Finsbury Bank & Trust Company v Att Gen
Jurisdiction | Cayman Islands |
Judge | (Zacca, P., Kerr and Collett, JJ.A.) |
Judgment Date | 06 December 1996 |
Date | 06 December 1996 |
Court | Court of Appeal (Cayman Islands) |
(Zacca, P., Kerr and Collett, JJ.A.)
R.D. Alberga, Q.C. and A. Turner for the appellant;
R. McMillan, Crown Counsel, for the respondent.
(1) -Nokes v. Doncaster Amalgamated Collieries Ltd., [1940] A.C. 1014; [1940] 3 All E.R. 549, dicta of Viscount Simon, L.C. applied.
(2) Owen v. Tate, [1976] Q.B. 402; [1975] 2 All E.R. 129, followed.
Bankruptcy Law (Revised) (Laws of the Cayman Islands, 1963, cap. 7, revised 1978), s.18: The relevant terms of this section are set out at page 353, line 42 – page 354, line 10.
Banks and Trust Companies Law, 1989 (Law 4 of 1989), s.14(1): The relevant terms of this sub-section are set out at page 353, lines 31–40.
(2): The relevant terms of this sub-section are set out at page 357, lines 34–37.
(3): ‘A person appointed under paragraphs (iv) and (v) of subsection (1) . . . shall from time to time at his discretion and in any case within three months of the date of his appointment . . . furnish a report to the Governor and the Inspector of the affairs of the licensee and of his recommendations thereon.’
s.21(1): ‘An appeal lies to the Court from any decision of the Governor-
. . .
(c) -requiring a licensee to take certain steps which the Governor may specify under section 14.’
Insolvency Act 1986 (c.45), s.287:
‘(1) Between the making of a bankruptcy order and the time at which the bankrupt”s estate vests in a trustee . . . the official receiver is the receiver and . . . the manager of the bankrupt”s estate and is under a duty to act as such.
(2) The function of the official receiver while acting as receiver or manager of the bankrupt”s estate under this section is to protect the estate; and for that purpose-
(a) -he has the same powers as if he were a receiver or manager appointed by the High Court, and
(b) -he is entitled to sell or otherwise dispose of any perishable goods comprised in the estate and any other goods so com-prised the value of which is likely to diminish if not disposed of.’
Banking-control of banks-appointment of receiver-manager by Governor-Governor”s appointee under Banks and Trust Companies Law, 1989, s.14(1) authorized by Governor”s directions to assume control of bank”s affairs and report to him-further action requires application to court
Contract-quasi-contract-discharging liability of another-person discharging statutory obligation of another to be reimbursed amount reasonably incurred in compliance with statute
The appellants, as liquidators of Finsbury Bank & Trust Co., challenged in the Grand Court the admission of a proof of debt submitted by the Government in respect of a receiver”s fees.
The Governor appointed B., a chartered accountant, to assume control of the Bank under s.14(1)(d)(v) of the Banks and Trust Companies Law, 1989 and gave him directions on how to perform his duties, including the production of a report on the Bank, which B. duly provided. The Governor, who had undertaken to indemnify B. for his fees, revoked the Bank”s licence upon receipt of B.”s reports and applied for its compulsory winding up.
The Bank opposed the petition and was eventually placed in voluntary liquidation with the appellants as receivers and managers, an arrangement which was ordered to continue under the supervision of the court. The appellants refused to reimburse the Government, however, on the grounds that B. had failed to seek directions from the Grand Court before
performing his duties, and that the Governor had acted as a volunteer in paying his fees.
The Grand Court (Schofield, J.) held that B. had erred in failing to seek the court”s directions and thus the Governor”s directions were void and conferred no authority to act, but that since the indemnity was necessary for the effectiveness of appointments under s.14(1), and since B. would have been authorized by the court had he applied at the proper time or retrospectively, the Bank was obliged to reimburse the Governor. The proceedings in the Grand Court are reported at 1994–95 CILR 531.
On appeal, the appellants submitted that (a) since the powers contemplated by the Banks and Trust Companies Law, 1989, s.14(1)(d)(v) were those which a trustee in bankruptcy could acquire as a receiver appointed under s.18 of the Bankruptcy Law (Revised) only by an application to the court, the Grand Court had correctly decided that the powers exercised by B. without such an application were unauthorized and void; moreover (b) the Governor”s appointment of B. was a mere designation which conferred only locus standi to apply to the court and no authority even to assume control of the Bank; and (c) the Bank was therefore not liable to pay B.”s fees either (i) on an indemnity basis, as the Governor”s payment had not discharged a liability of the Bank, or (ii) on a quantum meruit basis, since B. had conferred no benefit on it by recommending the revocation of its licence.
The respondent submitted in reply that (a) B.”s assuming control of the Bank and the preparation of his reports were actions properly authorized by the Governor, since the clear intention of the legislation (in incorporating into s.14 the powers which a trustee in bankruptcy could acquire under the Bankruptcy Law (Revised), s.18 on application to the court) was to enable the Governor himself to direct an appointed receiver as to his powers and duties; and (b) the Bank was therefore liable to reimburse the Governor for fees which the Government was in practice required to vouch for to ensure the proper working of the statutory scheme.
Held, dismissing the appeal but remitting the case to the Grand Court for the assessment of quantum:
(1) The fact that an appointee under the Banks and Trust Companies Law, 1989, s.14(1) needed to apply to the court for directions before carrying out his duties as receiver did not derogate from the authority conferred by his appointment to assume control of the company and report to the Governor. Whilst it was difficult to reconcile the provisions of s.14 with those of the Bankruptcy Law (Revised), s.18 due to the absence of any detailed description of a receiver”s powers in s.18 and the unhelpful use of the phrase ‘mutatis mutandis’ in s.14(1), the court was obliged to construe the two provisions so as to avoid defeating the clear legislative intention behind s.14, to enable the Governor to act quickly to revoke a company”s licence if necessary in the public interest (page 355, line 39 – page 356, line 4; page 356, lines 17–34; page 357, line 23 – page 358, line 15).
