S P Hywood Pty Ltd v Standard Chartered Bank Ltd No. SCGRG 92/678 Judgment No. 3764 Number of Pages 14 Tort Practice

[1992] SASC 3764

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA PERRY J

CWDS
Tort - conversion of cheque - appellant, a motor dealer, enquired of Standard Chartered Bank by mistake, rather than Standard Chartered Finance, as to pay-out figure on leased motor vehicle - bank had overdraft account in the name of the lessee and quoted the amount necessary to pay off the overdraft - appellant then sent cheque for that amount to the bank, which applied it to extinguish the overdraft - held (without finally deciding the point) that it was doubtful that the bank was guilty of conversion of the cheque, as the appellant intended the bank to have it, albeit as a result of a mistaken belief as to the identify of the lessor of the vehicle - however, the Local Court Magistrate should have entered judgment on Third Party proceedings issued by the appellant against the bank, either in negligence or for moneys paid under a mistake of fact. Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR
204 at 229; Citicorp Australia Ltd v Stillwell Ford Pty Ltd (1979) 21 SASR
142; ANZ Banking Groun Ltd v Westpac Banking Corporation (1988) 164 CLR 662; Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177 and Barclays Bank Ltd v W J Simms Son and Cook (Southern) Ltd and Anor (1980) 1 QB 677, discussed.
Practice - pleading - obligation to plead facts not law - The trial Court should give judgment on any cause of action made out on the evidence - generally speaking, the pleadings should not refer to the cause of action as pleadings should be confined to allegations of material facts - if a cause of action is referred to in the pleadings, the Court is not bound by it - neither is it bound by the fact that counsel confine themselves to arguing a particular cause of action - at the end of the day, the Court should give judgment on the basis of any available cause of action - on appeal the appeal court is free to substitute a judgment in lieu of an order of dismissal or uphold a judgment on any cause of action made out by the evidence, irrespective of whether any reference to that cause of action was made in the pleadings, in the argument, or in the reasons for judgment in the Court below. Local and District Criminal Courts Act s35e. Creedon and Measey Investments Pty ltd (1988) 91 FLR 318 at 320; Williams v Milotin (1956) 97 CLR 465 at 474; Drane v Evangelou and Ors (1978) 1 WLR 455 at 458; Konskier v B Goodman Ltd
(1928) 1 KB 421; Hudson v Nicholson 5 M and W 437 and Cairns Australian Civil Procedure 3rd Ed p109, discussed.

HRNG ADELAIDE, 11 December 1992 #DATE 21:12:1992
Counsel for appellant:     Mr P Humphries
Solicitors for appellant:    Reilley Downs and Humphries
Counsel for respondent:     Mr I Robertson
Solicitors for respondent: Piper Alderman

ORDER
Appeal allowed.

JUDGE1 PERRY J This is an appeal from the order of a Magistrate who tried the action in the Local Court of Adelaide, dismissing third party proceedings brought by the appellant against the respondent, Standard Chartered Bank Ltd. The appellant was one of four defendants sued by AGC (Commercial) Ltd ("AGC"), which was formerly Standard Chartered Finance Ltd, in the circumstances to which I refer below. I will refer to Standard Chartered Finance Ltd as Standard Chartered Finance, and to Standard Chartered Bank Ltd as Standard Chartered Bank. 2. By an agreement described as an "Asset Purchase Agreement" dated 23 November 1989, Standard Chartered Finance agreed to buy a Mitsubishi van, and to allow Seddel Pty Ltd ("Seddel") the use of the vehicle pursuant to a hiring to commence on 23 November 1989 for three years, on the terms and conditions set out in the agreement. 3. Pursuant to the Asset Purchase Agreement, upon payment of the total "rent" and all other moneys payable pursuant to the agreement, and provided that there was no other default in the performance of its obligations under the agreement, Seddel would take title to the van. 4. By an instrument described as a "Guarantee and Indemnity", Graham Frederick Cornell and Roderick Robert Wyllie, who were directors of Seddel, guaranteed Seddel's obligations under the Asset Purchase Agreement. 5. Before the Asset Purchase Agreement had run its course, namely, in August 1990, Mr Wyllie brought the van to Mr Stephen Hywood of Steve Hywood Motors, which is the name under which the appellant carries on business as a second-hand motor vehicle dealer, with a request that they accept it on consignment for sale. 6. Mr Wyllie informed Mr Hywood that the vehicle was encumbered "to Standard Chartered Bank". He was told further that their account with the bank was handled by a Steve Buckley. The reference to the bank was, of course, in error, as it was Standard Chartered Finance which owned the vehicle. 7. Mr Hywood's evidence was that he rang Standard Chartered Bank and asked to speak to Steve Buckley, only to be informed that the latter did not work there any more. He asked if he could speak to someone else with respect to a pay-out figure on a motor vehicle. He was put through to a lady to whom he gave the account number, the name of the company, that is, Seddel, and details of the vehicle. He asked for a pay-out figure. He was told that she would ring back. 8. His evidence was that later in the day: "...mid-afternoon, a girl rang me back and gave me a pay-out figure." 