Banking Essay

For the term â€Å"the business of banking†, the statute definition is inadequately, even some statute laws can help with the understanding about â€Å"the business of banking† but the definitions they are provided still not adequate (Waldeck & Giardina). Moreover, it become more difficult for defining â€Å"the business of baking† today as the fact that over the years and bank services are more diversified (Waldeck & Giardina). The case law Australian Independent Distributors Ltd v Winter (1965) 122 CLR 443 the Adelaide Cooperative Society accepted the money deposits from their members and recorded it on the passbook (Tyree 2008). The court held that the society had not carrying on the â€Å"business of banking† due to the society lacked of the power to lend money – the one of the ‘essential characteristic’ (Tyree 2008). However, there was a later reinforced in the judgement for the case Commercial Banking Co of Sydney Ltd v RH Brown & Co[1] and the ‘High Court held that the main business of bank should be that of the lending of money (Waldeck & Giardina). The s 5(1) of the Banking Act 1959 (Cth) shows the precise definition of â€Å"the business of banking† and the part (b)(i) said ‘a business that is carried on by a corporation to which paragraph 51(xx) of the Constitution applies and that consists, to any extent, of both taking money on deposit (otherwise than s part-payment for identified goods or services) and making advance of money’ which the definition was adapted straightforwardly by the High Court in Commissioners of the State Savings Bank of Victoria v Permewan Wright & Co Ltd (1914) 19 CLR 457 (Tyree 2008). However, the Victorian Court for the case R v Jost [2002] VSCA 198] held the Act merely restated the previous definition that developed by the courts (Tyree 2008). Furthermore, whether the characteristics are considered as essential or as usual, there are some doubts for the institution authorised to carry on the business of banking under the Banking Act would be considered a bank for all purposes (Tyree 2008). In Commercial Banking Co v Hartigan (1952) 86 ILT 109, the organisation was held to be a bank even they failed the Kirkwood test due to they compliance with the Irish Central Bank Act 1942 and was licensed under the Act. However, in PP Consultants Pty Ltd v Fiance Sector Union [2000] HCA 59, the High Court found that the pharmacist acting as an ‘agency’ bank and not carrying on the business of banking and held that carry on the business of a banking agent (Tyree 2008). In conclusion, statute definition, Banking Act definition and some case law are interpreting the term â€Å"the business of banking† but no one could be identified adequately. Due to the fact that over years, the definition keeps improving and become more diversified which is the reason that difficult to identified and no definition could give the adequate definition. The MacMillan and Greenwood duties are imposed on customers. Briefly explain these duties and what if any other duties have been sought to be imposed on customers. In general, the MacMillan and Greenwood are two fundamental contractual obligations owed by customer and their name is comes from the name of the relevant case (Tyree 2008). The original case of MacMillan is London Joint Stock Bank Ltd v MacMillan and Arthur [1918] AC 777. In this case, the House of Lords had to decide whether the customer owed a duty of care to the bank in the drawing of cheques. In this case, the company sued the bank breach of contract because the mistake made by careless confidential clerk of the firm. The bank paid only 120 pounds whereas the 2 pounds original payment and the firm won the case at the end. However, House of Lords took the chance to clarify the contract between firm and bank, the bank held that the customer owed the bank a duty to exercise care in the drawing of cheques and that the alteration of the cheque was, in this situation, the result is customer has breach of that duties (Tyree 2008). The Greenwood duty which from the case Greenwood v Martin Bank Ltd [1933] AC 51 mention that the plaintiff’s wife had forged a series of cheques on his account. When he found the forgeries, he threaten notify the bank immediately. However, his wife explained she just uses those money to help her sister in legal action and in second time, he discovered that his wife still forged cheque from his account and he threatens to notify the bank. Then, his wife committed to suicide. He brought the action to prevent the bank from maintaining the debit to the account for the amount of the forged cheques, the court held that had been breach of duty by he failing to notify the bank about the forged event immediately. In conclusion, this case is notify bank of any forgeries on the account known to the customer (no require to seek out), there are also two extensions for any unauthorized transactions and withdrawals (Tyree 2008). Furthermore, some further duties have been sought to be imposed on customer in order to protecting the bank’s interests. The additional duties could be classified into three categories and those duties have been the subject of recent case law (Tyree 2008). â€Å"The passbook has been replaced by the bank statement which is sent at intervals to the customer and the current practice seems to favour the customer even more since there is no way for knowing whether the customer has even received the statement (Tyree 2008). † Kepitigalla was approved by the New Zealand Court of Appeal in National Bank of New Zealand Ltd v Walpole and Patterson Ltd [1975] 2 NZLR 7 and the Privy Council in Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 (Tyree 2008).