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Keay}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 for the Appellant \par Mr. V. Maharaj}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 for the Respondent \par \par Date of Hearing:}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 22nd June, 1992 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 Date of Delivery of Judgment}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 :}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 9th July, 1992 \par \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid5927528 JUDGMENT}{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid5927528 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par This appeal arises from a decision of the Learned Magistrate Mr. H.C. Patel of the First Class Magistrates Court Suva, given in Civil Action No.4764/86 on 23rd October 1990. \par \par The hearing of the appeal came on before me on 22nd June, 1992. At the hearing C ounsel for the Appellant appeared but there was no appearance for the respondent. Counsel for the appellant advised the court that at the hearing before the Chief Registrar when the appeal was set down for argument the respondent advised the appellant tha t while it did not concede the appeal it would not be appearing at the hearing of the appeal and contesting it. I was satisfied that the respondent had had notice of the hearing of the appeal. Accordingly, pursuant to Order 37 Rule 14 of the Magistrates Co urts Rules Cap. 14, S-1, I proceeded with the appeal hearing only the argument and submissions of the appellant. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The facts of the case from which this appeal arises are as follows: \par \par On 10th June 1985 the Department of Inland Revenue issued a tax refund cheque No.}{\fs24\lang2057\langfe1033\langnp2057\insrsid8872575 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 008253-3 in the sum of $118.42 drawn on the Bank of New Zealand at Suva and made payable to the order of one Ulaiasi Lovo. The cheque was crossed and marked not negotiable. It was posted to Ulaiasi Lovo and addressed care of the Government Shipyard , Marine Department, Suva. This address had been given by Mr. Lovo as his mailing address on his 1984 tax return. \par \par On the 8th April, 1986 Mr. Lovo reported to the}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Suva Police that his tax return cheque which had been}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 posted to him had not been received. This matter was reported to the police by Mr. Lovo after making enquiries}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 with the Inland Revenue Department.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The Police conducted an investigation as a result of Mr. Lovo's report which revealed that his tax return cheque was presented to a Mr. Ko Chau Che un the owner of The Daumaka Store (the respondent in this appeal) at 3 Raojibhai Patel's Street, Suva. Mr. Cheun when interviewed by the Police admitted cashing the cheque which had been negotiated with him by a woman who had printed on the back of the ch e que the name Akanisi Lovo and gave the address of 98 Princes Road, Tamavua. Mr. Cheun advised the Police that he did not recognise or know the woman who had presented the cheque and that he had not seen her again. Mr. Cheun subsequently deposited the cheq ue with his}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 and}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 ultimately}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 received}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 payment for}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 the}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 same}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 from}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 the appellant's bank.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Police investigations were unable to locate the woman who negotiated the cheque with the respondent. It was discovered that no such person was known at 98 Princes Road , Tamavua. It became clear at that stage that Mr.Lovo's refund cheque had been stolen and negotiated with the}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 respondent by a thief. Needless to say Mr. Lovo never received the cheque nor the proceeds of it. It is important to note that the cheque was cros sed with the words "not negotiable" and "Account Payee only" appearing on the face of it. On the reverse side of the cheque there appeared a place for the signature of the payee with the words underneath "Payees endorsement". Below these words appeared a warning to any person negotiating the cheque to identify the payee as in the case of forgery an innocent third party would become liable to reimburse the drawer of the cheque.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Also, the stamp and signature of the respondent appeared on the back of the cheque clearly indicating that the respondent received it. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The appellant instituted proceedings in the First Class Magistrates Court at Suva to recover the amount of the cheque from the respondent. After a number of adjournments, the matter came on for trial before Mr. H.C. Patel on the 7th April 1989. At the trial the appellant argued that the relevant provisions of the }{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 BILLS OF EXCHANGE ACT CAP. 227}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 ("the act") applied to the facts and that accordingly judgment should be in favour of the appellant. On the 23 rd of October, 1990 the Learned Magistrate gave a short written decision which I set out in full. The}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 decision reads:-}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 "This case is the same type as 2688/86. The practice in Fiji is for shop-keepers to accept Non-Negotiable cheques from individuals in good faith and it seems normal business practice to accept them. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 The court has to take int o account normal business practices - otherwise strict legal interpretation would lead to highly in equitable result. It is for this major reason that I find that it would be against equity to uphold the plaintif}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 f}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 s claims. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 I therefore dismiss the plaintif}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 f}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 s claim with}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 costs. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 sgd. H.C. Patel \par }{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 Resident Magistrate}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14441348 "}{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14441348 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par The appellant now appeals from}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 that decisions. The}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 following are the grounds of appeal.