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On appeal from: [2018] EWCA Civ 84

 

An implied term of the contract between a bank and its customer is that the bank owes a duty of care not to execute the customer’s order if it knows the order to be dishonestly given, or shuts its eyes to obvious dishonesty, or acts recklessly in failing to make inquiries. This is known as the Quincecare duty of care, following the 1992 case of Barclays Bank plc v Quincecare Ltd.

The issue in this appeal was whether a claim against a bank for breach of the Quincecare duty is defeated if the customer is a company, and the fraudulent payment instructions are given by the company’s Chairman and sole shareholder who is the dominating influence over the company’s affairs.

The High Court dismissed the dishonest assistance claim but held there was a clear breach of the Quincecare duty of care to Singularis, with a deduction of 25% by way of contributory negligence. Daiwa’s appeal against the dismissal of the negligence claim was dismissed. Daiwa appealed to the Supreme Court. The Supreme Court unanimously dismissed Daiwa’s appeal and held that the High Court order should stand.

For judgment, please download: [2019] UKSC 50

For Court’s press summary, please download: Court’s Press Summary

For a non-PDF version of the judgment, please visit: BAILLI

To watch the hearing please visit: Supreme Court website: 23 July 2019 afternoon session and 24 July 2019 morning and afternoon session.