Citibank Limited v Ueckermann

[2002] NSWCA 357

CITATION:	Citibank Limited v Ueckermann [2002] NSWCA 357
FILE NUMBER(S):	CA 40193/02; 40557/02
HEARING DATE(S):	24/10/02
JUDGMENT DATE:	5 November 2002
PARTIES :	Citibank Limited (Appellant) Anke Ueckermann (Respondent)
JUDGMENT OF:	Spigelman CJ at 1; Handley JA at 2; Ipp JA at 3

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 9331/99; DC 1161/00; DC 1983/00
LOWER COURT JUDICIAL OFFICER :	Chesterman ADCJ

COUNSEL:	M Slattery QC/R D Marshall (Appellant) J E Sexton SC/L Tyndall (Respondent)
SOLICITORS:	Deacons (Appellant) Slade Manwaring (Respondent)
CATCHWORDS:	BANKING - appeal - bank and customer relationship - instruments used to transfer bank account holders - whether correct instrument was used to open a new account - where standard banking practice had not been followed - whether contract formed by bank's subsequent conduct - whether evidence able to establish if standard banking procedure for new accounts followed - where failure to follow usual banking practice does not affect the terms of the contract - turns on own facts - appeal dismissed - PRACTICE AND PROCEDURE - application for leave to appeal against Sanderson order - application dismissed. ND
LEGISLATION CITED:	Conveyancing Act 1919, s 12
DECISION:	(1) Appeal dismissed with costs (2) Application for leave to appeal (against Sanderson order) dismissed (3) Appellant to pay Respondent's costs of the Application.

CA 40193/00
CA 40557/02

DC 9331/99
DC 1161/00
DC 1983/00

SPIGELMAN CJ
HANDLEY JA
IPP JA

Tuesday 5 November 2002

CITIBANK v ANKE UECKERMANN

Judgment

1 SPIGELMAN CJ: I agree with Ipp JA.

2 HANDLEY JA: I agree with Ipp JA.

3 IPP JA:

The trial of three actions heard together in the District Court

4 These reasons concern two of three actions that were heard together before Chesterman ADCJ in the District Court.

5 In the first action Anke Ueckermann (“Anke”) sued Citibank Limited for damages. Anke relied on more than one cause of action but it is only necessary to refer to her claim based on breach of contract. Anke contended that on 15 November 1990 she and her late husband, Dietrich Ueckermann (“Dietrich”), entered into a contract with Citibank whereby they became customers of the bank and the holders of an account with it (termed Cash Management Account No 351405790). Anke contended that, in breach of that contract, Citibank allowed her stepdaughter, Kerstin Ueckermann (“Kerstin”), to withdraw virtually the entirety of the amount standing to the credit of the account in question (a total amount of $122,206). In consequence of the alleged breach of contract, Anke claimed damages from Citibank being the sum withdrawn together with interest thereon.

6 In the second action Anke sued Kerstin for having wrongfully withdrawn the sum of $122,206 from Cash Management Account No 351405790.

7 In the third action Citibank sued Kerstin, alleging that she withdrew the sum of $122,206 without due authority and that Citibank paid that sum to her by a mistake of fact.

8 Anke succeeded at trial in her claim against Citibank and obtained a judgment against it in the sum of $222,076.21. Anke and Citibank failed in their actions against Kerstin. In the action involving Anke’s claim against Kerstin, Citibank - by way of a Sanderson order - was ordered to pay Kerstin’s costs.

9 Citibank now appeals against the orders made in the action brought against it by Anke. It also seeks leave to appeal against the Sanderson order made against it in Anke’s unsuccessful action against Kerstin. Citibank does not appeal against the dismissal of its action against Kerstin (in that action Citibank made no submissions in support of its case).

Events leading to the establishment of the Citibank account in the names of Kerstin and Ingo

10 Save where otherwise stated, the facts recounted under this heading are facts as found (and which are not the subject of appeal) or facts that were not in dispute.

11 Dietrich and Anke were married in 1985. Anke, who lived in Germany at the time of the trial, was the third wife of Dietrich and is the stepmother of Kerstin. Dietrich, a German national, died on 13 March 1994. Ingo Ueckermann is the brother of Anke. Kerstin and Ingo have lived in Australia since 1972.

