Thanks John, Andrew and Sarah- nice to see that the answer wasn't as
simple as I feared it might be!
One thing I should mention is that one or two folk have off-list
suggested that the answer is an action based on money had and received
or generally on unjust enrichment principles. Since my knowledge of this
area is deeply deficient I would be happy to have any suggestions for
cases that might come from this area. Clearly in a general sense the
fraudster has been unjustly enriched at the expense of the cardholder-
but is that enough?
On the conversion issues- thanks for the "cheque" cases, John, I will
have a more detailed look at those. I think the valuation point I made
before may still be an issue (ie no determined face value). Andrew, I
like the suggestion of "causing loss by unlawful means". In terms of the
OBG v Allen analysis (which seems to be becoming accepted by Australian
courts as well) there is a an action (deceit) which would be wrongful if
sued on by the third party (the bank) if there had been any loss; it
interfered with an economic interest in the 3rd party's behaviour of the
cardholder; it was arguably done with intention that it would cause
economic loss to the cardholder. But if Lord Hoffmann is to be followed
is there "interference of the freedom of the 3rd party to deal" with the
card-holder. This last criterion seems not satisfied here.
I take your point that it is a bit tricky to specify precisely what
"chose in action" is at issue here, Andrew. One would like to say
something like "the right to get cash or goods on credit". But that
sounds a bit too "fuzzy". There may be someone who can come up with a
better formulation. Maybe it would be simpler as I first suggested to
say that there is conversion of either the banknotes or the goods
obtained.
Thanks Sarah, I need to go back and have another look at your article
in LQR. I agree that it seems odd that there are probably a number of
fairly ordinary sounding criminal offences that have been committed
here, but it seems so hard to pin down a straightforward tort action.
Regards
Neil



Neil Foster
Associate Professor,
Newcastle Law School;
University of Newcastle
Callaghan NSW 2308
AUSTRALIA
MC177, McMullin Bldg
ph 02 4921 7430
fax 02 4921 6931

http://www.newcastle.edu.au/staff/profile/neil.foster.html

http://works.bepress.com/neil_foster/

http://simeonnetwork.org/testimonies/119/Neil_Foster









>>> Andrew Tettenborn <A.M.Tettenborn@swansea.ac.uk> 02/07/13 8:51 PM
>>>
I take Sarah's point (as anyone interested in conversion is always
well-advised to do). But

(1) If the account is overdrawn what's the chose in action involved?
(2) Conversion involves complete destruction or exclusion: partial
damage or impairment of use won't do. Suppose I have £1,000 in my
account and the fraudster withdraws £500. Here we have neither complete

destruction nor complete exclusion. True, in theory you can divide up
my
£1,000 balance into 2 tranches of £500 and say one of them has gone
while the other remains: but that's not very convincing.

Andrew


On 07/02/13 09:29, Sarah Green wrote:
>
> It should be a conversion in my (probably deeply unpopular) view - by

> analogy with the cases mentioned by John and, on the basis that a
> chose in action has only one “life”.Once it has suffered an
> interference which exchanges it in favour of an employment of the
same
> value elsewhere, it disappears.In other words, where an interferer
> uses such a chose as a means of exchange in his own favour, what
> actually happens is that the original chose in action ceases to
> exist.As with all transactions of the this type, the original chose
is
> not assigned to anyone, but extinguished in favour of the creation of

> a new chose in action elsewhere. This is a process of novation rather

> than transfer. So, even in circumstances in which the customer is
> indemnified, the practical effect of this is that it creates a chose

> in action of the same value:it is not possible for it (or for anyone)

> to recover the original chose in action.In terms of the chose of
> action which was interfered with, the original parties to it have
both
> been excluded from it. This should suffice for a conversion.
>
> I have peddled similar heresies before (LQR sometime last year) -
> specifically by way of comparison with theft (which recognises with
> apparent ease that one can be permanently deprived of such a chose,
> despite tort's current refusal to accept that one can be excluded
from
> the same!)
>
> **
> *Sarah Green*
> *Fellow in Law*
> *St Hilda's College*
> *Oxford*
> *OX4 1DY*
> **
> *sarah.green@law.ox.ac.uk <mailto:sarah.green@law.ox.ac.uk>*
> **
> *01865 286661*
> **
> http://www.law.ox.ac.uk/profile/sarah.green
>
------------------------------------------------------------------------
> *From:* Andrew Tettenborn [A.M.Tettenborn@swansea.ac.uk]
> *Sent:* 07 February 2013 08:48
> *To:* John Randall QC
> *Cc:* Nathan TAMBLYN (Faculty of Law); Neil Foster;
obligations@uwo.ca
> *Subject:* Re: Conversion of credit card?
>
> John must be right where the card is converted. Where it isn't the
> action for deceit / fraud, i.e. taking money out of the bank by
> defrauding the bank with the knowledge that this will cause loss to
> the customer (if for some reason he can't plead "no authorisation")
> won't work since this tort requires reliance by the plaintiff: cf
> Tackey v McBain [1912] A.C. 186. But there might be an action for
> misuse of confidential / private information. Or possibly the
economic
> tort of causing loss by unlawful means, the unlawful means being the

