Tai Hing Cotton Mill Ltd v. Liu Chong Hing Bank Ltd and Others
Read the full judgment text of CACV 103/1983 on BabelCite. This Court of Appeal judgment.
1. This appeal raises issues of considerable importance to the banking world, in particular, how far does a customer who maintains a current account with a bank owe a duty of care to the bank with regard to the operation of the account. Is that duty limited to particular circumstances which are now well established, i.e. not to draw a cheque in such a manner as may facilitate fraud by a third party : London Joint Stock Bank v. MacMillan [1] ; and to inform the bank immediately of any forgery of
Cited by 12 cases
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Headnote A person who maintains a current account with a bank is required, in the operation of that account, to take reasonable care to protect the interests of the bank on, "to ensure the proper working of the account". On the facts of the case banks had a good defence to an action by a customer for a declaration that they were not entitled to debit his accounts with cheques forged by his own staff. Dates of hearing: 12th - 16th & 19th - 22nd December, 1983 Date of handing down of judgment: 27th January, 1984 IN THE COURT OF APPEAL Civil Appeal BETWEEN
------------ Coram: Hon. Cons, Fuad, JJ.A. & Hon. Hunter, J. Date of Judgment: 27th January, 1984 __________ JUDGMENT __________ Hon. Cons, J.A.: 1. This appeal raises issues of considerable importance to the banking world, in particular, how far does a customer who maintains a current account with a bank owe a duty of care to the bank with regard to the operation of the account. Is that duty limited to particular circumstances which are now well established, i.e. not to draw a cheque in such a manner as may facilitate fraud by a third party : London Joint Stock Bank v. MacMillan[1]; and to inform the bank immediately of any forgery of which he becomes aware : Greenwood v. Martins Bank Ltd.?[2] Or is it the more general duty for which the banks now, contend "to take such precautions as a reasonable customer in his position would take to prevent forged cheques being presented to his bank for payment" (the "Wider ditty")? Or if not that, is it at least "to take such steps to check his monthly bank statements as a reasonable customer in his position would take to enable him to notify the bank of any items debited therefrom which were not or may not have been authorized by him" (the "narrower duty"). 2. The learned judge below - in a judgment which, if I may say so, dealt clearly and concisely with all the submissions put forward - rejected both duties. He found nothing to support them in principle and felt that the weight of authority was against them. However he concluded that if in fact, or rather in law, there were such duties, then on the particular facts of the case the plaintiff was in breach of both duties in relation to all three defendant banks. That conclusion has not been challenged. 3. The plaintiff is a modern, medium sized and reasonably successful textile company which has been in business in Hong Kong since 1957. In September of that year the plaintiff opened an account with the third defendant, The Chekiang First Bank Ltd. Cheques were authorized to be signed by a Mr. Chen, the Managing Director, or by any two of four nominated signatories. In November 1961 another account was opened, this time with the second defendant, The Bank of Tokyo Ltd., having similar arrangements for the drawing of cheques. One year later, i.e. in November 1962, a third account was opened with the first defendant, The Liu Chong Hing Bank, again with similar provisions for the signing of Cheques. We are told that these accounts were net the main bank accounts of the company, these being held in yet other banks not party to these proceedings, nor for the most part subject to the malpractices from which these proceedings have arisen. 4. The plaintiff's banking arrangements operated smoothly until 1972. In that year the company took into employment the fourth defendant, a young accounts clerk by the name of Leung. He was given responsibility for the books of two divisions of the company, divisions whose accounts were kept to the greater extent with the first and second of the banks I have just mentioned. Mr. Leung was quite dishonest, and within a few months of his engagement was using his position for his own benefit. He would either obtain cheques from Mr. Chen by way of forged documents or would get Mr. Chen to sign cheques on which the words "or bearer" had not been deleted. These he would pay into accounts which he had opened for himself in names similar to those of genuine suppliers to the company. Later on, in November 1977, when his superior, a Mr. Wang, retired on account of ill health and he was given similar responsibility with regard to the Liu Chong Hing Bank, Mr. Leung extended his depredations into that account. By this time he had abandoned his earlier methods in favour of the more simple forgery of Mr. Chen's signature. So he carried on until May of 1978, when his dishonesty was exposed by the new chief accountant who, very properly, carried out routine checks which had been ignored by his predecessor. 5. All told Mr. Leung made away with some $7,000,000 by fraud and forgery together. We understand that a small amount has been recovered through a compromise reached with his wife regarding certain properties which had been purchased with the monies taken. This has been applied to the claim against them in fraud. We are concerned here only with the forged cheques. They amount to roughly $5,500,000. The question is whether the three banks were entitled to debit those cheques, as they innocently did, to the plaintiff's current accounts. 6.I turn then to the submissions of law advanced in support of the "wider" and "narrower" duties set out at the beginning of this judgment. They may be conveniently considered under the headings of "Implied Contract" and "Tort". I will come later to the effect of express terms which had been agreed between the plaintiff and the banks. Implied Contract 7. It is not uncommon for a court to imply into a contract terms which have not been expressly included by the parties. The two most common instances were set out by Lord Wilberforce in Liverpool City Council v. Irwin and Another[3] : -
Lord Cross, in the same case, at page 258 adopted what is usually called the "officious by-stander test" : -
8. Although the substantial submission of Mr. Morrit for the Liu Chong Hing Bank, whose arguments were adopted by counsel for the other two, is that the two duties are derived from a principle of law independent of those just set out, he does nevertheless submit that a properly informed by stander would give an unhesitating answer in his favour for both. By "properly informed" he means that the by-stander would be appraised of the accepted implications of MacMillan and Greenwood, together, in this instance, with the express obligation of the banks to render monthly statements, which by reason of Lloyds Bank Ltd. v. Brook[4] have to be prepared with reasonable care as to their accuracy. 9. For myself I do not, see it that way. It is the presumed intention of the parties that is material and I do not think that the average customer would testily suppress the officious by-stander who proposed either or both terms. I think he would at least say "I shall have to think about that". 10. The case of Liverpool City council v. Irwin(3) itself was one of landlord and tenant. The council had, in 1966, erected several tower blocks, 15 storeys high, each containing some 70 dwelling units. Access to these was provided by a staircase and two electrically operated lifts. Another facility provided was an internal chute into which tenants in the block could discharge rubbish or garbage for collection at ground level. There had unfortunately been a consistent history of trouble in one of the blocks, due in part to vandalism, in part to non-cooperation by tenants and in part, it was said, to neglect by the corporation. Eventually some of the tenants refused to pay their rent, pleading inter alia by way of defence to proceedings brought by the corporation that the corporation was in breach of an obligation implied by law to keep the "common parts" in repair. 11. There was no express obligation of this kind imposed upon the council. Such documents as there were imposed obligations only upon the tenants. Nevertheless their Lordships held that there was an implied obligation on the part of the council, an obligation that arose, independently of any presumed intention, as a legal incident of the particular relationship. It was not an absolute obligation, but was to take reasonable care to keep the lifts, staircase and chutes in reasonable repair and usability. The test was not one of business efficacy. All their Lordships directly or indirectly rejected the submission counsel had based upon The Moorcock. The test instead was what was required in the particular circumstances. Lord Wilberforce, with whom Lord Fraser agreed, put it this way (at page 254):-
Lord Cross spoke more generally (at page 257) :-
Lord Salmon commented (at page 261) that :-
and then, after referring to remarks of Bowen L.J. in Miller v. Hancock[5],
Finally he concluded (at page 263) :-
Lord Edmund-Davies, who also relied upon Miller v. Hancock(5), quoted what he called a "new approach" from the speech of Viscount Simonds in Lister v. Romford Ice and Cold Storage Co. Ltd.[6]: - (at page 267)
12. It is this "new approach" which is the foundation of Mr. Morritt's submission. It applies, he suggests, not merely to master and servant of landlord and tenant, but to all contracts which establish such a relationship as by its very nature and subject matter demands particular obligations. Banker and customer is one of those relationships and indeed, although not expressly acknowledged as such, the approach has, he says, been already adopted in several banking cases in the past. One of these cases is the London Joint Stock Bank v. Macmillan(l) which confirmed that there was a special duty imposed on the customer to exercise reasonable care in the drawing of his cheques to prevent the banks being misled, or not to draw them in such a manner as would facilitate fraud. This was no question of business efficacy or presumed intention of the parties. Lord Finlay L.C. relied upon Young v. Grote[7], a decision of the Court of Common Pleas in 1827, the authority of which had at times been doubted but which had, in his view, correctly applied an established principle of law. Viscount Haldane (at page 814) regarded the duty as an obligation directly reciprocal to that of the bank to honour its customers' cheques : -
Lord Shaw spoke to similar effect at page 824. 13. In Joachimson v. Swiss Bank Corporation[8], which decided that monies standing to the credit of a customer with his bank are payable to him only on demand, Warrington L.J. appears to have had the same idea in mind when he said at page 125:-
However, the other two lord justices relied upon the more traditional approach (page 121 & 129). 14. Greenwood v. Martins Bank Ltd. (2) was a case where a wife forged her husband's signature on cheques drawn against a joint account and subsequently against an account opened in his name alone. The husband became aware of the forgeries but did not notify the bank for well over six months. When he did, or was about to do so, his wife committed suicide. His subsequent claim against the bank was rejected on the ground of estoppel :- (at page 58)
Scrutton L.J. in the Court of Appeal, had put it this way[9] :-