9. The amount was $4,025.21. He wrote the figure down, and his wife thereupon, on the same day, drew a cheque for that amount made payable to Standard Chartered Bank. Mr Hywood's evidence was that he sent the cheque to Standard Chartered Bank, with a business card and a "with compliments" slip, both in the name of Steve Hywood Motors. On the "with compliments" slip he wrote down the name Seddel Pty Ltd, the pay-out figure which he had been given, the account number, which was 0115002253601 and a description of the vehicle, namely L300 (which is a Mitsubishi model designation) UEG 096. This was the same information which he had given over the phone when he asked for the pay-out figure. On the slip he also wrote words indicating that the cheque was to "pay out" the account relating to the motor vehicle. The cheque, with the "with compliments" slip and the business card, was sent to the bank on 21 August 1990. 10. When Mr Hywood spoke to Mr Wyllie the next morning and told him the amount which he had been quoted as the pay-out figure, Mr Wyllie expressed some surprise, suggesting that it was lower than he expected that it would be. Mr Wyllie suggested that he had best check it again. He said: "AGC might now be Standard Chartered Finance". 11. Mr Hywood then rang AGC, where he spoke to a Miss Jackie Arnold, who confirmed that Standard Chartered Finance had become AGC. Realising then that he might have paid the wrong company, Mr Hywood then rang Standard Chartered Bank. He spoke to a Mr Bowen at the bank and said that he had put the wrong name on the cheque and that it should have been Standard Chartered Finance, not Standard Chartered Bank. Mr Bowen indicated that he did not know anything about the matter. Thereupon, Mr Hywood rang his own bank to request that they stop payment of the cheque. He was told that it had already been presented. It was common ground at the trial that in fact it had been presented for payment by Standard Chartered Bank, who retained the proceeds. 12. When Mr Hywood spoke again to Mr Bowen, and asked the bank to pay back the money or to pay it to AGC, according to Mr Hywood's evidence, Mr Bowen said: "No, you've made out the cheque to Seddel Pty Ltd. Their business overdraft was $4,025.21. That's the cheque we've received made out to Standard Chartered Bank, so we've paid out that account." Despite a number of other approaches made subsequently to Standard Chartered Bank, they declined to do anything to remedy the situation. 13. Mr Hywood later ascertained that the correct pay-out figure was $6,070. The appellant thereupon paid to AGC $1,475, which Mr Hywood said was the difference between the pay-out figure of $6,070 and the amount of $4,025.21 which they had sent to Standard Chartered Bank. He is mistaken in that evidence, in that the difference between those two figures is $2,045, not $1,475. At all events, by the time the proceedings were instituted, the appellant had sold the vehicle to another person. 14. In about September 1990, AGC, or interests associated with it, took over Standard Chartered Finance. Previously, Standard Chartered Finance had been a wholly-owned subsidiary of Standard Chartered Bank. When it was taken over, the name of the company, that is, Standard Chartered Finance, was changed to AGC (Commercial) Ltd. 15. In the proceedings under appeal, AGC sued Seddel as the entity liable as principal on the Asset Purchase Agreement, Cornell and Wyllie as guarantors of Seddel's liability, and the appellant. 16. In the particulars of claim attached to the summons, the plaintiff alleges that the appellant: "did ... purport to acquire title to the said motor vehicle and in consequence thereof wrongfully and unlawfully convert (sic) the same to its own use." 17. Alternatively, the plaintiff alleges that the appellant: "...dealt with the said motor vehicle and by on-selling the said motor vehicle ... has destroyed the plaintiff's security interest in the same." The reference to security interest presumably refers to that expression as defined in the GoodsSecurities Act 1986. 18. The plaintiff's particulars of claim include the allegation that the appellant: "...paid out the sum of $4,595 to Standard Chartered Bank Ltd and not to the plaintiff." 19. That plea is somewhat surprising. In the first place, the amount does not square with Mr Hywood's evidence, although interestingly, it is the difference between the pay-out figure of $6,070 and the amount subsequently paid by the appellant to AGC, namely, $1,475. Furthermore, an allegation as to the payment of money by the appellant to Standard Chartered Bank would not seem to be a relevant or material plea with respect to any of the causes of action set up by AGC against the defendants, including the appellant. 20. In the Local Court proceedings, the appellant joined Standard Chartered Bank as a Third Party. The grounds of claim against Standard Chartered Bank appear in what is described as a schedule to the Third Party Notice. The schedule briefly summarizes the steps taken by the appellant leading up to its action in making a payment to Standard Chartered Bank. The facts in the schedule include the assertion that on 21 August 1990 the appellant forwarded to Standard Chartered Bank a cheque for $4,025.21, accompanied by a "with compliments" slip on which was written: "Pay-out L300 Express van - Seddel Pty Ltd. Registration UEG 906." 21. The allegations in the schedule go on to assert that Standard Chartered Bank: "misappropriated the moneys to pay an overdraft facility which was operated by the First Defendant, Seddel Pty Ltd." The allegations continue:
    "10. The Third Party was aware that the Third Defendant
    tendered the money to pay out the finance on the said motor
    vehicle, but nonetheless applied the money without the knowledge
    or the authority of the First and Second Defendants to pay off
    the overdraft.
    11. The Third Defendant says that any liability that may be
    attached to it in relation to the transaction is as a direct result
    of the misappropriation of monies by the Third Party in
    paying out the First Defendant's overdraft facility.
    12. The Third Defendant claims to be indemnified against the
    plaintiff's claim by the said Third Party, Standard Chartered
    Bank Ltd." 22. At the trial, Mr Ellis, the collections supervisor for AGC, gave essentially formal evidence as to the entry into the asset purchase agreement and the guarantees, the amount then owing pursuant to the agreement, and the history of the demands made on the defendants. 23. A submission of no case to answer by Mr Humphries of counsel for the appellant was dismissed. Mr Humphries then called Mr Hywood, who gave evidence as to the circumstances in which it came about that Hywood had paid out $4,025.21. I have already summarised that evidence. 24. After Mr Hywood had given evidence, a Mr Bowen gave evidence on behalf of Standard Chartered Bank. He confirmed that Standard Chartered Finance had been, before the AGC takeover, a wholly-owned subsidiary of the bank. He confirmed that in August 1990 Standard Chartered Bank and Standard Chartered Finance occupied the same premises in Flinders Street, and calls to both entities came through a common switchboard. He said that at the relevant time, Seddel had what he described as an unauthorised overdraft, that is, an overdraft for which formal approval had not been given. The number of the overdraft account, 0500066101, was quite different from the sequence of numbers designating Standard Chartered Finance accounts. It was clearly very different from the number, which I have cited above, attaching to the Standard Chartered Finance account in question. He recalls seeing the cheque received from the appellant and remembers that it was made payable to Standard Chartered Bank. He admitted that it came with a "with compliments" slip or what he described as a "name card". His evidence was: "The cheque would have been processed and the name card would have been thrown away." 25. He recalls that what he described as the "name card" had some writing on it, but he was unable to remember the detail of what was written. It is clear from Mr Bowen's evidence that he had no direct dealings with Mr Hywood until after the error was discovered. He admitted that on occasions a call might be misdirected to the bank which was intended for Standard Chartered Finance, and that it might be the case that in such instances bank officers simply passed the information on to the finance company. Importantly, he acknowledged that normally anyone in the position of Mr Hywood, who had asked for details as to accounts in the name of Seddel, would not have been given the information. He could only assume that information detailing the amount due on the Seddel account had been given because there was an enquiry as to a "pay-out figure". I must say that this evidence discloses a quite unacceptable, if not cavalier, attitude of the bank to the disclosure of confidential client information to strangers. No other evidence, apart from that given by Mr Bowen, was tendered by Standard Chartered Bank. Importantly it should be noted that no evidence was given by anybody who had dealt directly with Mr Hywood, before the error was discovered. 26. After hearing argument, the learned Stipendiary Magistrate reserved his decision. He gave it, together with reasons for judgment, several months later. 27. The reasons for judgment are unusual in a number of respects. They do not contain any account of the history of the transaction. They commence with the following observation:
    "I think I must agree with Mr McFarlane's submission that
    ... there cannot possibly have been a conversion of a cheque
    which was made payable to the bank. This also seems to be
    underlined by the evidence of Mr Bowen at p.43 when he said that
    the cheque for $4,020 was made out to Standard Chartered Bank and
    was for the exact balance of the Standard Chartered Bank's Seddel
    account, and also by the evidence of Mr Hywood at p.17 and p.18
    as to making the cheque payable to Standard Chartered Bank." 28. He went on to say:,
    "Although the vehicle registration number shown there might
    indicate a slight error in the transcript, which is something
    that does sometimes occur if the shorthand writer or tape
    recorder does not pick up exactly what was said by a witness, it
    certainly does seem at least possible that Mr Hywood might quite
    probably have mentioned the registration number as UEG 096 which
    is the number shown on exhibit P6. He also cited, after looking
    at his cheque butt, the account number 0115002253601 which is
    exactly the reference number mentioned in exhibit P6. If that
    number was in fact written on either the business card or the
    'with compliments' slip (I think that the evidence was intended
    to mean that it was the 'with compliments' slip which carried the
    account number) it seems rather surprising that no-one at the
    bank appears to have checked that reference number and found that
    it related to the security interest on the vehicle in question.