12 Early in 1988 Dietrich established a bank account in Kerstin’s name at the Raffeisen Bank in Germany. The funds in the account came from a resort business Dietrich carried on in Germany. Kerstin did not deposit any money into this account and it was operated solely by Dietrich.

13 Early in 1989 Dietrich and Anke separated from each other. It is not clear for how long the separation lasted but it endured for several months at least. In the latter part of 1989 Dietrich came to Sydney and told Kerstin that he wanted to open a bank account in her and Ingo’s names, with himself as a signatory. He said that he wished to transfer the money in the Raffeisen Bank to a bank in Sydney and asked her to assist him in doing so. This led, in the latter part of 1989, to the North Sydney branch of Citibank opening Cash Management Account No 351405790 in the name of Kerstin and Ingo with Dietrich as an authorised signatory. When this occurred, an Authority for Operations in the same form as set out in para 16 below was completed and signed. This Authority for Operations identified Kerstin and Ingo as the account holders and Dietrich as an authorised signatory. Thereafter, Dietrich returned to Germany and was reunited with Anke.

Events leading to the establishment of the Citibank account in the names of Dietrich and Anke

14 In about May 1990 Kerstin withdrew money for her own purposes from Cash Management Account No 351405790. She did this without the authority of Dietrich. She said that she always intended to pay the money back into the account and in fact did so. She first told Dietrich about her withdrawal late in 1990. Later, in January 1991, she wrote to Dietrich about the withdrawal in apologetic terms saying that her intention was “honourable” but accepting that, in hindsight, “this was a mistake”.

15 Kerstin was married in Sydney on 18 November 1990 and Dietrich and Anke arrived in Sydney a few days before that date to attend the wedding. Discussions took place between them concerning Cash Management Account No 351405790. At the trial, there was a dispute between Anke and Kerstin as to what was said. Kerstin’s version was that Anke wanted to be made a signatory to the account and, in effect, Dietrich agreed. Anke testified that Dietrich told Kerstin in her presence that he wanted to put the account into the names of Anke and himself.

16 On 15 November 1990 a meeting took place at the North Sydney branch of Citibank between Dietrich, Anke, Kerstin and the branch manager, Mr Sechos. At that meeting there was a discussion between Kerstin and Mr Sechos, following which certain bank forms were completed and signed.

17 The forms that were signed on 15 November 1990 were of critical importance to the result of the trial. Three were put into evidence. Each was a printed form that had been completed in handwriting and which bore the signatures of various persons.

18 The first form was headed “Authority for Operations”. It was in the following terms:

“ AUTHORITY FOR OPERATIONS
INDIVIDUAL/JOINT CITIBANK

To Citibank Limited (“the Bank”) 15/11/1990

We refer to banking account shown below.

Any ONE of the authorised signatories below OR
(one of, two of or as appropriate)

Alternate Signing Authority

KERSTIN E. UECKERMANN


(……………and…………jointly or as appropriate)

may:

· sign, draw, make, discount, accept, endorse or make arrangements with you regarding cheques, withdrawals, bank cheques, periodical payment/debit authorities, bills of exchange, orders and other instruments and to overdraw the account(s) to any extent permitted by the Bank.

· overdraw or increase the overdraft on the account(s).

· operate and enter into agreements to operate on account(s) in any way permitted by the Bank including transactions by electronic, mechanical and other means.

Authorise periodical payments and direct debits.

· place money on any form of interest-bearing deposit and receive repayments and interest and deal with certificates of deposit.

· give receipts for shipping documents and the like and to sign requisition for letters of credit.

· receive and give receipts for boxes, packets, documents or property held by the Bank for safe custody or otherwise.

· generally act fully and effectively in all dealings, matters and transactions with the bank.