15. It is upon the mutuality of the obligations that Mr. Morritt places particular emphasis. As I understand his arguments, one of them is that the wider duty for which he now contends is the direct reciprocal of the duties imposed upon banks by the next two authorities. 16. In Selangor United Rubber Estates Ltd. v. Cradock[10], the directors of a company abused their position as signatories of the company's bank account. Their dealings with the company's monies ought to have put the bank on enquiry. It was submitted however on behalf of the bank, that even so the bank's duty extended no further than to see that the signatories on the particular cheques concerned were those of the authorized signatories. Ungoed-Thomas J. rejected that submission (at page 1608)
17. That standard of care was adopted by Brightman J., as he then was, in Karak Rubber Co. Ltd. v. Burden[11], a case where authority to sign had been similarly misused and a similar argument had been put forward on behalf of the bank. He disposed of it in this way : (at page 628)
18. The direct reciprocal of the duties imposed upon the banks by these two cases would appear to be a contractual duty upon the customer to exercise such care and skill as would be exercised by a reasonable customer in similar circumstances. I do not think it can go that far, for skill is expected only from those who possess it inherently or by training and profess to exercise it. A "customer" does not fall within that category. But I see no reason why he should be absolved from taking care. If a banker, as well as being skillful, is required to be reasonably careful of the interests of its customer, why should not the customer be equally careful of the interests of the bank? 19. It cannot be said that the imposition of a duty of care on the customer is absolutely essential to the relationship. The banks could I think manage to service current accounts without that assistance. So could, I think, the tenant of the high rise flats have managed to live there without the benefit of lifts, lights on the staircase or garbage chutes. But that did not deter Their Lordships. They took a more practical view of necessity. They inquired if the transaction would become "futile, inefficacious or absurd" if these amenities were not maintained. For my part I can think of little more futile than for the operator of an active bank account to throw his monthly statements in the waste paper basket without ever bothering to looking at them; little more inefficacious than to leave the operation of that account to a clerk whose work is never checked; and little more absurd than to expect the bank to insure the honesty of the customer's clerk when the customer deliberately puts into the clerk's hands the weapons with which he can plunder and rob the bank. It cannot be economically feasible nowadays for a bank to subject the signature on each and every cheque presented to a thorough examination or comparison with the specimen signature card. Banks must look to other protection. Thus, after a great deal of hesitation, I find myself finally led to the conclusion that, in the world in which we live today, it is a necessary condition of the relation of banker and customer that the customer should take reasonable care to see that in the operation of the account the bank is not injured. 20. I do not think this conclusion necessarily conflicts with the recent decision of MacNeil J. in Wealdon Woodlands (Kent) Ltd. v. National Westminster Bank (unreported March 1983) where the exercise of reasonable care by the directors would not in any event have revealed the defalcations of their colleague. There is no mention in the judgment of either Selangor or Karak and the argument put to us does not seem to have been advanced before the learned judge there. The same may be said of the New Zealand case of National Bank of New Zealand v. Walpole & Patterson[12]. Nor was any argument on these lines put in the earlier case of Kepitigalla Rubber Estates Ltd. v. National Bank of India Ltd.[13] on which NacNeil J. heavily relies. There too, like in Wealdon Woodlands, there was nothing to alert the directors to the dishonesty of their secretary and the learned judge expressly found that they had not been negligent. Tort 21. I turn then to a consideration of the position in tort, but I must first deal with a submission that is relevant if the contractual duty that I have assumed is too wide. 22. Mr. Yorke, who appears for the plaintiff, argues that where proximity arises between two parties by reason of contract, as it does in this case, then as matter of law the only possible duty of care that can arise is such duty as is expressed or implied in the contract itself. He concedes that there may be an independent tortious duty concurrent and coterminous with the contractual duty, but he contends that the tortious duty cannot be in any circumstance more extensive. 23. It seems to me that there may be good sense in that argument so far as it concerns acts or omissions in the actual performance of the contract itself, for it would be strange that two branches of law, so closely allied in this circumstance, should lead to different results. But I am unable to grasp any reason why there should in principle be any restriction upon liability for conduct which, although it would or may not have occurred without the existence of the contract, is otherwise independent of it. Such liability may, of course, be limited or excluded by the contract, but that is a different matter. 24. The question then is, what is the duty in tort? The answer to that depends primarily on the questions put by Lord Wilberforce in Anns v. Merton London Borough Council[14]:-
25. Mr. Morritt submits that the answer to the first question is an obvious "Yes", but with respect I do not think it can necessarily be answered that simply, because the carelessness with which we are concerned involves the actions of a third party. Altematively the answer is "Yes", but the actions of the third party fall to be decided under the second question. The considerations are the same. 26. The nature of the carelessness was neatly set out by the judge below:-
27. General speaking a person is not liable for the conduct of a third party. In Smith v. Leurs[15] Dixon J. said :-
28. As an example he instanced the duty of a parent to take reasonable care to control his young child so as to avoid exposing the person or property of others to unreasonable danger. Another example is to be found in the Dorset Yacht Co. itself[16], where the passage I have just quoted is expressly relied upon by three of their Lordships. Lord Diplock referred to the need also for a special relationship between the person in control and the person to whom the duty is owed, exposing the latter to a particular risk of damage. 29. In my view such a special relationship exists in the present situation. The plaintiff could have controlled Mr. Leung either directly or by the introduction of a suitable accounting system. Moreover the position of the bank was one of danger. It was peculiarly liable to suffer from the misbehaviour of Mr. Leung. 30. Was there then a high degree of foreseeability that in the circumstances Mr. Leung would resort to forgery? Mr. Yorke would say "No", becuase the law which applies to commercial dealings does not require merchants to be on their guard against dishonesty. He refers us to remarks of Bowen L.J. in Saunders Brothers v. Maclean[17] relied upon by McNair J. in Pringle of Scotland Ltd. v. Continental Express Ltd.[18]:-
31. However, Macmillan shows that in certain circumstances dishonesty must be expected. And for myself, I find it impossible to draw any meaningful distinction between the facts of that case and of the present. Mr. Klantschi was a confidential clerk who had been with the firm for some years, keeping the books and filling in the cheques for the partners to sign. They had no reason at all to distrust him, yet his forgery was held to be the "very natural consequence" of negligence which was "almost an invitation to forgery". Mr. Leung was an untried junior accountant. He was put immediately into the situation described in the passage from the judgment that I have set out earlier. Human nature being what it is, it seems to me that that was tantamount to an open invitation to dishonesty and fraud. It does not then take a high degree of foreseeability to realize that if that fraud and dishonesty were left unchecked for over 18 months, as in fact they were, forgery is very likely to be the next step taken. 32. Mr. Yorke suggests that the distinction between Macmillan and the present lies in the initial validity of the cheques. In the earlier case, there was from the very beginning a genuine mandate to the bank, only the amount of the mandate being fraudulently altered. In the present case there has been no valid mandate to the bank at any stage. The cheques were at all times nothing but nullities, a factor which carried weight with the judge in Asien-Pazifik Merchant Finance Ltd. v. The Shanghai Commercial Bank[19]. 33. With the greatest of respect I do not see the importance of the distinction. If the forgery is reasonably skillful there is every likelihood that the bank will pay out money when the cheque is presented, and it is the fact of payment, not the intrinsic invalidity of the cheque, which causes the loss. And it is the probability that payment will thus be made which imposes the liability on the account holder. 34. There are many references in Macmillan and in other authorities to "negligence in the immediate transaction" or similar phrases. It is suggested that these indicate that the duty is confined to the actual drawing of cheques and it cannot, therefore, extend to other facets of the banker/customer relationship. The counter-suggestion is that this construction imposes too restricted a meaning upon the words "immediate transaction" and relies upon the words of Scrutton L.J. in Greenwood : - (at page 380)
35. I find some attraction to the latter view. I do not think it a distortion of language to call a current account an "immediate transaction". But more importantly I think that three matters have to be borne in mind when reading the words of their Lordships. Firstly, that at the time they were spoken a defendant was liable for all natural or direct consequences of his negligence whether these were reasonably foreseeable or not. There was naturally then a greater emphasis on causation than there is today. Secondly, that their Lordships were concerned only with one particular act of carelessness which did lead, in fact, to the alteration of a cheque already drawn. There was nothing before them by way of what might perhaps be called "systematic negligence". Thirdly, I do not think that the practice 75 years ago of handing in pass books for the purpose of being written up can bear any relation to the modern practice of issuing regular statements. 36. Reading them in the light of all these factors, I do not take the various dicta of their Lordships to be intended to do more than indicate that they were not sanctioning an open-ended liability upon the customer; he could not be expected to be looking over the shoulders of his staff all the time that he was conducting his business. But this does not mean he can throw all precautions to the winds and expect the bank to make good the inevitable damage. As Lord Finlay put it, at page 811, "if the customer chooses to dispense with ordinary precautions because he has complete faith in his clerk's honesty, he cannot claim to throw upon the bank the loss which results". He was of course only speaking of the drawing of the cheque. But in my view those words are apposite to circumstances like the present. 