    However, with regard to ordinary business procedures as already
    mentioned it does seem at least a reasonable possibility that the
    bank may have quite reasonably regarded that number as something
    of an error, given that the amount of the cheque was the amount
    of the overdraft." 29. He concluded as follows:
    "Upon consideration of all the exhibits, and particularly
    exhibit P12, and also the closing addresses of counsel, I think I
    must agree that the plaintiff has lost its security interest in
    the vehicle concerned by virtue of the matters pleaded in the
    particulars of claim. The file indicates that there was no
    appearance at trial for or on behalf of the first defendant. In
    all the circumstances of the matter I feel that I must order, and
    I do, that the plaintiff have judgment for the amended sum as
    claimed of $5,598.69 inclusive of interest. The defendants of
    course must pay the plaintiff's cost of action as may be agreed
    or taxed." 30. The transcript of the exchange with counsel which took place when judgment was delivered is as follows:
    "MR McFARLANE: Could I seek costs on behalf of my client
    Standard Chartered, who is joined as a third party against the
    fourth defendant Mr Hywood, to be taxed or as agreed. HIS
    HONOUR: So far as I know I've never ever heard anything about the
    third party. There is something on the file about the third
    party being - MR McFARLANE: If it assists you, I have been
    instructed by my client not to pursue that request for costs.
    HIS HONOUR: Thank you, very well." 31. His Honour's indication that he had never heard anything about the Third Party should be read against the fact that the front sheet of the reasons for judgment refers to the plaintiff and the four defendants whom the plaintiff had sued, but makes no reference to the Third Party. The backsheet of the Local Court file was endorsed: "J 4 Plaintiff for amended sum as claimed of $5,598.69 inclusive of interest. Defts to pay costs of P's action as agreed or taxed." 32. I can see no record in the file of a judgment in favour of the Third Party, or indeed, any judgment or order as to the Third Party proceedings. No such judgment or order is recorded in the reasons. It is doubtful that there is, in those circumstances, any decision, let alone an appealable decision, as to the Third Party proceedings. But neither counsel took that point, and argued the appeal on the footing that the Third Party claim had been dismissed. 33. The grounds of appeal set out in the appellant's Notice of Appeal are as follows:
    "1. That the finding that the banking of the cheque sent by
    the appellant to Standard Chartered Bank Ltd was in accordance
    with the ordinary banking or business procedures of the third
    party was wrong and (sic) in fact and in law.
    2. The finding that the third party Standard Chartered Bank
    Ltd could not possibly have converted the cheque sent to them by
    the appellant was wrong in law.
    3. The learned Special Magistrate failed to understand the
    evidence given at trial by the appellant and failed to have
    regard of (sic) the evidence relating to the banking of the
    cheque sent by the appellant to the third party.
