•
LAW OF FINANCIAL INSTITUTIONS AND SECURITIES
BLO3405
• Payment under mistake
• Common payment mistakes include:
• Bank pays a cheque overlooking a stop order
• Bank pays a cheque mistakenly believing there are sufficient funds available
• Person mistakenly pays an invoice twice
• Person making an internet payment mistakenly enters incorrect account number of payee
• Payment under mistake
• Elements of the cause of action:
• Essential that payment would not have been made but for the mistake, that is, the mistake
caused the payment
• Must be the payer’s mistake (including an agent)
• The payer need not be negligent
• Voluntary payments cannot be recovered
• Payment under mistake
• Defences
• Goff J in Barclay’s Bank Ltd v WJ Simms (1980) summarised the action and defences:
• (p338)
• Further, the defence of estoppel will fail if there is some fault on the part of the defendant
• And where the payee knowingly receives funds exploiting the mistake, may be a constructive
trust for the payer: Barnes v Addy (1874)
• Payment under mistake
• Payment orders
• A bank that pays a under mistake may want to recover the money from the payee
• 3 main situations:
1. Bank pays a customer’s order in the mistaken belief there are sufficient funds – payment not
recoverable
2. Bank pays a payment order after authority has been withdrawn – recoverable
3. Where one or more cheque signatures are forged – right to recover
• Consumer protection
• 1. Australian Consumer Law
, •
• (a) Background
•
• In March 2010, the first part of the Australian Consumer Law (‘ACL’) was passed ( under
amendments to the ASIC Act 2001 and the Australian Competition and Consumer Act 2010).
•
• The ACL introduced a single, national consumer law that included new provisions relating to
unfair contract terms from 1 July 2010.
•
• Parallel regulatory responsibilities
• Regulation of Financial Service Providers
• The ASIC Act 2001 contains provisions that deal with four separate, though sometimes
overlapping areas in relation to financial services:
• Consumer protection
• 6 consumer protection initiatives discussed below:
• Unfair contract terms
• Responsible lending requirements
• Consumer warranties
• Code of Banking Practice
• EFT Code of Conduct
• Financial Ombudsman service
• Consumer protection
• 1.Unfair contract terms
• Pt 2-3 of the Australian Consumer Law voids certain ‘unfair terms’ of a standard form
consumer contract
• The ASIC Act 2001 (Cth) contains similar provisions relating to contracts of financial products
and services
• Definitions:
• A ‘consumer contract’ is one where thee acquisition of the goods or services is for personal,
domestic or household use and consumption: ACL s23(3)
• Consumer protection
• A term is ‘unfair’ if it:
• Cause a significant imbalance in parties rights/obligations
LAW OF FINANCIAL INSTITUTIONS AND SECURITIES
BLO3405
• Payment under mistake
• Common payment mistakes include:
• Bank pays a cheque overlooking a stop order
• Bank pays a cheque mistakenly believing there are sufficient funds available
• Person mistakenly pays an invoice twice
• Person making an internet payment mistakenly enters incorrect account number of payee
• Payment under mistake
• Elements of the cause of action:
• Essential that payment would not have been made but for the mistake, that is, the mistake
caused the payment
• Must be the payer’s mistake (including an agent)
• The payer need not be negligent
• Voluntary payments cannot be recovered
• Payment under mistake
• Defences
• Goff J in Barclay’s Bank Ltd v WJ Simms (1980) summarised the action and defences:
• (p338)
• Further, the defence of estoppel will fail if there is some fault on the part of the defendant
• And where the payee knowingly receives funds exploiting the mistake, may be a constructive
trust for the payer: Barnes v Addy (1874)
• Payment under mistake
• Payment orders
• A bank that pays a under mistake may want to recover the money from the payee
• 3 main situations:
1. Bank pays a customer’s order in the mistaken belief there are sufficient funds – payment not
recoverable
2. Bank pays a payment order after authority has been withdrawn – recoverable
3. Where one or more cheque signatures are forged – right to recover
• Consumer protection
• 1. Australian Consumer Law
, •
• (a) Background
•
• In March 2010, the first part of the Australian Consumer Law (‘ACL’) was passed ( under
amendments to the ASIC Act 2001 and the Australian Competition and Consumer Act 2010).
•
• The ACL introduced a single, national consumer law that included new provisions relating to
unfair contract terms from 1 July 2010.
•
• Parallel regulatory responsibilities
• Regulation of Financial Service Providers
• The ASIC Act 2001 contains provisions that deal with four separate, though sometimes
overlapping areas in relation to financial services:
• Consumer protection
• 6 consumer protection initiatives discussed below:
• Unfair contract terms
• Responsible lending requirements
• Consumer warranties
• Code of Banking Practice
• EFT Code of Conduct
• Financial Ombudsman service
• Consumer protection
• 1.Unfair contract terms
• Pt 2-3 of the Australian Consumer Law voids certain ‘unfair terms’ of a standard form
consumer contract
• The ASIC Act 2001 (Cth) contains similar provisions relating to contracts of financial products
and services
• Definitions:
• A ‘consumer contract’ is one where thee acquisition of the goods or services is for personal,
domestic or household use and consumption: ACL s23(3)
• Consumer protection
• A term is ‘unfair’ if it:
• Cause a significant imbalance in parties rights/obligations