37. For these reasons I have come to the conclusion that there is no qualification upon the affirmative answer to Lord Wilberforce's first question, nor any consideration which ought to negative, or to reduce or limit the scope of the duty which that affirmative answer evidences. 38. I have approached this question from the practical view of contract and then tort because it was argued in that manner and because I have found it a convenient way to attempt to distinguish the underlying principles. It may well be that from a juristic point of view there is a great deal of overlapping or indeed no difference at all. Be that as it may, it seems to me that whether the account is that of an individual concerned only with his own personal affaris, or that of a large and busy commercial undertaking, the customer is required, in the operation of that account, to take reasonable care to protect the interests of the bank. What is reasonable will depend upon the particular circumstances of each case. It is a question that may not perhaps need a frequent answer. But there can be no doubt, both from the judge's unchallenged finding, and from the evidence to which we were referred, that it was a standard which the plaintiff failed to meet in the present instance. Other Jurisdictions 39. The conclusion I have reached on this difficult matter reflects the gradual development of what I take to be established principles of English law. Courts on the other side of the Atlantic seem to have advanced more quickly. Mr. Morritt's "narrower duty" was established in the United States of America as long ago as 1885 : Leather Manufacturers National Bank v. Morgan[20]. It has been applied many cases to which ore have been referred. In Arrow Transfer Co. Ltd. v. Royal Bank of Canada,[21] Laskin J. was in favour of importing the principle into Canadian law. Montgomery J. adopted the suggestion in Canadian Pacific Hotels Ltd. v. The Bank of Montreal[22] :
40. Also included in his view were "proper internal controls", indicating support for Mr. Morritt's wider duty. A factor that seems to have carried great weight with the learned judge is that the customer was a large and "sophisticated commercial customer". With every respect, it seems to me that the existence or otherwise of a general duty of this kind ought not to depend upon the nature or size of the customer's bunsiness. 41. Morgan v. The U.S. Mortgage & Trust Co.[23] is said to have taken the law that far much earlier and a passage at page 224 has been drawn to our attention :-
42. I have some doubts whether this gives the support for the wider duty that is suggested, for Hiscock J. seems to have been speaking in the context of "examination and verification of their account with the bank when the pass book and vouchers were returned". 43. Screenland Magazine Ltd. v. The National City Bank of Near York[24] gives perhaps more assistance, for the learned judge there does mention the failure of the customer to complete the cheque counterfoils in addition to his failure to check the statements or returned cheques. Yet the following passage (at page 290), seems to indicate that the underlying concept was that the customer should have "cured” the malpractice rather than have "prevented" it (the emphasis is my own):
44. We are told that the question in America is now, at least in most jurisdictions, regulated by legislation. But that apart, it seems to me that none of the authorities to which we have been referred conflicts significantly with what I have ventured to suggest is the result of established principles of English law. There is therefore no need, as I see it, to make a choice. Even had it been otherwise, I would respectfully have declined the invitation so charmingly extended by Mr. Morritt. This court should apply what we take to be the common law of England unless "the circumstances of the Colony or its inhabitants make it inappropriate". As to maintaining current accounts with a bank, it seems to me that the circumstances and inhabitants of Hong Kong are identical with those of England. The Express Conditions 45. Contrary to what we understand to be the custom in England and of some of the major banks in Hong Kong, the three banks with which we are concerned impose express conditions upon the operation of current accounts. The assent of the customer is obtained in each case by means of the formal letter of request to open the account. The plaintiff made that request to the 1st defendant "subject to your Rules and Regulations for the conduct of such accounts. The letter to the 2nd defendant includes "We hereby agree to observe the Provisions of the Agreement on the back hereof ........ and undertake to hold your Bank free from any loss whatsoever resulting through our failure to abide by such Provisions .............". The agreement with the 3rd defendant was to "comply with your bank's rules and procedures in force from time (sic) governing the conduct of such account". Mr. Yorke suggests that the conditions thus introduced are not intended to have legal effect, that they are only precatory or directory. He relies on the case of Lam Yin-fei v. Hang Lung Bank Ltd.[25] where the "Rules for Current Accounts" of that bank were held not to contain contractual terms. For myself I do not read that case as laying down any general principle. In addition the learned judge was strongly influenced by the fact that the rules were subject to change at any time without notice to the depositor. However the comments of this court in Lam Luk-ming and Others v. The Attorney General[26] indicate that an express term to that effect in a set of regulations is not fatal to their contractual nature as a whole. 46. Mr. Yorke further likened the rules of the banks to those of a Private club, the only sanction being that the member might be asked to leave, or in the case of the banks, that the customer be asked to take his business elsewhere. The learned judge below did not accept the analogy. He took into account the commercial nature of the relationship and held that the plaintiff was bound by the terms of the agreements so far as they could be given contractual effect. I respectfully agree. The question then is, what is the true effect of the individual conditions with which vie are concerned. They read as follows : -
47. In the construction of these clauses the judge below adopted the approach of Laskin J. as it appears in the following passage from his judgment in the Arrow(21) at page 97 case :-
48. Applying that approach to the present circumstances the judge concluded:-
49. This approach appears to have its foundation in a passage from Alderslade v. Hendon Laundry, Limited[27] which was applied by the Privy Council in Canada Steamship Lines Ltd. v. The King[28]. The principles there set out still hold good today but their ambit has been restricted:-
Per Lord Fraser in Ailsa Craig Fishing Co. Ltd. v. Malvern Fishing Co. Ltd. v. Malvern Fishing Co. Ltd. and Another[29], applied by Lord Bridge in George Mitchell (Chesterhall) Ltd. v. Finney Lock Seeds Ltd.[30] 50. Mr. Bromley who appears for the 3rd defendant argues that the rule on which his bank seeks to rely is not an exclusion clause at all, but rather what he would call, if a name is necessary, a "conditional, correlated, account stated clause"; alternatively, if it is such a clause as might fall within the general category, it is a limitation rather than exclusion clause. With all respect to an ingenuous and skillfuly presented argument I am not disposed to accept either of his propositions. The clause, if effective, will relieve the bank of what would otherwise be its liability and that, to my mind, is conclusive of its nature. 51. Nevertheless I do not find the English authorities applicable in this respect. They are all concerned with liability for negligence. The question of negligence, however, does not arise in the present instance. The bank would be liable whether its failure to discover the forgeries was negligent or not. Indeed the same authorities might be used to present the reverse argument. Suppose, for example, the bank attempted to rely upon the clause in respect of arithmetical errors or debits made to the wrong account. These would be matters of negligence and it might be well argued upon those same authorities that as the clauses would have subject matter apart from negligence, i.e. dishonesty by the bank staff or forgery, the clauses should be thus restricted. 52. The reason for distinguishing between exclusion and indemnity clauses on the one hand and limitation clauses on the other was given by Lord Fraser in Ailsa Craig(29) at page 970 :
Lord Wilberforce used similar words at page 966:-
Apart from the question of insurance, which seems to have no part in this type of situation, the factors mentioned are to my mind appropriate. The liability of a bank upon its customer's cheques is very special. It turns entirely upon the signature. And if a person has an original signature to imitate or practice from it is by no means difficult to make a copy that will pass muster upon a routine inspection. That is all that can be expected from a bank if it is to keep pace with the requirements of modern business. The risks to which banks are thus exposed are substantial. It may, at first glance, be thought that the risks must necessarily be limited to the amount standing to the customer's credit or the agreed limit of his overdraft, but the present case illustrates that if the forgeries continue undetected over a length of time, these amounts may be well exceeded. 53. On the other hand, banks seem to reap little advantage. So far as I am aware no bank in Hong Kong imposes a direct charge for the service it provides by way of current account. Its remuneration is derived only from the use to which it may be able to put the monies held therein, which individually cannot be expected to be great, and perhaps from the goodwill which the accounts engender. 54. In my view therefore, we should adopt a similar approach to the clauses with which we are concerned. They are contained in standard form contracts imposed by the banks and therefore, to adopt the words of Lord Wilberforce, "if they are to exclude liability they must be most clearly and unambiguously expressed and must be construed contra proferentem". At the same time we "must not strive to create ambiguities by strained construction" but give the relevant words "if possible their natural plain meaning". 55. It has been suggested that the recent decisions in the House of Lords have been influenced by the passage of legislation, in particular the Unfair Contract Terms Act of 1977. see Lord Denning M.R. at page 1045 of Finney Lock Seeds(30). Similar legislation has not yet been enacted in Hong Kong. However, with the very greatest respect, I can find no indication of this in the actual speeches of Their Lordships. 