Westpac Bank Samoa Ltd v A & V Ah Wa Ltd [2003] WSSC 40 (19 December 2003)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

WESTPAC BANK SAMOA LIMITED
formerly known as PACIFIC COMMERCIAL BANK LTD
a duly incorporated company having its registered office at Apia.
PLAINTIFF

AND:

A & V AH WA LTD
a duly incorporated company carrying on business at Saleimoa.
DEFENDANT

Counsel: Ms R. Drake for the Plaintiff
Mr PF Meredith for the Defendant

Hearing: 31 March 2003 and 29 April 2003
Submissions: 16 May 2003
Decision: 19 December 2003

DECISION OF VAAI J

The defendant operates a money transfer agency in the island of Savaii. It receives money from its overseas principal called Xpresstrac and disburses the remittances to the beneficiaries in Savaii. Monies remitted from Xpresstrac are credited into an account opened in March 2002 with the plaintiff’s branch in Savaii. Upon receipt of the advice from the overseas paying bank that funds have been sent, the International Section of the plaintiff then process the remittance and credit the account of the defendant. Each remittance from Xpresstrac is accompanied by a fax to the defendant setting out the details and names of payees, names of payor, amounts to be released to each payee as well the messages from the payors. And for each faxed list there are corresponding payout receipts which the payee must sign after providing adequate identification to the defendant.

On the 14^th May 2002 the International Section of the plaintiff’s bank received from the Bank of Hawaii a transfer credit for the defendant to the equivalent of $11,292.74 which was credited to the defendant’s account.

On the following day the plaintiff received from Xpresstrac a faxed advice advising the plaintiff of a remittance amounting to an equivalent of $11,276.00 which was also credited to the defendant’s account.

The two faxed advices on the 14^th and 15^th May 2002 were for the one and same remittance so that the defendant’s account was credited twice for the one remittance. On the 22^nd May the plaintiff discovered the mistake and the plaintiff’s Manager international spoke with Mrs Ah Wa, the defendant’s signatory to the bank account and advised her of the mistake and told Mrs Ah Wa that the second credit payment of $11,276.00 into the account will be reversed. The second credit was reversed causing the defendant’s account to be overdrawn and the defendant has refused to pay the plaintiff resulting in these proceedings. The plaintiff says that it was entitled to receive back from the defendant monies paid to the defendant under a bona fide mistake.

The defendant does not deny the double credit for the same transaction. It says however that the account with the plaintiff bank was opened specifically for the purpose of receiving remittances from its principal Xpresstrac and all bank statements for the said account were sent by the plaintiff to Xpresstrac but not the defendant so that the defendant’s only knowledge of funds deposited is when an employee of the plaintiff advises the defendant by phone call. The funds are then distributed in accordance with daily faxed instructions from the defendant’s principal; such instructions include the amounts and names and destinations of the beneficiaries. But the defendant also says that usually the remitted amounts were inadequate to comply with the faxed instructions so that there was always a backlog of unpaid instructions. On very many occasions a number of beneficiaries came in after they were informed by telephone by overseas relatives of monies remitted through Xpresstrac, but usually either the money remitted is not sufficient to pay for the faxed list of beneficiaries or the remitted funds is delayed. Sometimes people have to wait for up to two days to get their monies because there are always insufficient funds to pay for the faxed instructions. So that when the plaintiff credited the account of the defendant twice on the 14^th and 15^th May 2002 the defendant was not enriched as a result because the funds were utilised to pay for the backlog of payments due to the beneficiaries; so that if anyone was enriched it was Xpresstrac, the defendant’s principal.

The first issue to decide is whether the defendant was enriched. The defendant says that when it received a credit of $11,292.74 on the 14^th May 2002 it withdrew the money to pay for the backlog of unpaid instructions from its principal. But the court has difficulty in accepting that evidence because when $11,292.74 was credited on the 14^th May 2002 there was a balance of $10,569.29 in the defendant’s account as at the 10^th May. Secondly for every remittance the defendant concedes that it receives from its principal a faxed list of the details of the beneficiaries, the amounts to be paid, the messages from the payors; and the documentary evidence adduced to the court shows that the defendant has only paid to the beneficiaries the remittance of $11,292.74 credited on the 14^th but not the 15^th credit. In other words the same beneficiaries were not paid twice because for the duplicate credit on the 14^th and 15^th the defendant only received from its principal one set of payout receipts corresponding to the faxed list of beneficiary for the one remittance; so that while the credit on the 14^th was paid out there is no corresponding instructions from Xpresstrac for the disbursement of the 15^th credit. Thirdly it cannot be accepted that the defendant distributed the remittances without reference to the details in the faxed instructions so as a result, I do not accept submissions by counsel for the defendant that if anyone was enriched it was either the defendant’s principal or its beneficiaries.

Counsels have both cited the decisions of this court in ANZ Banking Group Ltd v Ale Ulugia 1980-1993 SLR 468 and Public Trustee v Foketi Brown & Others CP 393/33 (24/1/95) as the only two authorities in Samoa on the doctrine of unjust enrichment. In ANZ Banking Group v Ale Ulugia Ryan CJ held that the principle of unjust enrichment presupposes three requirements:

(i) the defendant has been enriched by the receipt of a benefit
(ii) the enrichment is at the expense of the plaintiff
(iii) it would be unjust to allow the defendant to retain the benefit.

In Public Trustee v Foketi Brown Sapolu CJ adopted the Canadian approach in Pettkus v Becker (1980) 2 SCR 834 that the three requirements are:

(i) enrichment to the defendant
(ii) corresponding deprivation to the plaintiff
(iii) absence of any juristic reason for the enrichment

I have ruled on the evidence that the defendant was enriched by the mistake of the plaintiff; a mistake which could have been avoided but it was nevertheless a mistake discovered about a week after its commission and as a result the plaintiff was deprived of $11,276. The remaining issue to consider, adopting the same approach as Sapolu CJ in Public Trustee v Foketi Brown & Others is whether the defendant can show any juristic reason for the enrichment. The principal argument for the defendant is that it was not enriched by the mistake; it was either Xpresstrac or its beneficiaries who was enriched. But the defendant cannot say the beneficiaries were enriched simply because the defendant did not pay the same beneficiaries twice on one set of faxed instructions from Xpresstrac. And if the defendant knew Xpresstrac did benefit because it did not remit sufficient funds to pay for the faxed instructions then the proper thing to do would have been to join Xpresstrac as a third party. The simple truth is that there was no backlog of unpaid beneficiaries. The defendant cannot show any juristic reasons for its enrichment.

Judgment is accordingly entered for the plaintiff in the sum of $11,276.00. Plaintiff is entitled to costs. I award costs of $1,200.00.

JUSTICE VAAI