The service of the order nisi binds the debt in the hands of the garnishee – that is, it creates a charge in favour of the judgment creditor. No cause of action for non payment arises in respect of money standing on a current account until the customer demands payment by the bank. The court set out the legal characteristics of a current bank account. For a bank account in credit, a demand is a necessary precondition to the customer having a cause of action to recover all or part of the balance of the account.
Atkin LJ rejected the proposition that a current account can be analysed as a simple contract of loan, with a superadded obligation of the bank to honour the customer’s drafts to any amount not exceeding the credit balance at any time. He said ‘I think there is only one contract made between the banker and its customer. ‘- ie, when a customer sues the bank to recover money in its current account, the customer is suing on the banker-customer contract, not suing for repayment of a loan or set of loans constituted by deposits.
Atkin LJ
[1921] 3 KB 110, [1921] 37 TLR 534, [1921] All ER 92, 125 LT 338
England and Wales
Cited by:
Cited – Societe Eram Shipping Company Limited and others v Hong Kong and Shanghai Banking Corp Ltd, Compagnie Internationale de Navigation HL 12-Jun-2003
The appeal concerned a final third party debt order (formerly a garnishee order). A judgment in France was registered here for enforcement. That jurisdiction was now challenged.
Held: A third party debt order is a proprietary remedy operating . .
Cited – Thomas Cook (New Zealand) Limited v Inland Revenue PC 10-Nov-2004
(New Zealand) Under the Act, certain companies had a duty to pay over to the Inland Revenue balance held on old and dormant accounts. They had issued travellers cheques which had never been presented. The revenue argued that the claim arose six . .
Cited – United Dominions Trust Ltd v Kirkwood CA 24-Feb-1966
The defendant was MD of a company which borrowed from the plaintiff. The company drew five bills as security, and the defendant endorsed them. When the company failed, the plaintiff gave notice of dishonour and sued the defendant as indorsee. The . .
Cited – Office of Fair Trading v Abbey National Plc and seven Others ComC 24-Apr-2008
The Office sought a declaration that the respondent and other banks were subject to the provisions of the Regulations in their imposition of bank charges to customer accounts, and in particular as to the imposition of penalties or charges for the . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice, Banking
Updated: 15 December 2021; Ref: scu.183522