56. It is not easy to set aside the ingrained teaching of many years. Nevertheless I do my best to interpret these clauses as I think they would be read by an ordinary person looking for no subtle distinctions, seeking no refined shades of meaning. Such a person would, I think, take "errors" to mean anything wrong, whatever happened to be the cause. He would not strain to distinguish "correct" from "correct but not conclusive". He would take "approved by us" as meaning that the customer accepted the statement as correct. In fine he would say that if the customer did not object within the specified period then the clauses made the statements final between the customer and the bank. Estoppel 57. If I am correct in the conclusions I have drawn as to the matters already mentioned those matters are clearly grounds on which the banks can base an estoppel. They have acted to their detriment by continuing to operate the accounts with the attendant risk of further forgeries. Two further matters need to be mentioned :- (1) Audit Requests - 58. A further ground of estoppel is suggested to lie in the annual requests for confirmation of the balance in the account for audit purposes. These were sent by the plaintiff to each of the banks on what appears to be a standard form prepared by the plaintiff's auditors. The form provides for fourteen possible items which may have an outstanding balance between the customer and the bank, including of course the current account. It requests the bank to confirm that the balance listed as at a particular date is correct, or should the bank disagree, to enter the bank's own figures. A form of certificate is provided for the bank to sign and return and I think we may assume that all the requests made in this way had been regularly complied with. In support of these requests as sufficient representation it is emphasized that they are not casual requests, that they are not limited to just the one item, and that they are a formal statement of the plaintiff's figures. It is said that it is not material that the procedure is undertaken solely for the plaintiff's own benefit. 59. I find myself unable to accept this submission. For a representation, or conduct amounting to a representation to be sufficient to support an estoppel, it must be intended to induce a course of conduct on the part of the other party. That of course the annual request does. It intends that the bank shall check the balance and return the certificate. But that is all. And no detriment to the bank results from that. The request in no way induces the bank to continue its services to the customer after the date of the balance shown therein. Indeed, in the particular instance to which we were referred during the course of argument, the bank had already done so for 4 months before it received the request. (2) Monthly Confirmations - 60. In the case of the 3rd defendant alone, included with the monthly statement sent to the plaintiff was a document marked at the head "Kindly sign and return the certificate". The certificate reads "I/We acknowledge receipt of your monthly statement of my/our current account with you showing the following balance which has been examined and found correct" and then the actual details are inserted. 61. This is very different from a request to the customer that the bank check its books for a balance several months in the past. It is a representation that the latest balance has been "examined and found correct" and a clear indication to me that the customer is content that the bank shall carry on from there on that basis. 62. Certificates in this form had been returned by the plaintiff regularly every month from the time that the account was opened in 1957 until the trouble arose. In my view, the plaintiff cannot, now, go behind them. 63. For my part, then I am satisfied that the banks have a complete answer to the plaintiff's claim by way either of the failure of the plaintiff to discharge a duty cast upon him by law, by the express terms of their agreements, or by way of estoppel. It is not necessary therefore for me to express a firm opinion upon the other issues raised, but in defence to the arguments of counsel I ought, I think, to deal briefly with them. Proof of Forgeries 64. It was argued in the court below, and again before us, that as the plaintiff's claims depended in the ultimate on a number of forgeries, those forgeries had to be proved beyond the reasonable doubt. The judge below rejected the submission. He sought to apply, as he put it, "the civil standard as defined in Khawaja[31] bearing in mind at all times the aphorism of Lord Denning in Blyth v. Blyth[32] 'in proportion as the offence is grave so ought the proof to be clear"'. 65. That the civil standard of proof can at times be more than a mere balance of probabilities was noted by Lord Denning in Bater v. Bater[33] when after referring to the requirement of proof beyond reasonable doubt in criminal cases, he said at page 37:-
66. He said much the same six years later in Hornal v. Neuberger Products Ltd.[34], with the express approval of Hodson & Marris LL. J and this approach has been applied in many cases since. That it is correct was confirmed last year by all five of their Lordships in the case to which the learned judge below referred. 67. There may be special considerations with regard to marine insurance claims where scuttling is alleged : see "The Cold Sky"[35] and the comments of Lord Denning in Horn(34) at page 254. 68. The strict criminal standard of proof has been demanded by the Privy Council in two instances. The first was in 1939, in New York v. The Heirs of Phillips, Decd.[36], a claim based on an alleged conspiracy where this passage appears at page 955 :-
69. The second came two years later in an appeal from Rangoon, Narayanan Chettyar v. Official Assignee[37] when this was said : -
70. It is not easy to reconcile these passages with the words of Their Lordships in Khawaja(31), or with the much earlier comments of the Privy Council in Doe d Devine v. Wilson[38]. It is to be observed, however, that in the first case the main submission was on a completely different point, and in the second the evidence put forward seems to have been of very poor quality. In neither case were Their Lordships required to examine the question to the depth that was necessary in Khawaja.(31) In my view the judge below adopted the correct approach. 71. It is then complained that even so he failed to indicate the exact standard, between the extremes of mere balance of probabilities and beyond reasonable doubt, which he thought would be appropriate in the particular circumstances. With respect I 'find no merit in this point. The judge indicated most that would not be satisfied by the former. I do not think he is required to go further and analyse his feelings to ascertain, and express if he can in suitable language, the precise degree of his conviction. 72. The evidence was in my view sufficient to support his conclusion as to the particular signatures that were not admitted to be forgeries. It is said that he misapprehended or failed to evaluate correctly the evidence of the handwriting experts. I am not persuaded that this is so. We have been taken through their evidence in some detail and, taking it overall, I think the judge was justified in preferring the evidence of Mr. Chen. Interest 73. The banks succeeded on their defence of estoppel below save in respect of six cheques in the account with the 1st defendant, amounting in a total to $187,195.74. The judge therefore made a declaration that the 1st defendant was not entitled to debit those cheques to the plaintiff's account and awarded interest on that amount from the 1st January, 1978 until the date of judgment. 74. Objection to an award of interest in these circumstances is made on several grounds. First it is said that as the claim was for a declaration there is no jurisdiction in the court, either by way of statute or in equity, to make an award of interest at all. Reference is made to the comments of Richmond J. in the National Bank of New Zealand v. Walpole(l2). However the plaintiff's claim is not for a declaration alone. There is also a claim for payment, even though there may have been little emphasis upon this aspect of the case during the trial. 75. Then it is said that, by reason of the well-established principle to be found in Joachimson(8), the plaintiff had no right to payment of the monies in his account until demand had been made. Therefore interest ought not to be awarded. 76. The answer to that criticism is, as Mr. Yorke pointed out, to be found in the same case. Atkin L.J., at page 132, observed that any repudiation by the bank of the customer's right to be paid would be waiver of the demand; Warrington L.J., at page 126, thought that demand was made by the issue of the writ itself. Mr. Yorke concedes that the plaintiff would not, in any event, be entitled to interest prior to the date of the writ. 77. Finally it was objected that a current account is a non-interest bearing item. In my judgment that was a consideration relevant only at common law. There is no restriction in Sec. 48 of the Supreme Court Ordinance, Cap. 4. Even if the plaintiff had not realized it at the time, he did in fact lose the opportunity of putting those monies to good use and it is not unreasonable that he should be compensated for the loss. It was, I agree, a loss that was brought about by the plaintiff's own negligence. Yet, if, contrary to my conclusion, that negligence carries no consequence with regard to the monies themselves, I would have thought it a wrong exercise of discretion to use that negligence to deprive the plaintiff of interest that would otherwise have been awarded. 78. For these reasons, I would dismiss the appeal of the plaintiff and allow the cross-appeal of the 1st defendant bank.
Hon. Fuad, J.A. : 79. I have had the advantage of reading the judgments of Cons, J.A. and Hunter J. in draft, and share their conclusions that that the appeal of Tai Hing Cotton Kill should be dismissed and that the 1st defendant bank should succeed in its cross-appeal. I agree in general with the reasoning in both judgments but with regard to the proper construction of what Cons, J.A. has termed "The Express Conditions", and Hunter J. "The Banking Contracts", I respectfully incline towards the approach and conclusions of Hunter, J.
Hon. Hunter, J. : 80. Mantell, J. set out his findings of fact very clearly in his judgment, and they have been conveniently summarised by Cons, J.A. I shall therefore go straight to the most important question raised in this appeal which is the extent of the duty owed by a customer to his banker and whether the plaintiff owed to the defendant banks either the wider or the narrower duty contended for. 81. It is a basic obligation of a bank to honour its customer's cheques, if first there are sufficient funds in the account or a prior agreement exists for overdraft; and secondly the cheque accords with the customer's mandate. A bank honouring such a cheque acts within its mandate and is entitled to debit the customer's account. If however the drawer's signature is forged, the bank has no effective mandate and cannot debit the drawer's account. As it is sometimes put, the bank pays with its own money, and unless it acts in time to recover from the payee the bank bears the loss; National Westminster Bank Limited v. Barclays Bank Limited[39]. But should the forgery have been caused by the negligence of the customer in the drawing of the cheque these roles are reversed. Such negligence on the part of the customer operates as a defence to the bank, and precludes the customer from challenging the material debit: London Joint Stock Bank Ltd. v. Macmillan & Others(1) 82. So much is common ground. The disputed issue is whether in the words of Richmond J. in the New Zealand Court of Appeal in National Bank of New Zealand v. Walpole and Patterson (12):
That learned judge, thought that this principle had been laid down in Macmillan. Mr. Richard Yorke, Q.C. for the plaintiff does seek to support this reading of Macmillan, but he invited us to reach the same conclusion in reliance upon a line of authority starting with the decision in Kepitigalla Rubber Estates Limited v. National Bank of India Limited(13) and what he called an unbroken line of authority since. Mr. Andrew Morritt, Q.C. for the 1st defendant, whose argument was adopted by the remaining defendants, disputes this. These early cases, he submits, were bedevilled by an outmoded view of causation and remoteness. Discard this, he says, and the direct application of modern principles lead inevitably to the conclusion that both in contract and in tort the customers owes to his banker what might be called an ordinary not some circumscribed duty of care. 83. At the outset therefore it seems to me necessary to do two things, namely :-
