State Bank of NSW v Kerswell

In State Bank of NSW v Kerswell, the State Bank of New South Wales sought to recover the debit balances that had arisen in two bank accounts from the individuals in whose names the accounts were held, or alternatively from their deregistered company. The case was heard by the Supreme Court of New South Wales. The dispute centred on the responsibility of the parties for the debit balances that appeared in the accounts, particularly in the context of the company's deregistration.

The primary legal issues before the court were the identification of the parties who were liable for the debit balances and the effect, if any, of the company's deregistration on that liability. The bank argued that the individuals who had opened the accounts were personally liable for the balances, while the defendants contended that they were not liable because the company, not they personally, was responsible for the debts.

The court held that the individuals were not personally liable for the debit balances. The accounts were opened in the names of the individuals, but the purpose of the accounts was to facilitate the company's operations. Since the company was deregistered, the court found that the company was no longer an entity capable of incurring debts. As a result, the individuals could not be held personally liable for the debit balances. The bank's claim against the individuals was dismissed. The court ordered that the State Bank of New South Wales recover the debit balances from the deregistered company, which, however, was no longer capable of fulfilling that obligation.