REPUBLIC OF TRINIDAD AND TOBAGO IN THE...

REPUBLIC OF TRINIDAD AND TOBAGO

IN THE HIGH COURT OF JUSTICE

C.V. No. 2014-00429

BETWEEN

HARDLINES MARKETING LIMITED

Claimant

AND

REPUBLIC BANK LIMITED

Defendant

Before the Honourable Mr. Justice Robin N. Mohammed

Appearances:

Mr. Robin Montano for the Claimant

Mr. Kerwyn Garcia instructed by Ms. Marcelle Ferdinand for the Defendant

_____________________________________________________________________________________

JUDGMENT

_____________________________________________________________________________________

I. Introduction

[1] On 4 February 2014 the claimant initiated a claim for damages, including exemplary

damages, against the defendant. The damages claimed were for libel and/or injurious

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falsehood contained in two cheques both dated 14 November 2012 which were stamped and

returned for “un-cleared effects” when according to the claimant’s case, at all material

times, there was enough money in the claimant’s account to meet the said cheques.

[2] The defendant entered an appearance to the claim on 20 February 2014 and filed its

defence on 28 March 2014. Consistent with the duty of standard disclosure, the defendant

and claimant filed their list of documents on 29 May 2014 and 2 June 2014, respectively.

[3] On 17 June 2014, the defendant filed the witness statement of Mr. Grant Dass in

support of its defence. On the same day, the claimant filed the witness statements of Kenny

Thomas and Haroon Mohammed in support of its claim.

[4] Both sides filed separate statements of issues on 2 October 2014. The trial was held

and completed on the 2 October, 2014 whereupon directions were given for the filing of

written closing submissions by both parties. The defendant filed its written closing

submissions on 24 October 2014 and the claimant filed written response submissions on 7

November 2014. On 21 November 2014, the defendant filed submissions in reply to the

claimant’s written submissions in keeping with the court’s directions.

[5] I have reviewed the law as it relates to the issues arising in this claim. I have

concluded that the claimant had sufficient available funds in his account on 26 November

2012 to satisfy the two cheques made to Board of Inland Revenue and that the notation “un-

cleared effects”, which was marked on the two cheques and returned to Board of Inland

Revenue was indeed capable of a defamatory meaning. Moreover, I have concluded that in

the circumstances of the instant matter, the notation marked on the returned cheques was

defamatory of the claimant. I have therefore concluded that judgment is to be granted in

favour of the claimant. The claimant is to be awarded general damages (inclusive of

aggravated damages) for the libel and injurious falsehood contained in the two cheques.

However, I am of the opinion that this is not an appropriate case for the award of exemplary

damages. The court shall hear the parties on the issue of quantum.

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[6] The reasons for my decision hereinafter follow.

II. Factual Background

[7] The claimant is a duly registered company with its registered office situate at

Charlieville, Chaguanas. The defendant is a bank, one of the branches of which is situate at

Main Road Chaguanas. At all material times, the claimant was a customer of the defendant.

The claimant’s bank account no. 660501541601 (hereinafter “the claimant’s account”) was

located at the Chaguanas branch of the defendant.

[8] An agreement existed between the claimant and defendant whereby the claimant

enjoyed the use of an overdraft facility with a limit of $15,000.00. The overdraft facility

permitted the claimant to use or withdraw more money than existed in its account, without

exceeding the specified maximum negative balance of $15,000.00.

[9] The claimant’s case was that the business practice at the Chaguanas branch of the

defendant, as regards customer deposits was as follows:

(i) to immediately credit to the claimant’s account cash deposits made by the claimant;

(ii) cheques from the bank (whether from the same or different branches) were credited

on the same day or the very next day; and

(iii) cheques from other banks were cleared after 4 working days.

[10] The defendant, however, denied that that was the practice. Rather, the defendant

stated that the practice was:

(i) to credit cheques drawn against the defendant two days after deposit; and

(ii) cheques drawn against any other bank four days after deposit,

provided that funds were available for this purpose.

[11] On 14 November 2012, the claimant drew two cheques in favour of the Board of

Inland Revenue. The cheques were numbered 771 and 772 and were in the amounts of

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$3,951.00 and $3,353.00, respectively. The total of the two cheques was $7,304.00. The

claimant was adamant that there were sufficient funds in its account to satisfy the cheques.

[12] It was the claimant’s case that during the period 1 January 2012 to 31 December 2012

it maintained a healthy available balance that was always in credit. According to the claimant

on 23 November 2012, there was an available balance of at least $228,631.92 on its account,

which increased to at least $429,287.01 by 30 November 2012. The claimant specified that

those sums did not include the $15,000.00 overdraft that was available to the claimant.

[13] The defendant’s version of facts in relation to the available balance in the claimant’s

account at the material time, however, differs. According to the defendant, on 26 November

2012, the two cheques were presented to it for clearance. The defendant stated that, apart

from the two cheques to be debited from the claimant’s account, a third debit entry was also

posted to the claimant’s account on that same date. That third entry consisted of a return

deposit item for $307,450.00. That return deposit item represented a cheque deposit made by

the claimant into its account on 23 November 2012 the proceeds of which was initially

credited to the claimant’s account but which was eventually debited against the account on

26 November 2012 as it was not honoured by the originating bank upon which it was drawn.

[14] Thus, it was the defendant’s case that at the close of business on the 26 November

2012, the claimant’s account reflected a credit balance of $428,925.01. However, the cheque

deposits in the claimant’s account that were on hold at the time totalled $499,522.09, which

resulted in the claimant’s account being in debit in the sum of $70,597.08 which debit

position was reduced to $55,597.08 having regard to the overdraft facility of $15,000.00.

[15] The defendant stated that it was in those circumstances, the claimant’s account being

in debit in the amount of $55,597.08, that the notation “un-cleared effects” was placed on

the two cheques and the two cheques were returned to the Board of Inland Revenue.

