The court considered the situation arising where there had been a payment from one customer’s account to another customer’s account within the same bank, and then reversed.
Held: The bank had until the end of the value date to decide whether to credit the customer’s account. It had decided so by 16.14 on that day to place a marker on the account and had therefore declined to make the funds available, but that did not avoid the consequences that a debt had already been created by the CHAPS procedures which had caused the Claimant’s account to be credited before the decision to place a marker on it and that marker had not divested the credit balance. Kerr J said: ‘The issue is whether or not a completed payment had been made by the defendants to the plaintiffs on June 26 . . If there were no authorities on this point, I think that the reaction, both of a lawyer and a banker, would be to answer this question in the affirmative. I think that both would say two things. First, that in such circumstances a payment has been made if the payee’s account is credited with the payment at the close of business on the value date, at any rate if it was credited intentionally and in good faith and not by error or fraud. Secondly, I think that they would say that if a payment requires to be made on a certain day by debiting a payor customer’s account and crediting a payee customer’s account, then the position at the end of that day in fact and in law must be that this has either happened or not happened, but that the position cannot be left in the air. In my view both these propositions are correct in law.’
Judges:
Kerr J
Citations:
[1977] QB 790
Jurisdiction:
England and Wales
Cited by:
Cited – Total Transport Corporation v Arcadia Petroleum Ltd (‘the Eurus’) CA 18-Nov-1997
Arcadia chartered the Eurus, and had succeeded in their application for an award in arbitration proceedings against Total. The award had been reversed, and they now appealed against that order. The parties disputed whether the amount was an award of . .
Lists of cited by and citing cases may be incomplete.
Banking
Updated: 06 May 2022; Ref: scu.462282