We have authorised each signatory separately to endorse all cheques, bills of exchange or drafts that may be paid to our credit …
We shall be jointly and severally responsible to the Bank for all liability incurred or to be incurred in respect of or arising from our above-mentioned account(s) …
Subject to any requirements of the law, if any one or more of us dies, the Bank may hold to the order of the survivor(s) of us any credit balance(s) in the above-mentioned account(s) and any deposits in our joint names, including interest accrued and to accrue thereon, and any property held by the Bank on our behalf, but without prejudice to any rights in law or equity, the Bank may have in respect of such balances, deposits and property or to any steps or proceeding which the Bank may take if any person other than the survivor(s) make(s) a claim.
All previous authorities relating to the matters mentioned above are superseded except for any undetermined liabilities and instruments already drawn or executed thereunder but not yet presented and/or paid.
If any one of us dies, this authority shall bind our respective executors, administrators, legal personal representatives and all persons claiming from or under us as to all documents, acts, matters and things done or executed under this authority before the Bank received notice revoking the authority.
…
We constitute all the duly appointed……………….351405790
ACCOUNT NAME: DIETRICH UECKERMANN & ANKE UECKERMANN

AUTHORISED SIGNATORIES (All parties to joint account(s) or Trustees, etc.)

Surname & Initials Signature Surname and initials Signature

UECKERMANN D.H. (Signature of Dietrich appears)

UECKERMANN A. (Signature Anke appears)

Authorised Third Party/ies signature(s)
Signature of Kerstin appears

Checked/Approved by: (Indecipherable)”

19 The second form was a card entitled “Signature Card – Non-corporate”. On the card, next to the printed words “Account Title,” were the handwritten words Ueckermann Dietrich H, Ueckermann Anka [sic]”. In a space below these words, the signatures of Dietrich and Anke were written, as was the signature of Kerstin.

20 The third form was entitled “Customer Name/Address Change”. In the first part of this document, under the heading “Account Title,” the words “Ueckerman K & J [sic]” were entered. Then, in a section entitled “Name Change,” next to the printed words, the “Present Customer Name,” the words “K & J A Ueckermann [sic]” were written in handwriting. Underneath that appeared the printed words “New Customer Name” and next to these the words “Dietrich H H and Anke Ueckermann” were written in handwriting. Under the heading “New Account Title,” the words “Dietrich H A Ueckermann and Anke” were written in handwriting. Under those words, next to the words “Personalisation Change” and under a heading “New Cheque Book Personalisation”, the words “D H A and A Ueckermann” were written in handwriting. In the following section of the document, next to the words “Address Change” and under the headings “New Address” and “Old Address,” Kerstin’s former address and the address to which she had recently moved were written in handwriting.

21 Following the meeting of 15 November 1990 and the completion and signing of the three forms in question, the Citibank records reflected Dietrich and Anke as the new holders of Cash Management Account No 351405790.

22 On all three forms various deletions were later made relating to the entries concerning Kirsten. These deletions were effected for reasons set out in para 28 below.

23 A bank document dated 15 November 1990 records Citibank’s recovery and destruction of a bankcard, linked to the account previously in the name of Kerstin and Ingo. The bankcard had been issued to “I Ueckermann”. The card status is noted as “Closed”.

Events subsequent to 15 November 1990

24 According to the records of Citibank, on 20 November 1990 bankcards were issued to Dietrich and Anke and the address given for them was Kerstin’s new home address.

25 Save for some insignificant exceptions, a consequence of the meeting of 15 November 1990, and the completion and signing of the three forms, was that, in the Citibank documents prepared subsequently in relation to Cash Management Account No 351405790, Dietrich and Anke, instead of Kerstin and Ingo, were shown almost invariably as the account holders. The exceptions to this were caused by the fact that Kerstin and Dietrich each retained and continued to use the cheque book they had received in November 1989 bearing the original account name, “K E Ueckermann and I H E Ueckermann”.

26 In January 1991 Dietrich and Anke returned to Germany. Chesterman ADCJ noted:

“In the summers of 1991-92 and 1992-93, Dietrich and Anke again spent time in Australia. According to Kerstin, but again with denials from Anke, their relationship was strained and Anke was not friendly towards Kerstin”.

27 On 18 May 1992 Dietrich wrote to Citibank requesting it to send the statements relating to the account to his address in Germany. Prior to this, they had been sent to Kerstin’s address in Sydney. Citibank complied with his request.

