Bank of Tokyo Ltd v Karoon (Note)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE ROBERT GOFF |
| Judgment Date | 24 May 1984 |
| Judgment citation (vLex) | [1984] EWCA Civ J0524-1 |
| Docket Number | 84/0210 |
| Court | Court of Appeal (Civil Division) |
| Date | 24 May 1984 |
and
[1984] EWCA Civ J0524-1
Lord Justice Ackner
Lord Justice Robert Goff
84/0210
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM AN ORDER OF MR JUSTICE BINGHAM
Royal Courts of Justice
MR L.H. HOFFMANN Q.C. and MR D.T. DONALDSON, instructed by Messrs Herbert Smith & Co., appeared for the Appellants (Plaintiffs).
MR N.A. STRAUSS, instructed by Messrs Baker & McKenzie, appeared for the Respondents (Defendants).
The respondent (Mr Karoon) is neither a national of, nor resident in, this country. He is an Iranian citizen who left Iran at the time of the revolution in November 1979 and is now living in France. The Bank of Tokyo Trust Company (BTTC), is a New York corporation which is a wholly owned subsidiary of the Bank of Tokyo Ltd. (BT), the appellants, a Japanese bank carrying on business in London.
On 7th November 1983 Bingham J. refused to grant an injunction restraining Mr Karoon from taking any further steps in an action that he had begun in New York against BTTC, or commencing or prosecuting any other proceedings relating to the same subject-matter before any other court than the English High Court. It is against this refusal that BT now appeals. He did however order that Mr Karoon be restrained from continuing the proceedings against BT, who had been joined as co-defendants with BTTC. Against this decision there is no cross-appeal.
The circumstances out of which his claim in the New York action arose can be shortly stated. Although Mr Karoon and his wife and children were able to leave Iran, the rest of Mr Karoon's family and his wife's family are still in Iran and he has fears for their safety. From 1961 onwards he was the chief operating officer of an Iranian company called Maritime Company Ltd (Maritime) in which he owned nearly all the shares. Maritime carried on a shipping business. For some years prior to his departure from Iran he maintained a personal bank account with BTTC. He also maintained both a personal and a company account with BT. Following his departure from Iran, Mr Karoon transferred approximately 685,000 from his personal account with BTTC to his personal account with BT. He also instructed BT to transfer all monies from the company account to his personal account.
In February 1980 BT received a letter from Maritime in Iran to advise them that on 3rd February 1980 Mr Karoon had "been sentenced in absentia to 10 years' imprisonment and that his property and the company's had been taken over by the Government of Iran. BT was asked to transfer all balances to Iran. BT responded to the effect that all the company's accounts had been closed prior to their receipt of this letter, upon the instructions of the account's sole signatory (Mr Karoon), and that under English law it would be a breach of confidence to make any disclosure regarding a customer's personal affairs without his prior authorisation. They also advised Mr Karoon of their receipt of this letter and their response. He thereupon instructed them to transfer funds they were holding to an account which he maintained with another bank. BT was concerned with its position. If it did not carry out his instructions, it might be liable to him. On the other hand, if it did carry out his instructions, it might be liable to those now in charge of Maritime. Accordingly, on 21st March 1980, BT issued an interpleader summons to determine whether the money which it held was payable to Mr Karoon or to Maritime.
On 15th April 1980 Mr Karoon issued a summons to strike out the interpleader proceedings under Order 18, rule 19 of the Rules of the Supreme Court. In his affidavit he swore, inter alia, that "On 3rd December 1979 I remitted US $3685,800 of my own money from my account at the Bank's branch in New York to the Bank…These monies had not originated from the Company."
He explained how they were placed on deposit and that on 27th December 1979 there was due to him U.S. $689,421.88. He contended that Maritime could have no arguable claim to these monies, even if proceedings were appropriate in respect of the English funds. He also expressed concern that, if the Iran Government knew about the funds in London, his relations would be used as a lever to force him to remit the money to Iran.
In reply to this affidavit, Mr Saunders, an officer of BT, swore another affidavit in which he said, in paragraphs 1 to 4 as follows: "1. Enquiries have been made of The Bank of Tokyo Trust Company, New York in respect of a remittance in the sum of U.S. Dollars 685,800 credited to the First Defendant's External Savings Account Number 61817–3 on 5th December 1979 in order to establish the source of the said money.
