The payout will be much higher as interest must also be paid.

In December 1997, Westpac mistakenly dishonoured 30 cheques drawn by the Homewise real estate agency, located in Auburn, Sydney.

Paul Aktas was the sole shareholder of Homewise.

The cheques were returned to Mr Aktas' clients, mostly landlords, stamped "refer to drawer", inferring there were insufficient funds to meet the payment.

That was not the case, and Mr Aktas subsequently won a breach of contract case relating to the incident.

However, he has since been involved in a long defamation challenge with Westpac, claiming he received an adverse and hostile reaction, particularly from the local Turkish community, when the cheques bounced.

His appeal of a NSW Supreme Court ruling in November 2007 that the bank's actions were covered by qualified privilege was upheld by the High Court.

In its judgment, the court said there was no public interest protecting the bank's communications to the payees, as payees have no interest in receiving notice of a refusal to pay a cheque where the drawer has sufficient funds to meet the payment.

"For the payee, there is no need for any communication from the bank about the fate of the cheque, if it is met on presentation," the court said in a statement issued in conjunction with the judgment.

"Further, to hold that giving a notice of dishonour is an occasion of qualified privilege is not conducive to maintaining accuracy in the decisions banks must make about paying cheques."