1827 - 1918 84. Ones starting point here must be Young v. Crote(7). This was a case of a cheque, ineptly completed by the wife of the customer and fraudulently raised by an hitherto trusted clerk. Best C.J. thought that the prima facie rule that a banker paying out on a forged cheque such as this paid without authority was "perfectly well established, yet if it be the fault of the customer that the banker pays more than he ought, he cannot be called on to pay again." Since want of "ordinary precautions" induced the banker to pay on this forged cheque, the loss for having "improperly trusted" the clerk fell on the customer. The basis for the implication of the duty of care was not adverted to, but it seems implicitly to have been an implication of law. 85. The next most significant case is Bank of Ireland v. Trustees of Evans Charities[40]. The defendant trustees, a corporation, held stock registered with the plaintiff bank. They gave possession of their corporate seal to their secretary. He with the assistance of some apparently innocent attesting witnesses, used the seal to execute powers of attorney and obtain delivery for himself of parcels of stock from the bank. The direction of the trial judge, Blackburne L.C.J. to the jury was to this effect:
86. The House of Lords adopted the advice of the judges delivered by Parke B. which was to the effect that the direction was wrong because there was no sufficient evidence of negligence to go to the jury. The negligence (if any) "was very remotely connected with the act of transfer. ........ The transfer was not the necessary or ordinary of likely result of that negligence". The "very extraordinary event" which intervened was the conduct of the attesting witnesses. The only relevant negligence in such circumstances was "negligence in or immediately connected with the transfer itself". This was truly causative. This was the position in and explanation of Young v. Grote(7). Anything short of that only "enabled" the secretary to forge : it was only what was later to be described as a "causa sine qua non". 87. The significance of this case to my mind is that it demonstrated the contemporary reluctance of the Courts to hold anyone civilly responsible for the criminal act of another. The phrase thereafter most quoted from Parke B.'s advice is not "the necessary or ordinary or likely result" but the words "negligence in or immediately connected with the transfer itself". This phrase defined the concept of likelihood in legal terms : it marked the confines of what the law then recognised as proximate cause, with which phrase it was to become synonymous. This view of causation and remoteness was for many years to govern and confine the duty. 88. This is well illustrated by another seal case, Mayor Constable & Company of Merchants of the Staple of England v. Governor of Bank of England[41]. There both the Divisional Court and the Court of Appeal held themselves bound by the Bank of Ireland case to say that the negligence was not the proximate cause of the loss although in the opinion of Wills J. at least "It was eminently calculated to facilitate if not to invite the commission of forgery" p. 169. Then in 1906 came the decision of the Privy Council in Colonial Bank of Australasia Limited v. Marshall and another[42] which virtually deprived the Young v. Grote(7) duty of any content. 89. It is, therefore, hardly surprising that in the three decisions between Marchall and Macmillan and in Macmillan in the Court of Appeal, the Courts were able to found their decisions wholly or substantially on causation. In Lewes Sanitary Steam Laundry (Limited) v. Barclay Bevan & Co. Ltd.[43], Kennedy J. said :-
In Walker v. Manchester and Liverpool District Banking Company Limited[44], Channell J. dismissed the Bank's attempted negligence defence in the words: "at most it was a cause sine qua non". 90. In Kepitigalla, Bray J. said that the cases "can be summed up by saying that they lay down most clearly that the negligence must be in or immediately connected with the transaction itself and must have been the proximate cause of the loss." p. 1025. Indeed the judge regarded himself as bound by the Lewes decision. He also negatived negligence in fact. His rejection of Mr. Scrutton K.C.'s submission of continuing duty (in words very similar to those later used in Greenwood), in the passage cited by Mantell J. may well be obiter. But in this jurisdiction the point is insignificant. What matters is its persuasiveness and to that I will return later. 91. Macmillan was a case of a cheque raised by a trusted but dishonest clerk who was then found to have been committing dishonest acts for some time. The Court of Appeal :-
92. The ratio of the decision of the House of Lords reversing the Court of Appeal can I think be expressed in the following four propositions:
93. There are two passages in the speech of Lord Finlay at pages 795 and 801 which are capable of being read as approving Bray J.'s rejection of any wider duty in Kepitigalla. I do not regard this as the correct reading, putting the words in their context : and if it is, the observations were obiter. I think that all their Lordships were simply expressing the then policy of the law on causation and remoteness where third party criminality was involved. It follows that I agree with Mr. Yorke in thinking that the New Zealand Court of Appeal in Walpole read more into the Morrison decision than is justified. This means that the reasoning in Kepitigalla must stand or fall on its own merits. Modern Principles 1918 - 1983 1. Causation/remoteness 94. It was not in issue that perhaps as a result of a wide-spread increase in criminality, the policy of the law has changed since 1918. The governing authorities are now generally The Wagon Mound[45], and in the particular context of criminality Dorset Yacht v. Home Office(16), which decision has recently been considered by the Court of Appeal in England in two cases concerning Camden Council namely Lamb v. Camden Council[46] and Perl Exporters Limited v. Camden Council[47] to which we were referred. But here the judges adverse findings against the plaintiff and in favour of all three banks were not challenged. Had they been I would for my part have concluded that the fourth defendant, Leung was not an independent third party in the sense that that phrase is used in the Camden cases. I would have regarded this as a case of special contract or relationship such as Dorset Yacht itself, and within Lord Sumner's exception in Weld-Blundell v. Stephen[48]. The plaintiff throughout had the power to control Leung both directly and by the system within which he worked; "and control imports responsibility" per Lord Pearson in Dorset Yacht at p. 1055. 2. Tort 95. Again there was no issue here but that for modern principles we need not look much beyond his speeches of Lord Wilberforce in Anns v. Merton London Borough Council(14) and of Lord Roskill in Junior Books v. Veitchi[49]. As Lord Roskill said, what has to be asked is not "whether the proper remedy should lie in contract or in tort" but the two questions posed by Lord Wilberforce in Anns namely :-
3. Contract 96. Somewhat surprisingly the issue of principle arose here. In common with all the judges who have rejected any wider duty in contract, Mantell J. expressed himself in the traditional terms of the presumed intentions of the parties : of business efficacy in the sense used in the Moorcock[50] and Reigate v. Union Manufacturing Co.[51]: and of Mackinnon L.J.'s "interfering bystander" Shirlaw v. Southern Foundries[52]. A helpful modern summary appears in two of Lord Simon's qualifying conditions in the B.P. Refinery[53] namely : -
97. Mr. Morritt challenges this approach. The true test he submits does not depend primarily or to any significant extent upon the presumed intentions of the parties to the contract. The question is what terms do the law impose as necessary incidents of the banker/customer relationship in all ordinary banking contracts. This he submits is the test which the Courts have in truth applied in many banking cases and that which we should apply here. 98. It seems to me that this is a submission of considerable importance which merits careful examination. Its significance goes beyond the ascertainment of the true test in contract. It goes to the reality and significance of any surviving differences between contract and tort in this field. There is a real difference concealed in the use of the word implied, between a term implied for reasons personal or peculiar to the contract in question and to a term implied - I prefer to use the word "imposed" - by law. The use of this word suggests that the classic differences between contract and tort start to disappear. If the duty of care (if any) resting on a banker or customer originating out of the banking contract between them is imposed it is pertinent to ask two further questions. 99. First can the duty be said to be truly contractual at all? This may depend upon emphasis and savour of a matter of semantics. If one looks only to the individual the answer may be no. Neither party may consciously have considered, accepted or relied upon any such duty. Indeed the party if asked might indignantly have denied it. But if one looks at the effect of the contract the answer may well be affirmative because a duty does not cease to be contractual if it is a legal and not a consensual incident of the contract. 100. Secondly, and possibly of greater significance, is the question why is the duty imposed? One possible answer is that it results from the conscious or unconscious application of what can now be called tortious principles of proximity to those who have entered into a special or proximate relationship by reason of their banking contract, and by reason of the reciprocal obligations undertaken by each. If this should prove on authority to be the reason, then it seems to me that the difference between contract and tort in this sphere is very marginal indeed. It may well be correct to say that the duty (if it arises) is both contractual and tortious. But if the tortious duty arises by reason of the contractual proximity; and if the contractual duty is imposed on tortious grounds; one is left with two different routes to the same conclusion. In both cases the relevant questions would be those proposed by Lord Wilberforce. 101. Mr. Morritt's submission is initially based upon two decisions of the House of Lords, Lister v. Romford Ice and Cold Storage Limited(6) and Liverpool Corporation v. Irwin(3), and upon a most useful summary of their principles in Mears v. Safe Car Security Limited[54] per Stephenson L.J. at p. 383. 102. In Lister, a master and servant case, the majority considered the question whether "the implied term (in issue) is imposed by law, not in respect of a particular contract but as a legal incident of this type of contract" per Viscount Simonds at p. 579. Lord Tucker included in his examples of "contractual terms implied by general rules of law" contracts of guarantee. This does not limit the principle to status. Two other points are worthy of note. First, all their Lordships regarded the servant's duty of care to his master as contractual, Viscount Simonds 573. But it was also imposed for at page 575 he said : "Just as the duty of care, rightly regarded as a contractual obligation, is imposed on the servant". Secondly in his dissenting speech Lord Radcliffe used words which I regard as particularly apposite to the present problem :-
