The Plaintiff, a credit bookmaker successfully sued the Bank in libel. The libel proved was writing the words ‘not sufficient’ on a cheque issued by the Plaintiff when they dishonoured it. He would have had sufficient funds ad the bank followed his instructions to stop an earlier cheque. As applied to cheques, s 49(12) of the 1882 Act required notice of dishonour to be given by the bank within a reasonable time thereafter.
Held: Though there was only one cheque Hilbery J thought the effect would have been significant because of the nature of the Plaintiff’s business and the speed with which news of dishonour would travel. Hilbery J said damages had to be ‘a proper sum to be given as a reasonable compensation for the injury which has been done to the plaintiff, and of course it must be sufficient to mark beyond a shadow of doubt the complete lack of justification for making the aspersion which was made by this means on the Plaintiff’s credit’. He awarded andpound;250.
The bank could not rely on mistake as an occasion of privilege: ‘you cannot, by making a mistake, create the occasion for making the communication, and what the bank seek to do here is to create an occasion of qualified privilege by making a mistake which called for a communication on their part.’ No general need was identified which required the engagement of principles of qualified privilege in respect of communication of a notice of dishonour.
Judges:
Hilbery J
Citations:
[1940] 1 All ER 316
Statutes:
Bills of Exchange Act 1882 49(12)
Cited by:
Cited – Kpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Lists of cited by and citing cases may be incomplete.
Banking, Defamation, Damages
Updated: 06 May 2022; Ref: scu.448094