    4. The appellant seeks the following order on appeal:-
    (i) That the appeal be allowed;
    (ii) That the appellant be entitled to judgment against the
    respondent on the appellant's Third Party Notice;
(iii) That the cost of the appeal be the appellants costs." 34. It is clear from the reasons for judgment that the learned Magistrate failed to deal adequately or properly with the issues raised in the third party claim. In my opinion, he fell into error in failing to give proper weight to the fact that Standard Chartered Bank was informed upon two occasions and in two different ways that the payment was with respect to the motor vehicle and not with respect to the current trading account of Seddel. It is clear from the evidence that when Mr Hywood rang Standard Chartered Bank for the first time, he made it clear that he was enquiring as to the pay-out figure with respect to the transaction involving the motor vehicle. He quoted an account number which was the account number of the account with Standard Chartered Finance, a number which was quite dissimilar from the account number of the trading account of Seddel with Standard Chartered Bank. Given the fact that Standard Chartered Bank and Standard Chartered Finance had apparently for some time been trading from the same address, using a single switchboard, it is, to say the least, surprising that the call was not directed to Standard Chartered Finance, if not from the switchboard, at least when Mr Hywood explained what he wanted to know to the young woman to whom the call was referred. 35. Be that as it may, when he received a reply to his enquiry several hours later on the same day, he was misinformed by Standard Chartered Bank and given the amount necessary to extinguish the current overdraft of Seddel with the bank. There was no attempt by Standard Chartered Bank to explain in evidence how that came about. 36. When subsequently the cheque was forwarded to Standard Chartered Bank, made payable to Standard Chartered Bank, it was accompanied by a clear indication that it was being paid or proffered with respect to the pay-out of the motor vehicle account, again quoting a number which did not in any respect tally with the trading account or overdrawn account number of Seddel with the bank. It referred also to a motor vehicle. There was no reason why Mr Hywood's evidence as to those matters should not be accepted. It was not placed under serious challenge and no evidence to the contrary was given by Mr Bowen, who simply could not remember what it was that was written on the document accompanying the cheque. 37. The young woman who took and later answered Mr Hywood's telephone enquiry was not called. Mr Hywood had 18 years experience in the trade. It is unlikely that he would have sent a cheque to pay out an encumbrance on a motor vehicle, without the essential details of the amount he was paying out. Everything points towards Standard Chartered Bank seizing upon a payment to it made in mistake to enable it to extinguish an account which by then had become troublesome. Mr Bowen's evidence was that the bank had been: "...trying to get recovery of $4,020 odd from Seddel." 38. It is clear that Standard Chartered Bank was at fault in at least two respects. In the first place, having received an enquiry which it should clearly have recognised was an enquiry to do with a motor vehicle and not to do with the current account of Seddel, they quoted the balance on the current account instead of redirecting the call to Standard Chartered Finance, or at the very least enquiring as to the accuracy of the account number which they had been given. In the second place, they were clearly at fault in failing to make any enquiry as to a possible error on the part of the appellant in proffering the payment which they subsequently received in the form of a cheque, accompanied by an indication that it was being proffered on another account and with respect to a motor vehicle. The other reprehensible aspect of their conduct, namely, the extraordinarily casual manner in which they were prepared to breach the confidentiality of their client by revealing the state of its account over the telephone to a stranger, while a striking indictment of modern banking practice, does not assist the appellant's case against them. 39. The defence of Standard Chartered Bank, both at first instance and on appeal, appears to have been on the technical ground that the bank could not convert a cheque made payable to itself. 40. It must be conceded that there is some difficulty in characterising the conduct of the bank as an act of conversion. "The essence of conversion is a dealing with a chattel in a manner repugnant to the immediate right of possession of the person who has the property or special property in the chattel." (Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 per Dixon J at 229.) 41. If A gives B a cheque to deliver to C, and B instead pays it into his own account, it is doubtful if there is a conversion of the cheque, at least a conversion actionable by A, as A voluntarily surrendered his right to possession to B when he handed it over. A fortiori when A gives B a cheque, intending that B keep it, even where that intention is the product of a mistake. It is different where the very act relied upon as the act of conversion, has the legal effect of investing the owner with an immediate right of possession, as was the case in Citicorp Australia Ltd v Stillwell Ford Pty Ltd (1979) 21 SASR 142. 42. It seems to me, however, unnecessary to resolve the question whether the evidence in this case discloses an act of conversion by the bank, as there were other causes of action upon which the appellant was entitled to succeed in its third party claim. 