103. In the Liverpool Corporation case the business efficacy route having led to failure in the Court of Appeal, the House of lords followed Lister and in the words of Lord Fraser's summary at p. 270 : "Implied, as a legal incident of the kind of contract between these landlords and these tenants, an obligation on the landlord to take reasonable care to maintain the common stairs" etc. Their Lordship differently expressed the circumstances in which they regarded it as right for such implication to be made. For my part I gratefully accept Stephenson L.J.'s summary in Mears : "The obligation must be a necessary term : that is required by the relationship p. 383. 104. On these authorities Mr. Morritt in my judgment makes good the first part of his submission. The law does impose obligations as incidents of particular relationships and I can see no reason to exclude the relationship of banker and customer for this purpose simply because it was not specifically mentioned in either authority. It, therefore, seems to me necessary briefly to consider some of the leading banking cases decided in and since 1918 for three purposes namely : -
105. The duty was recognised in Young v. Grote(7) "without analytical inquiry" as Lord Radcliffe put it. This could be true of the cases up to Macmillan, where particular emphasis was laid on the contractual obligation and upon reciprocity of duty. But I have found in the speeches no reference to the parties' intentions implied or presumed. This could, therefore, be regarded as the first legal incident case. But whether this be right or not the basis of the implication or imposition was legal and its apparent cause was contractual proximity. 106. Mr. Morritt was in greater difficulty in trying to fit Joachimson v. Swiss Bank(8), and Atkin L.J.'s famous implied contract formulation into his legal incident framework. One of the problems is that a case for implication argued from the other terms of the contract, which is the burden of the judgments, may equally be the basis of a business efficacy implication. That, and the presumed intentions of the parties, I regard as the basis of this decision. Two points in it can be noted. First the banking evidence played only a supporting not a decisive role. Secondly Atkin L.J. was glad to notice that the Court's view coincided with those expressed in the United States. 107. In the present context the same Court's views in Hilton v. Westminster Bank Limited[55] are more instructive, and not affected by the decision in the House of Lords. There Bankes L.J. said of the banker/customer relationship : "In essence it is a contractual relationship which involves I think the duty on the bank to take reasonable care in the carrying out for its customer of its customer's business" p. 358. Atkin L.J. said : I think it is the duty of the bank arising out of the contract to exercise reasonable care and skill in dealing with the communications which the customer sends to them in relation to his banking business" p. 362. It is interesting to compare these words with those of Collins M.R. in Sachs v. Henderson[56], where in drawing a "difficult" dividing line between contract and tort, he said : "But where it is only necessary to refer to the contract to establish a relationship between the parties and the claim goes on to aver a breach of duty arising out of that relatioship the action is one of tort." Like Bankes L.J., Atkin L.J. probably regarded his duty as contractual rather than tortious. But he does not allude to presumed intention. His duty seems to be based on proximity and upon an implication (or imposition) or law. 108. In Greenwood v. Martins Bank (9) in the Court of Appeal, Scrutton L.J. emphasised the mutuality of the obligations of banker and customer which he said involved "a continuing duty on either side to act with reasonable care to ensure the proper working of the account", p. 381. Naturally the banks relied upon this concept of mutuality as leading to the same duty, with the differences in performance according to the parties different functions. But beyond giving rise to a duty to report known forgeries sufficient to support an estoppel, Scrutton L.J did not seek to extend the Macmillan formulation; he re-emphasised the causation limitation, and pointed to the differences between the English and the United States Courts. Greer L.J. founded the customer's obligation to speak upon "the rules of fair dealing between man and man" p. 388. This is surely a tortious test originally based upon the proximity of being parties to the same bill of exchange; see Fung Kai Sun v. Chan Fui Hing[57]. In his speech in the House of Lords well known for its formulation of the principles of estoppel, Lord Tomlin did not have to deal with the basis of this duty, whose existence was conceded. 109. In Lloyds Bank v. Brooks(4), Lynskey J. held that a banker owed a duty of care to its customer in relation to the preparation of its customer's statements. The basis would seem to have been legal proximity. Mr. Morritt's narrower duty is the direct reciprocal of this In Woods v. Martins Bank[58], Salmon J. held that a bank manager owed a duty of care to a potential customer in giving advice on investment. The basis seems to me to have been tortious (a fiduciary relationship): "As he chose to advise ..... the law imposes an obligation...... to advise with reasonable care and skill" p. 72. When in Hedley Bryne v. Heller[59] the House of Lords held that the duty of care in tort extended to the spoken work, Lord Devlin included the banker and customer alongside the solicitor and client as an example of a "general relationship" giving rise to a duty of care p. 530. The dual significance of these two decisions to bankers is illustrated by cases like Box v., Midland Bank[60]. 110. In Selangor United Rubber Estates Limited v. Craddock(10) Ungoed Thomas J., after a full review of the authorities, concluded that "A banker has a duty under its contract with its customer to exercise 'reasonable care and skill' in carrying out its part which regard to operations within its contract with its customer", p. 1608. This duty he said "Extends over the whole range of banking business within that contract" p. 1609. In the absence of any reference in the judgments to the presumed intentions of the parties, it seems to me reasonable to conclude that the judge regarded this duty as implied or imposed by law on proximity grounds. The absence of any reference to intention and to the Reigate test (Reigate v. Union Manufacturing (51)) was one of the foundations of the challenge to the decision to Selangor in Karak Rubber v. Burden(11). Brightman J. rejected this on two grounds : First because the Selangor contractual duty of care "seems to be rational" : and secondly because the implied duty passed the test "without trouble" p. 629. This seems to put the matter on both grounds. 111. Mr. Morritt relies heavily on these two decisions. First he submits that if the law implies or impales this duty on a banker by reason of his contract with his customer, it must impose as a reciprocal obligation the same duty on the customer. Secondly he prays in aid Brightman J.'s Achilles Heel argument. Once the causation limitation is discarded, and once a duty of care in the drawing of a cheque is accepted, there is, he submits, "no rational stopping place short of a contractual duty to exercise such care and skill" as a reasonable customer would exercise in his own interests. 112. Finally in two areas of ancillary activity common to bankers, a tortious duty of care has been held to exist. In Cuckmere Brick v. Mutual Finance[61] Salmon L.J. based his conclusion that on a realisation of mortgaged property the mortgagee was under a duty to take reasonable care to obtain the true market value upon the concept of proximity. "The proximity between them could scarcely be closer. Surely they are neighbours" p. 966. His conclusion would appear to have been approved by the privy Council in Tse Kwong Lam v. Wong Chit San[62]. In Standard Chartered Bank v. Walker[63] a receiver was said to owe a like duty to both the borrower and to a guarantor of the debt. 113. In his speech in Hedley Byrne, Lord Devlin likened the position of banker and customer to that of solicitor and client p. 530. Lord Denning M.R. did the same in Dutton v. Bognor Regis[64], treating them both as professional men. Again in relation to professional men and after referring to the solicitor cases Lord Denning M.R. had this to say in Esso Petroleum v. Marden[65]at 819 :
In his masterly judgment in Midland Bank v. Hett, Stubbs and Kemp[66], Oliver J. showed that a solicitor under retainer could, and in the absence of some express or implied contractual limitation did owe a duty of care to his client both in contract and in tort. I believe that much of his reasoning can equally be applied to the banker/customer relationship. If in that case Oliver J. can be said to have closed the limitation gap between contract and tort, the Court of Appeal may be said to have done the same for remoteness of damage in parsons v. Uttley Ingham[67] See also Lord Denning M.R. in Photo Productions Ltd. v. Securicor[68] in the Court of Appeal, (not affected by the House of Lords decision). 114. Finally we must not forget Lord Macmillan's dictum in Donoghue v. Stevenson[69] itself. "The fact that there is a contractual relationship between the parties which may give rise to an action for breach of contract, does not exclude the co-existence of a right of action founded on negligence as between the same parties, independently of the contract, though arising out of the relationship in fact brought about by the contract. " 115. The effect of these decision can, in my judgment, be summarised thus :-
To these I shall now turn. Question 1 116. On these authorities this question seems to me to admit of only one answer. If the banker/customer relationship is sufficiently special to give rise to a duty of care in the banker, then it is difficult to see how in a contract which creates mutual obligations the converse proposition can be otherwise than true. As Mr. Morritt put it both are operating the bank account for their mutual benefit. It is in the interest of each that it should be properly conducted. From this mutual interest a duty if it arises should be mutual. More particularly any customer ought reasonably to contemplate that carelessness on his part both in and beyond the drawing of a cheque might be likely to cause damage to the banker if it caused him to honour a forged cheque or otherwise to act contrary to the customer's true wishes or outside the mandate. There is in my judgment a "sufficient relationship of proximity". Question 2 "Whether there are any consideration which ought to negative or reduce or limit the scope of the duty" is the real issue on this part of the appeal. Here Mr. Yorke made two submissions. His major premise was to invite us to follow Kepitigalla and those cases where it had been approved; not disturb as he put it 70 years of unbroken authority; and limit the customer's duty to the drawing of the cheque itself. His second and minor premise (which made a substantial inroad into the first) was to urge us to limit the duty to circumstances where damage was "very likely" to be caused, founding on the use of this phrase in the two Camden Council cases of Lamb and Perl, see for example perl at p. 775. Thus he submitted no duty would arise if a cheque book was simply lost; but it would arise if it was known to have been stolen because it would then be known to be in criminal hands. Again a duty to guard against lack of integrity in staff would only arise in an exceptional case e.g. of the employment, perhaps as an act of charity of a man with a criminal record : otherwise it would not. Conversely Mr. Morritt urges us to adopt his narrower duty formulation if we rejected his wider duty. 117. Before attempting to answer this question I propose separately to consider four matters namely :