[16] The claimant, dead set that there were sufficient funds in its account, contended that

the ordinary and natural meaning of the words “un-cleared effects” on the two cheques was

that there was not enough money in its account to clear either or both cheques. The

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defendant, on the other hand, denied that that was the accurate meaning of the term. Rather,

the defendant stated that the term “un-cleared effects” was used to refer to cheques that have

been deposited by a customer but which have not been paid by the drawee bank and the

proceeds of which have therefore not been credited to the customer’s account. In the

alternative, the defendant stated that the term may also refer to cheques lodged with the

defendant for collection, held by the defendant pending completion of the collection process.

To this end, the defendant indicated that in the ordinary course of its business, once the

drawee bank pays an un-cleared cheque, the relevant funds are released and/or credited into

the customer’s account.

[17] Nonetheless, when the cheques were returned to the Board of Inland Revenue, the

Board then notified the claimant by two letters dated 3 January 2013, which were received by

the claimant on 29 January 2013, that the two cheques were dishonoured.

[18] The claimant contended that it suffered great embarrassment as a result of the two

cheques being returned. According to the claimant, since that incident the Board of Inland

Revenue has insisted that the claimant pay all of its taxes by way of certified or manager’s

cheques thus putting the claimant through unnecessary trouble and expense. Prior to the

incident, the claimant’s method of payment of all its taxes was by way of ordinary or

uncertified cheques.

[19] Additionally, the claimant stated that a further consequence of the incident was the

commencement of an audit of the claimant by the VAT office of the Board of Inland

Revenue. The claimant was audited for the period February 2008 to December 2012. The

claimant was informed of that audit by letter from the VAT office of the Board of Inland

Revenue dated 25 January 2013. The claimant contended that it had been in business since

July 2007 and had never been audited before. However, the claimant alleged that at the time

of the audit, the Managing Director of the claimant (Mr. Kenny Thomas) was told by one of

the auditors (whose name was not known) that the audit was caused by the incident in respect

of the two cheques.

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[20] The claimant stated that the incident in respect of the cheques caused damage to its

reputation and brought it into public scandal, odium and contempt. However, the defendant

denied any damage being caused to the claimant and further submitted that if damage was

indeed caused, the defendant was not the cause of such damage.

[21] On 23 September 2013, the attorney for the claimant wrote a pre-action protocol letter

to the defendant requesting that the defendant apologise for the severe embarrassment caused

to it by the unjustified return of the two cheques. Counsel for the defendant responded by

letter dated 29 November 2013, whereby the defendant offered justification for its conduct in

respect of the two cheques and declined the claimant’s request for a written apology.

[22] As afore-stated, on 4 February 2014 the claimant then initiated a claim for damages,

including exemplary damages, against the defendant for libel and/or injurious falsehood

contained in two cheques which were stamped and returned for “un-cleared effects” when

according to the claimant, at all material times, there was enough money in the claimant’s

account to meet the said cheques.

III. Issues Arising for Decision

[23] The issues now arising for decision by this court are:

A. Whether on the 26 November 2012 there was sufficient available funds in the

claimant’s account to immediately pay the value of the two cheques;

B. What meaning is to be attributed to the term “un-cleared effects”;

C. Whether the returning of the two cheques to the Board of Inland Revenue with the

marking “un-cleared effects” was defamatory of the claimant if there was in fact

money in the claimant’s account to meet same; and

D. If issue ‘C’ is answered in the affirmative, what relief is to be awarded to the

claimant in respect of the defamatory act?

IV. The Law and its Application to the Instant Matter

[24] The determination of whether it was indeed defamatory for the defendant to mark the

two cheques with the term “un-cleared effects” and return it to the Board of Inland Revenue,

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is inevitably reliant upon the issues (A) whether the claimant had sufficient funds available

on 26 November 2012 to debit the two cheques; and (B) the meaning to be attributed to the

term “un-cleared effects”. Therefore, those two issues will be addressed firstly, in turn.

A. Whether on the 26 November 2012 there was sufficient available funds in the

claimant’s account to immediately pay the value of the two cheques

(i) Submissions

[25] The defendant submitted that the evidence that there was money in the claimant’s

account but that the money was not available because the cheques were on hold, came from

its sole witness, Mr. Grant Dass. Mr. Dass was at the material time the Accounts Manager of

the Commercial Credit Department at the Chaguanas Branch of the defendant. The defendant

premised its submissions on the fact that Mr. Dass stated that at the time the two cheques

were presented for payment, on 26 November 2012, there were monies in the claimant’s

account which reflected a current balance of $428,925.01 in credit, but that the available

balance in the account, that is, the sums actually available for immediate use by the claimant,

was $70,597.08 in debit.

[26] The defendant contended that at the trial Mr. Dass was cross-examined on this

evidence. He was asked to agree that the bank’s statement in relation to the account (tendered

into evidence by consent as part of an agreed bundle) did not show the available balance – a

proposition with which he readily agreed. He was further asked how, then, was he able to

arrive at the conclusion that at the time when the two cheques were presented for payment,

the available balance on the account was $70,597.08 in debit. Mr. Dass answered that he had

confirmed that figure from another document within the bank, namely a report titled “Items

Paid Against Uncollected and NSF Items.”

[27] Counsel for the defendant noted that earlier in the trial, the claimant’s counsel had

stated that his approach to the admission of evidence in the instant matter was to “let it all

hang out”. Yet, curiously, when Mr. Dass identified the source of his conclusion that at the

time when the two cheques were presented for payment the available balance on the account

was $70,597.08 in debit, the claimant’s counsel suddenly changed task and protested most

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animatedly against the identified report being put before the court to test Mr. Dass’

conclusions. Counsel for the defendant therefore submitted that the refusal of the claimant’s

counsel to test Mr. Dass’ evidence in this regard meant that Mr. Dass’ evidence on this issue

was left uncontradicted under cross-examination.

