Commercial Banking Company of Sydney Ltd v RH Brown & Co (1972) 126 CLR 337
Tort; deceit; indirect representations.
Facts: RH Brown, a woolgrower, wanted to find out if a purchaser of wool was in good financial standing. RH Brown asked their bankers to find out. Their bankers contacted the purchaser's bank, the Commercial Banking Co of Sydney (CBCS), and made the relevant inquiry. In reply, CBCS represented that the purchasers were "safe for their trading engagements generally". This was not in fact true, and the manager of the CBCS did not honestly believe it to be true. Having relied on the incorrect information that had been given, and having suffered loss as a result, RH Brown sued CBCS in deceit.
Issue: Was the CBCS liable to RH Brown for a representation made indirectly to RH Brown?
Decision: The court held the bank liable in the circumstances.
Reason: The statement was made by CBCS with the intention that it should be acted on by the plaintiff's bank or by that bank's customers who were concerned with obtaining the information.