Commonwealth Bank of Australia v Coolair Air-conditioning Pty Ltd No. 4250 Judgment No. SCGRG 93/1253 Number of Pages 5 Banking and Financial Institutions

[1993] SASC 4250

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MOHR J

CWDS
Banking and financial institutions - Garnishee - Attachment of Debts - Banking - the respondent obtained a garnishee order nisi against the defendant - the order was inaccurate in its description of the Judgment Debtor - the bank made no payments pursuant to the order - the respondent then obtained a Garnishee Order Absolute against the defendant - the order absolute correctly described the Judgment Debtor - the bank acted on the order absolute - the respondent was granted compensation from the bank for non-compliance with the order nisi - the appellant appealed - held that an order nisi did not attach to an account unless it correctly set out the judgment debtor - Appeal allowed and order for compensation set aside. Koch v Mineral Ore Syndicate London and South Western Bank (Lim.) 1910 Solicitors Journal 600 and Plunkett v Barclays Bank Ltd (1936) 2 KB 107, discussed.

HRNG ADELAIDE, 12 October 1993 #DATE 12:11:1993
Counsel for appellant:     Mr J E Lunn
Solicitors for appellant:    N P Andersen
Counsel for respondent:     Mr G D Edmonds-Wilson
Solicitors for respondent: Baker O'Loughlin

ORDER
Appeal allowed.