28 The relationship between Dietrich and Kerstin deteriorated, particularly after April 1993 when Kerstin refused to sponsor the proposed migration of Dietrich and Anke to Australia. On 7 July 1993 Dietrich made a new will under which Kerstin and her stepsister were to receive “no more than the obligatory share, since both children have turned away from me” (the quoted phrase was translated from the German).

29 On 12 July 1993 Dietrich wrote to the manager of the North Sydney Branch of Citibank in the following terms:

“Re Bank Account 351405790 Cash Management
Dear Sir
Herewith I cancel the authority for my daughter Kerstin Ueckermann to sign for the above bank account immediately.
Yours faithfully
Dietrich H H Ueckermann”

30 Chesterman ADCJ remarked in regard to this letter that two annotations, apparently made in consequence of this letter, can be seen on Citibank’s documents relating to the account. These his Honour described as follows:

“On the Authority for Operations dated 15 November 1990, Kerstin’s name and signature near the bottom have an inked line ruled through them and are followed by the handwritten words ‘cancelled 12/7/93’. Her name and signature on the Signature Card received similar treatment, except that the phrase used is ‘celeted 12/7/93’. In its Notice of Grounds of Defence, Citibank admitted that the annotation on the Authority took place on or about 12 July 1993”.

These deletions were those to which reference is made above.

31 Late in 1993 Dietrich and Kerstin were reconciled. At about this time Dietrich contracted lung cancer and he died on 13 March 1994.

32 On 21 March 1994 Kerstin withdrew $93,006 from Cash Management Account No 351405790 and on 12 April 1994 she withdrew a further $29,200. Chesterman ADCJ remarked in this regard:

“Evidently, the terms of Dietrich’s letter purporting to revoke her authority to operate the account had not been communicated to the bank employee or employees who processed the withdrawal. It would appear that her signature was known amongst the branch staff or that, if it was not known, whatever documentation they referred to in order to verify it did not disclose the revocation”.

These two withdrawals effectively cleared the account.

33 Anke contended that Kerstin had withdrawn the money without authority. Kerstin refused to repay the amount she had withdrawn. This led to the litigation that I have described.

The parties’ arguments at trial

34 At trial, Anke’s claim for breach of contract was put as follows. She asserted that:

(a) On 15 November 1990, in consequence of the completion and signing of the Authority for Operations form, Anke and Dietrich entered into a contract with Citibank.

(b) In terms of the contract, as from 15 November 1990 Anke and Dietrich became customers of Citibank and the sole holders of Cash Management Account No 351405790 at the North Sydney Branch.

(c) In terms of the contract, Anke and Dietrich could and did authorise Kerstin to operate the account as a third party signatory on the basis that they could at any time revoke this authority. In the event of the authority being revoked, any payment out of the account by Citibank pursuant to a withdrawal made by Kerstin would constitute a breach of the contract.

(d) By letter dated 12 July 1993 Dietrich validly revoked Kerstin’s authority on behalf of himself and Anke.

(e) On the death of Dietrich on 13 March 1994, Anke became the sole surviving account holder. She was then entitled to the balance of the funds in the account.

(f) Citibank’s payments made on 21 March and 12 April 1994 to Kerstin were in breach of the contract.

35 At trial, the principal argument advanced on behalf of Citibank in resisting Anke’s claim was that Citibank’s internal practice was that an account could only be transferred to new holders on completion of a document known as an “At Call Application”. According to Citibank practice the completion and signature of an Authority for Operations form could not constitute a contract creating a banker/customer relationship. Dietrich and Anke did not complete an At Call Application form. Hence an account in the names of Dietrich and Anke was not validly established.

36 Citibank contended that the oral evidence of Kerstin as to what was said at the meeting on 15 November 1990 supported its principal argument. Kerstin was not cross-examined on this evidence. Kerstin testified that when she Dietrich and Anke arrived at the Citibank offices in North Sydney she immediately had a conversation with Mr Sechos. At this stage her father was standing beside her and Anke “was in the background”. She testified that she said to Mr Sechos:

“I am here to sign some documents to put Anke on as a signatory to my account and to change the address for the forwarding of statements”.

She testified that Mr Sechos merely replied:

“Yes”.