> fraud practised on the bank.
>
> I have doubts whether conversion would work, even if the (indubitably

> correct) OBG had gone the other way and allowed the action in respect

> of choses in action. Further and better particulars, please, on what

> chose in action has allegedly been converted?
>
>
> Andrew
>
>
>
>> So far as the common law’s response to this problem as between the

>> credit card holder and the thief/fraudster is concerned, Neil’s
>> suggested analysis (an artificial measure of damages for conversion

>> of – or possibly only a transient trespass to? - a small
rectangular
>> piece of plastic) could derive some support from cases such as
>> Morison v London County and Westminster Bank [1914] 3 KB 356 (CA),
AL
>> Underwood Ltd v Bank of Liverpool and Martins [1924] 1 KB 775 (CA)
>> and Lloyds Bank v The Chartered Bank of India, Australia and China
>> [1929] 1 KB 40 (CA) which apply an artificial measure of damages for

>> conversion of nearly as small a rectangular piece of paper (aka a
>> cheque) [some discussion of the same appears at pp36-38 & 184-85 of

>> Sarah Green’s and my book on Conversion].
>>
>> However as Nathan observes, given the HL’s decision to reject
>> conversion of intangibles in OBG v Allan, even that legal sleight of

>> hand falls short where there is no physical interference at all with

>> the credit card itself. Quaere the exact legal nature and extent of
a
>> civil action for “fraud”?
>>
>> John
>>
>> JOHN RANDALL QC
>>
>> St Philips Chambers
>>
>> 55 Temple Row
>>
>> BirminghamB2 5LS
>>
>> www.st-philips.com <http://www.st-philips.com/>
>>
>> Tel +44 (0)121 246 7000 (DDI 246 2126)
>>
>> Fax +44 (0)121 246 7001
>>
>> Email jr@st-philips.com <mailto:jr@st-philips.com>
>>
>>
------------------------------------------------------------------------
>>
>> *From:*Nathan TAMBLYN (Faculty of Law) [mailto:tamblyn@cuhk.edu.hk]
>> *Sent:* 07 February 2013 01:53
>> *To:* Neil Foster; obligations@uwo.ca
>> *Subject:* RE: Conversion of credit card?
>>
>> The problem becomes more acute when it is not the physical credit
>> card itself which is stolen, but merely its details.
>>
>> These cases are often described as 'identity theft', which I think
is
>> a sneaky way of banks transferring the problem onto the credit card

>> holder. But the problem should not be the credit card holder's. What

>> happens thereafter is fraud: the thief uses the card pretending to
be
>> the authorized holder when he is not. That fraud is perpetrated on
>> (i) the credit card company, and (ii) the shop (say) which takes the

>> card in exchange for goods. The credit card holder is entitled to
say
>> to the credit card company, because it is true, you have deducted
>> from my account something which I did not authorize, nor given me
>> anything in exchange, so I will not pay that bill.
>>
>> What about the allegation that the PIN was not secure?
>>
>> First, how can the credit card company prove that? Just because the

>> card was used, I do not think it follows that the PIN was not
secure.
>> Very sophisticated technology exists to obtain PIN numbers. My
credit
>> card was skimmed once and used successfully, and my PIN is written
>> down nowhere, and known only to me. (Fortunately the bank blocked
the
>> transaction.)
>>
>> Second, any allegation of tortious negligence on the part of the
>> credit card holder is irrelevant; when A perpetrates a fraud on B,
>> any negligence by C is irrelevant to that claim.
>>
>> Third, perhaps the proper analogy is with someone who writes a blank

>> cheque then used by a rogue to draw down more money than the writer

>> anticipated. That, I think, is a breach of contract by the cheque
>> writer to the bank. So perhaps an insecure PIN is a breach of
>> contract to the credit card company which, if they can prove it,
>> would allow them to authorize the deduction.
>>
>> Finally, how can the credit card holder recover from the thief? The

