Bank and Ceylon v. Cargils [Ceylon Ltd] – sllr 1991 volume 1 page 104

In the case between Cargills (Ceylon) Limited and Bank of Ceylon, the court addressed whether the omission by the bank to use a carbon paper and a rubber stamp when issuing a bank draft amounted to actionable negligence, and whether the fraudulent alteration of the draft constituted a novus actus interveniens, thereby breaking the causative chain. It was held that the established banking practices, including the use of Indian ink without carbon paper or rubber stamps, had a consistent record of safety, and the actual loss resulted from an unforeseeable fraudulent act of a third party. The appeal was allowed, the plaintiff’s claims dismissed, and the principle reaffirmed that an intervening criminal act can break the chain of causation, placing limits on liability for remote damages. The de