[28] Counter to the submissions of the defendant, the claimant submitted that on 26

November 2012, the date on which both cheques were presented to the defendant, there was

an available balance of $228,631.92 – a sum that was greater than the total of the two

cheques which was $7,304.00. The claimant premised this submission on information that he

stated was provided to him by the defendant’s Customer Services Officer, as well as, the

information provided by the claimant’s accountant, Haroon Mohammed of Crosstown

Accounting Services. It was Mr. Mohammed’s evidence that the claimant’s statement of

accounts (which was prepared by Crosstown Accounting Services) showed that in November

2012 there was an available balance of $228,631.92 on 23 November 2012 and on 30

November 2012 the available balance was $429,287.01. The claimant relied on the evidence

of Mr. Mohammed that between those dates there were no significant withdrawals that could

possibly affect the available balance to the extent of the two cheques being returned with the

reason being “un-cleared effects”.

[29] The claimant also contended that assuming that no reliance was placed on the

statement produced by its accountant, then the only evidence would be the bank statements

(in the agreed bundle), in particular the bank statements covering the periods 17 October

2012 to 16 November 2012 and 17 November 2012 to 16 December 2012. It was the

claimant’s contention, that even a review of the bank statements supported its contention that

there were sufficient funds in its account on 26 November 2012 to satisfy the two cheques. In

its submissions the claimant outlined a detailed breakdown of the movement of money in and

out of the account from 12 November 2012 to 26 November 2012, including a $10,000 cash

deposit on 23 November 2012, which itself should have been sufficient to satisfy the two

cheques on 26 November 2012. The essence of the claimant’s findings was that even if the

available balance of $228,631.92 on 23 November 2012 was not actually available (which

the claimant strongly contended it was) then the $10,000 cash deposit would have been

sufficient to satisfy the two cheques.

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(ii) Law and application

[30] When faced with issues of fact, it is the duty of the court to analyse properly the

entirety of the evidence before arriving at a conclusion: Beacon Insurance Company Ltd v

Maharaj Bookstore Ltd1. Further, the court is entitled to draw reasonable inferences from

findings of primary fact, taking into consideration all inferences available and the

probabilities attached to them: Theodore Toussaint (Person named as Executor of the

Estate of Bonaventure Theo Eugene Toussaint, Deceased) v. Lechell Samuels2.

[31] There has been no agreement in the instant matter regarding the available balance in

the claimant’s account on 26 November 2012. Usefully, however, it was agreed by both

parties, firstly, that “available balance” means the amount in an account that had been

cleared and is available by a customer for use or withdrawal. Secondly, that “current

balance” shows what has been deposited but is not necessarily yet cleared or available. It

follows, therefore, that the available balance will be subsumed in the current balance, though

the total current balance will not be representative of the amount that the customer can

withdraw.

[32] Thus, in determining the issue of fact in this matter, this court is required to examine

and analyse the entirety of the evidence so as to ascertain whether the available balance, as

opposed to the current balance, in the claimant’s account was a sum which would have

enabled the immediate payment of the two cheques on the 26 November 2012.

[33] It is clear from an examination of both the bank statement (in the agreed bundle of

documents) and the statement of accounts prepared for the claimant by Crosstown

Accounting Service, that the current balance in the claimant’s account on 26 November

2012, prior to the presentation of the two cheques, was $436,229.01. That current balance

represented the sum after the returned deposit of $307,450.00 was already debited from the

claimant’s account. It also takes into account all the other cheque and cash deposits made by

1 (2014) UKPC 21 [12]

2 Civ. App. No. S054 of 2013

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the claimant up to the 26 November, including the cash deposit of $10,000.00 made on the

23 November 2012 which the claimant referred to in its submissions.

[34] Based on the bank statement (in the agreed bundle) and the claimant’s statement of

accounts from its accountant, the only activity in respect of the claimant’s account before the

26 November 2012, took place on 23 November 2012. Only deposits were made on 23

November 2012; no withdrawals occurred. There were twelve cheque deposits and one cash

deposit made on 23 November 2012. Of the 12 cheque deposits I will exclude, at this point,

consideration of the $307,450.00 cheque deposit, which I need not take into account as I have

already noted that the current balance of $436,229.01 was arrived at after that return deposit

was already debited from the claimant’s account on 26 November 2012. Therefore, the total

sum of the remaining eleven cheque deposits made on 23 November 2012 was $192,072.09

and the one cash deposit made on same date was $10,000.00.

[35] Now, I have accepted that the practice of the defendant was to immediately credit to

the claimant’s account cash deposits. Further, I have accepted that regarding cheques, as

stated by the defendant, its practice was to: (i) credit cheques drawn against the defendant

two days after deposit and (ii) credit cheques drawn against any other bank four days after

deposit, provided that funds were available for this purpose. On the basis of this practice, it is

then possible to calculate what would have been the true available balance on the claimant’s

account as at 23 November 2012, by using the current balance of $436,229.01 which appears

in the evidence of both parties.

[36] From the eleven cheque deposits made on 23 November 2012 which totalled

$192,072.09, six were cheques drawn against the defendant which would not have been

available to the claimant until two days after deposit (the total value of those six cheques

being $157,413.54), and five were cheques drawn against other banks which would not have

been available to the client until four days after the deposit (the total value of those five

cheques being $34,658.55). Therefore, applying the practice of the defendant in respect of

cheque deposits, none of the claimant’s cheque deposits would have been immediately

available for use on 23 November 2012. Only the $10,000 cash deposit would have been

immediately available.

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[37] Bearing in mind that there was no activity in the account between the 23 November

and 26 November 2012, the current balance of $436, 229.01 noted on 26 November 2012,

could then be used to ascertain the available balance on 23 November 2012. Thus, when the

total cheque deposits of $192,072.09 is subtracted from $436,229.01, a balance of

$244,156.92 is left. However, from that latter balance a further sum of $15,525.00 also has to

be subtracted, as a cheque drawn against another bank (RBC) was deposited in that value on

20 November 2012 and therefore that cheque would not have been available for use by the

claimant until four days after (i.e. until the 24 November 2012). Therefore, when that

additional sum of $15,525.00 is subtracted from $244,156.92, the true available balance as at

23 November 2012 would have been $228,631.92.

[38] Therefore, despite the fact that the bank statements (in the agreed bundle) only show

the current and not the available balance, I am satisfied and convinced that the claimant has

accurately represented in its statement of accounts prepared by Crosstown Accounting

Services that the available balance as at 23 November 2012 was $228,631.92. This further

adds to the credibility of the information given by Mr. Kenny Thomas, in his witness

statement, that both him and his wife were in the habit of getting the Customer Services

Officer (CSO) of the defendant with whom a relevant deposit is made to write clearly on the

back of each deposit slip the current and available balance in the account at the said time –

the available balance which was on the 23 November 2012 noted by the CSO on the reverse

of the deposit slip was $228,631.92.

