The Chartered Bank of India, Australia and China v Wee Kheng Chiang
| Jurisdiction | UK Non-devolved |
| Judgment Date | 25 March 1957 |
| Date | 25 March 1957 |
| Court | Privy Council |
(Lord Tucker, Lord Somervell of Harrow, and Mr. L. M. D. de Silva.)
War — Effects of Outbreak of — Trading with the Enemy — Authority Given to Agent Before Outbreak of War — Principal and Agent Resident in Different Territories, Both Occupied by Same Enemy — Whether Authority of Agent Determined by War.
Belligerent Occupation — Administrative Functions of Occupant — Liquidation of Banks — Settlement of Pre-occupation Debts in Accordance with Regulations of Occupant — Transactions Effected by Agent in Occupied Territory, the Principal being in Another, Unoccupied, Territory — Authority Given to Agent Before Outbreak of War — Territory in which Principal Residing Subsequently Occupied by Same Belligerent — Whether Agent's Authority Determined — The Law of Sarawak.
The Facts.—Prior to 1946 Sarawak was an independent State under the protection of the British Crown, who controlled its foreign policy and was responsible for its defence. By the law of Sarawak the law of England was, subject to certain qualifications, made the law of Sarawak. From December 24, 1941, until September 11, 1945, Sarawak was occupied by the Japanese. In 1946 Sarawak became a colony of the British Crown. On February 1, 1950, the Debtor and Creditor (Occupation Period) Ordinance, upon which the case turns, came into effect.
Prior to the occupation, the respondent carried on a banking business in Kuching under the name of the Bian Chiang Bank. The appellant was a company incorporated by Royal Charter which carried on a banking business with a branch office in Kuching. At the time of the occupation the respondent Bank had an account with the appellant with a credit balance of $242,641.48.
As from December 24, 1941, the Japanese “froze” all credit balances of customers of the appellant whose accounts were kept at the Kuching office. They closed down the respondent Bank. Some months later the Yokohama Specie Bank, a Japanese organization, was appointed by the Japanese authorities to act as the liquidator of a number of banks, including the appellant and the respondent Bank. The liquidator recovered debts, but no banking business in the ordinary sense was done prior to October 1944.
The respondent was in Singapore when the Japanese occupied Sarawak and he did not return there until after the liberation. Singapore was occupied by the Japanese in February 1942.
On October 16, 1940, before the Japanese had entered the war, the respondent wrote to the appellant informing it that Mr. Wee Hian Tech had authority to sign cheques for the respondent Bank. Mr. Lim Thian Liang also had authority to sign.
In September 1944, a military order made by the Japanese provided that 30 per cent. of the amount of the balances with the appellant might be refunded to customers. By October 10, 1944, the liquidator had liquid assets of the respondent Bank amounting to $273,386.47.
Shortly before October 10, 1944, the Japanese authorities established the Kyoei Bank. This Bank was a joint stock company under the law of Japan. It was to be an amalgamation of the respondent Bank and two other Chinese banks. Its object was to provide banking facilities for the customers of those three banks and, it may be, for others. On October 10, 1944, the appellant's liquidation account was debited with $72,792.44, being 30 per cent. of the amount of the respondent Bank's balance with the appellant. The respondent Bank's liquidation account was credited with that sum. Added to the sum of $273,386.47, this made $346,178.91. The respondent's liquidation account was debited and the Kyoei Bank was credited with that sum.
Also on October 10, 1944, a cheque for $72,792.44, signed by Wee Hian Teck on behalf of the respondent Bank, was drawn on the appellant. The cheque was payable to the Bian Chiang Bank or Bearer. (There was no suggestion that this cheque was signed under duress.) A receipt was also signed by Wee Hian Teck on behalf of the respondent Bank and addressed to the Yokohama Specie Bank as liquidator of the appellant.
During the occupation period the currency depreciated, and by October 1944...
To continue reading
Request your trial