"2. I am informed and verily believe that the said sum was made up from two fixed deposits ((a) and (b) respectively) which were automatically renewable every three months and which had been pre-matured and credited to the First Defendant's New York checking account (Number 121–004–775) in order to cover the said payment. Fixed deposit (a) was valued at U.S. Dollars 183,797.83 and (b) at U.S. Dollars 497,803.98.
"3. Fixed Deposit (a) was opened on 14th December 1978 with a transfer of U.S. Dollars 170,000 from a savings account maintained by the First Defendant, which account was opened on 5th April 1976 with initial funds of U.S. Dollars 425,000 by means of a transfer from the First Defendant's Checking Account Number 121–004–775. I am informed that the sum of U.S. Dollars 511,000 had been credited to the said checking account on 30th December 1975 by order of Fairfield International Limited of 227 Park Avenue New York. Prior to 14th December 1978, the said savings account had been credited with U.S. Dollars 115,200, being the proceeds of a cheque drawn on Midland Marine Bank, New York by order of Mowbrays Tug and Barge Sales Corporation.
"4. Fixed Deposit (b) was opened on 23rd April 1979 with a transfer of U.S. Dollars 473,000 from the said savings account maintained by the First Defendant. The account had been credited on 11th April with the proceeds of a cheque for U.S. Dollars 32,569.75 drawn on Wells Fargo Bank New York "by order of Utah House Fire Insurance Company and on 23rd April with the proceeds of a cheque for U.S. Dollars 441,992.01 drawn on Chase Manhattan Bank by order of Adams and Porter Incorporated."
The affidavit was never served on Maritime, who were at that time not party to the proceedings to strike out. The application, which was heard by Robert Goff J. (as he then was), failed. A note of his judgment was before Bingham J., and the relevant part to the proceedings before him was quoted by the learned judge as follows: "There were certain accounts in the name of Majid Karoon and certain accounts in the name of Maritime Company. Certain monies were transferred from New York which Majid Karoon says are his. There has been an amalgamation of accounts carried out in accordance with instructions given on 24th December 1979 and 20th February 1980.….. Finally I am asked to look at the evidence to find that a substantial part of the monies must belong to Majid Karoon. I am invited to look at the letter and to find that it makes no claim on Majid Karoon's assets. The difficulty is that I am faced with one party's evidence. The Bank is in the middle and can only act fairly, which it cannot do not knowing the full facts. It would be quite wrong for me to pre-empt the situation on one party's evidence-especially having regard to the history which shows that Majid Karoon has not sought to keep his own and Maritime's monies separate. No accurate assumptions on a split can be made.
"It seems to me that the workers council letter is written in such English as the Bank has reasonable grounds to assume that a claim may be pressed not only against Maritime's accounts but also against Majid Karoon's accounts in so far as the money is in origin Maritime's money which he has transferred into his own account. He may have acted in breach of his obligations to the company.
In my judgment there are reasonable grounds that the Bank may "be sued for not only Maritime's money "but also that money held "by Majid Karoon. The Bank was fully entitled to interplead. I cannot accede to the application. To interplead was a natural reflex of the Bank."
On 4th March 1983 an interpleader issue was eventually ordered. The order was "by consent, no attempt being made to limit the order to the English as opposed to the American monies. It reads as follows:
"1. The Plaintiffs (BT) be fortwith discharged from any liability to either of the Defendants in respect of any monies the subject matter of these proceedings and that no action be brought in respect thereof against the Plaintiffs by either of the Defendants, including an action by the First Defendants acting in the name of the Second Defendants.
"2. The Plaintiffs do pay the monies the subject matter of these proceedings after deduction of their usual banking charges into Court as and when each of the current Special Deposits matures and that the monies presently held on call be paid together with the first Special Deposit money on maturity thereof and that meanwhile the Plaintiffs hold the said monies to the direction of the Court."
The complaint in the New York proceedings is based upon BTTC's voluntary disclosure to BT of information relating to his account in New York. This disclosure is alleged to have been a breach of its contractual duty of confidence to Mr Karoon, to have violated Mr Karoon's "right of privacy", and made in conspiracy with BT to injure Mr Karoon. A total of U.S. Dollars 4,000,000.00...
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