[39] I therefore have no doubt that $228,631.92 was the available balance in the claimant’s

account as at 23 November 2012. To this end, as afore-stated it was agreed by both parties

that “available balance” refers to the amount in an account that had been cleared and is

available by a customer for use or withdrawal. Therefore, the available balance of

$228,631.92 that was in the account on 23 November 2012 does not include cheques on hold;

it only includes cheques that were already cleared as well as cash deposits. Therefore, it

logically follows that that available balance would have only decreased as a result of

subsequent withdrawals from the claimant’s account.

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[40] Nowhere, in the defendant’s defence or submissions was that available balance of

$228,631.92 taken into account, despite the fact that it can be clearly deduced from the bank

statements in the agreed bundle. Moreover, the bank statement does not show any

withdrawals from the claimant’s account between 23 November 2012 and 26 November

2012 that would have caused that available balance to decrease. Similarly, the claimant’s

statement of accounts prepared by Crosstown Accounting Services also does not show that

any withdrawals took place between 23 November 2012 and 26 November 2012. As a matter

of fact, following the end of 23 November 2012, absolutely no activity took place in the

claimant’s account until 26 November 2012 when the return deposit of $307,450.00 was

debited (which figure was already taken into account when the available balance was

calculated) from the current balance and the two cheques were presented to the bank.

[41] Therefore, on 26 November 2012 the defendant would have been very much able to

immediately satisfy the two cheques which totalled $7,304.00 from the claimant’s available

balance of $228,631.92 which does not take into account the overdraft facility of $15,000.00.

Indeed the available balance in the claimant’s account should have increased by the 26

November 2012 as by then the requisite two days would have passed since the six cheques

drawn against the defendant3 were deposited into the claimant’s account on 23 November

2012. Additionally, more than four days would have passed since the cheque valued at

$15,525.00 which was drawn against another bank was deposited on 20 November 2012.

There is no evidence in the bank statements that any of those cheques were dishonoured

subsequent to deposit.

[42] I am therefore gravely bemused as to how the defendant came to the conclusion in its

defence and submissions that the claimant’s available balance on 26 November 2012 when

the cheques were presented was $70,597.08 in debit, which debit position was reduced to

$55,597.08 having regard to the overdraft facility of $15,000.00! Nothing in the bank

statements produced by the defendant comes close to supporting that conclusion. In the

defence, the defendant reasoned that the twelve cheque deposits of the 23 November 2012

which were on hold and which totalled $499,522.09 was the cause of the account being in

3 See reference to these six cheques at paragraph 35 of this judgment.

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debit. However, as I have shown in paragraphs 32 to 40 of this judgment, even when those

twelve cheque deposits are taken into account, it was calculated that the available balance in

the claimant’s account on the 26 November 2012 was at least $228,631.92.

[43] In cross-examination, the defendant’s Account Manager, Mr. Dass, stated that he

confirmed that figure from a bank document, namely a report titled “Items Paid Against

Uncollected and NSF Items”. That document was never put into evidence and therefore the

court does not have the advantage of the information within it. However, it would be

reasonable to infer that the information contained in that document with respect to the

available balance would be premised on the same information in respect to the current

balance, cheque and cash deposits and withdrawals that was contained in the bank statements

in the agreed bundle. After all, both the bank statement and the report titled “Items Paid

Against Uncollected and NSF Items” would have been produced by the bank and ought to

have taken into consideration the same information in respect of the claimant’s account.

Therefore, I do not think this court to be at lost in the absence of the latter report. Though, it

is curious that such a drastically different available balance would have been arrived at by the

defendant’s agent through use of the latter report. On the evidence before me, I cannot accept

that the available balance on the claimant’s account on the 26 November 2012 was in debit to

the amount submitted by the defendant.

[44] Having reviewed the bank statements in the agreed bundle, the claimant’s statement

of accounts prepared by Crosstown Accounting Services, and having taken into consideration

the defendant’s business practice in respect of cash and cheque deposits, I have found that on

26 November 2012 there would have been sufficient available funds in the claimant’s

account to immediately pay the value of the two cheques.

B. “What meaning is to be attributed to the term “un-cleared effects”

[45] The second issue concerns the meaning which is to be attributed to the term “un-

cleared effects” that was marked upon the two cheques which were returned to the Board of

Inland Revenue. Although this was initially outlined as an issue in the defendant’s statement

of issues, it appears that at the trial as well as in the submissions of both parties, there was

agreement in respect of the meaning to be attributed to the term.

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(i) Submissions

[46] The defendant submitted that the natural and ordinary meaning of the term “un-

cleared effects” was that cheques and drafts have been deposited by the bank’s customer but

have not completed the bank’s clearing cycle either because the cheques/draft have not been

paid by the drawee bank or the proceeds have not been credited to the customer’s account.

[47] During cross-examination, Mr. Kenny Thomas, Managing Director of the claimant,

agreed to that meaning. Further, in the claimant’s submission it was stated that “[w]hen a

cheque is bounced for “un-cleared effects” the natural and ordinary meaning of those words

is that there is no money in the account to meet the amount of the cheque but that there might

be later on as something has been deposited which, if it clears, should be able to meet the

amount on the cheque.”

(ii) Conclusion on this issue

[48] Therefore, the submission of the claimant in respect of the natural and ordinary

meaning of the term “un-cleared effects” is on par with that of the defendant. As there is no

longer any issue regarding the meaning of the term, I turn to the issue of whether the acts of

the defendant in marking the two cheques with the term “un-cleared effects” and returning it

to Board of Inland Revenue, constituted a defamatory act against the claimant.

