Description
Opening a bank account for a customer – know your customer – failure to follow standard requirements – negligence by the bank – banker-customer relationship – express and implied duty of care – proof of fraud committed by the bank – shift of burden of proof – general damages – 31% interest rate.
- The defendant’s bank opened an account in the name of the Plaintiff’s company without following proper procedures and requirements obtained in Know Your Customer document. Also some of these requirements were skipped and the defendant did not give any explanation as to why she didn’t follow her own standard requirements. It was held that this amounted to negligence on the part of the bank and it imputes bad faith (p. 11).
- The bank permitted a bank account to be opened and operated without proper authority from the plaintiff. In law this was a breach of duty to exercise reasonable care and skill in discharging its obligations under the Banker-customer relationship (p. 12).
- In the banker-customer relationship, the banker has express and implied duty of care in processing and opening of a new account for customers to adhere to the stipulated standards. Any deviance from the required standards constitutes negligence (p. 12).
- In law, fraud is deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. For the Plaintiff to succeed in allegations of fraud the alleged fraud must be pleaded and strictly proved (p. 13).
- Some proof of fraud by the bank – the purported resolution of the Board of Directors of the Plaintiff’s company which was relied by the Defendant as the document which authorized the opening and operating of the disputed account was on the headed paper not of the Plaintiff, but of the Defendant’s bank and was filled in by a bank staff and there was no explanation from the bank about that situation, and the bank’s failure to call that staff as a witness without a sound explanation (p. 16).
- Shift of burden of proof on the defendant to rebut allegations of fraud (p. 16).
- In its character, fraud is infinite in variety with the ever dynamic operations of mankind. In civil disputes acts, omissions and concealment which involve a breach of legal or equitable duty, trust or confidence justly opposed and which are injurious to another are fraudulent acts and they constitute fraud (p. 16).
- Awarding general damages without any evidence to establish harm suffered would amount to double compensation (p. 18).
- 31% interest rate is unrealistic and unreasonable in the circumstance where the inflation rate is within a single digit (p. 18).
