The claimant casino alleged negligence by the defendant bank in a reference it had given for a mutual customer, leading to substantial losses. The requests was made on behalf of the claimant by a third party acting as its undisclosed agent. The customer had opened an account with the bank but had never deposited any funds, nor been given a cheque book.
Held: The Bank was responsible for the reference (whether by virtue of the doctrine of apparent authority or vicarious liability) since it was issued through a conventional channel in circumstances which would not have put a third party on enquiry.
Further, the Bank owed a duty of care not just to Burlington but to the Club in giving the reference because there was no attempt to restrict liability to the enquirer; there was no suggestion in the evidence that the reference would not have been given or would have taken a different form if sought by the Club nor was there any basis for treating the financing of gambling as being of a different order from the financing of ordinary trade. The Bank was also in breach of its duty of care and ‘but for’ the reference the Club would not have accepted the cheques; the fact that the cheques were counterfeit did not, therefore, break the chain of causation; the Club was, however, contributorily negligent to the extent of 15% since the cheques looked odd on their face. He therefore awarded the Club pounds 802,940 subject to a deduction of 15%.
Judges:
Mackie QC HHJ
Citations:
[2014] EWHC 2613 (QB)
Links:
Jurisdiction:
England and Wales
Cited by:
Appeal from – Playboy Club London Limited and Others v Banca Nazionale Del Lavoro Spa CA 18-May-2016
The club brought an action against the bank as to a reference given on behalf of a customer. They had certified him ‘good’ for 1.6m pounds, despite his having no funds in his account. . .
At QBD – Playboy Club London Limited and Others v Banca Nazionale Del Lavoro Spa CA 18-May-2016
The club brought an action against the bank as to a reference given on behalf of a customer. They had certified him ‘good’ for 1.6m pounds, despite his having no funds in his account. . .
At QBD – Banca Nazionale Del Lavoro Spa v Playboy Club London Ltd and Others SC 26-Jul-2018
The Playboy casino required a reference for a customer, but asked for this through a third party. The bank was not aware of the agency but gave a good reference for a customer who had never deposited any money with them and nor to whom it had issued . .
Lists of cited by and citing cases may be incomplete.
Banking, Negligence
Updated: 10 November 2022; Ref: scu.539362