(1) Recent English Decisions 118. What immediately stands out from these is the peculiar, if not unique, position of a customer, if his duty of care is limited to the drawing of the cheque. Beyond that he can be as careless as he likes. If he operates his account through others he need take no step to control or check their work or their integrity. If he operates his account himself he can ignore obvious wrong entries in his pass-sheets and throw them away unread. The consequences of either course may be as damaging to his bank as a carelessly drawn cheque. But the risk is exclusively their's. In respect of one particular field of dishonest conduct on the part of a servant, he enjoys free fidelity insurance. Counsel was unable to suggest any other situation in modern jurisprudence where such a selective duty, or where a duty of care short of one to take such care as was reasonable in all the circumstances, had been imposed by law, and none has come to my mind. For once any duty is accepted there is much force in the suggested application of Brightman J.'s dictum that there is "no rational stopping place" short of the usual duty. The Macmillan limitation was not based on reason but on "proximate cause". Indeed the emphasis there on reciprocity is now a potent factor against limitation. 119. Nor is there any novelty in asking a man to bear the consequences in whole or in part of his own carelessness. Independently of any actionable duty the law of contributory negligence imposes on any man complaining of a breach of a duty of care owed to him, an obligation to have due regard for his own interests and to bear losses occasioned by his own carelessness. "where a man is part author of his own injury, he cannot call on the other party to compensate him in full. " per Viscount Simon, Nance v. British Colombia Electric Railway Co. Ltd.[70] This defence is open to any banker sued for breach of any of the duties considered in the recent authorities. It has been assumed not to be available to the banks here for procedural reasons only, arising from the nature of the claim and the wording of the Ordinance. If it had been available its effect is not readily distinguishable from Lord Finlay's observation in Macmillan : "As the negligence of the customer caused the loss he must bear it". 120. These considerations are sufficient in my judgment to negative Mr. Yorke's minor premises. Any duty stemming from the banking contract must as I see it arise when the contract is made, and take effect according to circumstances during its subsistence. It cannot behave like some alternator and live and die according to circumstances e.g. on the actual signing of a cheque or the appearance of some particular risk. Secondly I reject the underlying reasoning. The Camden cases have in my judgment no application to a servant whose work and working environment is under his master's control. Since Mr. Yorke's minor premise was advanced in mitigation of what I have called the peculiarity of the customer's position, its rejection is itself a pointer to a negative answer. My prima facie conclusion from these authorities and these considerations therefore is, that they lead to the rejection of Mr. Morritt's narrower duty, and to a negative answer to this question, unless very convincing reasons to the contrary emerge from other authorities. (2) The United States and Canadian Cases 130. The Courts in the U.S. had at least by 1913 developed a principle best described by two citations from authority. The first is a decision of the Supreme Court of California in Pacific Coast Cheese Inc. v. Security First National Bank of Los Angeles[71] where the applicable principle (cited by Laskin J, in Arrow Transfer Co. Ltd. v. Royal Bank of Canada(21) p. 101 is said to be : -
131. The second authority is the decision of the Supreme Court of New York in Screenland Magazine Inc. v. National City Bank of New York(24) where after stating a series of propositions to the same effect as those in the Californian case, Shientag J. summarised the position as follows, p. 290 :-
I said this principle goes back at least to 1913 because it finds expression in a case decided in that year namely Trustee of Morgan v. U.S. Mortgage and Trust Company[72] 132. A singular feature of this principle is its striking similarity to Blackburne L.C.J.'s direction to the Dublin jury in 1847 in the Bank of Ireland case. Although I cannot pretend to have researched the matter, this seems to me to suggest that the English and U.S. principles have the same origin : that the U.S. Courts were able to develop the principle without the same "proximate cause" limitation which once controlled the English Courts; and that if this Court were now to adopt the second part of the U.S. formulation it could be said to be drawing upon ancient authority in both jurisdictions, as well as moving towards a beneficial harmonization of English/Hong Kong and United States banking practice. 133. Secondly as early as 1886 the U.S. Supreme Court in Leather Manufacturer's Bank v. Morgan(20), held that a customer had a duty to examine his pass-book. The contrary view did not seem to the Court "to be consistent with the relations of the parties or with principles of justice". Founding on both U.S. and English authorities the Court deduced : "The general principle that, where a duty is cast upon a person by the usages of business or otherwise, to disclose the truth - which he has the means by ordinary diligence of ascertaining - and he neglects or omits to discharge that duty, whereby another is misled in the very transaction to which the duty relates, he will not be permitted, to the injury of the one misled, to question the construction rationally placed by the latter upon his conduct." p. 112. The Court further entered a caveat against pushing this duty too far : "We must not be understood as holding that the examination by the depositor of his account must be so close and thorough as to exclude the possibility of any error whatever being overlooked by him. ..... While no rule can be laid down that will cover every transaction between a bank and its depositor, it is sufficient to say that the latter's duty is discharged when he exercises such diligence as is required by the circumstances of the particular case, including the relations of the parties and the established or known usages of banking business." p. 116. 134. This duty formulation is similar to that of "fair dealing between man and man" referred to by Greer L.J. in Greenwood. This decision was referred to but distinguished on the facts in Kepitigalla. 135. This and later cases suggest that the U.S. Courts have had no difficulty :-
136. In Canada the two particularly relevant authorities are the dissenting judgment of Laskin J. in Arrow Transfer Co. Ltd. v. Royal Bank of Canada(21); and the judgment of Montgomery J. in Canadian pacific Hotel Limited v. Bank of Montreal(22) which, having been upheld on appeal, is shortly, we were told, to be considered by the Supreme Court of Canada. The two significant features of these decisions are :-
137. I shall concentrate here on Kepitigalla and Walpole because in Wealdon Woodlands (Kent) Ltd. v. National Westminster Bank (unreported) 11th March 1983 (a somewhat special case on its facts) McNeill J., without the benefit of the full argument we have heard, followed Kepitigalla : and in Asien-Pazifik Merchant Finance Limited v. Shanghai Commercial Bank Limited(19) (a 1979 decision) Leonard J. founded his decision very largely on Kepitigalla and Walpole. In so far as he negatived any wider duty situation I must respectfully disagree. 138. In rejecting any wider duty formulation in principle in Kepitigalla at p. 1025 Bray J. relied upon four grounds namely :-
139. In Walpole, the Court of Appeal in New Zealand did not have the benefit of as full an argument as we have enjoyed, and particularly of considering very recent English authority. If for example they had had the Anns decision before them, I think that Woodhouse J. would have posed a different question and would have spoken of "limiting" not of "extending" the negligence concept p. 21 (33). Nor do I think that Macarthur J. would have advanced his third reason on p. 22 (36) which seems to me unsustainable on recent authority. I have already expressed my disagreement with the Court's views of Macmillan upon which it particularly founded, and have made my comments upon the reasoning in Kepitigalla which the Court substantially repeated. I shall defer consideration of their last ground of decision namely settled practice. 140. Finally in this context I must note the decision of the High Court of Australia in Commonwealth Trading Bank of Australia v. Sydney Wide Stores Pty Limited[73] upon which both parties relied. The decision finally rid the Australian Courts of the binding authority of Marshall in favour of the decision in Macmillan. It reversed a striking out decision and restored a defence containing on allegation of negligence against the plaintiff customer (whose statement of claim itself charged negligence against the bank) which contained two heads of particulars. Head C(1) alleged negligence in the drawing of the cheque - what might be called pure Macmillan. Head C(2) alleged a failure "to discover the continuing fraud" of its employee - which seemed to assert a wider duty. Mr. Yorke relies particularly upon the reasoning of Murphy J. to the effect that modern principles and current social conditions justified the imposition of a duty going up to, but not beyond, the drawing of the cheque. Mr. Morritt relied upon the majority judgment in two ways. First he said the reference to "the existence of the contractual relationship" as "the foundation for imposing a duty on the customer" supported his basic contention. Secondly the rejection of Marshall as not conforming "to modern notions of the duty and standard of care expected of the reasonable man", which now included taking account "of the possibility that others will break the law" p. 578, inevitably led not simply to, but beyond Macmillan. I think he is right, unless Murphy J.'s limitation can be justified as a matter of policy. (4) The Argument on Settled Practice and the Decisions on the Narrower Duty 141. The last ground of decision in Walpole relied upon by Macarthur and Woodhouse J.J. was that "customers and banks have long conducted their relationship on the footing" that beyond the drawing of the cheque the risk of forgery falls on the banker. 142. First I beg to doubt whether any inhibiting settled practice principle exists in the field of imposition of duties upon particular classes of person generally, as opposed to purely personal rights arising from particular contracts or common form agreements. It is easier to point to authority against than in favour in this context. The suggested principle did not impede the development of the law, or aid professional classes generally, in Hedley Byrne; solicitors in Midland Bank v. Hett; (66) customers (at least up to Macmillan limits) in Sydney Wide; mortgagees in Cuckmere Brick; or barristers in Rondel v. Worsley[74]. Counsel could refer to no other case in this field where this principle had been applied, and I know of none. 143. Equally I beg to doubt the premise behind it. I do not believe that people generally "conduct their relationship" upon the basis that they can be wholly careless, and still expect others to save them from harm. Rather I believe that people aim to exercise care both in their own affairs and where relevant in the affairs of others. I doubt whether the standards of those classes of persons, the subject matter of the decisons above referred to, were materially affected thereby. Before them, those conscious of their immunity were unlikely to exploit it : afterwards the most likely consequence was a policy of insurance. 