Australia and new zealand banking group limited v. manasseh

A famous case in the history of banking and finance!

Australia and New Zealand Banking Group Limited v. Manasseh [1990] 2 NZLR 177 is a landmark case in New Zealand law that dealt with the issue of banker's liability for negligence in the performance of their duties.

In this case, the plaintiff, Manasseh, was a farmer who had a loan account with the defendant, Australia and New Zealand Banking Group Limited (ANZ). The bank had agreed to lend Manasseh a sum of NZ$250,000 to finance his farming operations. However, the bank failed to properly verify the security for the loan, which was a mortgage over Manasseh's farm.

As a result, the farm was sold at a public auction, and the proceeds were insufficient to pay off the loan. Manasseh claimed that the bank was negligent in its duty to verify the security and that this negligence had caused him to suffer losses.

The High Court of New Zealand held that the bank was liable for its negligence in failing to properly verify the security. The court held that the bank had a duty to exercise reasonable care and skill in the performance of its duties, and that this duty extended to verifying the security for the loan.

The court also held that the bank's negligence had caused Manasseh to suffer losses, and that he was entitled to damages for those losses. The court awarded Manasseh damages of NZ$150,000, which was a significant amount at the time.

The case established important principles in New Zealand law regarding the liability of banks for negligence in the performance of their duties. It also highlighted the importance of banks verifying the security for loans and ensuring that they are properly secured.

The case has been cited in numerous other cases in New Zealand and has been influential in shaping the law of banking and finance in the country.