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Customs Commrs v. NatWest Bank
QBD 18/10/02
[2002] EWHC 2204 (QB)
On my website and elsewhere

A company called CDL pay some £46,000 in tax, but it is subsequently agreed that the money should be re-paid. By this time however CDL are in dispute with their bank, NatWest, and they direct Customs & Excise to re-pay the money to CDL's solicitor. Then:

1/ By mistake, Customs & Excise pay the money to CDL's account at NatWest. NatWest apply this sum in reduction of CDL's (considerable) overdraft.

2/ CDL point out the error, and Customs & Excise make a second re-payment to CDL's solicitors.

Customs & Excise then sue NatWest for restitution of the first attempt at re-payment. NatWest plead payment for good consideration.

HH Judge Rich holds that NatWest cannot be said to have CDL's authority to accept the payment, and therefore they have no defence to the claim. "[T]here is no general rule which enables [counsel for NatWest] to say that the defendant is, merely by virtue of holding a current account for CDL, authorised to receive payment from the Customs & Excise on CDL's behalf so as to discharge their debt to CDL. No specific authorisation is suggested" (para 15).

Steve Hedley

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FACULTY OF LAW, UNIVERSITY OF CAMBRIDGE

ansaphone : +44 1223 334931
www.stevehedley.com
fax : +44 1223 334967

Christ's College Cambridge CB2 3BU
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