Anklesaria v BCCI (Overseas) Ltd

• Jurisdiction: Cayman Islands
• Judge: (Zacca, P., Georges and Rowe, JJ.A.)
• Judgment Date: 08 August 2000
• Court: Court of Appeal (Cayman Islands)
• Date: 08 August 2000

Court of Appeal

(Zacca, P., Georges and Rowe, JJ.A.)

ANKLESARIA

and

BANK OF CREDIT AND COMMERCE INTERNATIONAL (OVERSEAS) LIMITED

The appellant appealed to the Grand Court against the rejection of a proof of debt by the liquidators of the respondent bank.

The appellant allegedly organized a hunting trip for the royal family of Abu Dhabi in his home country of Pakistan. In return for his services, he was paid US$400,000 in VISA travellers” cheques issued by the respondent bank. The cheques were unsigned by the purchaser, who was identified as a representative of the royal family.

The purchase agreement for the cheques provided that the purchaser should sign each cheque and later countersign it in the presence of the person cashing it. A similar provision for payment appeared on the reverse of each cheque. The agreement also stated that the issuing bank would not be required to stop payment on the cheques for any reason

Bills of Exchange-travellers” cheques-status-travellers” cheque is bill of exchange but sui generis-enforceable according to terms of purchase-negotiable if signed and countersigned by purchaser but also enforceable by mere holder signing and countersigning if terms so provide

and should pay each cheque in accordance with its terms when the same individual signed and countersigned it, whether or not that person was the purchaser. The appellant attempted unsuccessfully to cash the cheques by signing and countersigning them himself.

When the respondent bank went into liquidation, the appellant sub-mitted a proof of debt to the liquidators which was refused. On appeal from that refusal, the Grand Court (Murphy, J.) held that the cheques were to be regarded as bills of exchange, payment being enforceable by a named payee or by the purchaser. However, the appellant had no title to them and no rights against the issuer, in the absence of the purchaser”s signature. A defect in title could be cured only in favour of a holder in due course within the meaning of s.29(1) of the Bills of Exchange Law. The appellant was not such a person, because (a) the cheques were incomplete on their face; (b) he could not prove that he had received them for value; and (c) they had not been negotiated to him. The terms of the purchase agreement did not assist him, as it was an underlying contract which could not determine the enforceability of the cheques and he was not a party to it. The proceedings in the Grand Court are reported at 1999 CILR 274.

The appellant appealed to the Court of Appeal.

Held, allowing the appeal:

(1) The liquidators of the respondent bank would be ordered to admit the proof of debt, since payment on the travellers” cheques was governed by the terms of the purchase agreement signed by the purchaser and reproduced on the cheques themselves. The agreement provided for the eventuality that the purchaser had not been required to sign the cheques at the point of purchase by stating that the bank should make payment when the signatures on the face of the cheque were the same. The cheques had plainly been delivered to the appellant with the intention of passing title to him and he had both signed and countersigned them (page 411, lines 5–29; page 412, lines...