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Company account – two signatories – bank paid cheque with only one signature – bank agreed to reimburse
Mr G and Mr K went into business together and set up a company. A bank account was opened for the company and the bank was instructed that all cheques had to be signed by both Mr G and Mr K.
Some time later, Mr K issued a cheque for $1,500 under his signature only, leaving only a little over $200 in the company’s account. Shortly afterwards, the account was closed.
Mr G complained that the bank ought not to have processed the cheque, and that by doing so it had deprived him of money due to him for work done for the company.
The bank agreed that it should not have accepted the cheque signed by Mr K only, but refused to reimburse Mr G. It said its customer was the company, and any reimbursement would have to be made to the company’s account. As the company no longer had an account, matters reached an impasse.
Mr G wrote to my office with his complaint, and an investigator discussed it with the bank’s complaints officer. They agreed that while payment ought to be made to the company, it could also be made as the company directed. Mr G obtained the signatures of both the directors of the company to a form authorising payment to be made to him, and payment was duly made.