The parties then proceeded to complete the three forms to which I have referred. Dietrich, Anke and Kerstin signed the forms as I have indicated.

37 Citibank contended that, on the basis of this evidence, it could not be said that Mr Sechos had agreed to make Dietrich and Anke holders of Cash Management Account No 351405790 and to remove Kerstin as an account holder.

38 Citibank also argued that a valid account transfer could not have taken place as such a transfer would constitute an assignment of a chose in action and, by s 12 of the Conveyancing Act 1919, such an assignment could only occur in writing under the hand of the assignors, and with notice to the debtor. Citibank submitted that the parties had not complied with the required formalities.

The trial judge’s findings

39 Chesterman ADCJ did not accept that, at the relevant time, the North Sydney branch of Citibank adopted the alleged practice in regard to the transfer of an account. His Honour found that it had not been established that Dietrich and Anke signed an At Call Application form when the account was put into their name on 15 November 1990. He pointed out, further, that Citibank had not produced on discovery an At Call Application form relating to the initial establishment of the account in 1989. These matters led him to say:

“The explanation for the absence of such forms on both occasions may simply be that, although required by Citibank practice, they were not in fact used at that time at the North Sydney branch”.

40 Chesterman ADCJ held that it was open to Mr Sechos to enter into a contract with Dietrich and Anke on the basis that the Authority for Operations would record the terms of the banker/customer relationship – and this is what occurred.

41 His Honour held that the Authority for Operations, completed and signed on 15 November 1990, in fact constituted the contract between Citibank on the one hand and Dietrich and Anke on the other. He noted in this regard that:

“The particulars entered on two accompanying documents prepared and signed on the same day – that is, the ‘Signature Card and the Customer Name/Address Change’ – are all consistent with the creation of an account in Dietrich’s and Anke’s names and of a banker/customer relationship between Citibank and them. The fact that the second of these two documents was used for a purpose for which it was not designed does not detract from this conclusion”.

42 Chesterman ADCJ said that he could not discount the oral evidence of Kerstin as to what was said between her and Mr Sechos on 15 November 1990, despite having some doubts about her credibility generally. He found that:

“Mr Sechos did not fully instruct her as to the effect of the documentation signed by her at that meeting, so that her understanding of this crucial matter, as outlined in her evidence, remained uncontradicted”.

His Honour held that this finding did not detract from his overall conclusion as to the terms of the contract the parties had entered into on 15 November 1990. Implicitly, his Honour concluded that Kerstin’s understanding as to the effect of the documents had no bearing on the terms of the contract which, in effect, were to be construed by reference to the words contained in the forms. Kerstin’s subjective understanding was irrelevant to this issue.

43 Chesterman ADCJ dealt with the argument based on s 12 of the Conveyancing Act by noting that, on 25 November 1989, Ingo signed an Authority for Operations authorising Kerstin to act on his behalf “in all dealings, matters and transactions with the bank”. His Honour said:

“I do not see why he should not therefore be bound by the document which he signed on 15 November 1990. If she had withdrawn all the funds from that account and deposited them immediately in a different account, with a different number, held by Dietrich and Anke, there is no doubt that he would have been bound.”

44 In any event, Chesterman ADCJ noted that even if Ingo could have claimed immediately after 15 November 1990 that his share of the money in the account had not been validly transferred to Dietrich and Anke, it did not follow that Ingo would be entitled at a later stage to “all funds deposited in the future by or on behalf of Dietrich and Anke, pursuant to a new contract between them and Citibank”. His Honour stated in this regard:

“Indeed, once Dietrich, pursuant to the third party authority that he in fact held on the original account, had made withdrawals up to the amount standing in the account as at 15 November 1990, any such claim by Ingo would be dissipated, due to the operation of the Rule in Clayton’s case. A perusal of the statements of account following 15 November 1990 shows in fact that withdrawals to this extent occurred well before Dietrich’s death in 1994 and the payments to Kerstin with which this litigation is concerned”.

Citibank’s arguments on appeal

45 On appeal, Mr Slattery QC who, together with Mr Marshall, appeared for Citibank, commenced his argument by accepting that, on 15 November 1990, a banker/customer relationship was established between Citibank on the one hand and Dietrich and Anke on the other – in regard the account which had previously been conducted in the name of Kerstin and Ingo.