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \fi-720\li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid12917329 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid12917329 (1)}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329\charrsid12917329 \tab }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 THAT}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 the le}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11041334 arned trial magistrate erred in }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 law when he concluded that the normal business pr}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid12917329 actice of the respondent supers}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 eded the interpretation of the }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329\charrsid12917329 \tab }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 laws of Fiji. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid12917329 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 (2)}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329\charrsid12917329 \tab }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 THAT}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 the learned trial magistrate erred in law in ignoring the provisions }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329 \tab }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 of the Bills of Exchange Act Cap. 227. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid12917329 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 (3)}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329\charrsid12917329 \tab }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 THAT}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 the Appellant reserves the right to adduce further grounds of }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid12917329 \tab }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid12917329 appeal once the copy record of the trial is made available. \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 That the cheque, the subject of the appeal, is a bill of exchange is clear from the provisions of Section 3(1) of the act.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 Section 3(1) states:-}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "A bill of exchange is an unconditional}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum cert ain in money to or to the order of a specified person, or to bearer." \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Thus the provisions of the act applied to the cheque}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 in this instance.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Section 76(1) (b) of the act identifies and defines the cheque as being a generally crossed cheque. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Section 76(1)(b) states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 -}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (1) Where a cheque bears across its face an addition of - \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (a)........... \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (b) two parallel transverse lines simply, either with or without the words "not negotiable" \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 that addition constitutes a crossing, and the cheque is crossed generally.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Section 81 of the act makes it clear that a thief cannot pass any title in a generally crossed cheque, thus depriving an innocent third party who negotiates the cheque in good faith from obtaining a good title as a holder in due course. \par \par Section 81 of the act states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 -}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "Where a person takes a crossed cheque which bears on it the words "not negotiable" he shall not have and shall not be capable of giving of better title to the cheque}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 }{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 than that which the person from whom he took it had." \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 This is not to say that a generally crossed cheque with the words "not negotiable" appearing on it is incapable of being negotiated. Such a cheque can be negotiated by the genuine payee provided he endorses the cheque with his signature and is in fact the bona fide holder of the same. Under these circumstances a cheque is complete and regular on its face and the bona fide payee can pass good title to a third party. In such instances the third party becomes a genuine holder in due course under the provisions of Section 29(1) of the act. The appellant's cheque in fact caters for such an }{\fs24\lang2057\langfe1033\langnp2057\insrsid1640367\charrsid14313509 occur}{\fs24\lang2057\langfe1033\langnp2057\insrsid1640367 re}{ \fs24\lang2057\langfe1033\langnp2057\insrsid1640367\charrsid14313509 nce}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 in that on the reverse side it provides for such an endorsement by the genuine payee. It is again important to note in this regard that at the place of the signature of the payee there appears a}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 warning in the following form:-}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "WARNING \par Persons negotiating must identify Payee.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 In case of forgery person negotiating will be liable to reimburse drawer the sum.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 "}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 I will refer to the effect of Section 29(1) of the}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 act shortly.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Under Section 81 of the act the words "not negotiable" have the effect of restricting the negotiability of the title in the cheque. Section 81 of the Act is in identical terms as Section 81 of the English Bills of Exchange Act 1882. }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 HALSBURYS LAWS OF ENGLAND 4TH EDITION VOL.}{\b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 }{ \b\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 IV}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 at}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 para 402, in this regard states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509 -}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid14313509 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "402. "Not negotiable" cheque. In the case of a cheque crossed "not negotiable" the person who takes it does not acquire and cannot give a better title to it than that of the }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 p}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 erson from whom he took it. The legal effec}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 t}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 of adding the words "not negotiable" to a cheque is, therefore, not to impede transfer, but to perpetuate in the hands of any transferee whatever defect or infirmity of title may affect the person who first transferred the cheque w}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid15752531 ith those words on it.