Restitution Discussion Group Archives
| Sender: |
Charles Mitchell |
| Date: |
Fri, 14 Mar 2003 10:35:35 |
| Re: |
Natwest v Papamichael |
Jonathon Moore has written to remind me that on his approach
a bank can rely on the defence of ministerial receipt where a third party
pays money to the bank for the benefit of an account-holder, but a bank
cannot rely on the defence where it has been paid money by an account-holder
for his own account, as in these circumstances the bank takes beneficially.
In Papamichael,
the husband opened the forex margin trading account in his own name, and
then arranged for funds to be transferred via EFT from the joint account
(which was operated by another bank) to the forex account. The husband
was legally entitled to do this as a joint account holder, albeit that
his actions were inconsistent with his wife's equitable rights, and the
judge held that he could not be said to have acted with actual or apparent
authority of his wife when he arranged for the transfer. As I understand
him, Jonathon would therefore say that the bank must have taken beneficially,
with the result that no defence of ministerial receipt would be available.
On another point, I was not quite accurate when I said
that the judge did not appear to have tested whether the bank's employee
had acted with conscious dishonesty, since he held at para 251 that:
By the application of the double test
contained in the above passage [from Lord Hutton's speech in Twinsectra]
Mr Makris was dishonest with the consequence that the bank must also
be so held.
What I meant to say, more exactly, was that although
the judge purported to apply the Twinsectra test, it is unclear
which facts led him to the conclusion that the bank's employee had been
conscious of his own dishonesty. The judge does not point to any particular
statement by the employee as proof that the employee had consciously considered
the propriety of his actions, realized that he was acting improperly,
and decided to press on regardless. The impression is therefore created
that the judge thought that the employee 'must have known' because the
dishonesty of his behaviour would - or even should - have been obvious
to anyone in his position. If this was the judge's approach then it seems
to me to water down the Twinsectra test quite considerably.
Charles
<== Previous message Back to index Next message ==>
»
»
»
»
| For
editorial policy, see here. For the unedited archive, see here. The archive editor is Steve Hedley. |