46 Mr Slattery submitted, however, that this relationship did not detract from the rights of Kerstin as regards the account. His argument was that Kerstin remained a customer of the bank and a holder of the account. He submitted that the contract that was entered into on 15 November 1990 did not result in the cessation of the banker/customer relationship between Citibank and Kerstin. He submitted that Kerstin’s rights as a customer in regard to the account were not extinguished by the contract.

47 Mr Slattery relied on Kerstin’s testimony as to what she had said to Mr Sechos on 15 November 1990. He argued that, against the background of that conversation, the effect of the forms signed on 15 November 1990 was not to remove Kerstin as the holder of Cash Management Account No 351405790 but simply to add Dietrich and Anke as holders together with Kerstin (and, presumably, to remove Ingo as a holder). According to this argument, therefore, after 15 November 1990 there were three customers in respect of the account, namely Dietrich, Anke and Kerstin.

48 Mr Slattery’s argument rested upon the following propositions:

(a) According to the general practice of Citibank at the relevant time, an Authority for Operations form would not be used to open an account, but simply to change the signatory arrangements. When it was intended that a new account should be opened or that new parties should become the holders of an account, an At Call Application form would be signed.

(b) Chesterman ADCJ wrongly held that Kerstin and Ingo had not signed an At Call Application form when Cash Management Account No 351405790 was initially established in the latter part of 1989; at that time they had in fact signed such a form.

(c) If it were accepted that Kerstin and Ingo had signed such a form in 1989, it would not be open to find that, in the latter part of 1990, the North Sydney branch did not follow the Citibank general practice in regard to the transferring of holders of an account.

(d) The conversation on 15 November 1990 between Kerstin and Mr Sechos coloured the effect of the forms signed on that date.

(e) In all the circumstances, the conduct of Dietrich, Anke and Kerstin on 15 November 1990 (in completing and signing the Authority for Operations Form, the Signature Card and the Customer Name/Address Change Form) did not give rise to a contract that detracted from Kerstin’s rights as a holder of Cash Management Account No 351405790.

49 The written submissions filed on behalf of Citibank stated that application would be made to add an additional ground to the Notice of Appeal to reflect an argument that the transfer of the account to Anke and Dietrich failed by reason of non-compliance with the provisions of s 12 of the Conveyancing Act 1919; alternatively that there could not have been a transfer or novation of the account as “Ingo was not a party to any purported novation”. This application was not made and Mr Slattery did not raise this argument in his oral submissions.

Discussion of Citibank’s arguments

50 At the outset, it is to be noticed that there is a material inconsistency between Kerstin’s evidence as to what she said to Mr Sechos on 15 November 1990 (and Citibank’s argument at trial) and Citibank’s principal argument on appeal. Kerstin’s testimony (and Citibank’s argument at trial) was to the effect that on 15 November 1990 the parties did not intend to open a new account or change the holders of Cash Management Account No 351405790 (which was then in the name of Kerstin and Ingo), but merely to change the signatory arrangements (to make Dietrich and Anke signatories to the account). On appeal, however, Mr Slattery submitted that, on 15 November 1990, Kerstin, Dietrich and Anke agreed with Mr Sechos on behalf of Citibank that there would be a (new) banker/customer relationship between Dietrich, Anke and Citibank (that did not result in the cessation of a banker/customer relationship between Citibank and Kerstin) and that all three would be the holders of Cash Management Account No 351405790. This inconsistency cannot be reconciled.

51 The fundamental problem faced by Citibank is that the express terms of the Authority for Operations form completed and signed by Dietrich, Anke, Kerstin and, apparently, by an officer of the bank, give no support to its argument and are fatal to it. The Authority for Operations form made it plain that as from 15 November 1990 the authorised signatories (or holders) of Cash Management Account No 351405790 were to be Dietrich and Anke, and Kerstin was to be an “alternate signing authority” (that is, an agent for the authorised signatories). In other words, according to the Authority for Operations form, the holders of the account were to be Dietrich and Anke and Kerstin was merely to be their agent.

