Gopal Sri Ram JCA:

[1] The defendant (appellant before us) is a banker. The plaintiffs (respondents before us) are its customers. At the material time there was in the plaintiffs' employ a man by the name of Kang. He too was a customer of the defendant. He owed the plaintiffs a considerable sum of money: RM211,489.29 in all. He gave the plaintiffs 5 cheques in settlement of the debt. They were all drawn on the defendant's branch at Kepong, Kuala Lumpur. That is the same branch at which the plaintiffs had their account. The plaintiffs presented the first cheque. There was insufficient money in Kang's account to meet his cheque. In the ordinary course of business, a bank will return such a cheque to the presenter - be it a bank or its own customer - indicating that it had been dishonoured. But that is not what happened here. The manager of the defendant's Kepong branch returned the cheque to Kang. The plaintiffs were not told that the cheque had been dishonoured because of lack of funds. So, they assumed that the first cheque was good for payment. They then presented each of the other cheques and on each occasion the same thing happened. Each cheque was handed to Kang by the defendant bank. After the last cheque was dealt with in this way Kang left the plaintiffs' employment and disappeared. Later, the plaintiffs discovered the truth. They brought an action against the defendant to recover the value of the 5 cheques. They based their cause of action both in conversion and negligence. The Sessions Court found for them. The defendant bank appealed to the High Court. At the hearing it did not go forward on their appeal on liability. It confined its case to quantum. It failed. It then appealed to us. We too dismissed the appeal.

[2] The defendant's complaint in this appeal may be - without doing any disservice to learned counsel who argued its case - summarised thus. Kang had no money in his account. The cheques he gave the plaintiffs were therefore worth nothing. The plaintiffs should therefore receive only nominal damages. Awarding the plaintiffs the full value of the worthless cheques would amount to punishing the defendant. This line of argument is without merit for several reasons.

1

any person who, however innocently, obtains possession of the goods of a person who has been fraudulently deprived of them, and disposes of them, whether for his own benefit or that of any other person, is guilty of a conversion.

[4] It follows that mistake of law and, generally speaking, mistake of fact will not afford a defence to the tort. In Hollins v. Fowler , Blackburn J when delivering his judgment in the Court of Exchequer said:

However hard it may be on those who deal innocently and in the ordinary course of business with a person in possession of goods, yet, as long as the law as laid down in Hardman v. Booth , 1 H. & C.803, is unimpeached, I think it is clear law, that if there has been what amounts in law to a conversion of the plaintiff's goods, by any one, however innocent, that person must pay the value of the goods to the real owners, the plaintiffs.

Direct cause excludes what is indirect, conveys the essential distinction, which causa causans and causa sine qua non rather cumbrously indicate, and is consistent with the possibility of the concurrence of more direct causes than one, operating at the same time and lea