JUDGE1 MOHR J The respondent issued a summons in the Local Court of Southern Districts against Christopher John Wise trading as Chris Wise Air Conditioning. The particulars of claim were as follows. 2. The respondent duly signed judgment against the defendant in that action for $14,114.58 on 7th May 1992. Negotiations followed and the defendant on 1st June 1992 agreed to make payments. Some payments were made but on 16th December 1992 the respondent obtained a Garnishee Order Nisi. That order was headed:- "JUDGMENT CREDITOR COOLAIR AIR CONDITIONING PTY LTD A.C.N. 007 757 235 JUDGMENT DEBTOR CHRISTOPHER JOHN WISE trading as CHRIS WISE AIRCONDITIONING GARNISHEE COMMONWEALTH BANK OF AUSTRALIA and COMMONWEALTH SAVINGS BANK OF AUSTRALIA The body of the order stated: "... it is ordered that all debts due or accruing due from the abovenamed garnishee to the judgment debtor be attached ..." 3. The Garnishee Order Nisi was served on the bank on the same day i.e. the 16th December 1992. The bank held no account in the name of "Christopher John Wise trading as Chris Wise Air Conditioning". It did however hold an account in the name of "Christopher John Wise trading as Adelaide Heating and Cooling". 4. The bank made no payments pursuant to the Garnishee Order Nisi but continued to allow Christopher John Wise to operate the account "Christopher John Wise trading as Chris Wise Adelaide Heating and Cooling". 5. On the 23rd December the respondent appeared in the Christies Beach Magistrates Court seeking a Garnishee Order absolute. An officer of the bank appeared before the Magistrate stating that there was no account with the Bank in the name of "Christopher John Wise trading as Chris Wise Air Conditioning". According to the affidavit of Mr Hearn, the bank officer in question, the Magistrate enquired whether there were any accounts in the name of Christopher John Wise and that he told the Magistrate that there were but none as described in the Order Nisi. The Order Nisi was made absolute on the same day and served on the Bank. 6. The Garnishee Order Absolute has the same heading as the Garnishee Order Nisi except for one matter and that is that the name of the Judgment Debtor reads "Christopher John Wise" only. On that being served on the Bank it paid over the sum of $333.80 being the balance of the account in the name of Christopher John Wise trading as Chris Wise trading as Adelaide Heating and Cooling". 7. The respondent in due course applied for an order for compensation from the appellant bank alleging non compliance with the Garnishee Order Nisi. 8. The Learned Magistrate who heard that application gave reasons for making an order for compensation. There is in the file nothing to suggest or explain how the heading in the original action or the Garnishee Order absolute came to be amended. 9. The reasons after reviewing the brief facts continued:-
    "..Now Mr Gladys has referred me to the decision of the
    court of appeal in Koch v. Mineral Ore Syndicate London and
    S.W. Bank Ltd to a situation in which none of the particulars
    really specify in my view the requirements. Mr Wilson says that
    the heading of the action including surplus words. My view is
    this. That the bank, upon receiving the order nisi, and being
    properly aware of the identity of the client, see for instance
    the adjustment set out in the correspondence particularly Mr
    Anderson's letters, there is no doubt the bank was alive to the
    problem and the issue and all that was required in my opinion
    was for the bank to properly raise the matters that Mr Gladys
    now raises, before the Magistrate on the return of the order
    nisi, and at the same time simply declining to deal with matters
    until the outcome of the hearing was known on the 23rd December.
    It is true, as Mr Gladys complains, part of this has been
    contributed by the plaintiff incorrectly styling the account,
    but in my assessment, any person having any basic knowledge of
    the requirements of the law would properly have identified the
    fact that the monies sought were the monies properly already in
    the account or in an account that contained the title
    Christopher John Wise and that in my opinion was the proper
    course of action, it follows that the judgment creditor, the
    plaintiff has sustained loss and there should be judgment in
    favour of the judgment creditor against the bank. Mr Wilson
    asks for $10818.81. I have not checked the arithmetic. Mr
    Gladys does not complain. I assume it is correct. Judgment for
    that amount and order for costs to be taxed. Leave to appeal." 10. It is from that order that the appellant now appeals. The case of Koch v. Mineral Ore Syndicate London and South Western Bank (Lim.) is reported in 1910 Solicitors Journal 600. No other report has been found and I note that the Annual Practice cites only that reference. 11. The brief facts were that the bank was served with a Garnishee Order which referred to "Ernest Frederick Julius BECKHARDT trading as Mineral Ore Syndicate". There was no account in that name. According to the report the day after service the bank "as an act of courtesy" informed the solicitors that they had no account in either name. Later the solicitors called at the bank and informed it that they had spoken to Beckhardt who had told them he had an account with the bank under the name "General Import Co.". That bank had an account in that name operated on by a person who signed "Mr Julius Beckhardt, managing director". The bank refused to attach the balance of that account. The solicitors attended before a Master and obtained an order amending the name of Judgment Creditor to "Julius Beckhardt trading as General Import Co.". Meanwhile Beckhardt had drawn almost the entire balance of the latter account. 12. There were other proceedings before the matter reached the Court of Appeal and in the course of those proceedings A.T. Lawrence J had allowed an appeal on the grounds that, in his opinion, Beckhardt had been sufficiently identified to the bank and that subsequently they acted at their own risk. 13. Vaughan Williams LJ gave the judgment in the Court Appeal with which Fletcher Moulton and Buckley LJJ agree. His Lordship said:-
    "The order upon them was entituled Koch, Judgment Creditor
    v. Mineral Ore Syndicate, Judgment Debtor, and the London and
    South-Western Bank (Limited) Garnishees; and they said 'We have
    no such customer to whom we owe money deposited in our bank
    known as the Mineral Ore Syndicate, and we decline to act upon
    the order.' True, they had a customer who thought fit to
    describe the partnership or business in which he was engaged as
    the Mineral Ore Syndicate, and true that a person drew the
    cheques on which appeared a name very similar to the name of the
    person who was mentioned in the garnishee order. But before the
    bank would treat this account as attached they wanted to
    satisfied as to identity of the account. The solicitors for the
    judgment creditor were so informed, and they took the order away
    to get it amended - first, as to the spelling of the name, and
    secondly, by inserting into it the General Import Co.s name.
    Master Wilberforce thought that no amendment was necessary, and
    that the bank should accept the order as a proper notice. What
    was the bank to do if cheques were presented to them for
    payment? They could hardly justify refusing to honour a cheque
    when they were uncertain whether the garnishee order served on
    them referred to that account at all. Master Chitty found that
    Julius Beckhardt and Ernest Frederick Julius Berckhardt, the
    judgment debtor (trading as the General Import Co., and also
    trading as the Mineral Ore Syndicate), were one and the same.
    He considered the order required amendment, and accordingly he
    amended the order in those particular; and his Lordship thought
    that was the proper course it followed, therefore, that the
    order of A.T. Lawrence J., must be reversed, and that of Master
Chitty restored" 14. That case is very close to the case here. The bank takes the same point. They had no account in the name of the Judgment Debtor as described in the order nisi and as far as the bank was concerned they were under a duty to honour cheques on the account they did have and accept deposits to it. In my view although the adding of "trading as Chris Wise Air Conditioning" in the original summons may have been mere superfluage (see W Hill and Son v Tannerhill (1944) 1KB 472 at p.475) when it came to naming the Judgment Debtor on the Garnishee Order Nisi the respondent chose to identify the account to which the order nisi was directed and the bank was within its rights in the course it adopted. In other words the respondent brought on itself the situation which ensued and in that regard it is not without significance that the bank immediately honoured the Garnishee Order Absolute when it was served with the amended description of the Judgment Creditor. The note in the Annual Practice under the heading "Banking Account" reads "an order nisi does not attach the balance of an account at a bank unless it correctly sets forth the name of the account as it stands in the books of the bank. Where the debtor operates an account in a name other than his own, that name must be inserted in the order nisi". See Koch v Mineral Ore Syndicate (1910) 54 SJ 600. 15. That action accords with the decision of du Parcq J in Plunkett v Barclays Bank Ltd (1936) 2 KB 107 where a Garnishee Order Nisi directed to the bank garnishing all debts owing by "Donald William Plunkett" was held to attach to both accounts with the bank in his name. One was held in the name of "Donald William Plunkett trading as William Mandeville and Co" and the other "Donald William Plunkett trading as William Mandeville and Co Trust Account". 16. Although that case was to some extent complicated by the provisions of the Solicitors Act 1933 Section 1, in the course of his judgment de Parcq J at page 119 said:- "It is always open to the creditor to ask the Court to restrict the terms of a garnish order nisi so that such an account will not be affected by it". 17. Thus by analogy the respondent here by naming the judgment debtor as it did limited the effect of the order to the account named in the order nisi. 18. I allow the appeal and set aside the order for compensation made against the appellant.