Papers on the law of banking

Most of the following papers appeared in slightly altered form in the Journal of Banking and Finance Law and Practice:

• PINS and Signatures - Bankers often compare the PIN to the signature on a cheque, but the law treats the two quite differently. It may be that the legal treatment of the PIN is more suitable to modern conditions.
• Secrecy vs s52 - Tournier imposes a duty of secrecy on a banker. Under certain circumstances s52 of the Trade Practices Act imposes a duty to disclose. These two duties may conflict.
• Crisp v ANZ: secrecy and s52 revisited - A specific example of conflicting duties.
• Does Tournier apply to Building Societies? - The Code of Conduct drafted by the Building Societies does not contain sections obliging the society to account confidentiality. The reason appears to be that Societies do not believe that the Tournier case is applicable. This paper examines that proposition.
• Southern Comfort - Rogers J takes a robust view of the obligations imposed under a letter of comfort.
• When Rules Collide: Liggett Meets Simms - The reasoning in Liggett's case (the "equitable defence") conflicts with that in Simms (recovery of money paid on a stopped cheque).
• Liability when following a valid mandate - It seems hard, but a banker has a duty to do more than merely follow a customer's mandate.
• The Mercedes Benz Case: Bad Business makes Hard Law and Part II of the same case - What a mess! Have a look at a case where everybody did it wrong.
• Payment under a mistake of law - The High Court finally removes the fact/law distinction for the recovery of money paid under a mistake of fact.
• Virtual Cash: payment over the Internet - Secure payment of very small sums - can it be done?
• Virtual Cash II - Part II of the above paper.
• Virtual Cash III - Part III of the discussion of digital cash.
• Computer Money - a paper presented at the First Australian Computer Money Day Conference, University of Newcastle, 28 March, 1996.
• Robbed! In a bank! - Is a bank liable when its customers are robbed on its premises?
• Smart Cards: some issues - Smart cards are coming: they are not governed by the EFT Code of Practice even though many of the issues seem distressingly familiar.
• Legal Problems of Electronic Clearing and Settlement - Cheque Truncation in Australia, validity of netting arrangements and more - paper presented at the Australian Banking Law Association Conference, Surfers Paradise, 31 May, 1996.
• Regulation of International Electronic Trading - paper presented at the Second Australian Computer Money Day Conference, March, 1997.
• Performance bonds and s51AA TPA - Can it be unconscionable to call on a performance bond? Well, yes.
• The Wallis Report - The Wallis Report has recommended substantial changes in the Australian financial system. Read about it here.
• S74, TPA and the EFT Code of Conduct - The EFT Code of Conduct does not apply to some of the new electronic payment systems. Could it be that section 74 of the Trade Practices Act provides similar consumer protection?
• Converting Bearer Cheques to Order cheques - Pressure from the banks has resulted in the repeal of section 23(1) of the Cheques Act 1986. Is this a great victory, or is it completely irrelevant?
• Regulating the payment system - Part 1 - In a time when "deregulation" seems to be the order of the day, it may seem strange to find that payment systems are coming under increasing regulation.
• Regulating the payment system - Part 2 - Consumer protection: consumers have not had much to say about the operation of the payment system - until recently.
• Regulating the payment system - Part 3 - Financial Stability: without it, there is no payment system. But how do we get it?
• Regulating the payment system - Part 4 - Regulating "Purchased Payment Facilities": PPF's are "regulated" by the Payment Systems (Regulation) Act 1998. Unfortunately, the statutory definition is hopelessly confused and the "regulation" does the wrong thing.
• The Legal Nature of Electronic Money - The principal argument in this paper is that stored value cards and other forms of electronic money are "distributed accounting systems" and fit squarely in the mainstream of traditional banking and payment law.
• Bankers' references and implied consent - Does the customer give implied consent for a banker to disclose information in a "bankers' reference"? The English Court of Appeal said "No".
• CLERP6 and Payments - The February 2000 release of the draft Financial Services Reform Bill, affectionately known as CLERP6, includes "non-cash" payments as a form of "financial product". Some consequences are discussed.
• E-commerce and retail banking - Discussion paper presented at the Banking Law Association meeting in 2000.
• Strategic alliances - some regulatory issues - Alliances between banks and other organisations raise special issues. This paper discusses a few of them.
• The "business of banking" - Confusion over the nature of Purchased Payment Facilities leads to an inept extension of an already poor definition.
• The Privacy (Private Sector) Amendments - Australia finally gets privacy legislation. What does it mean for most organisations?
• CMTs, FTRA, etc - Cash management trusts have considered themselves to be outside the scope of the Financial Transactions Reports Act 1988. The Australian Government Solicitor disagrees, although not always for the right reasons.
• Conversion of altered cheques - Can an altered cheque be converted? The English Court of Appeal gets it dreadfully wrong.
