Can the bank ‘UNCLEAR’ cleared funds?

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hi, sorry that took a while as the file was in PDF and I had to buy a converter. I hope that I have readacted this fully, here goes....


DEFENCE

1. The Particulars of Claim dated 16 March 2015 ("Initial Particulars") lack particularity and disclose no reasonable grounds for bringing the Claim. Paragraphs referred to below are references to the unnumbered paragraphs in the Initial Particulars.
2. The Claimant stated, at paragraph 4 of the Initial Particulars, that she would provide the Defendant with detailed particulars of claim within 14 days of service of the claim form. No further particulars were received and the Defendant received a letter from the Claimant dated 7 April 2015, stating "/ am writing to notify you that I am not serving extra particulars relating to this claim'.
3. The Defence was filed at Court and served on the Defendant on 15 April 2015. After filing and serving the Defence, on 19 April 2015 the Claimant sent to the Defendant, and filed at Court, an unsigned document entitled "Further particulars" ("Further Particulars"). The Defendant then received the Directions Order dated 20 May 2015 requesting that it file and serve a Defence by 8 June 2015. Although the Claimant was out of time for serving the Further Particulars, in order to assist the Court, on a voluntary basis the Defendant has added a section to the Defence below (paragraphs 1O to 45) in response to the Further Particulars.
4. Paragraph 1 of the Initial Particulars is denied and the Claimant is put to strict proof, including of precisely when the sum of £9,052 was allegedly removed by the Defendant and from which account.
5. Paragraph 2 of the Initial Particulars is denied and the Claimant is put to strict proof, including details of the "mispredictiori' made by the Defendant and of the "commercial loss' which the Claimant alleges was suffered.
6. The Defendant avers that:
a. On 5 December 2012, the Claimant deposited a cheque in the sum of
£35,000 to the Post Office, to be paid into the joint account she shared with her partner, Mr Bell (account number xxxxxxxxxxx) ("Joint Account") ("First Cheque"). The First Cheque was drawn on the Claimant's mother's account;
b. On 13 December 2012, the Claimant's mother cancelled the First Cheque and wrote a second cheque for £35,000 paid out to the Claimant ("Second Cheque");
c. The First Cheque credited the Joint Account on 14 December 2012;
d. The Second Cheque was deposited at the Defendant's branch in Southampton on 13 December 2012, and credited the Joint Account on 14 December 2012;
e. The First Cheque was returned unpaid from the Joint Account on 17 December 2012;
f. On 17 December 2012 the sum of £35,000 was transferred by the Claimant from the Joint Account to another joint account held by the Claimant and Mr Bell with the Defendant. Following the transfer of this sum, the balance on the Joint Account was £9,027;
g. The Second Cheque was returned unpaid from the Joint Account on 19 December 2012, resulting in a negative (overdrawn) balance on the Joint Account as at 19 December 2012 of £25,973;
h. As a result of the negative (overdrawn) balance on the Joint Account, interest of £209.47 and charges of £55 were applied to the Joint Account;
i. On 4 February 2013 funds were received by the Defendant to clear the negative (overdrawn) balance on the Joint Account; and
j. The interest and charges incurred as a result of the negative (overdrawn) balance on the Joint Account (referred to at paragraph 6(h) above) were refunded by the Defendant on 6 February 2013. The Claimant has therefore suffered no loss.
7. Paragraph 3 of the Initial Particulars is denied and the Claimant is put to strict proof as to when the sum of £9,052 was "removed' from the Claimant's account as alleged.
8. Paragraph 4 of the Initial Particulars is denied. The Claimant is put to strict proof as to precisely when and how the Defendant has been "harassing' the Claimant "with telephone'.
9. Paragraph 5 of the Initial Particulars is denied and the Claimant is put to strict proof of the basis on which she is claiming interest of a rate of £500 per day.

