An order under the Act prohibited K from disposing of his assets, including a deposit account with the bank. K had an overdraft facility secured against the deposit account. The bank sought to set off the overdraft against the sums held on deposit.
Held: the bank was free to consolidate the accounts. Its actions would not reduce K’s assets.
Otton J said: ‘In my judgment, the right of a bank to combine [accounts] is well established and is fundamental to the bank/customer relationship. It is a means of establishing the indebtedness of the customer to the bank and the bank to the customer. In exercising this right a bank is not asserting a claim over the moneys, nor is it in conflict with the claims of the Crown. It is merely carrying out an accounting procedure so as to ascertain the existence and amount of one party’s liability to the other. This can only be ascertained by discovering the ultimate balance of their mutual dealing.’
Judges:
Otton J
Citations:
[1990] 2 QB 298
Statutes:
Drug Trafficking Offences Act 1986
Jurisdiction:
England and Wales
Citing:
Followed – National Westminster Bank Ltd v Halesowen Presswork and Assemblies Ltd HL 1972
The bank’s common law right of set-off was affirmed. The bank’s appeal succeeded.
The application of section 323 is mandatory in the sense that it cannot be excluded by prior agreement of the parties. . .
Cited by:
Cited – Irwin Mitchell v Revenue and Customs Prosecutions Office and Allad CACD 30-Jul-2008
The solicitors had been paid funds on account of their fees in defending the client. By the time a freezing order was made under the 2002 Act in respect of his assets, the firm’s fees exceeded the amount held. The court was asked what was to happen . .
Lists of cited by and citing cases may be incomplete.
Criminal Practice, Banking
Updated: 06 May 2022; Ref: scu.416227
