National Australia Bank Ltd v Swed (No. 2)

In the Federal Court, the National Australia Bank Ltd sought an order for possession of a property owned by Swed, following a default on a mortgage secured against the property. Swed’s wife had obtained access to Swed’s accounts and had made substantial withdrawals to satisfy her gambling addiction, without Swed’s knowledge or consent. The bank argued that Swed had authorised the transactions, failed to comply with the Banking Electronic Funds Transfer Code of Conduct and the bank’s Terms and Conditions, and had acted with extreme carelessness in allowing his wife to gain access to his accounts.

The primary legal issues were whether the transactions were authorised by Swed, whether Swed had complied with the Banking Electronic Funds Transfer Code of Conduct and the bank’s Terms and Conditions, and whether Swed had acted with extreme carelessness in allowing his wife to gain access to his accounts. The court had to determine whether Swed was liable for the default on the mortgage and whether the bank was entitled to an order for possession of the property.

The court found that the transactions were not authorised by Swed and that he had not complied with the Banking Electronic Funds Transfer Code of Conduct and the bank’s Terms and Conditions. However, the court also found that Swed had not acted with extreme carelessness in allowing his wife to gain access to his accounts. The court held that Swed had taken reasonable steps to protect his accounts and that his wife’s actions were unforeseeable. The court found that the bank was not entitled to an order for possession of the property and dismissed the bank’s claim.

The court ordered the bank to pay Swed’s costs of the proceeding.