Response to the Further Particulars

10. Paragraphs referred to below are references to numbered paragraphs in the unsigned document entitled "Further particulars" sent to the Defendant under cover of an emailfrom the Claimant on 19 April 2015.
11. Paragraph 1 is admitted to the extent that the Claimant has held the Joint Account for over 30 years.
12. Paragraph 2 is admitted to the extent that the Claimant deposited a cheque for £35,000 at the Post Office.
13. Paragraph 3 is not admitted and the Claimant is put to strict proof of the
"differing and incorrect explanations' allegedly given.
14. As to paragraph 4, it is admitted that the Defendant wrote to the Claimant on 13 December 2012 stating that "the cheque sent for £35,000 to the Co* operative Bank on 5 December 2012 [the First Cheque] has not been received as of the 13 December 9:54arrl'. The balance on the Joint Account as at 13 December 2012 was £8,915.47.
15. As to paragraph 5, it is admitted that the Claimant's mother cancelled the First Cheque. It is denied that this was done at the Claimant's suggestion. It is admitted, as set out at paragraphs 6(b) and 6(c) above, that the Second Cheque was drawn on the account of the Claimant's mother and was paid into the Southampton branch on 13 December 2012 and credited the Joint Account on 14 December 2012.
16. As to paragraph 6, it is admitted that on 14 December 2012 two credits of
£35,000 appeared on the Joint Account. Following its cancellation, the First Cheque was not returned unpaid until 17 December 2012.
17. Paragraph 7 is admitted.
18. As to paragraph 8, it is admitted that the Bank was aware that the First Cheque had been stopped (it had been told so by the Claimant). It is also admitted that the Bank mistakenly told the Claimant that the First Cheque had cleared. The Bank acknowledged this error to the Claimant in a letter dated
23 January 2013. Save for this, the remainder of paragraph 8 is not admitted and the Claimant is put to strict proof.
19. Paragraph 9 is not admitted and the Claimant is put to strict proof.
20. As to paragraph 10, it is admitted that the Defendant has been unable to obtain a recording of the second call from Mr Call Centre Adviser to the Claimant on 14 December 2012. However, it is denied that the Defendant is deliberately withholding or has destroyed that recording as alleged. The Defendant has attempted to obtain a recording of the call but has been unable to do so.
21. Paragraph 11 is not admitted and the Claimant is put to strict proof.
22. As to paragraphs 12 and 13, it is not admitted what investigations the Claimant undertook and the Claimant is put to strict proof as to the outcome of those investigations. It is admitted that there is a principle known as "Certainty of Fate". However, for the following reasons it is denied that the funds deposited by the First Cheque were the Claimant's to keep under the Joint Account terms and conditions or because of the Certainty of Fate principle. Whilst the First Cheque was deposited at the Post Office on 5 December 2012, it did not arrive at the cheque clearing centre until Thursday 13 December 2012. The Defendant has been unable to establish the reasons for this delay. The First Cheque then credited the Joint Account on Friday 14 December 2012 (being "T+2" the second day of the clearing cycle). The First Cheque would therefore not have been fully clear until "T + 6", four business days later, being after close of business on Thursday 20 December 2012. These timescales are consistent with those published on the Cheque and Credit Clearing Company website. As pleaded at paragraphs 6(b) and 6(e) above, the First Cheque was cancelled by the Claimant's mother on 13 December 2012 and returned unpaid from the Joint Account on 17 December 2012. The terms and conditions for the Joint Account provide that at the end of six business days (being after close of business on 20 December 2012), the cheque is cleared (clause 2.2).
23. As to paragraph 14, it is admitted that the Defendant is obliged to give customers details about their accounts in clear and understandable language. As stated at paragraph 18 above, it is admitted that the Bank mistakenly told the Claimant that the First Cheque had cleared. The Bank acknowledged this error to the Claimant in a letter dated 23 January 2013.
24. Paragraph 15 is denied. For the reasons explained at paragraph 22 above, the First Cheque did not clear the Joint Account.
25. As to paragraph 16, it is noted that the Claimant decided to "test' whether the "funds were cleared and hers to keep'. It is admitted that the Claimant transferred £35,000 out of the Joint Account on 17 December 2012. As pleaded at paragraphs 6(c) and 6(e) above, the First Cheque was cancelled by the Claimant's mother (at the Claimant's request) on 13 December 2012 and was returned unpaid from the Joint Account on 17 December 2012. The balance on the Joint Account on 17 December 2012 following the return of the First Cheque was £9,027.
