Richard Manui v ANZ Banking Group (PNG) Ltd (2008) N3405

• Jurisdiction: Papua New Guinea
• Judge: Gavara–Nanu, J
• Judgment Date: 01 July 2008
• Citation: (2008) N3405
• Docket Number: WS NO. 893 OF 2005
• Court: National Court
• Year: 2008
• Judgement Number: N3405

Full Title: WS NO. 893 OF 2005; Richard Manui v ANZ Banking Group (PNG) Ltd (2008) N3405

National Court: Gavara–Nanu, J

Judgment Delivered: 1 July 2008

N3405

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 893 OF 2005

BETWEEN:

RICHARD MANUI

Plaintiff

AND:

ANZ BANKING GROUP (PNG) LIMITED

Defendant

Waigani: Gavara–Nanu, J

2007: 25 September

2008: 1 July

NEGLIGENCE – Duty of care owed by a bank to its customers – Duty of a bank to protect its customers’ Accounts against fraud – Where forgery is obvious on the face of bank documents – A bank claiming signatures on bank documents belong to the customer – Bank has the onus to prove its assertion – Bank acting to its own peril in failing to prove its assertion.

Cases cited:

Papua New Guinea Cases

Bank of Hawaii (PNG) Limited v. Papua New Guinea Banking Corporation

Limited & 2 Ors (2001) N2095

MVIT v. Etape (1994) PNGLR 596

MVIT v. Pupune (1993) PNGLR 370

Papua New Guinea Institute of Medical Research v. Papua New Guinea

Banking Corporation N1934

Overseas Cases

Commercial Bank of Australia v. Flannagan (1932) 47 C.L.R. 461

Commissioner of Taxation v. English, Scottish & Australian Bank [1920]

A.C 683

Kolta Development Pty Ltd & Ors v. The State & Ors N1470

Lloyds Bank v. Savory [1933] A.C. 201

London Bank of Australia v. Kendall (1920) 28 C.L.R. 401

Marfani v. Midland Bank Limited [1968] 1 W.L.R. 956

Midland Banking Limited v. Reckitt [1933] A.C. 1

Orbit Mining & Trading Co. Limited v. Westminster Bank Limited [1963] 1

Q.B. 794

Saving Bank of South Australia v. Wallman (1935) 54. C.L.R 688

Shaw v. The C’wealth of Australia [1963] PNGLR 119

Supreme Court Ref. No. 4 of 1980 (No.2) [1982] PNGLR 65

Counsel:

T. Tingnni, for the plaintiff

C. Makail, for the defendant

1 July, 2008

1 gavara–Nanu, J: The plaintiff claims K18, 790.00 in damages against the defendant with interest at 8% and costs. The plaintiff was a Prime Customer with the defendant and held a Bonanzer Account No. 11202904 (the Account) at the Boroko branch of the defendant. The plaintiff’s claim arises out of the allegation by the plaintiff that between 3 August and 26 October, 2004, the defendant, without authority debited the amount claimed against his above Account. The plaintiff alleges that in the period mentioned above, he did not make any withdrawals from the Account or authorized withdrawals totalling K18, 790.00. The plaintiff alleges that the defendant paid out K18, 790.00 from the Account without any authority either express or implied from him.

2 The plaintiff’s claim is based on negligence, in that it is claimed that the defendant breached a duty of care owed to him as its customer to look after and protect his funds in his Account in accordance with safe banking practices. Thus the plaintiff says that the defendant was negligent in paying out the K18, 790.00 from his Account without his authority.

3 In the period stated above, the plaintiff alleges that there were 21 unauthorized withdrawals from his Account amounting to K18, 790.00.

4 In the Statement of Agreed and Disputed Facts filed on 27 July, 2006, the parties agreed that the plaintiff was a Prime Customer with the defendant and at all material times operated the said Account with the defendant’s Boroko branch. It was also agreed that K18, 790.00 was debited against the Account through withdrawals made with withdrawal forms or slips in the period stated above. It was also agreed that the proof of plaintiff being a customer of the defendant was by plaintiff’s specimen signature which was kept by the defendant. It was further agreed that the plaintiff did lay a complaint with the defendant resulting in the defendant directing a “stop payment” on the Account and an internal investigation being conducted by the defendant on the plaintiff’s complaint.

5 What is in dispute is the plaintiff’s claim that the payments or 21 withdrawals totalling K18, 790.00 against his Account were unauthorized. The defendant claims that all the withdrawals were made personally by the plaintiff by signing all the withdrawal forms. The defendant therefore says that the plaintiff authorized the debiting of various amounts totalling K18,790.00 against his own Account. The defendant says all the withdrawal forms bear the plaintiff’s signature which it says is the proof that he made the withdrawals.

