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Russell v Scott (1936)

Australian case.

“[t]he right at law to the balance standing at the credit of the account on the death of [the deceased party] … vested in the survivor”

Regardless of the beneficial ownership, the legal ownership means that the bank can obtain a good discharge from the survivor (Aroso v Coutts and Co 2002)

Account set up for convenience of administration

Marshall v Crutwell

Held, that the transfer of the account was not intended to be a provision for the Plaintiff, but merely a mode of conveniently managing her husband's affairs when he fell in poor health

Steele v Steel 2001

common pursue

This is likely in domestic situations where the individuals will pool individual income and then draw freely on the account.

This is assumed with husband and wife.

This can be rebutted if there are special circumstances in the case.

She tried to argue the account was set up for administrative convenience but this was not established on the facts.

Steele v Steele

Might arise where both parties get the account when neither intend to gift their contribution to the other. Both contributed in circumstances where both are trying to keep accounts of how it operated.

Tenancy in common

In law joint tenants- severance

Converting beneficial joint tenancy into tenants into common so that they hold shares separately which they can dispose of, Might arise where both parties get the account when neither intend to gift their contribution to the other.

Aroso v Coutts & Co [2002]

The deceased had transferred substantial amounts into an account in the joint names of himself and a nephew.

The evidence showed that the terms of the bank mandate were very clear and had been drawn to the deceased’s attention by the bank.

The deceased had intended that the nephew would not be able to draw on the funds whilst he was alive, but that the funds would pass to him by survivorship when on the uncles death.

At law: beneficial joint tenancy

At equity: there was a resulting trust in favour of the uncle during his lifetime.

The effect was that the presumption of the resulting trust was displaced and the balance in the account passed by survivorship to the joint account holder.

Such a presumption would have been inconsistent with the donors intention.

Analysis in Russel v Scott was accepted

payment made to either of the joint creditors will discharge the debtor’s liability to the other. As against the debtor it is as if there is a single creditor to whom he or she is liable.

Two joint account holders: any balance in the account represents a debt owed to the account holders jointly. Debt is a legal right which the customers co-own. This is a point made by FOX.

chose in action

Exceptional liability for breach of a contractual duty of care, or …?

Fielding v Royal Bank of Scotland

However, on the footing that the Bank was acting in accordance with the mandate … the breach of duty claim can only succeed ... if there had... come a time when [the bank] had some reason to suppose that the mandate was being abused.” ([108).

Within mandate

Fielding v Royal Bank of Scotland [2004]

The bank’s general liberty to act in accordance with its express mandate

within express terms: Absent some such self-imposed limitation, of which the bank is on notice, it is … no concern of the bank how a husband and wife choose to operate the joint account

[I]f there were scope for some such implication banks would in practice be placed in an extremely difficult, if not impossible, position, and joint accounts as between husband and wife would rapidly become a thing of the past.” ([101]-[102])

Facts

expressly authorise RBS to debit the account for all payment instructions whether the account was in credit or overdrawn.

she was trying to argue that the facts were so exceptional that it should have provided the bank with NOTICE that the withdrawals were not authorised. Terms of banks mandate so explicit that this was rejected.

Additionally, in the ordinary course bank can assume that husband and wife authorise each other transactions. Nothing inherently to draw banks attention to the fact private understanding between them.

Catlin v Cyprus Finance Corporation (London) Ltd [1983] QB 759, 771 following Jackson v White and Midland Bank Ltd (where it was held that, by the mandate,that that bank must act on joint instructions, the bank impliedly assumes a contractual duty jointly and severely not to act on the instructions on one of the joint account holders.
Having honoured cheques not signed by the plaintiff but forged by the other customer, the bank had acted outside its mandate. It was liable to the plaintiff for breach of the separate agreement.

Remedial Consequences

Thus in Catlin the claimant suffered a loss to the extent of her half-share interest in the funds in the account, reduced only by her half-share interest in the sum of £897.26 which remains.”

Catlin v Cyprus Finance Corporation

the measure of damages is prima facie equal to the value of the claimant's interest in the moneys wrongfully paid away

Jackson v White & Midland Bank Ltd

Catlin v Cyprus Finance Corporation (London) Ltd

jointly and severally entitled to the credits and liable for the debits

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