26. As to paragraphs 17 and 18, it is denied that on 17 December 2012 there was a large overdrawn balance on the Joint Account. On 17 December 2012 the balance on the Joint Account was £9,027. As pleaded at paragraph 6(g) above, the Second Cheque was returned unpaid from the Joint Account on 19 December 2012, resulting in a negative (overdrawn) balance on the Joint Account as at 19 December 2012 of £25,973. The Defendant did not "remove' the sum of £9,027 from the Joint Account. The balance of £9,027 was the balance remaining on the Joint Account on 17 December 2012, before the Second Cheque had been returned unpaid.
27. As to paragraph 19, as a result of the negative (overdrawn) balance on the Joint Account, it is admitted that items were returned unpaid. This was in accordance with the standard terms and conditions for the Joint Account which provide that "if [the Claimant] withdraws some or all of the amount of a cheque which is later returned unpaid and this withdrawal or the unpaid cheque causes [the Claimant's] account to go overdrawn, this will be considered an informal request to access [the Defendant's] overdraft services' (clause 2.2). As pleaded at paragraphs 6 (h) to 0) above, as a result of the negative (overdrawn) balance on the Joint Account, interest of £209.47 and charges of £55 were applied to the Joint Account. These were subsequently refunded by the Defendant and the Claimant has therefore suffered no loss.
28. As to paragraph 20, it is admitted that the Defendant wrote to the Claimant on 17 December 2012 to confirm that the First Cheque had been returned unpaid and that the Claimant wrote to the Defendant on 19 December 2012 asking for confirmation that she could use her account as normal.
29. Paragraph 21 is denied. The Defendant did investigate the Claimant's complaint and advised that the Defendant had up to 8 weeks to respond in accordance with rules governing dispute resolution of complaints set out in the Financial Services Authority Handbook (now the Financial Conduct Authority Handbook). It is denied that the Claimant was forced to "effectively close' the Joint Account whilst this investigation was on-going.
30. As to paragraphs 22 and 23 it is admitted that, due to the overdrawn balance on the Joint Account, standard money management calls were made by the Defendant to the Claimant. To the best of the Defendant's knowledge, two calls were made at a weekend.
31. As to paragraphs 24 and 25, as pleaded at paragraphs 6 (h) to U) above, as a result of the negative (overdrawn) balance on the Joint Account, interest of
£209.47 and charges of £55 were applied to the Joint Account and were subsequently refunded by the Defendant, once the Claimant had repaid the overdraft on the Joint Account. The Claimant has therefore suffered no loss. To the extent that it is alleged, the Defendant denies any "duress'.
32. The Defendant is unable to plead to paragraph 26 as it is unclear what "result of investigatiori' the Claimant is referring to. The progress of the First Cheque through the clearing cycle is explained at paragraph 22 above.
33. The Defendant is unable to plead to paragraph 27 as it is unclear what "report' the Claimant is referring to. The Claimant was aware that both the First Cheque and the Second Cheque had been stopped by her mother and the Defendant was authorised to return the First Cheque and the Second Cheque unpaid.
34. Paragraph 28 is denied. Whilst the Defendant initially told the Claimant, mistakenly, that the First Cheque had cleared, the clearing timescales were subsequently explained to the Claimant. In addition, the Claimant was aware that both the First Cheque and the Second Cheque had been stopped by her mother and therefore could not have cleared.
35. Paragraph 29 is denied. In its letter to the Claimant of 23 January 2012, the Defendant referred the Claimant to the Joint Account terms and conditions and to the publicised cheque clearing timescales on the Defendant's website.
36. The Defendant is unable to plead to paragraph 30 as it is not clear what the Claimant is alleging. The £35,000 was transferred from the Joint Account by the Claimant on 17 December 2012.
37. As to paragraph 31, it is admitted that the Joint Account did not have, and had never had, an overdraft facility. Paragraph 27 above is repeated. It is unclear what allegation the Claimant is making in the final sentence of paragraph 31. The overdrawn balance on the Joint Account of £25,973 was caused by the cancellation of the Second Cheque (and it being returned unpaid) following the transfer of £35,000 by the Claimant from the Joint Account.