>> thief stole from the credit card company. The credit card holder has

>> to indemnify the company through its breach of contract. The credit

>> card holder gets subrogated to the position of the credit card
>> company and can sue the thief in fraud.
>>
>> Nathan
>>
>> **Nathan Tamblyn**
>>
>> //MA (Oxford) LLM PhD (Cambridge) Barrister//
>>
>> //Assistant Professor, Director of the LLM in Common Law//
>>
>> //Faculty of Law, Chinese University of Hong Kong//
>>
>> www.law.cuhk.edu.hk <http://www.law.cuhk.edu.hk/>
>>
>>
------------------------------------------------------------------------
>>
>> *From:*Neil Foster [mailto:Neil.Foster@newcastle.edu.au]
>> *Sent:* Thu 07/02/2013 09:07
>> *To:* obligations@uwo.ca
>> *Subject:* ODG: Conversion of credit card?
>>
>> Dear Colleagues;
>>
>> Occasionally one finds that everyday transactions are unusually
>> difficult to analyse in tort categories- or perhaps it is a defect
in
>> the law. The question that came up today is, what tort remedy is
>> available to Y against X where X steals Y's credit card and then
>> appropriates a large sum of money (say $5000)? I think I can see a
>> way of arguing that there could be an action in conversion against
>> the wrongdoer (or trespass to goods) based on the touching or taking

>> control of the card, and then one could argue that the stolen money

>> was damages that flowed from that initial wrong. (Let us assume for

>> the moment that the bank concerned will not provide a refund
because,
>> for example, the PIN was not properly secured.) But this seems very

>> artificial. Perhaps one could also say that if banknotes were taken

>> from an ATM, then there is a conversion because the notes at the
>> point of emerging were to be deemed to be the property of the
account
>> holder? (But even that seems a bit odd.)< /DIV>
>>
>> One would like to say there is conversion of the value stolen, on
>> analogy with the rule allowing conversion actions in relation to
>> cheques, but are there any cases that say so? The difference from a

>> cheque, of course, is apparent- there is no "face value"- although
>> one could in theory perhaps regard the card as "worth" the maximum
>> credit limit. Still, this would be odd where less than the maximum
>> had actually been spent. Or were the minority in /OBG v
>> Allen/ correct to say that conversion should apply to intangible
>> property these days since many people would not physically touch
cash
>> in most transactions?
>>
>> If conversion is not applicable, it seems to me surprisingly tricky

>> to identify another appropriate tort action (though perhaps I am
>> missing something obvious.)
>>
>> Regards
>>
>> Neil
>>
>> Neil Foster
>> Associate Professor in Law,
>> Newcastle Law School;
>> Faculty of Business & Law
>> University of Newcastle
>> Callaghan NSW 2308
>> AUSTRALIA
>>
>> Room MC177,
>>
>> McMullinBuilding
>> ph 02 4921 7430
>> fax 02 4921 6931
>>
>> http://www.newcastle.edu.au/staff/profile/neil.foster.html
>>
>> http://works.bepress.com/neil_foster/
>>
>> http://simeonnetwork.org/testimonies/119/Neil_Foster
>>
>>
>>
>> /Scanned by MailDefender - managed email security from intY -
>> www.maildefender.net/
>>
>
> --
>
>
> *Andrew Tettenborn*
> /Professor of Commercial Law, Swansea University/
>
> School of Law, University of Swansea
> Richard Price Building
> Singleton Park
> SWANSEA SA2 8PP
> Phone 01792-602724 / (int) +44-1792-602724
> Fax 01792-295855 / (int) +44-1792-295855
>
>
>
> *Andrew Tettenborn*
> /Athro yn y Gyfraith Fasnachol, Prifysgol Abertawe/
>
> Ysgol y Gyfraith, Prifysgol Abertawe
> Adeilad Richard Price
> Parc Singleton
> ABERTAWE SA2 8PP
> Ffôn 01792-602724 / (rhyngwladol) +44-1792-602724
> Ffacs 01792-295855 / (rhyngwladol) +44-1792-295855
>
>
>
> *Lawyer (n):*One versed in circumvention of the law (Ambrose Bierce)
>
>
>
>
>
>
> ***
>
>

--


*Andrew Tettenborn*
/Professor of Commercial Law, Swansea University/

School of Law, University of Swansea
Richard Price Building
Singleton Park
SWANSEA SA2 8PP
Phone 01792-602724 / (int) +44-1792-602724
Fax 01792-295855 / (int) +44-1792-295855



*Andrew Tettenborn*
/Athro yn y Gyfraith Fasnachol, Prifysgol Abertawe/

Ysgol y Gyfraith, Prifysgol Abertawe
Adeilad Richard Price
Parc Singleton
ABERTAWE SA2 8PP
Ffôn 01792-602724 / (rhyngwladol) +44-1792-602724
Ffacs 01792-295855 / (rhyngwladol) +44-1792-295855



*Lawyer (n):*One versed in circumvention of the law (Ambrose Bierce)






***