(2) The Bank was therefore obliged to pay the expenses reasonably incurred by B. in the performance of his duties under s.14. Though the Governor was not required by statute to indemnify him, an assurance of some kind was clearly needed for the working of the scheme and had been properly given. However, since an indemnity did not identify which actions were incidental to the appointment, the matter would be remitted to the Grand Court to determine which expenses had been reasonably incurred and what sum should be awarded in consequence (page 358, lines 16–20; page 360, lines 11–29).
KERR, J.A.: This is an appeal by the joint liquidators of the Finsbury | |
5 | Bank & Trust Co. (‘the Bank’) against the judgment of Schofield, J. |
dated October 24th, 1995, in which he ordered that a proof of debt filed | |
by the Solicitor General on behalf of the Government of the Cayman | |
Islands in the sum of $124,448.39, having been presented and rejected by | |
the appellants, be admitted. The debt was in respect of fees paid by the | |
10 | Government to Mr. Theodore Bullmore, appointed by the Governor as |
receiver pursuant to s.14(1)(d)(v) of the Banks and Trust Companies Law, | |
1989. | |
Bullmore”s appointment, dated July 26th, 1993, was accompanied by | |
directions which in their operative parts read: | |
15 | ‘The Receiver is directed: |
(1) -forthwith to enter upon the premises of the licensee and | |
take control of affairs of the licensee”s business, premises, | |
property, assets, books, records and all other things | |
whatsoever and wheresoever situated so as to preserve the | |
20 | assets of the licensee and to protect the interest of the |
depositors and other creditors; | |
(2) -not to accept any further deposits, or incur further | |
liabilities, other than those necessary for the day to day | |
management of the affairs of the licensee, until further | |
25 | direction; |
(3) -not to make any disbursement or payment of any money | |
held by the licensee or to the order of the licensee, whether | |
on current savings, deposit or any other form of account, | |
and not to part with any gold or securities or make any | |
30 | changes in the persons to whose credit any sum stands or to |
whose order any gold or security is to be held or make any | |
payments other than those necessary for the day to day | |
operation of the business of the licensee, without first | |
obtaining the consent of the Inspector of Financial | |
35 | Services; |
(4) -as soon as possible to prepare and furnish a report to the | |
Governor and to the Inspector of Financial Services of the | |
affairs of the licensee and of his recommendations | |
thereon.’ | |
40 | On July 24th, 1993, the Governor (meaning the Governor in Council) |
filed a petition for the winding up of the Bank. The petition was opposed | |
and the Bank filed an action against Bullmore for trespass and an | |
To continue reading
Request your trial-
Premier Assurance Group Spc Ltd (in Controllership)
...2015 (1) CILR 143, followed. (4)F Bank & Trust Co., In re, 1994–95 CILR 531; on appeal, sub nom. Finsbury Bank & Trust Co. v. Att. Gen., 1996 CILR 349, considered. (5)Gouriet v. Union of Post Office Workers, [1978] A.C. 435; [1977] 3 All E.R. 70, referred to. (6)Governor v. Federated Intl. ......
-
An APPLICATION for JUDICIAL REVIEW and GCR O.53 BETWEEN: (1) Maples Corporate Services Ltd (2) Maplesfs Ltd Plaintiffs v Cayman Islands Monetary Authority Defendant
...of the case. Furthermore, in accordance with the decision of the Cayman Islands Court of Appeal in Finsbury Bank & Trust Co v Att. Gen 1996 CILR 349, where a matter raises for the first time issues of significant public importance and is brought in the public interest, including in relation......
-
An Application for Judicial Review and GCR O.53 Between: (1) Maples Corporate Services Ltd (2) Maplesfs Ltd Plaintiffs v Cayman Islands Monetary Authority Defendant
...of the case. Furthermore, in accordance with the decision of the Cayman Islands Court of Appeal in Finsbury Bank & Trust Co v Att. Gen 1996 CILR 349, where a matter raises for the first time issues of significant public importance and is brought in the public interest, including in relation......
-
Re Fraser (D)
...Counsel, for the Crown. Cases cited: (1) Euro Bank Corp., In re, 2002 CILR 497, applied. (2) Finsbury Bank & Trust Co. v. Att. Gen., 1996 CILR 349, referred to. (3) McCorkle, In re, 1998 CILR N–2, considered. (4) Piper, Re, [1999] 4 All E.R. 473, considered. (5) U.S. Govt. v. Montgomery, [2......
-
Negotiorum gestio: unjust sacrifice and officious intervention: a commonwealth caribbean perspective
...in an emergency to protect the property, life or health of the assisted person, unless he falls within one of the other exceptions 37 [1996] CILR 349, CA. 38 Ibid,, 411-412. 39 See Goff and Jones, The Law of Restitution 474 (5 th edn Sweet and Maxwell, 1998). 40 (1826) 5 B&C 737, 108 ER 738......
-
Conveyancers' title information sources in the Cayman Islands
...Registered Land Law (2004 Revision). 84. s 18 Bankruptcy Law (1997 Revision)] see Finsbwy Bunk & Trust Company v Attorney-General [1996] CILR 349 . Coventor v Federated International Bank [1998] CILR N-1. 85. s 29 Bankruptcy Law (1997 Revision) 86. s 37 Bankruptcy Law (1997 Revision). 87. s......