38.The Defendant is unable to plead to paragraph 32 because it is unclear what the Claimant is alleging. For the reasons explained at paragraph 22 above, it is denied that the First Cheque or the Second Cheque cleared the Joint Account.
39. Paragraph 33 is denied. The sum of £9,027 was not "removed' from the Joint Account as alleged. As explained at paragraph 26 above, the sum of £9,027 was the balance on the Joint Account, before the Second Cheque had been returned unpaid.
40. As to paragraph 34, it is unclear what the Claimant is alleging but it is denied that the Claimant was not authorised to return the First Cheque and Second Cheque unpaid. It is repeated that the Claimant was aware that the First Cheque and the Second Cheque had been stopped by her mother and the Defendant was authorised to return the First Cheque and Second Cheque unpaid. Regarding the "informal overdraft' , paragraph 36 above is repeated.
41. .The Defendant is unable to plead to paragraph 35 because it is unclear what the Claimant is alleging or of the relevance of the case referred to.
42. The Defendant is unable to plead to paragraph 36 because it is unclear what the Claimant is alleging. For the reasons explained above, neither the First Cheque nor the Second Cheque cleared the Joint Account.
43. The Defendant is unable to plead to paragraph 37. Paragraph 25 above is repeated as to the transfer of the £35,000 by the Defendant and the resulting balance of £9,027.
44. Paragraph 38 is denied. For the reasons explained above, it is denied that the First Cheque or the Second Cheque cleared the Joint Account.
45. As to paragraph 39, it is noted that the Claimant believes the interest rate of
£22 per day is correct but it is denied that any interest is due to the Clamant.


Statement of Truth

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Yes I know, I would just stay out of it but I am concerned about the costs risks on Nicola. Lets see what the defence says.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Well Sharon, I tinks we will continue to disagree on this one.:tinysmile_kiss_t4:
If a bank tell me a cheque is cleared I would assume that any attempt to cancel it would fail.
The bank haven't said the funds are available (which means the transaction can still be reversed).
If a cheque is cleared the funds are certain.

However I still think a win by Nicki is unlikely

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

The bank mistakenly confirmed the cheque had cleared.
The OP had no reason to doubt this

Well she did, she knew her mum had cancelled it.

Apologies Nicola, my view on this still hasn't changed.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello,
.
I would be happy to make the defence available but obviously not on the public site as it has all names etc on it. I don't know how to attach a file in the members area.

Nicki

You could either join the VIP section, which gives a degree of privacy or redact the documents prior to posting.
As I said in my PM you are IMO better advised to post up so you get a cross section of opinion.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Hello,

thanks for all the posts.

My mum did cancel both cheques. She cancelled the first 9 calendar days after I had deposited it at the post office as it appeared to be lost and my bank would not even check their suspense account let alone look for it properly. She cancelled the second one when I told here that my bank would be presenting both cheques to her bank. As my mum lives with me she had been aware over the week of what had been happening and the fact that my bank was acting very badly. She decided that she would not take the risk of both cheques being presented and the money withdrawn as it would have made her account overdrawn.

I can't find any case law or other guidance on this, maybe because it was only new in 2007 and this is an extraordinary set of circumstances that has led to this. On top of which most people might just accept what the bank told them, I think that the bank has fallen into bad practice because it goes unchallenged (and it is not easy to challenge, it has taken me 2 and a half years to get this far after all). I think the bank routinely disregards the rules and regulations because it normally can. I have tried to get a legal opinion on this but either the experts in banking were all experts for banks and didn't want to compromise those relationships or it is hugely expensive as the case is now so detailed.

