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Skip to main content. Log In Sign Up. Belinda ongong'a. It is intended, however, to provide: A selection of useful texts and references for further reading and information is included in the Appendix. What is banking law? Banking law is not a discrete area of law like contract or torts.
This abstract will appear on the contents page of the issue containing your submission. Note that subscribers come from a wide variety of jurisdictions so please provide explanations of terms where necessary.
Plain English should be used where appropriate. Style Guidelines Please submit material under one of the following headings. All material must discuss subjects of international interest. Opinions In the style of an editorial, these are topical, opinionated pieces that often express a fairly radical or controversial view. Word length: approximately 1, Articles Articles should focus on a major, current theme of interest to the banking and financial community.
They should explain a current situation or issue in a fairly practical way and provide thoughtful analysis, comment, evaluation and criticism as appropriate.
Comparisons with other jurisdictions should be added where appropriate. Word length: approximately 4,, Legal Analysis A very specific, significant topic such as an individual case, Bill, Act or section of an Act should be discussed.
An analysis should explain why it is of relevance to a particular jurisdiction, and internationally. Membership of an approved scheme is a licence requirement. They include the power to regulate unconscionable conduct and consumer protection in the financial services industry, contained in Part 2 Division 2.
Regulation of Financial Services and Markets Chapter 7 of the Corporations Act was a new chapter of the Corporations Act, replacing the previous chapters 7 and 8, and was introduced via what is 20 See below for more about the dispute resolution framework under the Corporations Act and the Code of Banking Practice.
The UCCC was introduced in to replace previous state-based credit legislation.
This means that when you download a copy of the Consumer Credit Code, you download the Queensland legislation, which has been adopted in Victoria via the Consumer Credit Victoria Act The UCCC applies to credit: See www. It covers credit contracts and by section 10, a hiring agreement where the hirer has a right or obligation to download the goods. It also, in a separate Part 10, covers consumer leases where the hirer does not have a right or obligation to download the goods.
So some of the questions to ask when determining whether the UCCC applies will go to: Once those questions are answered, the exceptions set out in section 7 and in the Regulations will need to be considered. The banker-customer relationship is essentially a contractual one.
It is more than that, however, and contains other contractual incidents implied by the courts. In addition, the contract is overlaid by equity, tort to a lesser extent and statute including consumer protection legislation. Although described in those terms, the banker-customer relationship is not a normal debtor-creditor relationship where the debtor is required to seek out his or her creditor and repay the debt when it is due.
A bank is entitled to and should wait for a demand for repayment — a withdrawal slip or equivalent — and the timing of the demand may be prescribed by the express terms of the contract, such as with term deposits. The monetary threshold is now linked to an ABS index of the cost of new houses in Sydney so it changes regularly.
For the up-to-date threshold see the government site www. Also the Lawyers Practice Manual, Victoria chapter on consumer credit disputes.. And as banking practice changes, the way in which they are expressed may also change. The normal incidents of the relationship The basic incidents of the banker-customer relationship30 have been identified as: Under common law, the customer has only two duties: Attempts have been made at various times to extend the duties owed at common law by a customer to such things as discovering forgeries by reading statements;33 taking care of a cheque book;34 and running an organized business.
The absence of a common law duty does not, of course, prevent an obligation being imposed under the express terms of the contract, although it is necessary to ensure that important obligations are sufficiently brought to the attention of the customer. For example, leaving spaces in the figures or words for the amount. The duty includes notification of known unauthorised transactions: See section 5 of the EFT Code, available at www.
Such a duty may, in limited circumstances, include a duty to question an otherwise valid mandate, e. The banker-customer relationship is not one of the accepted fiduciary relationships41 and the contractual duty of a banker to a customer is not a fiduciary duty, except in special circumstances.
The case of Commonwealth Bank of Australia v Smith45 is an example. His advice included discouraging other sources of advice. And the geographical context was a small town.
The facts will therefore be crucial. Duty to Disclose? Misleading or deceptive conduct by silence. Claims of misleading conduct by silence are sometimes brought in the alternative to a claim of breach of fiduciary duty.
