Kpohraror v Woolwich Building Society: CA 10 Jan 1996

The defendants had wrongfully refused payment of the claimant’s cheque for pounds 4,550. The error was realised on the same day, and corrected. The master awarded damages of pounds 5,550 as general damages to the claimant’s credit by reason of the dishonour. It was argued that as the claimant was not in business he could not recover general damages relating to loss of credit. The cheque had been drawn in a business transaction.
Held: It was open to the court to hold that the master had been right to award more than a nominal sum by way of general damages.
Evans LJ stated: ‘It is abundantly clear, in my judgment, that history has changed the social factors which moulded the rule in the nineteenth century. It is not only a tradesman of whom it can be said that the refusal to meet his cheque is ‘so obviously injurious to [his] credit’ that he should ‘recover, without allegation of special damage, reasonable compensation for the injury done to his credit’ (see [1920] AC 102 at 112, [1918-19] All ER Rep 1035 at 1037 per Lord Birkenhead LC). The credit rating of individuals is as important for their personal transactions, including mortgages and hire-purchase as well as banking facilities, as it is for those who are engaged in trade, and it is notorious that central registers are now kept. I would have no hesitation in holding that what is in effect a presumption of some damage arises in every case, in so far as this is a presumption of fact.’ and
‘The contentions for both parties were presented as if in a straitjacket imposed by the strict application of the rule in Hadley v. Baxendale so as to require the separate consideration of each of the two limbs . . I would prefer to hold that the starting point for any application of Hadley v Baxendale is the extent of the shared knowledge of both parties when the contract was made . . When that is established, it may often be the case that the first and second parts of the rule overlap, or at least that it is unnecessary to draw a clear line of demarcation between them.’


Evans LJ


Gazette 10-Jan-1996, Independent 04-Jan-1996, Times 08-Dec-1995, [1996] 4 All ER 119


England and Wales


CitedWilson v United Counties Bank Ltd HL 1920
Bank’s duty to client’s reputation and credit
Major Wilson had left England on active service soon after the beginning of the Great War, leaving his business affairs, in a fairly precarious state, with his bank. The jury found that the bank had failed in its duty to supervise his business . .
Lists of cited by and citing cases may be incomplete.

Damages, Banking

Updated: 15 May 2022; Ref: scu.82834