43. The action of Standard Chartered Bank, having been put on enquiry by Mr Hywood's telephone call asking for the pay-out figure, quoting details of the motor vehicle transaction, in failing in the first place to check the matter out further or refer the enquiry to Standard Chartered Finance was clearly negligent. Furthermore, Standard Chartered Bank was equally clearly negligent in failing accurately to ascertain the true intent of the appellant when the cheque was received by it, accompanied as it was by a written indication of the account number with Standard Chartered Finance with respect to which the cheque was proffered. 44. Apart from an action in negligence, the amount of the cheque was recoverable from Standard Chartered Bank as money paid under a fundamental mistake of fact. (See ANZ Banking Group Ltd v Westpac Banking Corporation

(1988) 164 CLR 662, Porter v Latec Finance (Qld) Pty Ltd (1964) 111 CLR 177 and Barclays Bank Ltd v W.J. Simms Son and Cook (Southern) Ltd and Anor (1980) 1 QB 677.) It is nothing to the point that the matter was argued in the Court below on the basis of a conversion by Standard Chartered Bank. There is no mention of a cause of action in the Third Party Notice or in the schedule to the Third Party Notice, pursuant to which Standard Chartered Bank was brought into the action. I have cited the relevant paragraphs in the schedule to the Third Party Notice, which embody an assertion that Standard Chartered Bank: "...misappropriated the moneys to pay an overdraft facility which was operated by the first defendant Seddel Pty Ltd." Misappropriation does not designate a civil cause of action. The prayer for relief in the schedule to the Third Party Notice simply sought indemnification against the plaintiff's claim against the appellant. 45. There was, of course, no requirement to plead a cause of action, and indeed, an express reference to a cause of action would be contrary to the rules as to pleading. It was incumbent, notwithstanding the manner in which the case was argued, for the learned Magistrate to give such relief on whatever cause of action entitled the defendant to relief against the third party, having regard to the facts established by the evidence. Rule 67(b)(a)(ii) of the Local Court Rules, which were then of application to the hearing, obliged the pleader simply to plead a statement in summary form of the material facts on which the party relies. Rules to that effect have been, of course, common to most jurisdictions since the Judicature Act. Furthermore, s.35(e) of the Local and District Criminal Courts Act, as it was, provided: "35e. A local court in every cause or matter pending before it shall have power to grant, and shall grant, either absolutely, or on such reasonable terms and conditions as it deems just, all such remedies whatsoever as any of the parties thereto may appear to be entitled to in respect of every claim properly brought forward by them respectively, in such cause or matter, so that, as far as possible, all matters so in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of such matters avoided." 46. In Creedon v Measey Investments Pty Ltd (1988) 91 FLR 318, Martin J put the matter in this way (320):
    "Order 23, r 4 of the former rules provided that every
    pleading shall contain, and contain only, a statement in a
    summary form of the material facts on which the party pleading
    relies for his claim or defence. In Williams v Milotin (1956) 97
    CLR 465 at 474 the High Court said: 'When you speak of a cause
    of action you mean the essential ingredients in the title to the
    right which it is proposed to enforce.' That case and others are
    cited by Williams in "Civil Procedure in Victoria" Vol 1 at par
    13.02.30, for the proposition that: 'The pleader is not bound to
    state the legal effect of the facts upon which he relies; he is
    only bound to state the facts themselves.' The learned author
    goes on: 'It is sufficient if the pleader states the material
    facts, and at the trial he is free to present in argument
    whatever legal consequences are appropriate to the facts as found
    by the Court.' It is not necessary that the plaintiff plead a
    conclusion of law, that is, that the facts disclose as a matter
    of law the fourth defendant is vicariously liable for the alleged
    negligence of the third defendant. However, the plaintiff must
plead the 'essential ingredients'." 47. It is clear on the authorities that the trial judge is not limited to a consideration of the particular cause of action which might be identified by counsel. In Drane v Evangelou and Ors (1978) 1 WLR 455, Lord Denning MR said
(458):
    "Now there is an appeal to this court. The first point
    taken on behalf of the defendants was a pleading point. The
    amended particulars of claim alleged that the landlord had
    'interfered with the right of the plaintiff and his de facto wife
    Ann Watts to quiet enjoyment of the said premises by unlawfully
    evicting them from the said premises on Tuesday October 14,
    1975.' Counsel for the defendant submitted that that claim was
    for breach of a convenant for quiet enjoyment. He cited a
    passage from Woodfall on Landlord and Tenant, 27th ed. (1968),
    para 1338: 'Since the claim is in contract, punitive or
    exemplary damages cannot be awarded.' The judge at once said:
    'What about trespass? Does the claim not lie in trespass?'
    Counsel for the defendant urged that trespass was not pleaded.