52 The Customer/Name Address Change form is entirely consistent with the Authority for Operations form. The first-mentioned form reflects an intended change in the holders of the account from Kerstin and Ingo to Dietrich and Anke. Kerstin signed the Customer/Name Address Change form.

53 The address change reflected on the Customer/Name Address Change form was a change from the previous address of Kerstin to her new address. Dietrich had agreed with Mr Sechos that Citibank should send the bank statements relating to the account to Kerstin at her new address and not to him and Anke in Germany. Kerstin had recently changed her address following her marriage; hence the need to record her change of address. Later, Dietrich instructed Citibank to send the statements relating to the account to him in Germany and this was done.

54 Although Kerstin’s statement to Mr Sechos prior to the signing of the forms was inconsistent with their terms, the subsequent signing of the forms establishes the agreement thereby arrived at, namely that Dietrich and Anke would be the holders of Cash Management Account No 351405790 and Kirsten only an authorised signatory. It is to be inferred that Mr Sechos, who completed the forms, did so because those present had instructed him to do so and he agreed to do so. Citibank’s subsequent conduct, in any event, constituted an acceptance of the terms of the forms.

55 In my view, Chesterman ADCJ correctly held that whatever was said on 15 November 1990 prior to the signing of the forms (and Kerstin’s understanding as to the effect of the forms) was irrelevant to the contract constituted by the Authority for Operations form and Customer/Name Address Change form.

56 In any event, the evidence as to the general practice adopted by Citibank does not assist it. That evidence was to the effect that, when a transfer of holders of an account occurred, an At Call Application form would be signed. An Authority for Operations form, as a matter of general practice, was used only to appoint an authorised signatory. A Customer/Name Address Change form, as a matter of general practice, was only to be used in the case of a name change, and not in the case of a transfer. But, there was nothing to prevent Mr Sechos (if he wished to do so) from using an Authority for Operations form and Customer/Name Address Change form to transfer the account from Kerstin and Ingo to Dietrich and Anke.

57 In this regard, it is significant that, on 15 November 1990, the Customer Name/Address Change form was not used because of a name change on the part of Kerstin or Ingo. Kerstin and Ingo had not changed their names. Mr Sechos was using the form, firstly, to record the change in the names of the holders of the account and, secondly, the change in Kerstin’s address. The change in the holders’ names reveals the intention of he parties.

58 Mr Slattery pressed the argument that Chesterman ADCJ wrongly held that Kerstin and Ingo had not signed an At Call Application Form in 1989 when the account was first opened. He submitted that, had his Honour found that they had then signed such a form, it would not have been open to him to reject the argument that Mr Sechos would have followed the general practice of allowing new parties to open an account only when an At Call Application form was completed and signed.

59 The principal piece of evidence on which Mr Slattery relied in this regard was an outline of evidence filed on Anke’s behalf in which it was stated that - when the account was opened in 1989 - an At Call Application form was signed. This evidence was supported by evidence from Ms Levesita Nery, an administration officer employed by Citibank. Ms Nery reviewed extracts of the branch file relating to the Cash Management Account No 351405790. She was unable to locate an At Call Application form used to open the account. She did say, however, that she had located a form entitled “Account Opening Check List” dated 12 October 1989. This form had been completed by a Citibank officer and a box next to the words “Application Form” on the Account Opening Check List had been ticked. Ms Nery testified that, by reason of these matters, she was able to say that “the account would have been opened on or about 12 October 1989”.

60 Ms Nery’s evidence in this respect can by no means be regarded as conclusive. There are two matters, in particular, that cast doubt on the inference that she drew that Kerstin and Ingo signed an At Call Application form when the account was first opened.

61 Firstly, the Account Opening Check List does not bear the name of any of the parties to the litigation. On the contrary, the words “Wayne Brown”, “Lincoln and Associates” and other words unrelated to the parties to this action were written on the Check List. Moreover, some unidentified person (not Mr Sechos) signed the Check List on behalf of Citibank. These matters suggest that the Check List was not related to the account opened by Kerstin and Ingo.

62 Secondly, Kerstin testified that the account was opened in November 1989 (and not in October 1989) and her pleadings were consistent with this testimony.

