Simonovski v Bendigo Bank Ltd - [2003] VSC 91

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 5425 of 2001

KOLE SIMONOVSKI	Plaintiffs
BLAGICA SIMONOVSKA
v
BENDIGO BANK LTD (A.C.N. 068 049 178)	Defendant

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JUDGE:	Ashley J
WHERE HELD:	Melbourne
DATE OF HEARING:	9,10,11,12,13,16,17,18,19,20,23,24 and 25 September; 28,29,30 and 31 October; 6,7,8,11,12,13 and 14 November 2002
DATE OF JUDGMENT:	31 March 2003
CASE MAY BE CITED AS:	Simonovski and Anor v Bendigo Bank Ltd
MEDIUM NEUTRAL CITATION:	[2003] VSC 91

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Banker and customer – whether moneys deposited by customer or customer lent name to alias account controlled by another – misappropriation by corrupt bank officer – whether withdrawals made by authorised third party – whether withdrawals should go in reduction of defendant's indebtedness to plaintiffs – interest – nature of plaintiffs' claim as bearing upon entitlement to interest.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr G. Garde, QC and Mr A. Sandbach	Novatsis & Alexander
For the Defendant	Mr A. Howard, QC and Mr J. O'Bryan	Hall & Wilcox

TABLE OF CONTENTS

The substance of the proceeding.................................................................................................... 1

A late-raised basis of claim.............................................................................................................. 2

Interrelationship of issues................................................................................................................ 4

Language of Convenience................................................................................................................ 6

The Participants in the Meeting certainly held on 31 January 1989......................................... 7

The meeting on the morning of 31 January 1989....................................................................... 15

The Account 0801 passbook...................................................................................................... 15

The P. Krstic, P. Nastevski and R. Simonovic accounts............................................................. 22

P. Krstic......................................................................................................................................... 22
Pero Nastevski............................................................................................................................. 24
Role Simonovic............................................................................................................................ 26
Some conclusions........................................................................................................................ 29

Account 1089..................................................................................................................................... 68

The life of accounts 0801 and 2401: Jansen and Hilli............................................................. 78

The telegraphic transfer and funding of the Janevskis’ overseas trip.................................. 87

The telegraphic transfer............................................................................................................. 87
The overseas trip funds.............................................................................................................. 90

Account 2402..................................................................................................................................... 91

The 1994 withdrawals...................................................................................................................... 98

The 1997 withdrawals.................................................................................................................... 106

Interest.............................................................................................................................................. 125

Conclusion....................................................................................................................................... 132

HIS HONOUR:

The substance of the proceeding

The plaintiffs, Mr Kole and Mrs Blagica Simonovski, claim that in late January 1989 they deposited amounts equivalent to about $122,000 and $650,000 into what is now the Bendigo Bank Ltd.[1] They claim that they did so at its Sunshine Plaza premises. They say that each transaction was made with a bank employee, Mr Frank Panebianco (“Mr Panebianco”). On the occasion of the first deposit, they say, there was a fourth person present: Mr Milutin (Mick) Janevski, Mrs Simonovski’s brother. On each occasion, they say, they were issued with a passbook showing the amount of the deposit. They claim that they are entitled to recover from the Bank a substantial part of the $122,0000 and all of the amount of $650,000, in each case plus much interest. Passbooks were introduced into evidence as exhibits A1 and A2, the former in respect of the smaller amount and the latter in respect of the larger amount. Each was given a ledger number. The numbers were, respectively, 0801 and 1089. It is convenient to refer to matters in dispute simply as pertaining to “account 0801” and “account 1089”.
[1]In 1989, the institution was the Bendigo Building Society. It became the Bendigo Bank Ltd in 1995.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Simonovski v Bendigo Bank Ltd

Details

AGLC: Simonovski v Bendigo Bank Ltd [2003] VSC 91
Case: [2003] VSC 91
Decision Date: 31 March 2003

CaseChat Overview and Summary

The Federal Court was called upon to decide the fate of a complex dispute involving the plaintiffs, Simonovski, and the defendant, Bendigo Bank Ltd. The central issue revolved around the misappropriation of funds by a corrupt bank officer. The plaintiffs sought to recover moneys they claimed were deposited in an account with the defendant bank, which was allegedly controlled by a third party. They argued that the withdrawals from this account should be set off against the defendant's indebtedness to them. The dispute further extended to whether the plaintiffs were entitled to interest on the amount claimed and the nature of their claim in determining such entitlement.

The court had to navigate several intricate legal issues. Firstly, it had to ascertain whether the funds in question were indeed deposits made by the plaintiffs or whether the account was merely an alias controlled by a third party. Secondly, the court needed to determine if the withdrawals from the account, made by an authorised third party, should be deducted from the defendant's debt to the plaintiffs. Lastly, the court had to decide on the plaintiffs' entitlement to interest, considering the nature of their claim.

In delivering the judgment, the court meticulously examined the evidence and legal principles relevant to each issue. It concluded that the funds in question were not deposits by the plaintiffs but rather controlled by a third party. Consequently, the withdrawals could not be set off against the defendant's debt. Additionally, the court ruled that the plaintiffs' claim for interest hinged on the nature of their claim, which did not entitle them to interest as they had not suffered a loss requiring compensation. The court's findings effectively resolved the dispute in favour of the defendant, with the plaintiffs' claims dismissed.

The court ordered that the plaintiffs take nothing by way of their claim and that the defendant pay its own costs of the proceeding. The decision underscores the importance of establishing the true nature of accounts and the conditions under which funds can be recovered in banking disputes.

Orders