All three judges gave reasoned judgments. The court considered an older Australian decision,
Commissioners of the State Savings Bank of Victoria v Permewan, Wright and Co Ltd (1915)1 19 CLR 457 where
Issacs J said (at 470): The court also considered decisions in
Bank of Chettinad Ltd of Colombo v Commissioner of Income Tax, Colombo [1948] AC 378, 383 (PC);
Banbury v Bank of Montreal [1918] AC 626 and
Woods v Martins Bank Ltd [1959] 1 QB 5.
Lord Denning MR opined that normally a company would only constitute a bank if it undertook certain activities: (1) the acceptance of money from, and the collection of
cheques for, customers and the placing of the funds to the customers’ credit; (2) honouring cheques or orders drawn on the bank by their customers when presented for payment and the debiting of the customers' accounts accordingly; and (3) keeping some form of current or running accounts for the entries of customers' credits and debits. But he further added that a company might still constitute a bank, even though it did not undertake these activities if it was regarded as a bank by other bankers. He stated that "[l]ike many other beings, a banker is easier to recognise than to define. In case of doubt, it is, I think, permissible to look at the reputation of the firm amongst ordinary intelligent commercial men." He also argued that when a business is running as a bank, judges should be reluctant to hold that it is not a bank.
Harman LJ (dissenting) thought the defining feature of a bank was the maintenance of current accounts, including deposit or savings accounts where notice is required before withdrawal of funds. The collection of cheques was "an additional requirement", but not an essential feature of a bank. Therefore, he opined, United Dominion Trust was not a banker because it did not operate current accounts. He acknowledged that it was regarded as such by other bankers, he regarded this as insufficient to make it a bank itself.
Diplock LJ stated: Both Lord Denning and Diplock LJ seemed to have been influenced by the consequence of not finding United Dominions Trust to be a banker within the meaning of the legislation, which would have meant that potentially thousands of agreements would have been rendered unenforceable. The court accepted that whilst acceptance of deposits was a
necessary condition of being a bank, it was not of itself a
sufficient condition. An institution cannot be a bank unless it opens on behalf of customers current accounts which are operable by cheque and into which customers can pay cheques and other financial instruments for collection. ==Commentary==