63 As regards Anke’s outline of evidence, it is to be noted that it was signed on her behalf by her solicitor. The statement in the outline of evidence that an At Call Application form was signed on 12 October 1989 appears to be based on an inference the solicitor drew from the Account Opening Check List (which was in the bank file relating to the account). The statement was not based on personal knowledge; it was not suggested that Anke was present in 1989 when Cash Management Account No 351405790 was opened.

64 In the circumstances, in my view, it was open to Chesterman ADCJ to find that an At Call Application form was not signed in October 1989 and such a form was not signed when the account was opened.

65 Moreover, in my view, it was open to his Honour to find that, irrespective of whether such a form had been signed in 1989, Mr Sechos had not followed the usual practice and the parties had come to an agreement as contended for by Anke without such a form being completed and signed. It was not suggested that, at the relevant time, Dietrich and Anke knew of the Citibank practice in question. For the reasons expressed, that practice cannot affect the clear terms of the completed and signed forms.

66 Accordingly, I would not uphold Citibank’s principal argument.

67 Also, I would not uphold the arguments in Citibank’s written submissions (which arguments, as mentioned, were not raised in oral submissions) concerning the alleged non-compliance with s 12 of the Conveyancing Act 1919 and the proposition that there could not have been a transfer or novation of the account as “Ingo was not a party to any purported novation”. In my opinion, the reasoning of Chesterman ADCJ (to which I have referred above) in regard to these issues is correct.

68 In my opinion Citibank’s appeal should be dismissed with costs.

The application for leave to appeal

69 I now turn to the application for leave to appeal against the Sanderson order made against Citibank in the unsuccessful action brought by Anke against Kerstin.

70 In making costs of Anke’s action against Kerstin the subject of a Sanderson order against Citibank, Chesterman ADCJ said:

“First, it was reasonable for Anke to take these proceedings against Kerstin. Had the evidence on a number of crucial issues gone another way – and in particular I refer to Kerstin’s knowledge or lack of knowledge of the revocation of her authority – I might well have been persuaded that there were grounds for the action brought by Anke against Kerstin to succeed. That is only one of a number of possibilities. It was certainly not an action where the decision was clear cut all the way along the line.
And then the second reason is that the correspondence – and I refer particularly to letters, during 1999, between Citibank and its representatives and Anke and her representatives – including strong inducements, for wont of a better word, on the part of Citibank to Anke to press her into suing Kerstin. The position taken by Citibank at that time was that they were in effect almost in the position of stakeholders of this money, and that the true battle was between Anke and Kerstin”.

71 Mr Slattery did not contend that the criteria applied by the learned judge were incorrect. Rather, he submitted that his Honour was wrong in finding that it was reasonable for Anke to take the proceedings against Kerstin and in finding that Citibank had induced Anke to sue Kirsten.

72 In my view it was open to Chesterman ADCJ to find that Anke’s conduct in bringing proceedings against Kirsten was reasonable.

73 As regards Citibank’s attempt to induce Anke to sue Kerstin, it is sufficient to refer to a letter dated 22 July 1996 that Citibank wrote to Anke’s solicitors in which the following was said:

“Upon receipt of your letter the bank again contacted Kerstin Ueckermann and demanded that she return the money to the bank. It is currently waiting for a response to that demand, failing which she will be joined in any proceedings instituted against the bank should your client decide not to pursue Kerstin directly for a return of the money. I would submit that Kerstin would appear to be the more appropriate person for your client to pursue in view of the fact that she is the person who withdrew the money and then refused to return it when requested to do so.”

74 The passage quoted contains an inducement of the kind to which Chesterman ADCJ referred. It is true that Anke commenced action against Kerstin in December 1999, some three and a half years after the letter of 22 July 1996. But Citibank never withdrew the observations contained in that letter.

75 In all the circumstances I consider it was open to his Honour to make the finding that the position taken by Citibank was that it was virtually a stakeholder in a contest between Anke and Kerstin, and that it attempted to persuade Anke to sue Kerstin.

76 Therefore, I would dismiss the application for leave to appeal and order Citibank to pay Anke’s costs of the application.

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