US International Marketing Ltd v National Bank of New Zealand Ltd [2003] NZCA 295; (2004) 8 NZBLC 104,040; (2003) 16 PRNZ 979; (2003) 10 TCLR 941 (15 December 2003)

Last Updated: 16 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA144/02

BETWEEN US INTERNATIONAL MARKETING LIMITED
Appellant

AND THE NATIONAL BANK OF NEW ZEALAND LIMITED
Respondent

Hearing: 4 December 2003

Coram: Blanchard J McGrath J Glazebrook J

Appearances: B O'Callahan for Appellant
W M Wilson QC and D Chan for Respondent

Judgment: 15 December 2003

JUDGMENT OF THE COURT DELIVERED BY GLAZEBROOK J

[1] The National Bank seeks conditional leave to appeal to the Privy Council from the judgment of this Court of 28 October 2003.
[2] Mr Wilson QC submitted first that Rule 2(a) applies as the judgment was a final judgment and the matter in dispute is $5,000 or upwards or involves some claim or question of property of $5,000 or upwards. The Bank accepted that the judgment dealt only with liability and that there has not yet been a trial and judgment on damages and that, in such circumstances, the general principle is that such a judgment is not a final judgment – see Wilding v Attorney-General CA260/02, 17 October 2003, Langham v Seed (1994) 8 PRNZ 8 and Attorney-General v Gray [1982] 2 NZLR 22.
[3] Mr Wilson submitted however, that this case is different in that the Court granted a declaration as to liability and a declaration cannot be interlocutory. He described this argument as technical, in that the judgment could equally have been worded as a finding on liability. We agree. We do not consider the Bank has an appeal as of right under Rule 2(a).
[4] Mr Wilson’s second submission was that the question in the appeal is one which, by reason of its great general or public importance or otherwise, ought to be submitted to the Privy Council. There are two aspects to this. The Bank submitted first that the judgment creates some uncertainty as to the test for dishonest assistance because of the divergence of opinion among the three members of the Court.
[5] Mr Wilson pointed to the fact that Tipping J considered it helpful to introduce into the present arena the concept of the reasonable banker, and to look at the circumstances known to the bank in question through those objective eyes (para [9]). However, Anderson J questioned this approach (at para [68]). Glazebrook J considered that Tipping J’s “reasonable banker” formulation may be able to be seen as merely reinforcing the objective element, while recognising that the subjective elements include a third party’s experience as well as the state of his or her knowledge (para [78]). Glazebrook J also had some reservations (at para [79]) as to the final subjective element as accepted by the majority of the House of Lords in Twinsectra v Yardley [2002] 2 AC 164. In Mr Wilson’s submission it would be desirable to obtain, as quickly as possible, greater certainty as to the precise test, in order to achieve the efficient and orderly conduct of business affairs of banks (and others who hold the funds or property of others), their customers, and potential third party claimants.
[6] It may well be a matter of great general or public importance that the test for dishonest assistance be clarified but in this case the differences of approach between the three judgments (to the extent they exist) had no effect on the decision in the case. It would be inappropriate therefore to grant leave for the Bank to argue what can be seen as a hypothetical issue. We acknowledge it is possible that the Privy Council may take a different view of the facts but this is only a possibility and the application of the test to these unusual facts can have no general or public importance.
[7] The second basis upon which Mr Wilson argued that there is great general or public importance relates to the Bank’s principal argument in the proposed appeal. The Bank wishes to argue that, in this situation, the liability of banks to third parties is to be determined in accordance with Royal Brunei Airlines v Tan [1995] 2 AC 378 and possibly Twinsectra v Yardley but that banks should be excused from liability for not meeting a customer demand on a basis that is more in line with that set out in Westpac Banking Corporation v Savin [1985] 2 NZLR 41.
[8] Mr Wilson submitted that the judgment as it stands affects all banks (and others holding funds). If leave to appeal is not granted now, Mr Wilson submitted that such parties will act in accordance with the judgment, which places a greater onus to meet their customers’ demands and to reject third party claims. He submitted that, if the judgment is reversed on appeal, those who have complied with the judgment in the meantime may find that they are ultimately liable to third parties.
[9] As indicated above, the Bank is not arguing for anything other than the Royal Brunei test, insofar as liability to third parties is concerned. There can therefore, on its argument, be no liability to third parties if it pays out in accordance with the test set out in the judgment. What the Bank seeks is a twilight zone where it will have no liability to its customer if it does not pay out and no liability to third parties if it does. We are not convinced, therefore, that the matter is of sufficient general or public importance that conditional leave be granted at this stage with all the attendant delay and expense.
[10] We therefore adjourn the Bank’s application for conditional leave, to be brought on with 21 days notice after the remaining issues have been determined in the High Court and any appeal to this Court has been determined or abandoned, or the right of appeal to this Court lost.

Solicitors:
Carter & Partners, Auckland for Appellant
Minter Ellison Rudd Watts, Wellington for Respondent