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answer together - CHEQUE Q1death , pay money? Will? (i)...

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CHEQUE Q1death , pay money? Will? (i) Bank BB should not allow a fixed deposit withdrawal. When Bank BB Bhd has the notice of Mr Wong’s death, the credit balance in the customer’s account vests in his personal representatives. Generally, the death of a customer terminates the authority given to the banker and has the effect of terminating the relationship. (ii) Bank BB Bhd should not pay Mrs Wong for the cheque even though the cheque was dated before Mr Wong’s death. At the time the cheque was presented for payment, the Bank already had notice that Mr Wong had died. Section 75 of the Bills of Exchange Act 1949 provides that the banker’s authority to pay on a cheque is terminated upon notice of the customer’s death. (iii) Yes, it does matter if Mr Wong died leaving a will or without a will. If Mr Wong died testate (with a will) a Grant of Probate has to be applied for and the executor, i.e. the person appointed by the will to administer the property of the deceased person and to carry into effect the provisions of the will, will operate the executorship account. If Mr Wong died without leaving a will, i.e. intestate, Letters of Administration has to be granted first to the administrator who may be appointed to administer the property of the deceased person. Q2 bank,paying bank duty,cheque The two main duties which Mr SS as a current account holder, owes to Bank AA Bhd in relation to cheques are the Macmillan duty and the Greenwood duty. The Macmillan duty is the duty to draw cheques carefully so as not to facilitate fraud or forgery. In London Joint Stock Bank v. Macmillan and Arthur, the House of Lords held the bank’s customer bound to exercise reasonable care when drawing cheques to prevent the banker from being misled.The Greenwood duty is the duty of the customer to notify the bank promptly of any forgeries. The House of Lords in Greenwood v. Martins Bank held that a customer must inform his or her banker without delay upon discovering that cheques purported to have signed by the customer have been forged. These duties were reiterated in Tai Hing Cotton Mills Ltd v. Liu Chang Hing Bank Ltd and UAB v. Tai Soon Heng Construction Sdn Bhd which held that besides these duties the customer had no duty to take precautions in the general course of his or her business to prevent forgeries on the part of his or her servants; or, in the absence of any contract, inspect his or her bank statements to ascertain if the account is properly maintained by the bank. If Bank AA Bhd pays a cheque drawn by Mr SS which he has earlier countermanded, the Bank is not entitled to be reimbursed by the customer since it has no authority to pay. Q3
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(a) Colleen argues that Transworld Bank should not have paid the cheque to sorrento Motors because they were not named as payee on the cheque . Is she correct? Discuss.
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This note was uploaded on 10/08/2011 for the course LAW 101 taught by Professor Jan during the Three '11 term at Monash.

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answer together - CHEQUE Q1death , pay money? Will? (i)...

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