}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 " \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid14313509\charrsid14313509 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Thus, the thief in this instance was unable to pass to the respondent any better title than she had herself. It does not matter how honestly the respondent acted in taking the cheque or that he gave value for it . The respondent could not, and did not acquire any title or rights to the proceeds of the cheque other than those of the thief. The crossing and marking "not negotiable" on the cheque as well as the warning on the reverse should have put the respondent o n guard to identify its true owner. The respondent made no effort to identify the presenter of the cheque as the bona fide payee. The respondent should have been more thorough in this regard. Evidence from the court below showed that the respondent admitte d never having seen the woman who presented the cheque previously in his store or again after its presentation. \par \par The fact that the thief printed a name and address}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 on the back of the cheque does not assist the respondent}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 in gaining a legitimate title to the proceeds of it as}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 a holder in due course. Section 29(1)(b) of the Act states:}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "29-(1) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions, namely - \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (a) \'85\'85\'85\'85\'85 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (b) that he took t he bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it." \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The cheque was not complete and regular on its face in that it was not endorsed correctly. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 Section 32(a) of the act states: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "32. An endorsement in order to operate as a negotiation must comply with the following conditions, namely:- \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 \par }\pard \ql \li1440\ri0\nowidctlpar\faauto\adjustright\rin0\lin1440\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 (a) it must be written on the bill' itself and be signed by the endorser." The simple signature of the endorser on the bill, without additional words, is sufficient. .................."}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The writing on the back of the cheque by the thief was printed and unsigned and was not in the name of the payee. The place for the endorsement of the payee's signature was left blank.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par In }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid11607212 ARAB BANK LTD. V. ROSS}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 (1952) 2 QB 216 at p.227}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 Denning LJ. said:- \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "\'85\'85\'85 . the question is when is an indorsement irregular? The answer is, I think, that it is irregular whenever it is such as to give rise to doubt whether it is the endorsement of the named payee. ....." \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 When the thief printed what purported to be a name on the back of the cheque that was not an endorsement and was not in the name of the payee. That alo ne should have put the respondent on guard. In these circumstances the cheque was incomplete and irregular on its face and this irregularity prevented the respondent from becoming a holder in due course regardless of the good faith in which}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 he negotiated it.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par The respondent has received payment of the proceeds of the amount of the stolen cheque from the appellant through its banker. Not being a genuine holder in due course, nor being able to obtain good titl}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 e to the proceeds of the cheque}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 the respondent is liable to the appellant for the amount of the cheque. In }{ \b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid11607212 SMITH V. UNION BANK OF LONDON}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 (1875) 10 L}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 r }{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 QB 291 at p.296, Blackburn J. when discussing the legality of a holder of a stolen crossed cheque said:}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par }\pard \ql \li720\ri0\nowidctlpar\faauto\adjustright\rin0\lin720\itap0\pararsid13989221 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid15752531 "....if a thief got it and were to m ake a forged indorsement, the person who, in ignorance, took it, even for value, would not be holder at all, and anyone who took the cheque from him, and converted it to to his own use, would be liable to the true holder in trover. ..............." \par }\pard \ql \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid14313509 {\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par Counsel for the appellant cited the case of }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid11607212 ATTORNEY GENERAL V CHAMPANERI AND SONS}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 decided by H.G. Scriven Esq. in the First Class Magistrates Court at Suva on 30th April 1975 Civil Action No.893/74. The facts and questions of law in that case were identical to the present case. In that case the Learned Magistrate held that Section 81 of the Act deprived the defendant of any title in the stolen cheque, and that the defendant could not be considered the holder in due course under Section 29(1) of the act as the c heque in that instance was not complete and regular on its face. Accordingly, judgment was given for the plaintiff in the value of the cheque.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par It appears that the Learned Magistrate in the present case did not refer to that case and that had he done so he may have preferred the reasoning of a Brother Magistrate. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 For the reasons set out herein I am of the opinion that the Learned Magistrate erred in law by failing to take into account or co}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13989221 nsider the relevant provisions }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 of the Bills of Exchange Act Cap.227 and holding that the common business practice of Suva merchants prevailed over that of the enacted legislation applicable in such a situation.}{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 \par Accordingly, the appellant succeeds on grounds (1) and (2) of its appeal. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid14313509 The appeal is allowed and there will be judgment for the Appellant with costs to be taxed if not agreed. \par \par }\pard \qc \li0\ri0\nowidctlpar\faauto\adjustright\rin0\lin0\itap0\pararsid13989221 {\b\caps\fs24\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid13989221 David E. Ashton-Lewis \par }{\b\caps\fs24\ul\lang2057\langfe1033\langnp2057\insrsid13989221\charrsid5927528 JUDGE \par }}