Australia and New Zealand Banking Group Ltd v Qing Li [2000] FJHC 34; Hbc0614j.98s (1 March 2000)

Fiji Islands - Australia and New Zealand Banking Group v Qing Li - Pacific Law Materials

IN THE HIGH COURT OF FIJI

At Suva

Civil Jurisdiction

CIVIL ACTION NO. 0614 OF 1998

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Between:

AUSTRALIA AND NEW ZEALAND

BANKING GROUP

Plaintiff

- and -

QING LI

Defendant

Mr. S. Parshotam for taintiff

Mr. Robinson Prasad for the Defendant

JUDGMENT

This is an application for summary judgment under Or.14 r.1 of the High Court Rules 1988 in which the plaintiff claims the sum of $21,000 `... for the damage suffered by the plaintiff as a result of the defendant wrongfully drawing monies from (a) bank account maintained ... with the plaintiff and converting the same to his own use’. Alternatively, the plaintiff claims `for money payable to the plaintiff by the defendant for (sic) monies received by the defendant for the use of the plaintiff’.

The claim relates in counsel’s submissions, to a chequeing account maintained at the plaintiff bank by China Tianjin International Economic and Technical Co-operative Corporation (`CTI’) out of which monies totalling $21,000 was withdrawn by means of three (3) forged cheques presented by the defendant fraudulently and without the authority of `CTI’. In respect of these three (3) cheques the plaintiff claims the defendant was subsequently charged and convicted in the Magistrates Court and has unsuccessfully appealed his conviction to the High Court.

p class=MsoNormal stal style="text-align: justify; margin-top: 1; margin-bottom: 1"> The plaintiff subsequently repaid to `CTI’ the face value of the cheques ($21,000) her with interest thereon aeon and this is the loss the plaintiff claims it suffered as a result of the defendant’s actions.

In a proposed Statement of Defence filed on his behalf, the defendant although admitting to receiving the proceeds of the cthe cheques, denies any knowledge of the forged nature of the cheques or any intent to defraud anyone in their encashment. He further claims that the plaintiff’s employees were negligent in encashing the cheques without properly verifying the signatures on them.

In opposing the application defence counsel submitted that
precluded the plaintiff’s application inso insofar as the plaintiff’s claim was : `(b) an action which includes a claim by the plaintiff based on an allegation of fraud.’ That this is so is clear in counsel’s submission from an examination of the plaintiff’s Statement of Claim in particular paras.7, 8 & 11. In counsel’s words `the Statement of Claim reeks of fraud, forgery and conversion ...’

ass=MsoNormal stal style="text-align: justify; margin-top: 1; margin-bottom: 1"> Plaintiff’s counsel on the other hand dismisses defence counselaim as superficial insofar as the plaintiff’s claim as ples pleaded is `based on a cause of action for monies had and received which the defendant was not entitled to receive and/or use for his own purposes ...’ and counsel says that the criminal proceedings in which the defendant was convicted for criminal offences that undoubtedly involve an `intent to defraud’ are relied upon in the present claim solely to establish that the three (3) cheques were in fact forgeries (which is not seriously disputed by the defendant) and not that the defendant was necessarily fraudulent in presenting them.

In other words even if one accepts tfendant’s claim that he did not commit the forgeries and knew nothing about them, the fact fact remains that the cheques are forgeries and monies were paid out to the defendant by the plaintiff’s employees in the mistaken belief that they were genuine.

Such payments Counsel submits, were plainde on the basis of a `mistake of fact’ on the part of the plaintiff’s servantrvants as to the genuineness of the signatures on the cheques and are accordingly recoverable in a claim in `quasi-contract’ or restitution as being money paid under a `mistake of fact’.

In the leading authority of Kelly v. Solari (1841) 60 RR. 666 Parke B. laid down the general rule when he said at p.670 :

`I think that where money is paid to another under the influence of a mistake that is, upon the supposition that a specific fact is true, which would entitle the other to the money, but which fact is untrue, and the money would not have been paid if it had been known to the payer that the fact was untrue, an action will lie to recover it back, and it is against conscience to retain it ; though a demand may be necessary in case in which the party receiving may have been ignorant of the mistake.’

and later in rejecting the suggesthat carelessness on the part of the payer might preclude such a claim, his lordship said:

ass=MsoN=MsoNormal style="text-align: justify; margin: 1 36.0pt"> `... if the money is paid under the impon of the truth of the fact which is untrue, it may, generally speaking, be recovered back,back, however careless the party paying may have been, in omitting to use due diligence to inquire into the fact. In such a case the receiver was not entitled to it, nor intended to have it.’

In light of the foregoing and having carefully considered the competing submissions of counsels I rethis preliminary technical ical objection raised by defence counsel.

In so rejecting it I am satisfied that Or.14 r.1(2)(b) is not necessarily enlivened by the mention of the word `frb>`fraud’ in the pleadings as appears to be suggested by defence counsel nor does it necessarily mean that the claim is `based on an allegation of fraud’.

In the not dissimilar case of Barclays Bank Ltd. v. Cole (1967)B. 738 where there was a bank robbery and the robber haer had paid-in part of the stolen proceeds into another branch of the same bank and the bank sued the robber to recover the stolen monies after the robber had been convicted of robbery and the robber had claimed that the bank’s claim was one based on an allegation of fraud, the court in rejecting the robber’s claim held : that `fraud’ (in the rule) is used in its ordinary and primary sense of deceit i.e. where the plaintiff alleges that the defendant has made a false representation, and not as referring generally to dishonesty.

Furthermore in Everett v. Islington Guardian (1923) 1 K.B. 44 it was held : that where an allegation ofon of fraud does not involve the court in having to decide whether fraud has taken place before the rights of the parties can be determined, that allegation will not suffice to prevent the plaintiff from applying for judgment under Order 14.

I turn next to consider whether, in the words of Order 14(3), the dent in his affidavit showing cause and proposed Statemtatement of Defence , has raised :

`... an issue or question in dispute ought to be tried ...’

In this regard defence counsel when questioned by the court stated that the defence pleaded was : `absence of knowledge of the forgeries and negligence on the part of the bank’s employees’ , and the `triable issues’ raised were : `negligence of bank employees and whether or not the cheques were forgeries’.

As to the question of whether or not the cheques were or were not in facteries, that is an issue which has been finally and conclusiclusively disposed of in the criminal proceedings before the Magistrate’s Court but, in any event, I am not satisfied that such an ``issue’ is directly raised in either the proposed Statement of Defence or the defendant’s affidavit showing cause. Needless to say this is an `issue’ which, given the defence, would be beyond the defendant’s personal knowledge to prove or disprove.

As for `the negligence of the bank’s employees’/b> , in the absence of a clear duty of care arisingising between the bank and the defendant (which is no where pleaded in the proposed Statement of Defence I am not satisfied that a `triable issue’ has been clearly raised in that regard sufficient to overcome the statement of principle enunciated by Parke B. in Kelly v. Solari and set out in this judgment at p.3 above.

For the foregoing reasons the application is granted. Final judgment is entered in favour of the plaintiff against the defendant in thin the sum of $21,000 with interest at the rate of 4% from 12^th February 1999 till payment. Costs are also awarded to the plaintiff summarily assessed in the sum of $250.00.

D.V. Fatiaki

Judge

At Suva,

1^st March, 2000.

HBC0614J.98S