6 The plaintiff has claimed that in the period stated above, which is when the withdrawals were made he was in Wewak trying to run his PMV business. The defendant disputes this and says that plaintiff was in Port Moresby at that time and says that plaintiff personally made the withdrawals from the Account. The defendant therefore denies liability.

7 The issue to be determined is whether the withdrawals made in the period mentioned above totalling K18, 790.00 which was debited against the plaintiff’s Account were made by the plaintiff personally. If it is determined that the withdrawals were made by the plaintiff as claimed by the defendant then that will be the end of the matter. But if it is determined that withdrawals were made by someone other than the plaintiff without the plaintiff’s authority then the next question will be whether the defendant was negligent in not preventing such unauthorized withdrawals. And if the defendant was negligent then it will follow that it is guilty of breaching the duty of care it owed to the plaintiff by failing to protect the plaintiff’s funds from being illegally withdrawn.

8 The next issue that will arise is the measure of damages for the plaintiff.

9 The plaintiff relied on his two affidavits, one was sworn on 21 September, 2006 and the other was sworn on 14 September, 2007. He also relied on an affidavit sworn by Mr Sam Bangui on 2 August, 2006. The plaintiff and Mr Bangui also gave evidence at the trial. The gist of plaintiff’s affidavit and oral evidence is that from 29 August, 2004 to 14 November, 2004, which is the period in which all the withdrawals were made, he was in East Sepik Province trying to get start his PMV business, with a vehicle he bought in Port Moresby, which was a Toyota Dyna, which he had shipped to East Sepik Province. He says the vehicle arrived at the Wewak wharf on 6 September, 2007, and he stayed in Wewak for almost three months.

10 Before the plaintiff went to Wewak, he told Mr Bangui to check his Post Office Box for his incoming mail. He authorized Mr Bangui to open all incoming mail and read them and inform him of any urgent matters. Plaintiff’s bank statements were in one of those incoming mail and when Mr Bangui checked the statements, he noticed that there were withdrawals made by someone totalling K18, 790.00. Mr Bangui then phoned the plaintiff on 25 October, 2004 and informed him of the withdrawals. As a result the plaintiff travelled to Port Moresby from Wewak on 14 November, 2004. The plaintiff has adduced evidence of his dates of travel to and from Wewak by producing copies of his airline tickets. The period between those dates of travel is consistent with the period he says he was in Wewak.

11 On 25 October, 2004, when Mr Bangui informed the plaintiff about the withdrawals, he instructed the defendant through Mr Francis Waranduo, an employee of the defendant to put “stop payment” on his Account. However, after “stop payment” was put on the Account, on the next day which was 26 October, 2004, the last withdrawal was made from the Account for the amount of K590.00.

12 The defendant as I alluded to earlier denies liability to plaintiff’s claim and maintains that withdrawals were made personally by the plaintiff. In its denial, the defendant relies on evidence given by two of its staff, Mr Leo Kamara who is the Manager, Commercial Banking and Ms Seneka who is the Branch Manageress who at relevant times was working at the defendant’s Boroko Branch. The evidence by Mr Kamara covered the internal investigations he conducted into the complaint made by the plaintiff, including his interview with an employee of the defendant Ms Patricia Patapul on 29 December, 2004.

13 In his evidence, Mr Kamara told the Court that all withdrawals made against the plaintiff’s Account were made in accordance with normal and accepted banking practices and procedures. He said all the necessary safe guards and banking requirements to effect proper and valid withdrawals were followed and complied with by the defendant and said that the defendant made those payments from the plaintiff’s Account only after it was satisfied that withdrawal forms bore the plaintiff’s signature. In other words the defendant was satisfied that all the withdrawals were made personally by the plaintiff.

14 Ms Seneka’s evidence was that she interviewed Ms Patapul who was a teller with the defendant who had served the plaintiff on most times when he went to the bank to withdraw money from his Account. In the interview, Ms Patapul told Ms Seneka that as far as she could remember all the withdrawals were made by the plaintiff personally. Ms Seneka also told the Court that she compared one of the signatures in one of the withdrawal forms with the plaintiff’s specimen signature kept by the defendant and both signatures matched. She also told the Court that the plaintiff was present in her office when she questioned Ms Patapul regarding the withdrawals and said that the plaintiff was angry and was uncooperative and kept saying to her that withdrawals were unauthorized. She said because the plaintiff was not co-operating, the discussion between her, Ms Patapul and the...