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Neutral Citation No: [1989] IESC 2

THE SUPREME COURT

Finlay C.J.

Walsh J.

McCarthy J.

(46/88)

TROMSO SPAREBANK

PLAINTIFF

AND

JAMES FRANCIS BYRNE, THOMAS A. FORDE, JOSEPH CRIMSON, NORTHERN BANK LIMITED, NORTHERN BANK (IRELAND) LIMITED AND MIDLAND BANK PLC.

DEFENDANTS

Judgment of McCarthy J., delivered the 15th day of December 1989.

The Plaintiff's claim in this action is for a sum of £8,848,707.00 being the total of amounts due on foot of two promissory notes, the^- first in the sum of U.S. $7,090,000.00 due on 18th July 1986 to the account of a Norwegian Company (Alvestad) and the second in the sum U.S. $4,755,000.00 due on the 4th September 1986 to the account of Alvestad. Both notes were endorsed for and on behalf of Northern Bank Limited by the Manager of the branch of that bank at Carrick-on-Shannon, Co. Leitrim. Alvestad endorsed the notes in favour of Tromso in return for full face value. Before paying these monies, Tromso through its correspondent bank in the United Kingdom, Hambro's Bank, sought confirmation of the Northern Bank manager's signature on the promissory notes and received a written statement by Norman Winslade, Manager of the Head Office Accounts Department of Midland Bank plc., (Midland) as follows:-

"If this is a true copy of the original I confirm that the signature E. Keaveney conforms to that held in our records."

On the 1st July 1986 Northern Bank Limited transferred to Northern Bank (Ireland) Limited all of its branch banking services within the State. Both at the time were wholly - owned subsidiaries of Midland, but Midland has-since sold the entire of that shareholding to National Australia Bank. Whatever- liability it may have to Tromso remains despite such a disposition of Northern Bank (Ireland) Limited.

The principal original defendants as sued were the first, fourth and fifth defendants, being sued on foot of the promissory notes. The position of the second and third defendants is irrelevant to this appeal.

In the amended defence of the fourth and fifth named defendants (the Banks), the substantial defence appears to be the allegation that the promissory notes were forgeries, that after signature the notes were materially altered and that Eugene Keaveney, the Branch Manager, exceeded his authority. This defence was filed by the same firm of solicitors and signed by the same senior and junior counsel as have represented Midland on the hearing of this appeal.

In the Affidavit grounding the application for the Order the subject matter of the instant appeal, Mr. Olaisen states his belief that

"In verifying and confirming the signature of Mr. Keaveney, Midland were under a duty of care to any party who gave value on foot of the said promissory notes to take all reasonable steps to ensure that the certification was factually correct and would not mislead or be likely to be misconstrued by any party relying on it. The Banks allege in their defence that Mr. Keaveney did not in fact have any authority to endorse the said promissory notes in the manner in which he purported to do so, so that the Banks allege that the said endorsements which appear on mthe face of the notes to be endorsements on behalf of Northern Bank Limited are in fact forgeries. The Banks also rely upon other grounds set out in their defence."

He then refers to the discovery of documents made on behalf of the Banks which, for the purposes of this judgment, may be summarized as indicating a degree of control and supervision exercised by Midland in this regard. In the course of lengthy affidavits filed on behalf of Midland and replying affidavits filed on behalf of Tromso, containing charge and counter charge, it appears to be contended that it was only on discovery of documents that Midland's potential involvement became clear and, on behalf of Midland, that this was not so. I cannot see the relevance of this argument,^-other than on some question of costs. The essential argument advanced by Midland appears to be stated in paragraph 17 of the affidavit of Christopher John Jenkins, Deputy Group International Legal Adviser of Midland where he says:

"I note from the order made by the High Court herein that Midland has been joined as a defendant to the proceedings upon the basis that it is a necessary or proper party to the proceedings in this jurisdiction. This is something which I would respectfully dispute. The only apparent connection appears to be the fact that the plaintiff has an existing set of proceedings before this Honourable Court. The cause of action alleged against Midland is an entirely separate and new cause of action which turns entirely upon different matters of fact which have occurred in the United Kingdom and which have no direct connection with the facts and events upon which the existing claims appear to be based. Moreover, as I have said above, the cause of action is one which appears to be governed exclusively by a separate system of law, namely, the Law of England and Wales. If the plaintiff succeeds against Northern Bank Limited and/or Northern Bank (Ireland) Limited, it would appear to have no claim against Midland.. On the other hand if the plaintiff does not succeed against Northern Bank Limited and/or Northern Bank (Ireland) Limited, its claim against Midland is based on matters both of fact and law which are entirely distinct and separate from his claims against both of those banks."

I am at a loss to understand how it can be responsibly sworn that the matters of fact which have occurred in the United Kingdom have no direct connection with the facts and events upon which the existing claims appear to be based. Tromso alleges that it would not have discounted the promissory notes but for the Midland certification. That appears to me to be a direct connection. The relevant circumstance is that if Tromso only sued the Banks in Ireland it could well fail on such a ground as the scope of Keaveney's authority; it might, then or contemporaneously sue Midland in the United Kingdom and there lose on the ground that there was not an abuse of authority. It may readily be said that the facts underlying the causes of action against the two significant defendants, the- Banks and Midland, are totally different and it is conceivable that Tromso could lose both against the Banks and against Midland. At the same time, the desirability of having the issues of fact determined in the one tribunal is compelling, it is commonplace for the law of one nation to be applied to litigation in another; this is particularly so as between Ireland and the United Kingdom. If Midland, as the learned Trial Judge said, had been in this jurisdiction, it would have been joined in this action without leave. That circumstance appears to me to give ample jurisdiction to the Court within Order 11 Rule 1(h).As Mr. Collins argued on behalf of Tromso the thrust of the law today is to centralize the hearing of actions arising out of disputes. The possibility of inconsistent verdicts in different jurisdictions emphasizes this which is reflected in the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters adopted in 1968 and amended by the 1978 Accession Convention and the 1982 Accession Convention and incorporated into the domestic law by the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, 1988. Various authorities were cited to the Court during the argument but

I do not consider it necessary to comment on this line of authority. In my view, everything points to the desirability of centralizing the trial of the several claims, in the alternative or otherwise arising out of what appears to have been an elaborate fraud. The making of an order of this kind joining Midlands was, prima facie, a matter for the discretion of the learned Trial Judge. I confess I find it difficult to see how he could have exercised his discretion other than as he did. I would dismiss this appeal.