Playboy Club London v Banco del Lavoro

[2016] EWHC Civ 457

So much to dislike about this case, but so many lolz too.  Gambling, caddish behaviour and tort law.  A dress code for bunny girls that really puts the PWC heels story in perspective. The Respondent here was Hefner’s Playboy club.

Also the story line is reminiscent of an episode of Inspector Montalbano.  Except the plot thickens, or perhaps curdles, in Parma rather than Sicily.  One Hassan Baccarat (Barakat) spends most of his time gambling at the Casino du Liban.  This is near Beirut, and has the cheesiest of cheesy websites:  check it out!

Wishing for something more sophisticated perhaps, he’s recommended a London club by the manager of the Casino du Liban, where the croupiers pretend to be bunnies. And not even convincing ones.  Lebanese Manager recommends Hassan to Chief Rabbit at the Playboy as a fool likely to be soon parted from his money.

So far, so of sociological interest only. But Hassan needs to open an account at the Warren before he can play, and for this he needs a Bank reference. Hassan produces the card of one Paola Guidetti, a bank manager at the Parma branch of the Banco del Lavaro.  As this is Montalbano, I’m guessing Paola is luscious and has an audacious cleavage and vertiginous high heels.  Chief Rabbit is far too discrete to approach the bank himself.  Instead he does it through eminence grise bunny, its service company called “Burlington”.

Eminence grise rabbit faxes the bank and using Banco di Lavoro notepaper, sultry Paola responds to the enquiry about her (???) lover’s liquidity.  Good for £1.6 mil, a week, she writes confidently in fluent English, though using a rather unsightly CAPITALISED font.  “PRIVATE AND CONFIDENTIAL.”

Two things are a bit wrong with this.  First of all, the Banco di Lavoro didn’t know that they were credit referencing to Flopsy, Mopsy and Cottontail, But, whether they did, or they didn’t, they are fixed with apparent authority and there is and end of it.  There was no appeal on this.   Secondly, there wasn’t even one lot of £1.6m in the bank account; merely a bank account opened with the promise of that sum to be deposited.

Hassan turns up at The Burrows, and the Flopsy, Mopsy and Cottontail, the Chief Rabbit’s cashiers let him have £800k of chips (or “plaques” as they are called).  The cheques admittedly looked a bit odd, – sort of, uh, photocopies, but as Hassan comes highly recommended, that little detail was overlooked.  Hassan then plays lots and wins a bit and then loses lots.

Yes, I’m guessing you know what happens next, because you’ll all have seen the films/series.  Hassan is unmasked, and, resplendent in DJ, gets into a high performance fanny magnet and is pursued around scenic London by Flopsy, Mopsy and Cottontail. Not that one.  Wrong film. Television isn’t real, you know!

No, the one I’m thinking of, is that the cheques bounce and Hassan disappears back to the Levant, where he carries on gambling happily.  Flopsy et al sue Banco del Lavoro for negligent misrepresentation with damages of £1.25m.  (Paola is let go by the bank.  It seems she has been careless with her favours elsewhere).

At first instance, HHJ Mackie found in favour of Chief Bunny.   Following Heller, which itself involved a dodgy credit reference, he found that Banco del Lavoro was skewered good and proper by Paola, and had assumed liability not just to the Burlington front bunny, but also the Club itself. 

And also, the counterfeit cheques didn’t break the chain of causation.  At least the judge knocked something off the claim for contributory negligence.

The Appeal Court took a different view and allowed the bank’s appeal.  Longmore LJ disagreed that the Burlington reference could also be relied on by the Chief Rabbit. The bank had not assumed any responsibility for the Playboy Club.  of the ambit of Longmore said, that if Flopsy wants to protect the identity of its customers by using a lagomorphic front company, then the bank is entitled to believe that its representation would not go any further.  The learned lord justice pointed out this tactic of “the undisclosed principal” type of jag might have worked in the seminal case of Hedley, but the facts of that case could be distinguished.

Once the court had decided this, then the novus actus point becomes redundant.  However, obiter he held that the counterfeit did not break the chain of causation.  It’s difficult to argue with that. 

I was amused by counsel for the bank’s question to the actual cashier, who accepted the photocopied cheque. 

“Would you have accepted such a cheque in payment for your own car?” 

“Of course not!” the lady replied indignantly.

No new law here, but a nice story for the weekend, with a moral and principled end.

The Chief Rabbit