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Rights and Duties of Banker and Customer (Duties of B (Duty of Secrecy (i.…
Rights and Duties of Banker and Customer
Rights
of B
charge
commission or service charge
charge
interest
expresse agreement between BC
implied agreement based on previous dealings
Duties
of B
receive money and collect
cheques
- credit C acc
i. B -
reasonable care and diligence
- secure payments
Bank is liable if C suffer loss resulting from delay of clearance of cheque
ii.
prompt notice
to C if cheque for payment is
dishonoured
honour
cheques and pmt
;
not to pay w/o valid authority
Conditions
:
sufficient fund in account
cheques drawn is proper, clear, unambigous form
no legal bars to pmt (x garnishee order)
banking hour @ reasonable time after closing
Wrongfully dishonour cheque
defamation - x prove actual loss, libel, e.g. B - customer no money
breach of contract - bizman - x prove; x bizman - prove only can recover
Countermand of payment
(inform x honour cheque)
information in countermand:
when cheque was issued
person payable
amount
cheque number
Oral countermand
- effective only if bank can prove authenticity
Non-face to face countermand
(phone or fax)
B x bound to law if doubt on authenticity of instructions
Duty of
Secrecy
i. begins when r/s form
ii. info B obtain from other source
iii. cont' even if termination on b-c r/s
Exceptions:
a. disclosure allowed by law
b. owes duty of disclosure to public
c. interest of bank
d. customer give express or implied consent
FSA Def
: S.132(1)(a)(b); S.133(1)(a)(b); S.133(3); S.143(7)
Disclosure Allowed (FSA)
S.73(1), (2), S.133(2)
Disclosure under Anti-Money Laundering and
Anti-Terrorism Financing Act 2001 (
AMLA
)
Avoid committing or helping with money laundering
File
Suspicious Transaction Report
Garnishee Order
Rights of C
draw cheques
interest
repayment
Duties of Customer
Macmillan Duty
reasonable care
in drawing cheques -
x facilitate forgery
London Joint Stock Bank v. Macmillan and Arthur
C - reasonable
care
C ensure cheque cannot be fraudulently
altered
C negligent - leaving
black spaces
around amt figure and figures subsequently altered
Slingsby v Distric Bank Ltd
Greenwood Duty
disclose any forgeries
promplty after aware
Cases
Greenwood v. Martin Bank
signed cheque forged, inform bank x delay
if remain silent, amount to a representation the forged cheques are in order
B entitled to debit for pmt for forged cheques before discovery
Proven Development Sdn Bhd v. HSBC
inform bank any irregularities once aware
if fails to do so, estoppel and cannot sue bank for loass