C. Whether the returning of the two cheques to the Board of Inland Revenue with the

marking “un-cleared effects” was defamatory of the claimant if there was in fact

money in the claimant’s account to meet same

[49] I have already concluded that there were in fact sufficient available funds in the

claimant’s account to immediately meet the value of the two cheques. The instant claim is for

damages, including exemplary damages, against the defendant for the libel and/or injurious

falsehood contained in the two cheques which were stamped and returned to Board of Inland

Revenue for “un-cleared effects”.

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(i) Submissions

[50] The defendant submitted that the crucial question in this case was whether the words

“un-cleared effects” written on the two cheques were capable of referring to the claimant.

The defendant contended that unless this can be answered in the affirmative the claimant had

no cause of action: Knupffer v London Express Newspaper Limited4. To this end, the

defendant submitted that the words “un-cleared effects” were not capable of bearing any

meaning defamatory of the claimant and the words could not be regarded as capable of

referring to the claimant.

[51] It was the defendant’s view that it is not defamatory to say of someone that there are

in his account cheques and drafts that have been deposited by him but which have not

completed the bank’s clearing cycle; and which either have not been paid by the drawee bank

or the proceeds of which have not been credited to the customer’s account. Such a statement

does not give rise to an adverse imputation in relation to the claimant; it does not cause right-

thinking people to have a lower estimation of the claimant. Rather, according to the

defendant, such statement is a statement about the progress of cheques and drafts in the

bank’s clearing cycle. Thus, the account holder who deposits the cheques or drafts bears no

responsibility for the bank’s clearing cycle, and the rate of progress of the bank’s clearing

cycle is no reflection on the claimant. The defendant noted that the claimant’s Managing

Director, Mr. Thomas, agreed with this under cross-examination.

[52] In the alternative, without prejudice to its contentions that the words were not

defamatory, the defendant defended the claimant’s claim by pleading that to the extent that

the words “un-cleared effects” were defamatory, the meaning of those words was true in

substance and fact as there were not sufficient available funds in the claimant’s account to

satisfy the two cheques.

[53] In opposition, the claimant contended that if a bank breaches its duty to its customer

by dishonouring a customer’s cheques, for which it holds sufficient funds, the bank may be

4 (1944) AC 116, per Lord Russell at 123

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liable in damages for breach of contract and defamation: Byles on Bills of Exchange and

Cheques 29th

edition at paragraph 21-09. According to the claimant where the words

complained of are defamatory in their natural and ordinary meaning the plaintiff5 need not

prove anything more than their publication: Gatley on Libel and Slander 11th

edition at

paragraph 115. Quoting Gatley on Libel and Slander 11th

edition at paragraph 56, the

claimant further submitted that “although it has been held that, least in the case of a trader,

the dishonour of a cheque will naturally affect the drawer’s credit, such dishonour is not,

apparently, of itself defamatory, and actions for libel are only brought on a paying bank’s

answer on or attached to the cheque or on a report of dishonour. If such an answer or report

conveys an impression that the drawer or acceptor of a bill or a cheque has no funds or no

account to meet it the publication will usually be defamatory”.

[54] In the claimant’s view, the short point is that all of the learning on defamation

concerning the bouncing of a customer’s cheque by a bank can be summed up by asking the

simple question – what is a reasonable inference to be drawn from the notation marked on the

two cheques in question? If the notation on the cheque would tend to lower the customer in

the estimation of right-thinking people generally, and there were sufficient funds to meet the

cheque, then the words could be defamatory. To this end, the claimant referred to Mr.

Mohammed’s evidence in chief, in which he referred to the rather unsavoury business

practice of “kiting” where someone writes a cheque knowing that the money is not in the

account but hoping that the money will be there by the time the drawee of the cheque

presents it for payment. The claimant emphasised that this was a practice severely frowned

upon in professional and business circles.

[55] The claimant contended that when the two cheques were bounced for “un-cleared

effects” the natural meaning of those words was that there was no money in the claimant’s

account to meet the amount of the cheque but that there might be later on as something had

been deposited which, if it clears, should be able to meet the amount on the cheque. In other

words, the reasonable inference would have been that the claimant was indulging in the

5 The claimant was referred to as “plaintiff” under the previous civil justice system governed by former Rules of the

Supreme Court in UK as well as in this jurisdiction

of 27

unsavoury business practice of “kiting”, which implied dishonesty on the part of the

claimant. According to the claimant, the words could not mean anything else, especially in

these circumstances, and the situation was intensified by the fact that the two cheques were

drawn in favour of the Board of Inland Revenue, the one government agency with which no

business wants to mess. In conclusion, the claimant was adamant that there was no other

reasonable explanation and the natural and ordinary inference from the words was that there

was not enough money in the claimant’s account at the time of presentation of the two

cheques and that the claimant was “kiting”.


[56] Libel refers to a defamatory statement in permanent form, usually in the form of

written words. There are essentially three elements that have to be proved in a successful

claim of libel: that the words in question are defamatory; that they refer to the claimant; and

that the words were communicated by the defendant to at least one person other than the

claimant. These are questions of fact to be determined by the court.

[57] Notably, a corporation can maintain an action for libel reflecting on the management

of its trade or business and injuriously affecting the corporation as distinct from the

individual who composes it: Pan Trinbago Inc T.C and anor. v. Maharaj and anor.6

Further, it has been held that a published statement that a corporation’s cheques had bounced

was capable of being defamatory: see for instance British Guiana Rice Marketing Board v

Peter Taylor and Co Ltd7.

