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Be careful when you authorise access to your bank account

In a recent case, Iannella v Stirans by her tutor the NSW Trustee & Guardian [2019] NSWSC 1181, an elderly widowed pensioner living alone signed an authority for a neighbour to operate 2 bank accounts in her name. Later on, it was discovered that the neighbour had withdrawn significant funds from her accounts and the evidence suggested that the money had not been used for her benefit.  The NSW Trustee & Guardian (‘the Trustee’) was appointed her financial manager.  The Trustee sued the neighbour for the return of the funds. The neighbour admitted that he withdrew the funds but said he always gave the withdrawn cash to the pensioner.   The case highlights some of the technical legal difficulties faced in trying to recover funds in this situation.  It is a serious matter to allege dishonesty and Judges are very reluctant to make such a finding.  The Magistrate who heard the case made an order for the recovery of some of the money.  The neighbour appealed against the order.  A Supreme Court Judge refused to overturn the order on appeal.  He agreed that there was insufficient evidence for a finding of dishonesty but also held that a simple claim for return of monies “had and received” could be made out.  Thus, whilst prevention is better than cure (don’t give authority to people unless you have a basis to trust them), the Judge has provided some “handy hints” about recovering money in this situation and at least the Local Court is an easy way to access justice.

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