    The judge then said: 'The facts are alleged sufficiently so it
    does not matter what label you put upon it.' The judge was
    right. The plaintiff in the particulars of claim gave details
    saying that three men broke the door, removed the plaintiff's
    belongings, bolted the door from the inside: and so forth. Those
    facts were clearly sufficient to warrant a claim for trespass.
As we said in In re Vandervell's Trusts (No. 2) (1974) Ch 269,
    321-322: 'It is sufficient for the pleader to state materials
    facts. He need not state the legal result. If, for convenience,
    he does so, he is not bound by, or limited to, what he has
    stated. He can present, in argument, any legal consequence of
which the facts permit'." 48. Furthermore, it is open to an appeal court to substitute a judgment on what appears to be the proper cause of action, even though attention was confined to another cause of action at the trial. See, for example, Konskier v B. Goodman, Ltd (1928) 1 KB 421. In that case, an action was brought by the plaintiff against builders who had allegedly been responsible for allowing rubbish from a building which they were demolishing to fall on a roof, with a result that it was carried down by a drainpipe and choked a gully in the basement of the plaintiff's adjoining premises. Following a heavy downpour of rain, the basement was flooded. The plaintiff had moved into the premises after the builders had completed their work which resulted in the accumulation of the rubbish. The case was argued at first instance solely as a case in negligence. The trial judge found liability in negligence, but on appeal the Court of Appeal held that the action in negligence did not lie, as the defendants owed no duty to the plaintiff, who was not in occupation of the adjoining premises at the relevant time. 49. However, the Court of Appeal was of the view that there was clearly an action in trespass. Notwithstanding the fact that trespass was not argued in the court below, they upheld the judgment on that footing. See per Scrutton LJ at p.426 (referring to Hudson v Nicholson 5 M and W 437):
    "The plaintiff brought an action upon the case and delivered
    a declaration which contained no allegation of vi et armis and
    was in point of form framed in case and not in trespass. The
    question arose whether the plaintiff, who at the time of the
    wrongful act was not in possession, could bring an action on the
    case. Lord Abinger CB in delivering judgment said: 'I still
    adhere to the opinion that this is properly the ground of an
    action of trespass, and not of case. It is not similar to those
    cases that have been cited, of trespass to a personal chattel,
    where trespass and case are concurrent remedies, and where a
    party may waive the trespass and go for the consequential
    damage.' The point having been raised after verdict the Court of
    Exchequer discharged a rule for a new trial. It follows from
    that case that if the present action had been brought in trespass
    there would have been no answer to the claim. But a plaintiff is
    not now bound to state the legal effect of the facts on which he
    relies; he is only bound to state the facts themselves, and we
    cannot see that the respondent has suffered any injustice in the
    way of being shut out from giving evidence which he might have
    given if the action had been treated as an action of trespass.
    We therefore think that the judgment should stand as a judgment
    in an action of trespass and that the appeal should be dismissed,
    but without costs." 50. See generally Cairns' Australian Civil Procedure, 3rd Ed, p.109:
    "Now that the rules expressly require a party to plead
    only the facts, there is no need to name any particular cause of
    action or defence. Before the Common Law Procedure Act 1852 (UK)
    the plaintiff had to indorse the cause of action on the writ.
    Under the present rules, the position is different. Once a party
    has pleaded a claim or defence, the cause of action, or the
    nature of the defence, appears from the pleadings. The court
    gives whatever judgment is justified by the proved facts.
