaintiff believed the account was still open. The court held it was
therefore libellous of the bank to print the words "Account Closed" because the bank had a
legal obligation to honour the account. The bank, on the other hand, had no obligation to
honour the second cheque because the plaintiff was unaware that his account had been
closed.
Customer Mental Disorder
In the case of Imperial Loan Co. v Stone, the facts were that the defendant, who was of
unsound mind, signed a promissory note as surety on which the plaintiff brought an action,
and insanity was used as a defence. The court held that the defendant must prove that he was
so insane at the time of doing the deed that he was incapable of knowing the ramifications of
the arrangement, and that his insanity was identified to the plaintiff in order to prevail on the
insanity defence.
In the case of Che Som b Yip & Ors. v Maha pl. & Ors, the other party must be aware of the
party's insanity in order for the defence of unsoundness of mind to succeed. The court held
that the other side had not been informed of the party's insanity. As a result, the defence was
defeated.
In the case of Drew v Nunn, the actual authority of an agent is terminated by the death or
supervening mental incapacity of either the principal or the agent: ‘The actual authority of an
agent, whether granted by deed or not, and whether expressed to be irrevocable or not, is
determined by the death or supervening mental incapacity of either the principal or the agent.'
He can, however, continue to have ostensible authority to bind the principal.