The bank's duty includes timely clearance of cheques and proper communication regarding insufficient funds; qualified privilege applies to defamatory statements made under such duties.

Introduction

[1] This is an appeal from the decision of the learned judge of the High COURT at Kuala Lumpur allowing the respondents' claims for RM275,000.00 with costs.

[2] Having heard and carefully considered the submissions of the respective parties, we allowed the appeal in part.

[3] We now set out the reasons for our decisions.

[4] for convenience, the parties will be referred to as they were in the High COURT. Accordingly, in this judgment, the appellant, CIMB Islamic Bank Berhad, is referred to as "the defendant" and the respondents, Mohd Saufi Taib, Surya Putra Mohamed Taulan & Mohd Syairusrohan Md Sehan, are referred to as "the plaintiffs".

Facts

[5] The facts which give rise to this appeal are not much in dispute and can be shortly stated as follows:-

(a) The plaintiffs are the partners of a firm of solicitors, M/s Saufi, Putra & Associates.

(b) The defendant is a public company which carry out the banking business and has a branch at Block 8, Kompleks Pejabat Kerajaan, Jalan Duta, Kuala Lumpur.

(c) The plaintiffs are the defendants' customers of which they maintained a Current Account No 1418- 0000022-10-2 ("the said account"). The said account is a client account established under the Legal Profession Act 1976 and its regulations.

(d) On 18 June; 2008, the plaintiffs deposited in the said account 4 EON Bank Cheques at the defendant's branch in Shah Alam. The EON Bank Cheques had been paid by EON Bank since 19 June; 2008, but only been credited to the said account by the defendant on 11 July 2008.

(e) On 9 July 2008, before the EON Bank Cheques cleared, the plaintiffs issued a CIMB Islamic Cheque ("the CIMB Islamic Cheque"). The CIMB Islamic Cheque was dishonoured when presented for payment by PW3 and a Return Cheque Advice dated 11 July 2008 with the remark "Refer to Drawer" was issued to PW3.

(f) Thereafter, the plaintiffs had sent a letter dated 23 July 2008 to the defendant requiring an explanation. There is no respond until the defendant's Group Chief Executive sent a letter dated 24 July 2008 explaining that they had difficulties in their cheque clearing system and consequently, RM100.00 had been refunded to the said account.

(g) Dissatisfied with the conduct of the defendant, the plaintiffs instituted an action at the High COURT. The plaintiffs' claim are three fold, namely, the defendant:-

(i) acted negligently in failing to clear the EON Cheques and subsequently, in dishonouring the CIMB Islamic Cheque;

(ii) breached its contract with the plaintiffs; and

(iii) committed the tort of libel by causing the publication of the remarks "Refer to Drawer".

Findings Of The High COURT

[6] The learned judge decided in the plaintiffs' favour. The principal findings of the High COURT were these:-

(i) The defendant had a common law duty to the plaintiffs to clear the EON Cheques within 3 days and to honour the CIMB Islamic Cheque, and the defendant was negligent in failing to carry out these duties;

(ii) The failure of the defendant to clear the EON Cheques and honour the CIMB Islamic Cheque was a breach of a contract with the plaintiffs; and

(iii) The publication of the remarks "Refer to Drawer" was a libel committed by the defendant.

The Appeal

[7] Before us, the arguments on which the judgment of High COURT is assailed are that:-

(a) the learned judge erred in law and in fact in failing to appreciate that the plaintiffs were under a duty to ensure that there were sufficient funds in the said account before proceeding to issue any cheques;

(b) the learned judge erred in fact in disregarding the fact that the delay in clearing the 4 EON Bank Cheques depo