Deniz (D.B.) Nakliyati TAS v Yugopetrol
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE RUSSELL,LORD JUSTICE NOLAN |
| Judgment Date | 07 February 1991 |
| Judgment citation (vLex) | [1991] EWCA Civ J0207-5 |
| Docket Number | 91/0262 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 February 1991 |
and
and
[1991] EWCA Civ J0207-5
The Master Of The Rolls
(Lord Donaldson)
Lord Justice Russell
Lord Justice Nolan
91/0262
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(MR JUSTICE LEGGATT)
Royal Courts of Justice
MR JAMES EADIE, instructed by Messrs Ince & Co., appeared for the Appellants (Plaintiffs).
MR JOE SMOUHA, instructed by Messrs Stephenson Harwood, appeared for Styga Compania Naviera S.A.
MR DAVID JOSEPH, instructed by Messrs Oswald, Hickson Collier & Co., appeared for Mr K. Mamidakis.
In July 1984 the plaintiffs (whom I shall call "Deniz") began an action claiming demurrage against the first defendants, or alternatively against the second and third defendants. The action was brought on the footing that the first defendant, Yugopetrol, incurred the demurrage as direct charterers of a tank vessel called the Engin which belonged to Deniz. It was common ground between all the parties that the charterparty was negotiated by the second and third defendants (whom I shall call "Mamitank London" and "M.S.E." respectively) and that in the course of the negotiations Mamitank and M.S.E. represented to Deniz that they were acting merely as agents on behalf of Yugopetrol as principals in concluding the charterparty. Yugopetrol, for their part, denied that there was any direct contractual relationship between themselves and Deniz.
On 4th December 1987, after a ten day trial, Hirst J. gave judgment for Deniz against Mamitank London and M.S.E. in the total sum of $348,029.63, made up as to $159,887.11 of demurrage and as to $188,142.52 of interest. He awarded Deniz costs against Mamitank London and M.S.E. in the sum of £76,511.21, and ordered Mamitank London and M.S.E. to indemnify Deniz against the costs payable by Deniz to Yugopetrol. There was no appeal against the order of Hirst J., and the costs of Yugopetrol were duly paid by Deniz in the agreed sum of £70,000, but Deniz have yet to recover a single cent or penny piece from Mamitank London or M.S.E. Deniz obtained a Mareva injunction over the assets of Mamitank London and M.S.E. within the jurisdiction up to a maximum of $500,000 on 26th November 1987, and Hirst J. ordered that this injunction should remain in force when he gave judgment for Deniz eight days later, but Deniz suspect that such assets as Mamitank London and M.S.E. may have owned were removed before the injunction came into force, and that these companies are now worthless, save for the value of any claims which they may have for the recovery of the assets removed. They suspect that the removal of the assets was arranged by Mr Mamidakis, who at all material times owned substantially the whole of the shares of Mamitank London and one third of the shares in M.S.E. (the other two thirds being held by his brothers), who was the President of both companies, and who was described by Hirst J. as their "moving spirit". Deniz have formed the view that money representing the former assets of Mamitank London and M.S.E. has found its way, or may have found its way, into bank accounts of Mr Mamidakis, and Styga Compania Naviera S.A. ("Styga"), another company of which he is President, and in which he is believed to be a substantial shareholder.
That is the background against which, on 8th May 1989, Deniz successfully applied ex parte to Hirst J. for an order under section 7 of the Bankers' Books Evidence Act 1879 by which their solicitors were given liberty to inspect and take copies of all entries in the bank accounts of Mamitank London, M.S.E., Mr Mamidakis and Styga at the National Bank of Greece or the Royal Bank of Scotland, for the period from January 1978 to December 1988. In addition, the order gave Deniz's solicitors liberty to inspect and take copies of the bank mandates on those accounts. On 7th November 1989, after an inter partes hearing, Leggatt J. (as he then was) granted an application by Mr Mamidakis and Styga that the section 7 order should be set aside so far as they were concerned. Deniz now appeal against that decision, seeking the reinstatement of the order in respect of the accounts of Mr Mamidakis and Styga. Before coming to the substance of the appeal, I would mention in passing firstly that Mr Mamidakis apparently had an account at the National Bank of Greece but no account at the Royal Bank of Scotland during the period covered by the order, and secondly that, as Deniz conceded in argument, the order could not in any event be sustained in so far as it referred to bank mandates. In Williams v. Williams [1988] 1 Q.B. 161 this court held that an order under section 7 could not extend to cheques or paying-in slips because they do not fall within the definition of "bankers' books" in section 9(2) of the Banking Act 1979 (which replaced the original definition in section 9 of the 1879 Act), and the same reasoning must clearly apply to bank mandates.
The other step which was taken by Deniz to protect their interests was to obtain orders under Order 48 of the Rules of the Supreme Court for the examination of Mr Mamidakis and of Miss Giakoumaki, in their capacity as directors, and therefore "officers", of Mamitank London in the case of Miss Giakoumaki and of both Mamitank London and M.S.E. in the case of Mr Mamidakis. The examination of Miss Giakoumaki took place as long ago as 10th January 1989, that is to say before the section 7 order was obtained. The order for the examination of Mr Mamidakis was made on 30th October 1989, but has not yet been carried out. We were told that the examination is due to take place on 14th February. I shall return to this point.
Section 7 provides that "on the application of any party to a legal proceeding a court or judge may order that such party be at liberty to inspect and take copies of any entries in a banker's book for any of the purposes of such proceedings." The general law governing the application of the section is set out in a number of cases, almost all of which were concerned with orders made during the interlocutory stages of the proceedings in question. It is clear that the section gives the court power to authorise the inspection of the banking account of someone who is not a party to the proceedings, but equally clear that this power should only be exercised within narrow limits. In Pollock v. Garle [1898] 1 Ch. 1 Lindley, M.R., summarised the position in these terms at pages 4–5:
"The Bankers' Books Evidence Acts were passed for the obvious purpose of getting over a difficulty and hardship as to the production of bankers' books. If such books contained anything which would be evidence for either of the parties, the banker or his clerk had to produce them at the trial under a subpoena duces tecum, which was an intolerable inconvenience to bankers when the books were in daily use. The leading object of the Acts was to protect bankers from that inconvenience. This is accomplished by the first six sections of the Act of 1879, which enable bankers to send attested copies of entries in their books instead of producing the books. Then comes s. 7, which has nothing to do with the protection of bankers, but has to do with litigants. [His Lordship read s. 7]. If those words are taken literally, they say that on the application of any party to legal proceedings the Court may enable the applicant to inspect and take copies of any entries in the banking accounts of any other people. It is monstrous to suppose that such was the intention of the Legislature. What was meant was entries in an account which is in form or in substance the account of a...
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