Aktas v Westpac Banking Corporation Limited [2010] Hca 25

The High Court of Australia heard an appeal from the New South Wales Court of Appeal concerning a defamation claim brought by Mr Aktas against Westpac Banking Corporation Limited. Mr Aktas alleged that Westpac had defamed him by mistakenly dishonouring 30 cheques drawn on a trust account operated by his company, Homewise, and communicating this dishonour to the payees of the cheques by stamping them "Refer to Drawer" and, in some cases, sending letters to customers of Westpac. The dishonour occurred due to a mistaken belief by Westpac that a garnishee order applied to the trust account, despite sufficient funds being available and the account being protected from such orders by statute.

The central legal issue before the High Court was whether the communication of the dishonoured cheques by Westpac to the payees was made on an occasion of qualified privilege at common law. This required the court to consider the rationale for the defence of qualified privilege, particularly in the context of banking communications, and whether a reciprocity of interest existed between the bank and the payees, or a public interest that warranted such privilege, even when the communication arose from the bank's own mistake. The court also had to determine the relevance of the bank's statutory obligations and the nature of the error made.

The High Court, in allowing the appeal, ultimately found that the occasion of the communication was not one of qualified privilege. The court reasoned that while there is a public interest in the efficient communication of a bank's dealings with cheques, even in cases of error, the defence of qualified privilege is not intended to be a tool for achieving particular social goals. The court emphasised that the circumstances of the case, including the bank's error in failing to observe statutory requirements regarding trust accounts, did not establish the necessary reciprocity of interest or public interest to attract the defence. The court noted that mere carelessness or negligence does not amount to malice, but the error itself did not create a privileged occasion for the notice of dishonour.

Consequently, the High Court allowed Mr Aktas's appeal, setting aside the orders of the Court of Appeal and the trial judge. The court entered a verdict and judgment for Mr Aktas for damages in the sum of $50,000, with costs awarded to Mr Aktas in both the High Court and the lower courts. The parties were granted liberty to re-list the appeal for further orders regarding the addition of interest to the damages award.