But it can be unhelpful to frame the claim as arising from a duty to disclose. That context may or may not include facts giving rise to a reasonable expectation, in the 44 Timms v Commonwealth Bank of Australia, at para One question that arises in a claim of misleading conduct by silence is whether the omission to speak must be deliberate or advertent: Conduct may be misleading or deceptive at law, even though it was not intentionally so.
Intention is regarded as an unnecessary ingredient. Where the silence in issue is a failure to provide information then, Miller suggests, the plaintiff must show that the defendant deliberately withheld that information. In turn a reference to refusing to do an act is stated to include a reference to refraining other than inadvertently from doing an act.
Other sources of liability Apart from statutory causes of action, a bank may have liability under a number of heads. A discussion of the duty of confidentiality is contained below. They cover issues such as: It is qualified - Bankes LJ in Tournier60 articulated three qualifications: Clause 22 sets out four exceptions: A claim for breach of the duty might arise where information is given to a person with no authority in relation to the account such as a spouse or relative; where information is given to a person the bank mistakenly believes to be the account holder or where information is insecurely held and as a result is inadvertently made available to third parties.
Although it can appear to be closely related, it has a different rationale to equitable principles relating to unconscionable conduct which are based on notions of a person under a special disability or disadvantage being exploited by a stronger party.
Nor is it based on their vulnerability to exploitation because of their emotional involvement.
The rule in Yerkey v Jones is also not subsumed by Amadio Liability for unconscionable conduct under Amadio contemplates that the creditor has notice of unconscionability factors: It must either explain the purport and effect of the guarantee to her or ensure that an independent adviser has explained it. The majority restricted the operation of the rule to wives although acknowledging that it might in future be extended to others in long-term, publicly declared relationships.
Kirby J, dissenting, gave as reasons for rejecting the principle: Some lower courts have extended the principles to all relationships of trust and confidence not just married women.
Dispute Resolution and the Code of Banking Practice The Role and Significance of the Code of Banking Practice The revised Code of Banking Practice the revised Code is a document with which all lawyers who advise clients in relation to their financial or property-related affairs or disputes should be familiar. Although it is described as a voluntary code, once adopted by a bank it becomes contractually enforceable. Unlike most consumer protection legislation it applies to small business and investment customers as well as individuals.
It gives customers of adopting banks an important set of rights in relation to matters including: It contains a key commitment to act fairly and reasonably in a consistent and ethical manner.
It sets out a compulsory dispute resolution framework that should not be ignored by lawyers whose clients are in dispute with a bank. The revised Code took three years to come to fruition.
Mr Richard Viney was appointed in May There was further consultation and his Final Report with 61 recommendations was published in October The drafting process itself involved further consultation into A version of the revised Code was then launched in August for implementation in August The publication and implementation of the revised Code was not straightforward.
Lawyers will therefore need to make sure that they know which version of the Code of Banking Practice they are looking at and whether the bank about whom or to whom they are providing advice has adopted the , the or the modified Code. Issues arising from particular provisions of the revised Code A detailed discussion of the main provisions of the revised Code version is contained in BFSO Bulletin 39, published in September , and it is not proposed to set out such a discussion here.
There are, however, some provisions which raise relatively complex issues. Acting fairly and reasonably Clause 2.
In doing so we will consider your conduct, our conduct and the contract between us. A list of banks that have adopted the and Codes is on the ABA website 68 www.
References in this paper are to the modified Code. It does not necessarily involve a duty to advise — a banker has not, traditionally, owed fiduciary duties to their customers. It will be interesting to see whether the courts, when they come to decide cases raising interpretation and application of the Code of Banking Practice, identify conduct as being in breach of clause 2.
Financial hardship The revised Code has introduced an obligation to try to help customers overcome their financial difficulties and, where appropriate, provide information about the hardship variation provisions of the Consumer Credit Code UCCC. We could, for example, work with you to develop a repayment plan.