• Cheque washing - Part I - "Cheque washing" is the process of using chemicals to obliterate names or amounts on cheques and replacing them with new names or figures. This is part I of the discussion of Australian law.
• Cheque washing - Part II - The second part of the discussion of the Australian law applying to "cheque washing".
• CMTs revisited - The Australian Government Solicitor disagrees. I think the reasons are still wrong, but the end result may be the same. This article looks at the meaning of "signatory" and what it means to "collect cheques".
• The Australian Payments System - A sometimes critical look at the payments system System and its regulation. This paper appeared in (2000) 17 Banking and Finance Law Review 39.
• Riedell gets a credit card - the Riedell case taught us something about clearing house rules. What does it have to say about credit card payments?
• Unauthorised deposits - What is the effect of a stranger making a deposit to an account?
• Mistaken Internet payments - Electronic payment systems that require consumers to enter numbers are inherently error-prone. The systems should be designed, both physically and legally, to minimise these problems and to resolve them equitably and inexpensively. This paper examines the legal position and recommends practical measures for consumer protection.
• 20+ years of NZ and Australian banking law - a lightweight paper presented in 2003 at the 20th Anniversary conference of the Banking and Financial Services Law Association. I thought it was harmless, but it provoked complaints from some attendees. Even more amazing, the complaints were taken seriously. Go figure.
• Cheques obtained by fraud - the problem of determining the "true owner" of a cheque.
• International funds transfers - What are the obligations of a bank when making an international transfer of funds? This paper examines a New Zealand case that might have had a different outcome in Australia.
• Payment by credit card - An analysis of payment by credit card, arguing that Re Charge Card Services does not apply to most Australian credit card payments.
• Account opening and s95 - How to follow all the requirements of the FTRA when opening an account and still do it wrong.
• Simms revisited - Argues that payment on a stopped cheque should not be recoverable from the payee.
• Smart Cards and unclaimed money - Smart card "residuals", the sums remaining on an "electronic purse" which are too small to be spent, should be treated as unclaimed money under the principle in Thomas Cook (New Zealand) Limited v. Inland Revenue (New Zealand) [2004] UKPC 53 (10 November 2004). The Privy Council decision is being challenged in the NZ Courts: see below
• Informal funds transfer systems - Funds transfers which occur outside the "normal" banking system.
• Personal liability on business cheques - a director signs a company cheque; a partner signs a cheque drawn on the firm's account. Under what conditions can the director or partner be held liable as drawer?
• Electronic signatures - an English case considers the question of electronic signatures for the purposes of the Statute of Frauds.
• Fraud by design - The practice of accepting cheques for investment accounts allows large scale fraud.
• Standby Credits - Standby credits are often the ticking time bomb of a commercial relationship.
• AML/CTF and conversion of cheques - Section 95 of the Cheques Act 1986 provides bankers a statutory defence to a claim of conversion. The circumstances of opening the account has always been relevant to establishing the defence. What is the effect of the new AML/CTF rule?
• Final payment vs Mistaken payment - Some submissions to ASIC's review of the EFT Code of Conduct seemed to confuse the two notions.
• How not to write a cheque - Can a bearer cheque be converted into an order cheque? Can a bank have a lien on a cheque where the cheque does not belong to the customer?
• Mistake and qualified privilege - Can the banker's own mistake raise an occasion of qualified privilege? - UPDATE: the Court of Appeal has upheld the lower court decision in Aktas v Westpac Banking Corporation Limited [2009] NSWCA 9. See the discussion below in /"Qualified privilege: again"/
• The business of banking - The Banking Act 1959 defines "banking business" and then prohibits certain parties from carrying on "any banking business". What does this mean?
• UCP600: Article 14(h) - The Uniform Customs and Practices for Documentary Credits specifies that banks deal only in documents. What, then, should a bank do when faced with a credit containing a condition not evidenced by a document?
• Acceptance 'under reserve' in credit transactions - The UCP 600 does not mention acceptance 'under reserve'. Unfortunately, that does not mean that it is dead.
• Revocable credits and the UCP600 - The latest revision of the Uniform Customs and Practices for Documentary Credits does not explicity recognise revocable credits. Are they still possible?
• Qualified privilege: again - The Court of Appeal affirms the lower court decision in Aktas. In NSW, It is now almost impossible to sue a bank for defamation when a cheque is wrongfully dishonoured. NOTE: The High Court allowed the appeal. See Aktas v Westpac Banking Corporation Limited [2010] HCA 25.
• The EFT Code and mistaken payments - ASIC is reviewing the EFT Code of Practice. It has indicated that mistaken payments will be covered by the new Code. This paper discusses a few of the issues.
• Unclaimed money: again - Westpac asked the High Court of New Zealand to review the decision of the Privy Council in Thomas Cook. Surprisingly, the Court did so. UPDATE: The NZ Court of Appeal has affirmed the decision: see Westpac Banking Corporation v The Commissioner of Inland Revenue [2009] NZCA 24. An appeal to the NZ Supreme Court is expected to be heard early 2011. FURTHER UPDATE: the Supreme Court has affirmed the decision: see Westpac, BNZ and ANZ National v CIR [2011] NZSC 36.