[58] Nonetheless, each case is to be decided on its own context. It is for the court to

determine, firstly, whether certain words are capable of being defamatory and secondly,

whether the use of the words in question is indeed defamatory in the circumstances of a

particular matter. It is well-established that words are capable of being defamatory if the

words tend to, inter alia, lower the claimant in the estimation of right thinking members of

society, discredit the claimant’s trade, or damage its financial position or credit. The Court of

6 H.C.A No 1071 of 1995

7 (1967) 11 WIR 208

of 27

Appeal in Kayam Mohammed and ors. v. Trinidad Publishing Co. Ltd and ors8 usefully

outlined the approach that a court should apply in determining the meaning of words alleged

to be defamatory. At paras. 10 to 13, Mendonca, J.A explained:

“10. There was no dispute as to the proper approach of the Court in

determining the meaning of words alleged to be defamatory. The principles

were recounted by Lord Nicholls in Bonnick v Morris [2003] 1 A.C. 300 (at

para 9): Page 10 of 35

“……As to meaning, the approach to be adopted by a court is

not in doubt. The principles were conveniently summarized by

Sir Thomas Bingham MR in Skuse v Granada Television Ltd.

[1966] EMLR 278, 285-287. In short, the court should give the

article the natural and ordinary meaning it would have conveyed

to the ordinary reasonable reader of the “Sunday Gleaner”

reading the article once. The ordinary reasonable reader is not

naïve; he can read between the lines but he is not unduly

suspicious. He is not avid for scandal. He would not select one

bad meaning where other, non-defamatory meanings are

available. The court must read the article as a whole, and

eschew over-elaborate analysis and, also too literal an

approach. The intention of the publisher is not relevant…..”

11. The Court should therefore give the article the natural and ordinary

meaning the words complained of would have conveyed to the notional

ordinary reasonable reader, possessing the traits as mentioned by Lord

Nicholls, and reading the article once. The natural and ordinary meaning

refers not only to the literal meaning of the words but also to any implication

or inference that the ordinary reasonable reader would draw from the words.

[Lewis v Daily Telegraph Ltd. [1964] AC 234, 258] …..

………

12. And Lord Morris in Jones v Skelton [1963] 1 W.L.R 1363, 1370-1371

stated:

“The ordinary and natural meaning of words may be either the

literal meaning or it may be implied or inferred or an indirect

meaning: any meaning that does not require the support of

extrinsic facts passing beyond general knowledge but is a

meaning which is capable of being detected in the language used

can be a part of the ordinary and natural meaning of words...

The ordinary and natural meaning may therefore include any

implication or inference which a reasonable reader guided not

by any special but only by general knowledge and not filtered by

8 Civ. App. No. 118 of 2008

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any strict legal rules of construction would draw from the

words.”

13. It is also relevant to note that the words have only one correct natural and

ordinary meaning [Charleston v News Group Newspapers Ltd. [1995] 2 AC

65 Lord Bridge at p.71]” [Emphasis added]

[59] If the words are defamatory, the question then becomes whether a reasonable person

might understand the defamatory statement as referring to the claimant. In the case of

Knupffer9, which was cited by the defendant, Lord Porter stated that “the true question

always is: Was the individual or were the individuals bringing the action personally

pointed to by the words complained of?”

[60] Once it can be proved that the defamatory words can reasonably be understood as

referring to the claimant, then the claimants claim for damages caused by libel will be

successful, if it is shown that the defamatory words were communicated by the defendant to

at least one other person other than the claimant.

[61] In light of the law as aforementioned, I have come to the conclusion that the

defendant’s marking of the two cheques with the term “un-cleared effects” and returning of

same to the Board of Inland Revenue, indeed amount to libel against the claimant. I am

guided by the approach set out by the Court of Appeal in Kayam Mohammed10

, in

determining the meaning of words alleged to be defamatory. Applying the principle therein,

this court should give the notation, “un-cleared effects”, the natural and ordinary meaning it

would have conveyed to the ordinary reasonable reader of the notation, reading the notation

once. This must be done bearing in mind that the natural and ordinary meaning refers not

only to the literal meaning of the words but also to any implication or inference that the

ordinary reasonable reader would draw from the words.

[62] Thus, in the instant matter it was agreed that the notation “un-cleared effects” in

essence means that at the time of presentation of the two cheques the claimant did not have

9 Knupffer (fn 4) at 499

10 Kayam (fn 7)

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sufficient available funds to satisfy the cheques, however, that there were un-cleared cheques

and drafts in the claimant’s account which when or if same was cleared may be able to meet

the amount. I agree with the claimant, that from that meaning of the words, an ordinary

reasonable reader would inevitably make the inference that the claimant wrote the two

cheques, knowing that it did not have sufficient available funds in its account at the time but

merely hoping that the cheques or drafts which had been deposited would be cleared by the

time the two cheques were presented. That is, in essence, an inference that the claimant was

indulging in the unsavoury business practice of “kiting’.

[63] Not only was the notation “un-cleared effects” capable of a defamatory meaning, it

was indeed defamatory in the circumstances of the instant matter. The claimant is not a small

business now establishing itself; it is a well-established company which provides a wholesale

service to the construction industry and hardware stores. It is also the authorised dealer for a

number of other well-established companies such as ABEL, Bestcrete and Point Lisas Steel

Products, and represents exclusively two major Chinese companies for the local market and

the Caribbean. Further, it appears from the bank statements that the claimant enjoyed a

continuously profitable status in the months prior to the incident, that is, from January 2012

to October 2012.

[64] Against that backdrop, the claimant was the type of company that would reasonably

have been expected to have, at the very least, a decent monetary cash flow with continuously

stable available funds. Yet, the ordinary and natural meaning of the notation “un-cleared

effects” on the two cheques meant that the claimant did not even have sufficient available

funds to cover not even one of the two cheques which were for fairly minor amounts of

$3,951.00 and $3,353.00; the total of the two cheques being $7,304.00. Worst yet are the

implications from the reasonable inference that the claimant may have knowingly made the

two cheques in hope that its funds would be cleared in time. I have no doubt that the incident

in respect of the two cheques may have lowered the claimant in the estimation of right-

thinking members of society by damaging its financial credit particularly in light of its trade.

The reasonable reader may have considered that the claimant was struggling financially or

that there was some mismanagement of funds in the claimant company.

of 27

[65] Further, I do not accept the defendant’s contention that the notation could not have

been taken to refer to the claimant. As stated by the court in Knupffer11

, the true question is

whether the defamatory words complained of personally pointed to the claimant. It is my

view that the words do. A reasonable reader looking upon the words “un-cleared effects” is

hardly likely to frown upon the process of the bank; rather the words immediately bring to

mind the lack of available funds in the claimant’s account to satisfy the two cheques.