144. The lines of authority on a wider duty have already been traced. Those on narrower duty have not. Since on one view the narrower is not a distinct duty, but a particular application of the wider, this has some bearing upon the settled practice point. As Dr. Milnes Holden shows in his article in 17 M.L.R. 41 the authorities here are confused and inconclusive. One of the difficulties to my mind is that this problem became interwoven with the parallel but distinct account stated problem, and in consequence this led to confusion arising from the ambiguities in the use of that phrase. Any implied obligation to check the accuracy of a pass book, was not readily separable from an implication of an account stated of one kind or other. 145. In relation to inspection, the law in England and the U.S. had the same source, Devaynes v. Noble[75](75), where the Master in his report records a custom or practice which included inspection by the customer. It is difficult to determine when the paths diverged. It may have been the reference to "lack of evidence" of the implied contract showing neglect of the customer's duty (again in an account stated context) in the judgment of Bowen L.J. in Vagliano v. Bank of England[76] in the Court of Appeal; which now appears somewhat outdated. Or it may have been the ex tempore observations of Lord Esher M.R. in Chatterton v. London County Bank,[77] which so incensed Sir John Paget, but which seemed to have been given weight by their adoption by Bray J. in Kepitigalla, again in an account stated context. If together these constitute authority against any obligation to inspect, the law is precariously perched in the uncertain area of presumed knowledge. Both strangers and customers have a duty to inform if they know of a forgery, Fung Kai Sun v. Chan Fui Hing(57) and Greenwood v. Martin's Bank(2). But notwithstanding the purpose of returning pass-sheets to the customer, he can close his eyes unless it should be held to be a "suitable case" to attribute knowledge Wealden Woodlands at page 21. The passage in Paget's Law of Banking 9th edition 113 from which this phrase is taken, contains a useful summary of the cases and anticipates my conclusion. I find the reasoning in Leather Manufacturer's Bank v. Morgan (20) both persuasive and more fitting. I find it very difficult to reconcile this limitation with modern principles of negligence, and impossible to discover any policy considerations in favour of its retention. 146. In his well known speech in Camillo Tank Steamship Co. v. Alexandria Engineering[78]. Viscount Cave identified three types of accounts stated. The first, which could equally be called an admitted statement of account, has only evidential effect. The second and third, which could equally be called accounts settled for valuable consideration, since the presence of consideration is the vital difference, have substantive effect; can only be re-opened like any other agreement e.g. for fraud or mistake; and create a new cause of action. We have the authority of Lord Wight in Firm Bishum Chand v. Seth Girdhari Lal[79] for the proposition that there can be a true "settlement of account between banker and customer". But no single case can be found where this has apparently happened. I believe the explanation to be that the admitted statement of account concept fits the normal banker/ customer relationship; whereas the account settled concept does not. It seems to me both artificial and unreal to say that because any bank account has both debit and credit entries, that when it is considered by the customer the parties in the words of Blackburn J. in Laycock v. Pickles[80] (quoted in Firm Bishum Chand at p. 468) "mutually agreed the several amounts of each and .....go on to agree the balance". Prima facie acceptance by the customer is likely : mutual discussion the exception. This approach accords with the usual banking practice of crediting accounts with uncleared effects with adjustment following where necessary. If therefore there was ever thought to be a risk that an acceptance of an obligation on a customer to inspect his pass-sheets might have led to a strict account settled conclusion, such risk in my judgment ought now to be regarded as not well founded. 147. I come back to the answer to the second question. In my judgment, in Hong Kong, the governing and highly persuasive authority is in general that of the recent English decisions, and in particular the United States and Canadian authorities. I am not persuaded that the arguments in the contrary authorities are convincing or entitle us to give other than an negative answer to this question. In my judgment therefore a customer owes to his banker both in contract and in tort a duty to take reasonable care "to ensure the proper working of his account" in the words of Scrutton L.J. in Greenwood. Mantell J. having found such duty to have been broken (if it existed) in relation to all three defendant banks, for my part I would allow the 1st defendant's cross appeal against the plaintiff and dismiss the plaintiff's appeals against the 2nd and 3rd defendants. 148. As the remaining issues were most carefully argued by counsel I shall deal with them shortly. The Banking Contracts 150. I agree with Mantell J. that the various rules relied upon had contractual effect, but that in no case did they constitute conclusive evidence clauses. For my part I reach this conclusion on the basis that nowhere are the words used sufficiently clear to have that effect; and particularly to bring home to the customer the intended importance of the inspection he is being expressly or impliedly invited to make, and its alleged conclusiveness. As Mantell, J. emphasised : "Not one of the rules or terms refers to the account becoming 'conclusive evidence'". The words used in all cases are consistent with the common law duty I have found to exist. This duty and they at most lead only to an agreed statement of account; not to an account settled for valuable consideration. It is unnecessary to determine whether they are sufficient alone to create any such duty. 151. I reach this conclusion without having to determine whether we should in Hong Kong adopt the approach of Laskin J. in Arrow Transfer to the construction of such contracts, or the yet more difficult and important question whether we should follow and apply the principles of construction recently stated by the House of Lords in George Mitchell v. Finney Lock Seeds Ltd.(30); Ailsa Craig Fishing v. Malvern Fishing (29); and Photo productions v. Securicor Transport(68): or whether we should hold that a different statutory position and especially the absence here of any legislation equivalent to the Unfair Contract Terms Act 1977 justifies Hong Kong Courts under section 3 of the Application of English Law Ordinance in retaining the full rigour of the principles of Canada Steamship Co. v. The King (28). Estoppel 152. Upon my conclusion on duty and the judges' findings, an estoppel arises in favour of all the banks. I would have reached the same conclusion in any event in favour of the 3rd defendant upon the terms of the certificates provided to it monthly by the plaintiff : but not upon the accountancy - audit documents. Standard of Proof of Criminal Conduct in Civil Proceedings 153. The industry of counsel has revealed two conflicting lines of the highest authority. Twice in expressing the opinion of the Privy Council Lord Atkin said expressly or by necessary implication that the standard was proof "beyond reasonable doubt" : People of the States of New York v. Phillips (36), and Navayanan v. Official Assignee, Rangoon(37). The contrary view that the civil standard applies with due regard for the importance and seriousness of the conduct charged has the support of the privy Council in Doe d. Devine v. Wilson(38); of the House of Lords in Blythe v. Blythe(32) approving the decision of the Court of Appeal in Hornal v. Neuburger(34); and again very recently of the House of Lords in Reg. v. Home Secretary ex parte ex parte Khawaja(31). I can only say that I find the latter approach the more persuasive. I think that the trial judge was right to apply this standard, and I can see no grounds whatever for challenging any of his factual findings so based. Interest 154. Upon this it is sufficient to say that I agree with the reasoning and conclusions of Cons, J.A.
Hon. Cons J.A. 155. This judgment is handed down in accordance with Order 42 Rule 5A of the Rules of the Supreme Court; the appeal of the Plaintiff is dismissed; the cross appeal of the lst Defendant is allowed; in the court below the 1st Defendant was ordered to pay part of plaintiff's costs, and it may be that counsel wishes to argue for a variation of that order, in which case we shall be pleased to hear him in due course; subject to that we make an ordernisi that the 1st, 2nd and 3rd Defendants are to have their costs in this court.
Representation: R. Yorke, Q.C., C. Ching, Q.C. & R. Tang (Therese P.F. Chow & Co.) for the Plaintiff Andrew Morritt, Q.C., Oswald Cheung, Q.C. & A. Li (Deacons) for the 1st Defendant D.Chang, Q.C. & Raymond Faulkner . (D.W. Ling & Co.) for 2nd Defendant Leonard Bromley, Q.C., K. Bokhary, Q.C. & Miss Josephine pinto (F.Zimmern & Co.) for the 3rd Defendant [1] [1918] A.C.777 [2] [1933] A.C. 51 [3] [1977] A.C. 239 at page 253 [4] [1950] 6 L.D.B. 161 [5] [1393] 2 Q.B. 177 at 181 [6] [1957] A.C. 555 at 576 [7] 130 E.R. 764 (1827) 4 Bing 253 [8] [1921] 3 K.B. 110 [9] [1932] 1 KB 371 at 381 [10] [1968] 1 W.L.R. 1555 [11] [1972] 1 W.L.R. 602 [12] [1975] 2 N.Z.L.R. 7 [13] [1909] 2 K.B. 1010 [14] [1978] A.C. 728 at 751 [15] [1945] 17 C.L.R. 256 at 261 [16] [1970] A.C. 1004 [17] [1883] 11 Q.B.D. 327 [18] [1962] 2 Lloyds List Reports 80 at 87 [19] [1982] H.K.L.R. 273 [20] 117 U.S. 96 [21] [1971] 27 D.L.R. 81 [22] [1981] 122 D.L.R. 32. 519 at 532 [23] [1913] 208 N.Y. 21 [24] [1943] 42 N.Y.S. (2nd) 286 [25] [1982] H.K.L.R. 215 [26] [1980] H.K.L.R. 815 at 830 [27] [1945] K.B. 189 [28] [1952] A.C. 192 [29] [1983] 1 W.L.R. 964 at 970 [30] [1983] 3 W.L.R. 163 [31] R. v. The Home Secretary Ex. parte Khawaja, [1983] 2 W.L.R. 321 [32] [1966] A.C. 643 at 669 [33] [1951] Probate 35 [34] [1957] 1 Q.B. 247 [35] [1972] 2 L.L.R. 187 at 192 [36] 1939] 3 All E.R. 952 [37] (28 A.I.R. 1941 PC. 593 [38] [1855] X Moore 502 at 531 [39] [1975] 1 Q.B. 654 [40] 5 H.L.C. 389, 10 E.R. 950 [41] 21 Q,B.D. 160 [42] [1906] A.C. 559 [43] [1906] 11 Commercial Cases 255 [44] [1913] 108 LT 728 [45] [1961] A.C. 388 [46] [1981] Q.B. 625 [47] [1983] 3 W.L.R. 769 [48] [1920] A.C. 956 at 986 [49] [1983] A.C. 520 at 545 [50] [1889] 14 P.D. 64 at 68 [51] [1918] 1 K.B. 592 at 605 [52] [1939] 2 K.B. 206 at 227 [53] [1978] A.L.J.R. 20 at 26 [54] [1982] 3 W.L.R. 366 [55] [1926] 135 L.T. 358 [56] [1902] 1 K.B. 612 at 616 [57] [1951] A.C. 489 at 503 [58] [1959] 1 Q.B. 55 [59] [1964] A.C. 465 [60] [1979] 2 L.L.R. 391 [61] [1971] Ch. 949 [62] [1983] 3 All E.R. 54 at 60 [63] [1982] 1 W.L.R. 1410 [64] [1972] 1 Q.B. 373 at 394 [65] [1976] Q.B. 801 [66] [1979] Ch. 384 [67] [1978] 1 Q.B. 791 [68] [1973] 3 All E.R. 146 at 150 [69] [1932] A.C. 562 at 610 [70] [1951] A.C. at page 611 [71] [1955] 286 P. (2d) 353 [72] 208 N.Y. 218 [73] [1981] 55 A.L.J.R. 574 [74] [1969] 1A.C. 191 [76] 23 Q.B.D. 243 at 263 [78] [1921] 38 T.L.R. 134 at 143 [79] [1934] 50 T.L.R. 465 [80] 33 L.J.Q.B. 43 |
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