• Delivery of cheques by a stranger - "If A procures from B, by means of deception, a cheque in favour of C, which is delivered to C who receives it bona fide, without notice and for value, C will obtain title to the cheque on which B remains liable to C." But suppose A says to C "Hold this for the account of my wife." The NSW Court of Appeal in Heperu says "It makes no difference." UPDATE: The High Court granted leave to appeal. The case was settled the day before judgment was to be delivered.
• Contactless cards and the EFT Code - Several banks have introduces cards that are "contactless". They contain a small "RFID" chip which allows them to be used by "swiping" near, but not necessarily touching, a reading terminal. This note explains the operation of the card and the protection offered by the existing and future EFT Code of Conduct.
• Collecting bank's duty of care - Does the collecting bank owe a duty of care to the drawer of a cheque? Some Canadian cases have said "no", but the reasoning does not seem to apply to Australia.
• Collection of third party cheques - Some banks claim the right to refuse to collect so-called third party cheques. The claim, and the practice, are probaby a breach of statute law.
• Internet banking fraud - The Internet is a dangerous place. Here is a sad tale about banking on the Internet.
• Bitcoin - Digital cash never took off as expected. Bitcoin is digital cash with a difference: it is anonymous and not connected to any financial institution. This paper has been translated into Slovak by Barbora Lebedova and is available at https://www.bildelarexpert.se/blogg/2017/12/05/bitcoin/
• Payment by cheque - It is not necessary for the debtor to accept a cheque in payment, but if it is accepted, the time of payment is when it is handed over, not when the cheque is honoured by the paying bank.
• Duty to question a valid mandate - A bank must question a valid mandate in certain circumstances, but it can go horribly wrong.
• Verification clauses - the normal banker-customer contract does not impose a duty on the customer to read the bank statement. In some countries, banks have introduced a contractual term requiring the customer to verify the statement. This note looks at the use and limits of so-called 'verification clauses'.
• Deferred payment letters of credit - deferred payment letters of credit are sometimes used in those jurisdictions which still have stamp duty on bills of exchange. The UCP600 attempts to give deferred payment credits the same status as acceptance credits.
• Silent confirmation - 'Silent confirmation' is a contract between the nominated bank and its customer who is the beneficiary of a letter of credit. Silent confirmation is not confirmation and almost always allows recourse against its own customer in the event of the letter of credit not being paid immediately. Since this note was published, the Full Court of the South Australian Supreme Court has allowed an appeal by the bank: Commonwealth Bank of Australia v Greenhill International Pty Ltd [2013] SASCFC 76.
• Interpreting the UCP - Like any other document, the Uniform Customs and Practice for Documentary Credits (UCP) requires interpretation. Because of its international nature, interpretation of the UCP is sometimes said to be subject to special rules.
• Fees and Penalties - Round and round she goes. The issue has now been heard by the High Court and we await judgment
• Performance bonds: preventing payment - Some recent decisions seem to make it trivial to prevent payment of a performance bond. If the trend continues, a performance bond is no longer "as good as cash".
• BEA games - Information gleaned from the Internet is not always reliable. See some arguments about bills of exchange that will make your head spin.
• The Code of Banking Practice in the Courts - The banks claim to abide by the Code, but when push comes to shove, they argue that it is not binding. Sometimes the courts agree.
• Banking practice, clearing house rules and a payment gone wrong - A bank used a second class payment system, a misleading form and then relied on a banking practice that the customer could not have known about. The English Court of Appeal agreed with the bank. Really.
• Tournier unbound - Is it possible that a sex worker may rely on Tournier but a guarantor cannot? So it seems.
• - Is Liggett dead or just feeling poorly? - What is the scope of the Liggett defence? It's not near as wide as bankers would like.
• Bitcoin's identity crisis - Bitcoin advocates like to call it a "currency". But if not a currency, what is it?
• BIS v Bitcoin - The Bank of International Settlements publishes a report on Bitcoin. They don't like it. Bitcoin has some comments about the BIS. They don't like it.
• Blockchains: the basics - The hype about blockchains is everywhere. This is the first in a series explaining how they work and what uses they might have.
• Blockchains: Permissioned blockchains - The Bitcoin public blockchain is almost useless for most applications. The private, aka "permissioned" blockchain is often seen as the answer. It may be an answer in search of a problem.
• Blockchains: Immutability - Can a blockchain be altered? Enthusiasts say "NO!", and they may be right in a practical sense. The problem is that immutability may not be a good thing. In some applications, it may be illegal.
• CBDC - Central banks around the world are considering the issue of digital currencies. Why?
• International Payments Gone Wrong - Can an international payment be held on trust? Possibly, but it will be very unusual.

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