National Commercial Banking Corporation of Australia Ltd v Batty
(1986) 160 CLR 251(Decision by: Wilson J)
Between: National Commercial Banking Corporation of Australia Ltd
And: Batty
Judges:
Gibbs CJ
Wilson JBrennan J
Deane J
Dawson J
Subject References:
Partnership
Banker and Customer
Judgment date: 13 May 1986
Decision by:
Wilson J
I have had the advantage of reading the reasons for judgment prepared by the Chief Justice. I agree in substance with those reasons and with the conclusion to which they lead. Save for the observation I am about to make there is nothing that I wish to add.
2. Counsel for the appellant, in advancing the claim for money had and received, argued that it was sufficient to show that the respondent had the means of knowledge that the money had been credited to the firm's account notwithstanding that he neither knew nor ought to have known of that fact. The phrase "means of knowledge" appears to have its origin in the opinion of the judges which was provided by Park J. to the House of Lords in the case of Marsh v. Keating (1834) 2 Cl. & Fin. 250; (6 ER 1149). It was repeated in Jacobs v. Morris (1901) 1 Ch 261 (on appeal (1902) 1 Ch 816) and again in this Court in James v. Oxley (1939) 61 CLR 433 . A consideration of the context of the references to "means of knowledge" in these cases inclines me to the view that it is a misconception to perceive any distinction between a case where it is said that a person had the means of knowledge and a case where it is said that a person "ought to have known". In Marsh v. Keating, at pp 289-290 of Cl. & Fin.; (p. 1164 of ER), Park J., speaking of the defendants, said:
"If they had not the actual knowledge, they had all the means of knowledge; and there is no principle of law upon which they can succeed in protecting themselves from responsibility, in a case wherein, if actual knowledge was necessary, they might have acquired it by using the ordinary diligence which their calling requires".
By coupling the means of knowledge available to the defendants with the diligence which their calling required his Lordship was plainly saying that if the defendants did not have actual knowledge of the payment of the money, they ought to have known of it. In Jacobs v. Morris the finding of Farwell J. at first instance is expressed to be an application of the "means of knowledge" test enunciated in Marsh v. Keating illumined by the principles of equity and justice to which Lord Mansfield referred in Moses v. Macferlan (1760) 2 Burr 1005, at p 1012; (97 ER 676, at pp 680-681). The decision was upheld in the Court of Appeal and it is unnecessary to repeat the analysis of the reasoning of their Lordships that appears in the reasons of the Chief Justice. It suffices to say that there is no authority to be found in Jacobs v. Morris for the proposition that the means of knowledge available to a defendant is a criterion of liability independent of any consideration of what, in the circumstances of a particular case, a defendant ought to have known. Of course a finding that a defendant, having no means of knowledge, could not have known of the payment will render any further consideration of the element of knowledge unnecessary.
3. Finally, I understand Dixon J. in James v. Oxley to take up the references in the earlier cases to "means of knowledge" and to accord to them an operation consistent with that which I have indicated. At p.456, his Honour said:
"The explanation of the introduction into the question of the element of 'means of knowledge' may lie in the peculiarity of the position of partners in relation to a partnership bank account upon which each partner may be empowered to draw by himself. In substance, money, though temporarily there, may never be in the actual de facto control of any member of the firm except the fraudulent partner. He may pay a cheque to the credit of the account and immediately draw against it. In such circumstances the technical 'receipt' by the firm may be considered as insufficient to make payment into the account a receipt to the use of the plaintiff unless the other partners knew or ought to have known of the credit and of its nature".
In other words, that which in the circumstances of a particular case a defendant ought to have known is intimately related to the means of knowledge available to him.
4. I would dismiss the appeal.