    Although it is usual for a party to plead the claim for a
    particular cause of action, that formulation is not binding on
    the court. Pleadings in personal injury cases are cast in terms
    of allegations and particulars that are relevant only to a breach
    of a duty of care, or breach of a statutory duty. Likewise,
    allegations in contractual disputes are cast in terms relevant
    only to contract. None of this is binding on the court. So long
    as the facts proved show the plaintiff to be entitled to relief,
    the plaintiff obtains judgment. In giving judgment, the court
    does not necessarily accept the cause of action on which the
    plaintiff pleaded the claim. The plaintiff alleges the facts,
    the defendant admits or denies those facts, or alleges additional
    facts. Finally, the court applies the law to the facts as
    proved." (citing Williams v Milotin and Creedon v Measey
    Investments Pty Ltd, (supra).) See also the passage in the same work at p.115:
    "Since the first requirement of pleading is that only
    material facts are to be alleged, then obviously matters of law,
    or legal conclusions or inferences, must not normally be alleged
    in the pleadings. The pleader alleges the facts, in turn the
    court finds what facts are proved, and then draws any legal
    inferences that arise on the findings. Judgment is given on the
    basis of the findings of fact and the allegations in the
    pleadings. The legal result of the facts is a matter entirely
    for the court. A party must not plead matters of law or legal
    conclusions. For the plaintiff to allege a particular cause of
    action is usually an improper assertion of a matter of law. So
    long as the facts alleged in the pleadings show a cause of
    action, the pleading is sufficient. The plaintiff need not
    allege which cause of action is asserted." 51. With respect to that passage, I do not know that I would agree that it is necessarily improper to allege a particular cause of action. A common form of pleading is to assert an entitlement for damages "for negligence" or "for breach of contract". Such an assertion in a statement of claim can draw the attention of the opposing party to the principal cause of action relied upon. But such a plea in no way circumscribes the nature of the available relief. The trial judge is free to give judgment on any available cause of action whatever, irrespective of any mention of particular causes of action in the pleadings. Of course, it must be observed that the pleading of the material facts will often operate to confine the evidence in such a way as to have the practical effect of limiting the options of the trial judge in fashioning relief at the end of the trial. 52. But what must be kept steadfastly in mind is that all causes of action are at large at the end of the trial, in the sense that judgment may be given upon any cause of action open on the evidence as proved, irrespective of the manner in which the plaintiff's case has been presented, or argued. 53. Notwithstanding these observations, it is true that there may be cases where the suggestion that a particular cause of action is available might catch a party by surprise, and if it had been adverted to earlier, might have affected the course of the trial. That will not often be the case, as parties should go to trial well knowing that judgment may be entered on any available cause of action. In any event, there was no reason in this case for any party to think that the Third Party claim fell to be resolved only by reference to the tort of conversion. 54. There was no allegation of any particular cause of action in the third party pleadings. The words "misappropriated the money" when they appear in the schedule to the Third Party Notice were not apt to define any particular cause of action. When the parties had finished calling their evidence, the question of the cause of action against Standard Chartered Bank was at large. It was not circumscribed by reason of the fact that counsel for the appellants sought only to argue the case in conversion. A party is not denied a remedy if counsel choose to rely on one legal argument rather than another. 55. In my opinion, the learned Special Magistrate should have found that the third party Standard Chartered Bank was liable to the defendant Harwood for damages, if not in conversion, in negligence, or for money paid on a mistake of fact. 56. Here, the justice of the case calls for the substitution of a judgment against the third party on the ground that the evidence proved an entitlement to such a judgment on the basis of either negligence or as moneys paid under a mistake of fact. 57. A question arises as to the terms of the Notice of Appeal. That does not refer expressly to an entitlement to relief in negligence or any other cause of action. It would be just as wrong, however, to deny the appeal on the ground that the Notice of Appeal did not raise all the legal arguments, as it would be to deny relief at first instance on the ground that all of the possible causes of action were not canvassed. The Court has power to amend the grounds of appeal under s.63(f) of the Local and District Criminal Courts Act. Moreover, I adverted to the question of negligence during the course of the hearing of the appeal, although I did not expressly advert to the possibility of a judgment for money paid under a mistake of fact. 58. I will, on delivery of the judgment on appeal, permit an appropriate amendment to the grounds of appeal. 59. There must be an order that the appeal be allowed, and that there be judgment in favour of the appellant on its Third Party Notice against the respondent. The judgment cannot be for the indemnity claimed in the Third Party Notice. The amount of the judgment should be for the amount of the cheque, that is, $4,025, together with interest under s.35g of the Local and District Criminal Courts Act. In the circumstances, without pausing to address the question whether the claim is liquidated or unliquidated, it seems to me that it is appropriate that the interest should run from the date upon which the respondent negotiated the cheque, that is to say, from the 21 August 1990. Interest should be calculated at, say, 12% over that period to the date upon which the learned Magistrate delivered judgment, namely, 30 September 1991. That is the appropriate date because the effect of the order allowing the appeal is to substitute the judgment which he should have made for the judgment which the learned Magistrate pronounced on that day. 60. I assess interest at a lump sum of $520, giving a total judgment sum of $4,545. 61. The judgment which I have found should have been entered will speak from 30 September 1991. From that date, the judgment will, until payment, carry interest in accordance with Rule 302A. 62. I will hear the parties as to the costs of the appeal.