I would be happy to make the defence available but obviously not on the public site as it has all names etc on it. I don't know how to attach a file in the members area.

Obviously I maintain that I was not told wrongly that the cheque had cleared but that the first cheque was cleared in the knowledge that it had been cancelled but in the expectation that the second one would clear. The mistake was in the considered decision to clear the first cheque.

The defence was not found to be filed late, it seems it was in on time and that is why the original finding in my favour by default, ,was set-aside,

best wishes,

Nicki

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I think someone should look up certainty of fate when it is known the cheque has been cancelled before withdrawal.

If a cheque has been cleared (and the op was assured by the bank that it had been) the cheque cannot be cancelled.
The bank mistakenly confirmed the cheque had cleared.
The OP had no reason to doubt this , as it was within the time parameters for clearance set by the Coop for deposits via Post Office and certainty of fate rules as incorporated into their terms and conditions.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

At the moment IMO the unreasonable behaviour has been on the side of the bank who failed to file a defence in time.
The biggest threat to receiving a costs order on basis unreasonable behaviour will be to reject a "reasonable" offer from the bank to settle. However the rejection alone should not constitute sufficient reason to make such an order (but you never know)

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

I think someone should look up certainty of fate when it is known the cheque has been cancelled before withdrawal.

[Amethyst]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Sorry can you clear this bit up for me - did your mother cancel both cheques ? ( from reading back it appears so but just wanted to be certain)


Costs - be VERY careful - even though you are in small claims track the judge does have the ability to award substantial costs if he feels you have acted unreasonably at all.

I would like to see their defence.

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

The bigger the firm the more they charge and so the more expensive for the bank!

Never worry about the solicitor. and don't be overawed.
In court they may talk legalese, but the small claims track was never intended for solicitors and the judge should be sympathetic towards you.
Remember that when lawyers clash in court the success rate is only 50% for them

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

ok thanks. I'll assume that includes legal arguments then. I have received papers from the court including directions questionnaire so need to get on with filling that in as well as following up the detailed references.

I looked up the solicitor dealing with this and it looks like the bank are taking this reasonably seriously, it seems like a big company, 875 staff, 761 solicitors, this particular solicitor is an associate who specialises in commercial litigation. but also mediation of retail banking disputes, I'm sure she won't be too cheap,

NB

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

The mediator will only be trying to get an agreement to settle out of court, and it is not an intrusive or heavy handed process.
At mediation you won't see any more of their defence, (nor they of your claim), but in any case you should have seen all of their case.
No party can suddenly introduce new information in an attempt to ambush the other party.

Both of you will have been told to file in court and serve on the other a copy of all documents on which you intend to rely on in court.
Failure to do this could result in the case being adjourned to allow the other side to study it, or could mean the document is excluded from the trial.

[Nicola Bell]

Re: Can the bank ‘UNCLEAR’ cleared funds?

ok thank you, if it went to mediation would I be able to see more/any of their case? Obviously in the reply to the defence I have to give all of my info (and I'm sure like everyone going to small claims think that any sensible judge reading it would be bound to find in my favour as it is such a strong case:tinysmile_hmm_t2 but I think that I still won't have seen the main bit of their case, any legal arguments that I might not be aware of, for example, or would it just be trying to settle the finances?

best wishes,

NB

[des8]

Re: Can the bank ‘UNCLEAR’ cleared funds?

Can't really anticipate, but this is , like it or not, a money claim.
You may wish to view it as a matter of principle, but the court won't.
The mediator will attempt to get both parties agree a compromise over the amount claimed.
Doubtlessly the bank will argue they owe you nothing, but you will stand out for your £9000.
Because the bank are facing costs (either staff if self representing or solicitors) they will probably be happy to offer something for you to discontinue.
If they do it will be for you to argue an increase or decline and continue to court (where nothing is certain)