[66] Moreover, in the instant matter, there is no issue that the defamatory words which

referred to the claimant were communicated by the defendant to at least one person other

than the claimant. That third party in this case is the Board of Inland Revenue. Indeed, the

matter is intensified by the fact that the two cheques were returned to the Board of Inland

Revenue, which in light of its objective as a tax collection agency of the State, would have

definitely found the inability of the claimant to satisfy the two minor cheques to be

suspicious and it is therefore of no surprise that a decision was soon after taken to audit the

company.

[67] I am therefore satisfied that the words “un-cleared effects” were indeed defamatory in

the circumstances of this instant matter; that those words referred to the claimant; and further

that they were communicated to a third party, in this case the Board of Inland Revenue, so as

to have the effect of lowering the reputation of the claimant among other individuals. The

defendant put forward the defence of justification in respect to this claim. However, as I have

already concluded under the first issue, there could be no justification for the marking of the

two cheques with the notation “un-cleared effects” as based on the evidence before this court

the claimant would have had sufficient available funds in its account to meet the amount of

the two cheques.

[68] The claimant having proven its claim for libel and/or injurious falsehood, I now turn

to the assessment of the sum that should be awarded to the claimant in damages.

D. What relief is to be awarded to the claimant in respect of the defamatory act?

11

Knupffer (fn 4).

of 27

(i) Submissions

[69] The claimant has claimed relief in the form of damages including exemplary

damages. No pleadings were made for special damages. The claimant contended that it

suffered great embarrassment as a result of the cheques being returned and the Board of

Inland Revenue had ever since insisted that the claimant pay all taxes by way of certified or

manager’s cheques putting the claimant to unnecessary trouble and expense. The claimant

pointed out that before this incident the claimant was able to pay all taxes with ordinary or

uncertified cheques.

[70] Additionally, the claimant stated that a further consequence of the incident was the

commencement of an audit of the claimant by the VAT office of the Board of Inland

Revenue. The claimant was audited for the period February 2008 to December 2012. The

claimant was informed of that audit by letter from the VAT office of Board of Inland

Revenue dated 25 January 2013. The claimant contended that it had been in business since

July 2007 and had never been audited before. However, the claimant alleged that at the time

of the audit, the Managing Director of the claimant (Mr. Kenny Thomas) was told by one of

the auditors (whose name was not known) that the audit was caused by the incident in respect

of the two cheques. Altogether the claimant contended that the incident in respect of the

cheques caused damage to its reputation and brought it into public scandal, odium and

contempt.

[71] In support of its claim for exemplary damages that the claimant submitted that the

libellous act of marking and returning the cheques occurred in circumstances whereby at all

material times there were sufficient funds available in the claimant’s account to satisfy the

two cheques, and this, the defendant ought to have known. Further, that the defendant knew

or ought to have known that by refusing to clear the two cheques and returning them to the

Board of Inland Revenue that the claimant’s reputation with the Board would be damaged

and that adverse consequences would follow.

[72] Apart from denying that it was the cause of any of the damage claimed by the

claimant, the defendant, alternatively, denied that the claimant suffered damage to the extent

claimed. Firstly, the defendant did not accept that the claimant, being a company, could have

of 27

or did suffer “great embarrassment”. The defendant contended that the law as to that is

clear: a company does not have feelings (i.e. human emotions), and so cannot in a defamation

action claim to be embarrassed: Rubber Improvement Limited v Daily Telegraph

Limited12

.

[73] Furthermore, the defendant submitted that it was untrue for the claimant to state that

ever since the incident with the two cheques, in November 2012, the Board of Inland

Revenue insisted that it pay all its taxes by way of certified or manager’s cheque. To this end,

the defendant noted that the claimant’s cheques were already certified in favour of the Board

of Inland Revenue, and that subsequent to the incident regarding the two cheques, the Board

of Inland Revenue was still accepting ordinary cheques from the claimant. In support of this

contention, the defendant put into evidence eight ordinary cheques which were drawn in

favour of Board of Inland Revenue in the months of January, March, April, May and

September 2013 (i.e. the months following the incident regarding the two cheques)


[74] The aim of an award of damages in a defamation claim is to compensate a claimant

for injury to reputation. Notably, in all cases of libel, there is a presumption that the

claimant’s reputation suffered some damage for which the court may award damages. Special

damages will only be awarded where it is pleaded and proved that pecuniary loss resulted

from the libel. Based on the circumstances, the court may also award aggravated or

exemplary damages.

[75] Also important in the instant matter is the type of damages that a court can award to a

corporation as opposed to an individual. The defendant contended, relying on the case of

Rubber Improvement Limited13

, that a company does not have feelings (i.e. human

emotions), and so cannot in a defamation action claim to be embarrassed. That is indeed the

position that has been accepted locally. In the case of Pan Trinbago Inc. T.C14

, Bereaux J.

12

(1964) AC 234 per Lord Reid at 262

13 Ibid.

14 Pan Trinbago Inc T.C. (fn 5)

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(as he then was) stated clearly that an article which imputes improper action and motives to a

non-natural person is bound to be damaging to its goodwill and reputation. Reference was

made to the dictum of Lord Reid in Lewis v Daily Telegraph Ltd15

which discussed the

question of injury to a non-natural person as a result of words said or printed, as follows:

“A company cannot be injured in its feelings; it can only be injured in its

pocket. Its reputation can be injured by a libel but that injury must sound in

money. The injury need not necessarily be confined to loss of income. Its

goodwill may be injured”. [Emphasis added]

[76] Bearing the unique nature of a defamation of a company in mind, a court should then

apply the general principles of compensation in defamation cases. These principles were set

out in detail by Kokaram J. in the judgment of Faaiq Mohammed v Jack Austin Warner16

.

