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.