CUSTOMER

Definition of customer
-BAFIA does not define the word customer but defines the
word depositor as a person entitled to repayment of deposit,
whether made by him or any other person.
- the word depositor has a narrower meaning as customer
-all depositors are customers but not all customers are
depositors
• a person may be a customer even though his
only connection with the bank at the time in Q
was payment into an acc opened 4 the
purpose of a single cheque for collection.
- Ladbroke & Co. v Todd
• a person is not a customer if the bank
performs a casual service for him ie. cash a
cheque for a person who has no acc at the
bank.
-Barclays Bank Ltd v Okenarhe
• A thief who opens acc with a stolen cheque is
also considered as a customer.
- Oriental Bank of Malaya v. Rubber Industry

• A bank can be a customer to another bank

- Importers Co. Ltd v. Westminster Bank Ltd
 Relationship of Bank and Customer
Charcteristics of the relationship
(i)Contract – express(agreement) or implied (S97 BAFIA-banking secrecy) or
custom (usual practice by bank or customer eg. Customer need to be
carefull with their a/c)
- Foley v. Hill (1848) @ HLC 28 – when a customer deposit his money with a
bank, a debtor-creditor relationship base on contract exist.
(ii) Agency –
- Westminster Bank Ltd. V. Hilton (1926) 43 TLR 124 – bank receive cheque or
pay cheque on behalf of customer.
(iii) Fiduciary - A person who hold a position of trust and confidence with
respect to someone else and who is obliged to act solely for that person
benefit.
Woods v. Martin Bank Ltd. & Anor (1959) 1QB 55 – Bank give overdraft to W
and advised him to invest in a company which later become bankrupt.
(iv) Constructive trustee & beneficiary relationship
-Karak Rubber Co. Ltd. V. Burden & othrs (1972) 1 All
ER 1210
Facts: New directors has taken over mgmt from
previous directors of KRCL. Bank has help to released
the compny’s money. KRCL used the money to buy
it’s own shares which is against s. 67 of Companies
Act and later is dissolved. New directors and bank
are sued.
Court: Bank is wrong in helping the directors to
deceit. As a trustee, bank is wrong to released the
money when it has knowledge that the directors has
dishonest intention and fraudulent scheme.
v) Bailee – safe custody & safe deposit box customer.
- s101 Contract Act1950 – A bailment is the delivery of goods by
one person to another for some purpose, upon a contract
that they shall, when the purpose is accomplished, be written
or otherwise disposed of according to the directions of the
person delivering them. The person delivering the goods is
called the bailor. The person to whom they are delivered is
called the bailee.
The Effect of War To Bank
Arab Bank v. Barclays Bank (1945) AC 495
Facts: AB has current a/c with BB branch at Allenby
Square, Jurusalem. After 14/5/1948, Israel is
announced as a country and BB is in Israel. Israel has
passed a law that give right to property of
‘absentees’ to ‘Guardian of Property of Absentees’.
( Absentee – whoever has property in Israel after
29/11/47 but has gone out from Israel)). AB is an
absentee, so BB in Jurusalem has to give all the
money in current a/c to custodian. AB try to get its
money back from BB in England.
HOL: Dismiss – have to follow law of Israel.