Metliss v National Bank of Greece and Athens S.A.
| Jurisdiction | UK Non-devolved |
| Judge | Viscount Simonds,Lord Morton of Henryton,Lord Tucker,Lord Keith of Avonholm,Lord Somervell of Harrow |
| Judgment Date | 25 November 1957 |
| Judgment citation (vLex) | [1957] UKHL J1125-2 |
| Date | 25 November 1957 |
| Court | House of Lords |
[1957] UKHL J1125-2
Viscount Simonds
Lord Morton of Henryton
Lord Tucker
Lord Keith of Avonholm
Lord Somervell of Harrow
House of Lords
After hearing Counsel, as well on Thursday the 10th, as on Monday the 14th. Wednesday the 16th, Thursday the 17th, Monday the 21st and Tuesday the 22d, days of October last, upon the Petition and Appeal of National Bank of Greece and Athens S.A., whose principal place of business is at 86 Eolou Street, Cotzia Square, Athens, Greece, and who also carry on business at 6 Old Jewry, in the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 18th of March 1957, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of Cyril Metliss, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 18th day of March 1957, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The Respondent is the holder of bonds of the total amount of £29,700 part of an issue of £2,000,000 7 per cent. sterling mortgage bonds issued by the National Mortgage Bank of Greece in the year 1927 and guaranteed by the National Bank of Greece. Both these companies were incorporated under Greek law.
In the year 1935 the provisions of the bonds were modified so as to reduce the rate of interest from 7 per cent. to 4¾ per cent. and to provide that bondholders resident in Greece should be paid only in drachmae. These modifications, the latter of which did not affect the Respondent, were agreed to by the guarantor, the National Bank of Greece.
On the 6th December, 1955, the Respondent, having in vain presented for payment coupons for interest which had accrued since the 1st June, 1941, brought an action in the Queen's Bench Division not against the original debtor nor against the guarantor but against the Appellants, the National Bank of Greece and Athens, claiming unpaid arrears of interest for 14½ years to the 1st June, 1955, amounting to £15,083 12s. 6d. He recovered judgment for £6,241 5s. 1d., being the interest due for the six years preceding the presentations of coupons. An appeal by the Appellants was dismissed by the Court of Appeal.
Your Lordships will see at once how important and novel a question is raised in this appeal. For I am not aware of any case, nor has the industry of learned counsel discovered one, in which in the Courts of this country a plaintiff has without a plea of novation or statutory assignment recovered a sum due under a contract from one who was not a party to that contract. It will be necessary to examine closely the circumstances which in the opinion of Mr. Justice Sellers and the Court of Appeal support the claim.
A further question, not of general importance, is also raised whether, if the Appellants are suable in this action, they can claim the benefit of a moratorium decreed by Greek law which would undoubtedly avail them if they were sued in Greece.
The Appellants, a company incorporated under Greek law, owe their existence to an Act of the Greek Parliament and a Decree made under it, to which I must briefly refer. By the Act, which was enacted on the 18th December, 1953, and was numbered Act No. 2292, it was provided (I take the so-called official translation) that "When the amalgamation of Limited Liability Banking Companies is concerned, the legal provisions in force are amended as follows". Then follow provisions relating to amalgamation consequent on shareholders' meetings to which I need not refer. Then comes section 4:
"No description of the items contributed is required in the relative contract of amalgamation nor in the Statutes, in the case of amalgamation by formation of a new company, provided that all the assets and liabilities of the Banking Companies amalgamating are contributed as a whole.
The Company which absorbs another Company by merger, or the new Company formed by the amalgamation, becomes the universal successor to the rights and obligations in general of the amalgamated Companies, without any other formality or act whatsoever".
Section 8 provides that "Wherever in a Law, Decree or Ministerial Decision reference is made to one of the abovementioncd amalgamated Limited Liability Banking Companies by shares, it is understood that reference is made to the new Limited Liability Banking Company formed pursuant of the amalgamation, and generally all provisions in force of Laws, Decrees or Ministerial Decisions in favour of one of the amalgamated Companies are considered as being in favour of the new Company as from the formation of the latter."
Section 10 provides that "The amalgamation of Limited Liability Banking Companies by shares, by formation of a new Limited Liability Banking Company by shares, may also be effected without a resolution of the General Meeting of the Shareholders, by Decree promulgated on the proposal of the Council of Ministers".
It was under the authority of this last section that on the 27th February, 1953, a Decree was promulgated under which the Greek company that I have mentioned, the National Bank of Greece and another Greek company, the Bank of Athens, were amalgamated and a new Limited Liability Company by shares formed under the style "National Bank of Greece and Athens" having its seat in Athens and as objects the carrying on of the business of the amalgamated banks for a period of 50 years. The Decree prescribed the terms of amalgamation in respect of shareholders and other matters, and then by clause 5 provided that as from the publication of the Decree the two companies, the National Bank of Greece and the Bank of Athens, should cease to exist and the entire property of each of them in its whole (Assets and Liabilities) on the day of publication should be considered as being automatically contributed to the new company constituted by those presents, which was substituted ipso jure and without any other formality, in all rights and obligations of the amalgamated banks as their universal successor. (I again use the language of the official translation.)
Thus the guarantor Bank which owed its existence to the law of Greece was by the same law extinguished. On the other hand, the original debtor Bank was left untouched by that or, so far as I am aware, any other Decree and on the 27th October, 1955, asserted its continued existence by making an offer to the holders of its sterling bonds about which it is necessary to say no more than that it was rejected by the Respondent. On the contrary, within a few days he presented his interest coupons to Hambros Bank Limited (one of the paying agents named in the bonds) for payment, and, payment being refused, brought this action not against the debtor Bank but against the new company created by the Greek Decree of the 27th February, 1953.
It may be mentioned here that the new company, that is the Appellants, duly registered with the Registrar of Companies the prescribed particulars under section 410 of the Companies Act, 1948, and are now carrying on business in this country.
It must also be added that it has not been, and could not be, alleged that there has been a novation of the original contract between the Respondent and the Appellants. The Respondent rests his claim against the Appellants on Greek law and specifically on the Decree of the 27th February, 1953, and on nothing else.
I have so far said nothing about the second point that arises in this case, viz.: how far the Appellants can avail themselves of the Greek Moratorium Laws to which I will refer later, even if they are otherwise liable on the bonds. I propose to defer any discussion of this point until I have dealt with the main question.
To the Respondent's claim the Appellants object in brief that they were not parties to the original bonds and therefore are not liable in respect of them, that the proper law of the bonds was English law and no foreign decree can operate to modify the terms thereof or to substitute one company for another as a party thereto and (stating the same proposition in other words) that English law does not recognise a succession imposed by a foreign law to an obligation arising under a contract governed by English law. Each one of these propositions is challenged by the Respondent so far as it relates to the present claim except that it is now conceded, as was held by the learned trial Judge, that the proper law of the contract is English.
My Lords, it must be apparent that, if the Appellants are right, a strange situation is revealed. Here is a company whose status is recognised by the Courts of this country because it is incorporated by the law of its domicile. By that law it is invested with duties, powers, assets, liabilities. It admits that, if sued in Greece, it would be liable on the bonds here in question, subject always to the benefit of any moratorium. It comes to this country, carries on its business, and assumes unchallenged possession of the assets of the dissolved...
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