National Bank Ltd v O'Connor

JurisdictionIreland
Judgment Date01 January 1969
Date01 January 1969
CourtHigh Court
(H.C.)
National Bank Ltd
and
O'Connor

Mistake - Bank drafts - Drafts obtained by fraud of teller and handed over to a third party - Lack of proper enquiry by third party - Implied knowledge of fraud - Title to moneys obtained by fraud and mistake of fact -Right to recover proceeds of drafts so obtained -Whether mistake must be inter partes.

T., an employee of the plaintiffs, in 1950 was transferred to the Nenagh branch of the Bank where he met the first named defendant O'C., a customer at this branch and a very successful businessman. T. was transferred to another branch in 1953 and in 1956 he was transferred to the Tuam branch, where he held the position of teller. Between the year 1953 and August,1961 a number of complex transactions took place between T. and O'C., in the course of which O'C., advanced considerable sums of money to T. which were supposed to have been used by a group known to T., for investment in an enterprise which T. alleged had to do with the purchase of motor vehicles for re-sale at such a profit that an unusual rate of interest was paid on the money so advanced. It was not definitely proved that no such group existed but O'C. never met them, although he had requested a meeting with them on a number of occasions. Furthermore, precisely what T.did with the moneys and how he operated was not clearly shown. The money advanced by O'C. from time to time to T. was repaid as arranged with substantial interest. For the purpose of these transactions it became necessary for O'C. to obtain an advance of £8,000 from the second named defendants, Bowmaker (Ireland) Ltd., which was to be repaid, after extensions, on 26th August, 1961. On the 25th August, 1961, O'C. went to Tuam, for the purpose of obtaining money to discharge his liability to Bowmakers (Ireland) Ltd., and to arrange for the completion of these transactions with T. and the group. He obtained from T. a cheque for £8,000 which was signed by B. P. Canavan and which was duly sent to Bowmakers. (This cheque was forged by T.). It was agreed between O'C. and T. to complete the transaction and, for this purpose, they agreed to meet in Tuam on the 28th August, 1961. The sum then due to O'C. was £17,000, as agreed by the parties. On this date the plaintiffs through their Tuam branch issued two bank drafts. The first, No. 10899 was for £6,000 in favour of "C. Melvin". The second, No. 10900 was for £11,000, in favour of O'C. No consideration was given for the drafts. Having been...

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1 books & journal articles
  • The Rise and Fall of the Mistake of Law Rule
    • Ireland
    • Trinity College Law Review No. III-2000, January 2000
    • 1 January 2000
    ...Did the mistake cause the payment; (iii) Did the payee have a right to receive the sum that was paid to him." 42 (1992) 175 CLR 353. 41 (1969) 103 ILTR 73. 44 Ibid., per Budd J., at 89. 2000] The Mistake of Law Rule reference to fundamental mistake. Recognition of unjust enrichment principl......

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