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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Kumar & Anor v United Bank Ltd [2001] EWCA Civ 1651 (26 October 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1651.html Cite as: [2001] EWCA Civ 1651

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(MR JUSTICE ANDREW SMITH)

		Royal Courts of Justice Strand London WC2A 2LL 26 October 2001

1. LORD JUSTICE RIX: This is a renewed application for permission to appeal from a judgment of Mr Justice Andrew Smith given on 22 June 2001. There is also an application for a relatively short extension of time. I would extend time although, as this judgment will make plain, I feel unable to grant permission to appeal.
2. This is a claim by Mr and Mrs Kumar against the United Bank Limited, which provided banking services to the Kumar's company, but not to the Kumars themselves. Their company was known as Kumar Brothers International Limited. It had previously carried on business under another name, although the trading name had always been, during the relevant period, Kumar Brothers International. When the company started trading with a foreign supplier, Novaknit, it had apparently been agreed that the company would be invoiced and dealt with on the basis of its trading name, Kumar Brothers International.
3. The arrangement between the company and Novaknit was that payment would be made against documents which would come forward with bills of exchange for acceptance by the company. The United Bank was acting in connection with these bills as the agent of Novaknit's bank, presenting the bills on their instructions for acceptance.
4. In previous litigation, Mr and Mrs Kumar had been found liable on a series of bills, all of which had been signed by Mr Kumar, with the exception of one which was signed by Mrs Kumar, on the basis of the provisions of section 349 of the Companies Act 1985, whereby anyone signing on a bill of exchange in respect of a company whose full and proper name was not on the document would be personally liable for the bill. That is what happened in this case, for the company's full name, Kumar Brothers International Limited, was not on the bills..
5. In this claim the Kumars were suing the bank in tort for breach of an alleged duty of care to fail to advise the Kumars, when presenting the bills for acceptance, that the manner in which they signed the bills was dangerous for reasons to be explained by reference to section 349.
6. There was little dispute in the court below, and there has been no dispute on this application by Mr Mahmood who represents the Kumars, to the effect that wrong principles of law have been applied. It is accepted that they have not been. The judge said that it was acknowledged below that no duty of care ordinarily arises from the relationship of a collecting bank and the acceptor of bills, or indeed from the ordinary course of the banker and customer relationship. Even if the Kumars were treated as customers, because they were directors or officers of their company, it was accepted that no duty of care would arise in the ordinary course of such a relationship.
7. The Kumars, therefore, on the facts, had to prove some special relationship setting out the reason for imposing a duty of care upon the bank to advise the Kumars about the way in which they signed the bills. The Kumars sought to prove such a special relationship, and such a duty and breach of that duty, by evidence relating to the servant of the bank, Mr Kader, whose conduct it was to would turn up at the company's premises with the bills for signature.
8. Mr Kader was the foreign exchange manager of the bank and described by the judge as a "relatively junior bank official". The Kumars' evidence was that, on those occasions when Mr Kader appeared at the company's premises, he would stay for some considerable time providing special services to the company in checking and reconciling documents relevant to the bills which had been brought for acceptance. He would also advise the company on its activities. It was on the basis of that evidence that it was alleged that a special relationship had been brought into existence.
9. In a careful and detailed judgment, the judge went through the evidence. He concluded that Mr Bimal Kumar, the husband and the main witness for the claimants, was not a satisfactory witness. He illustrated that by points which may, as Mr Mahmood has submitted, have been small and detailed and were not perhaps centrally material points in themselves. Nevertheless, the judge did conclude that he was an unsatisfactory witness, and that his evidence that Mr Kader had been in the habit of giving advice to the Kumars on their business and that they discussed the business together in depth, was evidence that the judge was not able to accept.
10. He summed up the position at paragraph 44 of his judgment in this way:

"All this, however, falls far short of Mr Kader assuming the role of an advisor to the Kumar companies and assuming responsibilities to them: a fortiori of him assuming responsibilities to the claimants. Although much was made of the bank providing a 'special service' for the Kumar companies, the assistance that Mr Kader gave them did not involve any banking expertise. It concerned the Kumar Companies' business. In my judgment, Mr Kumar was not a man who would expect or accept advice from outside the family about how to conduct the business. Mr Ramesh Kumar described his brother as a man who liked to be involved in all aspects of the business, and I find that picture difficult to reconcile with the picture of a man reliant upon and compliant with advice given by Mr Kader on such matters."

11. In my judgment, there is no reason to disturb the judge's specific findings of fact that no advice (and no advice of a banking nature) was tendered to the Kumars or to the companies. It is one thing to undertake an element of accounting reconciliation about delivered goods and the invoices which concern them; it is another to find a relationship in which Mr Kader accepted a duty of giving advice which, on the facts of this case, would have to be advice not just about banking matters but about legal matters. The judge found that there was no duty to give legal advice in this case. I see no real prospect of the Court of Appeal being in a position to form any different view on the facts of this case.
12. In addition, there was not sufficient evidence, despite the presence of expert witnesses of both sides, that a person in Mr Kader's position, or a reasonable banker, should have been aware of the effect of section 349. It was Mr Kader's evidence, accepted by the judge, that Mr Kader was not aware of the significance of section 349. The judge therefore found no special relationship and that it was not just and reasonable to impose a duty of care. In the circumstances, there was no duty to give legal advice; the facts were not such that a reasonable banker would have been aware of the effect of section 349; there is no duty and no breach; there is no basic principle of law which would be in dispute on appeal. Therefore, for the reasons which I have given, I must decline this application.
Order: Permission to appeal refused.