At paragraphs 50 to 51, it is outlined that:

“Kangaloo JA in Rahael [C.A.CIV.166/2006] referring to John v MGN and

Cleese v Clark [2004] E.M.L.R. 3 alluded to the main factors which fall to be

considered. Kangaloo JA referred to this passage of Eady J judgment in

Cleese v Clarke by way of a general guide:

“It is necessary always to take into account the full

circumstances of the case. Such factors have to be borne in mind

as the gravity of the allegation, the scale of publication, the

extent to which any readers believed the words to be true, any

impact upon the claimant’s feelings, reputation or career. There

may also be matters of aggravation or mitigation which also

need to be put in the scales. It is, moreover, often the case that

the claimant’s own conduct will have a part to play in arriving at

the appropriate figure. A fundamental point always to be

remembered is that the purpose of such damages….is

compensatory and not punitive.”

51. Upon a review of the authorities referred to me by counsel for the parties

in arriving at the compensatory component of damages the following wide

range of factors are relevant, though not mutually exclusive:

Objective features such as: The gravity of the allegation, its prominence,

its social context, the mode, extent and duration of circulation of the medium

in which it was published, its enduring nature, its repetition. The position,

reputation and standing of the Claimant; his credibility. The stature of the

defendant and the extent to which his statements will be given prominence and

15

(1964) A.C 234 at 262

16 CV2013-04726

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belief. Evidence that the libel was believed and the capacity of the allegation

to generate hatred and/or anger against the Claimant.

Subjective features: Effect on the claimant’s feelings, importance of

reputation for working life, the importance of reputation in the eyes of the

recipients of the defamatory remarks. The difficulty of remedying the libel.

Matters tending to aggravate the injury: The absence or refusal of any

retraction or apology. The conduct of the defendant from the time when the

libel was published. Any offensive conduct of the defendants: prior to, at the

time of or after publication.

Matters tending to reduce and mitigate damage: The publication of an

apology. Evidence of bad reputation of the Claimant. Conduct of the

defendant subsequent to the libel and during the course of proceedings.”

[Emphasis added]

[77] Given that the claimant has also claimed for exemplary damages, it is noteworthy to

also mention that exemplary damages will only be granted in certain exceptional cases. In

Trinidad Express Newspaper Limited and ors v. Conrad Aleong17

, Mendonca J.A.

expressed the principle in respect of exemplary damages thus:

“110. It is well settled that exemplary damages can only be awarded if the

claimant proves that the defendant, when he made the publication, knew that

he was committing a tort or was reckless whether his action was tortious or

not, and decided to publish because the prospects of material advantage

outweighed the prospects of material loss. What is necessary is that the

tortious act must be done with guilty knowledge for the motive that the

chances of economic advantage outweigh the chances of economic, or

perhaps physical, penalty. If the case is one where exemplary damages can be

awarded the court should consider whether the sum which it proposes to

award by way of compensatory damages is sufficient not only for the purpose

of compensating the claimant but also for the purpose of punishing the

defendant. It is only if the sum proposed by way of compensatory damages

(which may include an element of aggravated damages) is insufficient that the

court should add to it enough to bring it up to a sum sufficient as punishment.

The sum awarded as damages should then be a single sum which will include,

where appropriate, any elements of aggravated or exemplary damages. [See

Lord Bingham M.R. in the case of John v MGN Ltd (supra) at page 616

citing Duncan & Neil on Defamation 2nd ed. (1983) p. 136, para. 18.27].”

[Emphasis added]

17

Civ. App. No. 122 of 2009 [110]

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[78] Having regard to the law, I am of the view that this is not an appropriate case for the

application of exemplary damages. Certainly, there is no evidence of any material advantage

that was or even could have been gained by the defendant. The award in the instant matter

shall therefore be limited to an award for general and aggravated damages.

[79] General damages shall be granted for the injury to the claimant’s reputation and

goodwill. I have taken into consideration that the claimant is a well-established company,

sufficiently respected in its trade to attract the business of other well-established and

reputable companies. Notably, the defendant, being a prominent bank, the marking of the

notation on the cheques was very much likely to be believed by readers. I have further taken

into account the gravity of the allegation effected by the marking of the two cheques with the

term “un-cleared effects” would no doubt be to cast aspersions on the integrity of the

claimant based on the reasonable inference that the claimant indulged in the dishonest and

unsavoury practice of “kiting”. Additionally, I have considered the negative consequences of

the cheques being returned to Board of Inland Revenue and have concluded that the

subsequent auditing of the claimant was a foreseeable consequence resulting from the

lowering of the claimant’s estimation caused by the incident.

[80] In light of the evidence put forward by the defendant, I have however, excluded from

consideration the claimant’s contention that the Board of Inland Revenue insisted that it pay

all its taxes by way of certified or manager’s cheque, as the evidence put forward by the

defendant showed this to be untrue. Additionally, I have kept in mind that the claimant is a

company; therefore damages cannot and will not be awarded for injury to feelings.

[81] I shall include in the sum for general damages, an award for aggravated damages. The

award of aggravated damages is premised on the fact that the defendant refused, in its

response to the claimant’s pre-action letter, to apologise for its error. It has been shown upon

the evidence of the bank statements produced by the bank that the claimant indeed had

sufficient available funds to satisfy the payment of the two cheques. That notwithstanding,

the defendant not only refused to apologise but chose to defend this matter without any

proper evidential basis for pursuing its defence of justification.

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[82] In light of my findings, I shall invite the parties to make submissions on the quantum

of general damages (inclusive of aggravated damages) which should be justly granted to the

claimant.

V. Disposition

[83] The claimant has successfully established its claim of libel against the defendant.

Judgment be and is hereby entered for the claimant against the defendant for damages

(inclusive of aggravated damages) for the libel and injurious falsehood contained in the

two cheques, both dated 14th

November, 2012 stamped and returned to the Board of

Inland Revenue with the notation “uncleared effects”.

[84] Damages for libel and injurious falsehood to be assessed before this court unless

there be settlement between the parties as to the quantum of damages to be awarded to

the claimant.

[85] The defendant shall pay to the claimant costs of the claim to be quantified after

the issue of quantum of damages is determined.

Dated this 24th

day of April, 2015

___________________

Robin N. Mohammed

Judge

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