Section (2) of Financial Institution Act, Cap 57 of 2004 defines Bank to mean any company

licensed to carry on financial institution business as its principal business, as specified in

schedule 2 to this Act and includes all branches and offices of that company in Uganda. 1It

further defines financial institution to mean a company licensed to carry on or conduct financial

institution business in Uganda and includes commercial bank, merchant bank, mortgage bank,

post office savings bank, credit institution, a building society, an acceptance House, a discount

House, a finance house, an Islamic financial institution or any institution which by regulations is

classified as a financial institution by the Bank of Uganda. However, section 1of the Bills of

Exchange Act Cap 281 defines Banker to include a body of persons whether incorporated or not

who carry on the business of banking,2 as well as section 1 of the Evidence (Banker’s Books)

Act Cap 7 defines Bank or Banker to mean any person carrying on the business of banking in

Uganda (including the Post Bank Uganda Limited established under the Uganda

Communications Act, and any branch of that bank)3. In the case of Re Shield Estates [1901] 1

Ir.R 173, 179, Fitzgibson J., in his judgment said that the real business of banking from the

banker’s point of view is to obtain deposits of money which may be used for purposes of making

profits4. In the Commissioner of State Savings Bank of Victoria Vs Permewan Wright &

Co, Justice Isaacs described the business of Banking as: the collection of money by receiving

deposits repayable when and as expressly or impliedly agreed upon and the utilization of the

money so collected by lending it again in such sums as are required.5United Dominions Trust

Limited vs Kirkwood (1966) 2 QB.431, This case is a leading authority on the question of the

1
Section (2) of The Financial Institution Act Cap 57 of 2004
2
Section (1) of Bills of Exchange Act Cap 281
3
Section (1) Evidence (Banker’ Books) Act Cap 7
4
Re Shield Estates [1901] 1 Ir.R 173, 179
5
the Commissioner of State Savings Bank of Victoria Vs Permewan
Wright & Co
common law meaning of a Banker. Lord Denning propounded that there are two characteristics

usually found in bankers today: 1. they accept money from, and collect cheques for their

customers and place them to their credit ; 2. They honour cheques or orders drawn on them by

their customers when presented for payments and debit their customers accordingly. These two

characteristics carry with them also a third namely ; 3. They keep current accounts or something

of that nature in their books in which the credits and debits are entered.6

While a customer of a bank is any entity for which the bank agrees to conduct an account. The

main determinant of whether one is a customer of the bank or not is whether they have an

account with that particular bank. In Great Western Railway Vs London and Country

Banking Co. Ltd [1901] AC 414, It was held that a person was not a customer of the bank who

had no account of any sort with the Bank and nothing to his credit in any book or paper held by

the bank. The fact that the bank does render some casual services to him doesnot make him a

customer and the bank is not liable to him as it would be to its customer.7 In Ladbrooke Vs Todd,

Court held that a person becomes a customer of the bank when he goes to the bank with money or cheque

and asks for an account to be opened in his name. If the bank accepts the money or cheque and is

prepared to open an account for that person, then that person becomes a customer of the bank from that

point. Similarly in Woods Vs Martins Bank, a bank accepted instructions from the plaintiff to collect

money on his behalf, remit some to his company and hold the balance to his order. He had no account

with the bank at the time of the instructions. Court held that when the

The Banker-Customer Relationships are categorized into four unit. For instance: Contractual,

Debtor-Creditor, Principal-Agent, and Fiduciary relationships. For instance, in the case of

6
United Dominions Trust Limited vs Kirkwood (1966) 2 QB.431
7
Great Western Railway Vs London and Country Banking Co. Ltd
[1901] AC 414
The nature and scope of the duties of a Banker when making and receiving payments on behalf

of a customer are justified below:

First and foremost the duty to honor a customer mandate: in that the customer gives the bank

authority to operate the account in accordance with the instruction, that

It is the bank's duty to ensure that no unauthorized changes are made to customer9s documents kept by

the bank. The banker therefore has an implied duty to honor its customer’s cheques, provided that: a)

They are drawn in the proper form. b) The account on which they are drawn- for credit to an amount

sufficient to pay them, or arrangements have been made for an overdraft facility and the agreed overdraft

limit will not be exceeded. c) There is no legal cause (service of a garnishee order nisi ) which makes the

credit balance or the agreed overdraft limit unavailable. d) They are presented during banking hours or

within a reasonable time thereafter. Baines v Nation Provincial Bank (1927 ) 96 KB 801

Facts
Mrs Philipp, the Respondent, was a customer of Barclays Bank. She and her husband,
Dr Philipp, fell victim to an authorised push payment fraud which was perpetrated by a
third-party fraudster posing as an operative working for the Financial Conduct
Authority in conjunction with the National Crime Agency. As a result of the fraud, Mrs
Philipp was deceived into transferring £700,000 from her Barclays current account to
two bank accounts in the UAE. Attempts to recall the funds that had been transferred
were unsuccessful. Mrs Philipp sued Barclays claiming that Barclays owed her a duty to
observe reasonable care and skill in and about executing her instructions, and that this
duty required Barclays to refrain from executing her payment instructions if and for so
long as it had reasonable grounds for believing that the instructions were an attempt to
misappropriate funds from Mrs Philipp. Mrs Philipp alleges that Barclays acted in
breach of the duty (said to be derived from the decision of Steyn J in Barclays Bank plc v
Quincecare Ltd [1992] 4 All ER 363, which recognised what has come to be known as
‘the Quincecare duty’): (i) by making the payments from her account, and (ii) in not
taking adequate steps to recover the payments once the fraud had been discovered.
Barclays applied to strike out Mrs Philipp’s case and/or sought summary dismissal, for
which application was granted. Mrs Philipp appealed to the Court of Appeal, who
unanimously allowed her appeal. Barclays now appeals to the UKSC. Issue
(1) Does the Quincecare duty have any application in a case where the relevant payment
instruction was not issued to the bank by an agent of the bank’s customer?
(2) If not, should either (i) the Quincecare duty be extended so as to include the obligations
contended for by Mrs Philipp in relation to authorised push payment fraud, or (ii) the law
recognise or impose such obligations on a paying bank as incidents of its duty to exercise
reasonable skill and care in and about executing an instruction?

The question on this appeal relates generally to the question of whether the bank
owes the customer a duty of care in these circumstances