Commonwealth Bank of Australia v Farquhar - [2009] WADC 52

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION: PERTH

CITATION: COMMONWEALTH BANK OF AUSTRALIA -v- FARQUHAR [2009] WADC 52

CORAM: DEPUTY REGISTRAR HEWITT

HEARD: 6 APRIL 2009

DELIVERED : 6 APRIL 2009

FILE NO/S: CIV 3286 of 2008

BETWEEN: COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124)
Plaintiff
AND
BRETTNEY DAVID FARQUHAR
Defendant

Catchwords:

Practice and procedure - Money paid under mistake of fact - Summary judgment

Legislation:

Property Law Act 1969

Result:

Judgment for the plaintiff

Representation:

Counsel:

Plaintiff: P D Quinlan
Defendant: In person

Solicitors:

Plaintiff: Clayton Utz
Defendant: Not applicable

Case(s) referred to in judgment(s):

Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87

DEPUTY REGISTRAR HEWITT: In this matter, the plaintiff has applied for summary judgment against the defendant by a summons dated 13 February 2009 and that is the matter requiring my decision.
The plaintiff is a bank which alleges that it paid a sum of money to the defendant by mistake and seeks the reimbursement of those funds.
The circumstances of the payment have in their genesis a Family Court proceeding between the defendant and his former wife which eventually resulted in orders for the settlement of a property dispute between them. Those orders were pronounced by the Family Court by order dated 27 June 2008 and included within the orders was the following:
"Contemporaneously with the transfer of the respondent's right, title, estate and interest referred to in paragraph 7, the monies held in the Commonwealth Bank cash investment account be applied.
(a)A payment of all monies secured on the property including the mortgage to Keystart Loans Limited;
(b)In payment of the sum of $80,000 to the respondent; and
(c)In payment of the balance to the applicant."
The evidence establishes that the bank account referred to was a cash investment account in the joint names of the defendant and his wife. The evidence also establishes that the account required two signatures to be operated. Following the decision of the Family Court the defendant requested the bank to transfer the sum of $80,000 to him pursuant to the orders made. I do not doubt that he did so in good faith, since previous orders requiring monies to be removed from the account and paid to the parties had been actioned by the bank. The terms of this order however were different since the Court did not order the direct disposal of monies from the account but ordered that upon the happening of certain events the money in the account was to be disposed of in a particular way. The officers of the bank, upon receiving the defendant's request, considered it was necessary for his wife to join with him in a request that the monies be dispersed in accordance with the terms of the order. Notwithstanding the fact that an officer of the bank formed that view, through an error within the bank itself, the monies were transferred by it to an account operated by the defendant. Subsequently, the defendant's wife obtained the balance of the account including a cheque for $80,000 made out to the defendant which he received.
Subsequently, the wife learned that the bank had made the earlier payment of $80,000 and agitated the issue.
In my view, it is clear that the payment which was made by the bank did in fact require the authority of both of the parties and was not of itself sufficiently authorised by the order of court. The order of the court was an order governing the manner in which the assets of the parties to the marriage were to be dealt with, and the defendant's right to the money required him to undertake certain acts as a pre-condition to his right to receive that money.
In my view, it is clear that some administrative oversight within the bank resulted in the payment by it to the defendant being made. The bank had identified the need for the approval of the wife but for some reason at a later stage that requirement was overlooked. I agree with the contentions advanced by the plaintiff that the court order was not of itself authority to the bank to make the transfer.
Again, it is clear on the materials which are before me that the payment was made to the defendant and that is not a matter which is seriously in dispute – the defendant conceding that he has received not only the initial transfer but also the subsequent cheque from his former wife.
In times past, there were distinctions of importance between payments made under a mistake of fact and payments made under a mistake of law. To a large extent, those distinctions have become irrelevant by virtue of the provisions of s 124 and s 125 of the Property Law Act 1969 ("the Act"). In any event, this would appear to me to be a mistake of fact rather than any mistake of law.
This is however a proviso within the Act that where the recipient of a payment made under a mistake of fact or law has so altered his position in reliance of the validity of the payment that it is inequitable to grant relief ‑ the Court may refuse relief. There is not in the circumstances of this case any suggestion that the defendant has altered his position in any way to his detriment relying on the monies paid.
In the course of argument before me, I raised the issue as to whether or not the plaintiff was in fact out of pocket by virtue of this payment. There is no evidence before me that the plaintiff has made good to the wife the amount by which it depleted the account by the unauthorised transfer to the defendant. Although that may have some impact on other aspects of the claim, it seems to me clear that the wife has raised an objection to the transfer to the husband and were she to press the point, would succeed in an action requiring the bank to recoup the amount transferred. In those circumstances it seems to me that it is not of particular relevance to ascertain whether or not the bank has in fact repaid the wife the monies wrongly transferred from the account, sufficient that it is clear that it would be required to do so and that she is agitating the position.
The husband has raised, by way of defence, an assertion that because of a delay in transferring the monies to him he suffered a loss because of the declining value of the Australian dollar in the world market, the loss of investment opportunities and the like. Those complaints cease to have any force when a conclusion is reached that the husband was not at the date of transfer entitled to require the bank to transfer the monies to him without the acquiescence of his former wife. Once that point is grasped, there can be no loss due to the delay since there is no default by the bank in failing to transfer the monies at an earlier stage. In fact, the husband may have, although there is no evidence of this, benefited to some extent by receiving the funds rather earlier than he would have done had he had to wait for the wife to give appropriate authorisation.
In summary therefore I find that:
(a)The transfer to the defendant by the plaintiff was made under a mistake of fact;
(b)The court order did not authorise the bank to make the transfer;
(c)That the bank, by the transfer, has made itself liable to the defendant's wife for repayment of the monies transferred;
(d)That the claim for loss by virtue of the falling Australian dollar is not sustainable on the facts as I have found them; and
(e)That there is no prejudice to the defendant such as would activate the provisions in s 125 of the Act and deny the plaintiff the opportunity to recover the funds.
This being a summary judgment application the authorities require the exercise of the discretion to enter a judgment only where there is a clear case and no real question to be tried: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87.
I find this to be such a case and in my view, the plaintiff is entitled to a judgment for the amount of $80,000. I have some reservations concerning the claim for interest since there is no evidence that any claim for interest has been made by the wife, nor any evidence that the plaintiff is at the present time, or ever has been to the date of this hearing, out of pocket. I therefore reserve the question of interest and grant the plaintiff liberty to apply. The costs of the action and the application shall be the defendants.
I shall post a copy of this decision to each of the parties when it is available and either party may move for orders in terms of this judgment by letter without the need for further court attendance.