Refer to Drawer


Susanah Ng explains the dangers of the indiscriminate use of the above-referred phrase


You gaze fondly at your long service award plaque and think, “How time flies. It has been 25 years since you first started as a bank teller and slowly rose to become the branch manager.”

You are jolted from your reminiscing by a ruckus outside your room. You rush to the scene of the commotion. Before you stands a very angry man, Mr. X, shouting at the top of his voice that the bank had wrongfully dishonoured his cheque despite him having sufficient funds in his account.

You usher him into your room to speak to him in private. After having calmed down, Mr. X explains that he had issued a cheque to his consultant as payment for consultancy services rendered. However, the cheque was dishonoured and returned to the payee with the words "Refer to drawer".

You check Mr. X's account and realize that the bank had erroneously dishonoured his cheque. You apologize and say, "But this is an innocent and small mistake. It merely informs the payee to check with you." After all, the phrase is used in banking transactions almost on a daily basis.

Mr. X does not accept your reasoning. "You will hear from my solicitors", he says and storms out of your office. Sure enough, the very next day, you receive a letter of demand from Mr. X’s solicitors seeking damages for breach of contract and defamation. You refer the matter to the bank’s solicitors, rather bewildered as to how Mr. X could claim that he had been defamed by the bank. Had he?



The facts in Mathew Vergis & Anor v HSBC Bank Malaysia Bhd [2012] 2 CLJ 922 are somewhat similar to those experienced by our friendly bank manager described above.

The Plaintiffs were customers of the Defendant bank and operated a current account with them. The Plaintiffs issued two cheques drawn on the said account payable to third parties to meet certain financial obligations of the Plaintiffs.

Although the Plaintiffs had more than sufficient funds in their current account to meet the cheques payments, the cheques were nevertheless dishonoured by the Defendant upon presentation and returned to the payees with the phrase “Refer to the Drawer”.

The issues for determination by the High Court were:

(1) Whether the phrase “Refer to the Drawer” with reference to the cheques under the circumstances of the case were libellous and/or capable of carrying a defamatory meaning; and

(2) Whether the said phrase was in fact defamatory of the Plaintiffs.


The Plaintiffs contended that the phrase used by the Defendant upon dishonouring the cheques was in law, defamatory of the Plaintiffs under the circumstances of the case and was in fact, defamatory to the Plaintiffs. The Plaintiffs cited 12 cases from Malaysia and other jurisdictions in support of their contention.

On the other hand, the Defendant argued that the phrase was not libellous and even if it was capable of a defamatory meaning, it was in fact not defamatory of the Plaintiffs for two reasons. Firstly, banks (which included one of the payees of the dishonoured cheques) are used to those words being used in practice. Secondly, the payee of the other dishonoured cheque was the Plaintiff’s brother and his estimation of the Plaintiff would not have been affected by the phrase. The Defendant cited 15 cases and claimed that the majority of the Malaysian cases cited supported its contention.



Lau Bee Lan J allowed the Plaintiffs’ claim with damages to be assessed by the Registrar.

Her Ladyship adopted the approach taken by Gopal Sri Ram JCA (as he then was) in Chok Foo Choo v The China Press Berhad [1999] 1 CLJ 461 and held that in deciding whether the phrase “Refer to the Drawer” was capable of being libellous, one had to look at the context and circumstances in which the phrase appeared. If the phrase is defamatory based on its natural and ordinary meaning, then one had to look at the meaning which a reasonable man of ordinary intelligence, general knowledge and experience of worldly affairs would be likely to assign to it. This included any implication or inference which a reasonable person, guided not by any special knowledge but only by general knowledge, and not fettered by any strict legal rules of construction, would draw from those words.

Her Ladyship also relied on the case of Lee Wah Bank Ltd v Ng Kim Lek & Ors [1978] 1 LNS 95 where the Federal Court held that it was settled law that if the dishonour was without reason, the customer had been libelled and was entitled to damages.

The learned Judge also relied on Top-A Plastics Sdn Bhd & Ors v Bumiputra Commerce Bank Bhd [2006] 3 CLJ 460, where Ramly Ali J (now JCA) held that:

“It is a question of law for the court to decide whether the natural and ordinary meanings of the words used in the articles are capable of conveying a defamatory meaning of and concerning the plaintiff. Libel does not depend on the intention of the defamer but on the fact of defamation and it is irrelevant to consider the meaning (that) the writer and publisher intended to convey.”

Her Ladyship also referred to Gatley on Libel and Slander where the learned author stated that words are not to be construed in a milder sense (mitiori sensu) merely because they are capable on some forced construction of being interpreted in an innocent sense. Further, an imputation may be defamatory whether or not it is believed by those to whom it is published.

The learned judge concluded that the phrase “Refer to Drawer” when used in the context of cheques being returned for non-payment was capable of carrying a defamatory meaning that the drawer had insufficient funds in his account to meet the cheque payments. As the Plaintiff in the present case had sufficient funds in his account, the phrase was clearly untrue and is thus libellous to the Plaintiff.

In the light of the passage cited from Gatley on Libel and Slander, the learned judge held that the payee’s belief as to the drawer’s ability to pay was irrelevant.



In conclusion, the phrase “Refer to Drawer” may be regarded as defamatory and would found a successful action for defamation unless justified. A phrase is either defamatory or not. It is defamatory even if justified. Justification is merely a defence to publishing a defamatory statement, but this defence does not, strictly speaking, “undo” the defamatory meaning of the phrase. The arguments that banks are used to such a phrase being used in practice and that the esteem of the drawer would not be affected in the view of the payee are irrelevant to the question of liability.

Although this case does not break any new ground, it is a timely reminder that a bank should exercise great care when they use the phrase “Refer to Drawer” as a ground not to honour payment on a cheque. If they do so without good reason or cause, the bank could be liable to its customer not only for breach of contract but also for defamation.

Perhaps our friendly bank manager will now have second thoughts about Mr. X’s claim that he had been defamed.

Writer’s e-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it




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