Architects of Wine Ltd v Barclays Bank Plc: CA 20 Mar 2007

The bank appealed summary judgement against it for conversion of cheques. The cheques had been obtained by a fraud.
Held: The court considered the question of neglience under section 4: ‘The section 4 qualified duty does not require an assumption of negligence, just because a bank bears the burden of showing that it took reasonable care. The enquiry is fact sensitive. Current banking practice is highly relevant to the issue of negligence. A bank’s evidence about its practice is, especially if unchallenged, relevant evidence of the current practice of bankers. A court is not bound by such evidence, but it will be hesitant to reject it. Notice of what is so out of the ordinary course of events as to arouse doubts in a banker’s mind or put him on enquiry is a relevant test of negligence, and may make the proof of the taking of reasonable care very difficult. However, the courts should be wary of hindsight or of imposing on a bank the role of an amateur detective. ‘ The court was not in a position to reject the bank’s evidence without a trial, and the summary judgment was set aside.
Sir Mark Pooer, (FD P), Rix LJ, Wilson LJ
[2007] EWCA Civ 239, [2007] 2 Lloyd’s Rep 471, [2007] Bus LR D37
Bailii
Cheques Act 1957 4
England and Wales
Citing:
CitedCommissioners of State Savings Bank v Permewan, Wright and Co 18-Dec-1914
(High Court of Australia) The court considered the nature of negligence in a banker: ‘the test of negligence is whether the transaction of paying in any given cheque [coupled with the circumstances antecedent and present] was so out of the ordinary . .
CitedMarfani and Co Ltd v Midland Bank Ltd CA 1968
A rogue opened a new bank account under a false name with the help of an incorrect reference from a valued customer.
Held: When an account is fraudulently opened with the bank in the name of another person by someone pretending to be that . .
CitedRoss v London County Westminster and Parr’s Bank 1919
Bailhache J considered the standards to be expected of a bank clerk: ‘I must attribute to the cashiers and clerks of the defendants the degree of intelligence and care ordinarily required of persons in their position to fit them for the discharge of . .
CitedCommissioners of Taxation v English, Scottish and Australian Bank Limited PC 2-Jan-1920
The Board considered what would amount to negligence in a bank.
Held: The test in Permewan was to be applied by ‘the standard to be derived from the ordinary practice of bankers, not individuals.’ A customer of the bank is a person who has a . .
CitedA L Underwood Ltd v Bank of Liverpool and Martins CA 1924
Scrutton LJ considered the concept of exceptional circumstances in a banking context: ‘If banks, for fear of offending their customers will not make inquiries into unusual circumstances, they must take with the benefit of not annoying their customer . .
CitedThe Honourable Society of the Middle Temple v Lloyds Bank plc and Another QBD 8-Feb-1999
Where a cheque marked ‘a/c payee only’ had been stolen, and an English clearing bank collected it as agent for a foreign bank not acting for the payee, that bank was liable for the misrepresentation involved in the presentation. Where a bank asks . .
CitedLloyds Bank Limited v The Chartered Bank of India, Australia and China CA 1929
Sankey LJ said: ‘a bank cannot be held to be liable for negligence merely because they have not subjected an account to a microscopic examination. It is not to be expected that the officials of banks should also be amateur detectives.’ . .
CitedLloyds Bank Limited v E B Savory and Company HL 1932
The bank was held to be negligent (depriving it of the protection of section 82) not to ask a customer though respectively introduced the name of his employer and in the case of a married woman the name of her husband’s employer. Whether a bank was . .

These lists may be incomplete.
Updated: 23 April 2021; Ref: scu.250272